/raid1/www/Hosts/bankrupt/TCR_Public/230315.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, March 15, 2023, Vol. 27, No. 73
Headlines
1272775 B.C.: Goldman Sachs Marks $919,000 Loan at 19% Off
1272775 B.C.: Goldman Sachs Marks CAD454,000 Loan at 27% Off
2340 ND: Lender Seeks to Prohibit Cash Collateral Access
ABACUS DATA: Goldman Sachs Marks $1.2M Loan at 52% Off
ACQUIA INCORPORATION: Goldman Sachs Marks $3.2M Loan at 43% Off
AD1 URBAN: Seeks to Hire RobertDouglas as Investment Banker
AEMETIS INC: Incurs $107.8 Million Net Loss in 2022
AEMETIS INC: Registers 1.4M Common Shares Under 2019 Stock Plan
AGUA HOLDINGS: Bankr. Court Lacks Jurisdiction Over Adversary Case
ANTHYMTV CO: Seeks to Tap Fitzgerald Law as Bankruptcy Counsel
APEX LEGACY: Files Emergency Bid to Use Cash Collateral
ARCADE BEAUTY: Davis Polk Advises Lenders on Restructuring
ARSENAL INTERMEDIATE: Unsecureds to Recover 5% to 25% in Plan
ARTS DISTRICT: Case Summary & Five Unsecured Creditors
ASSOCIATED MATERIALS: Fitch Affirms B LongTerm IDR, Outlook Stable
ATLAS HEAVY: Case Summary & 20 Largest Unsecured Creditors
BEATO AUTO SALES: Lines Up $1.5 Million Funding
BED BATH & BEYOND: Amends Equity Offering Agreement
BERKTREE LLC: March 16 Hearing on Continued Cash Collateral Use
BERTUCCI'S RESTAURANTS: Wins Cash Collateral Access Thru April 11
BETANXT INC: Moody's Assigns B2 CFR, Outlook Stable
BETANXT INC: S&P Assigns 'B-' Issuer Credit Rating, Outlook Pos.
BIRCHINGTON LLC: Court OKs Cash Collateral Access
BJ SERVICES: Keystone's Bid for Withdrawal of Reference Denied
BK RACING: Parties' Consent Motion to Consolidate Appeals Granted
BMI WELLNESS: Seeks Cash Collateral Access
C S I ROOF: Unsecured Creditors Will Get 70% of Claims in 5 Years
CALIFORNIA RESOURCES: Appoints New CEO as Part of Restructuring
CARLA'S PASTA: Lenders Motion for Summary Judgment Granted
CELSIUS NETWORK: Creditors Get Court Okay to Sue Executives
CELSIUS NETWORK: Still Open for Other Bids After NowaWulf Offer
CHINOS INTERMEDIATE: S&P Alters Outlook to Neg., Affirms 'B' ICR
CLOVIS ONCOLOGY: Taps Ernst & Young as Tax Services Provider
COBRA PIPELINE: Unsecureds to Recover 10% to 15% in Plan
CORIZON HEALTH: Court Halts Proceedings in Benjamin Oryang's Case
CORIZON HEALTH: Proceedings in Joshua Wade Ray's Lawsuit Stayed
CREEPY COMPANY: Wins Cash Collateral Access Thru April 9
CWI ENTERPRISES: Files for Chapter 11 After Landfill Shutdown
CYTOSORBENTS CORP: Posts $32.8 Million Net Loss in 2022
D&D BAKER: Court OKs Cash Collateral Access Thru April 4
DAREN C. DALY: Bid to Dismiss Amended Complaint Granted in Part
DIOCESE OF CAMDEN: Court Declines Chapter 11 Settlement Conference
DIOCESE OF ROCKVILLE CENTRE: Says $5M Not Gift to TV Channel
DIOCESE OF SACRAMENTO: Sexual Abuse Suits Could Bankrupt Diocese
DIOCESE OF SANTA ROSA: Case Summary & 20 Largest Unsecured Creditor
DIXIE HOME: Court OKs Cash Collateral Access Thru Aug 31
EMERGENT FIDELITY: Taps Morgan, Lewis & Bockius as Legal Counsel
EMPEREON MARKETING: Voluntary Chapter 11 Case Summary
EXCL LOGISTICS: Seeks Interim Cash Collateral Access
FENIX GROUP: Gets OK to Hire Richard F. Avellone as Accountant
FIELDWOOD ENERGY: Court Declines Bond Firms' Plan Appeal
FISHBONE SAFETY: Case Summary & 20 Largest Unsecured Creditors
FREE SPEECH: Alex Jones to Get $520K Salary Under Chapter 11 Plan
FREE SPEECH: Jones Ordered to File Financial Docs by March 30
FTX GROUP: Advisers Billed $38 Million for January
FTX GROUP: LedgerX Auction Delayed to March 22
FTX TRADING: UST Appeals Ruling Rejecting Independent Examiner
FUELCELL ENERGY: Incurs $21.1 Million Net Loss in First Quarter
FUSION: Summary Judgment Granted in Favor of Ashley Furniture
GARDNER AGENCY: Case Summary & Six Unsecured Creditors
GIRARDI & KEESE: Prosecutors, Ex-CFO Seek Nov. 7 Fraud Trial
GOTSPACE EQUITY: Involuntary Chapter 11 Case Summary
GREATER FELLOWSHIP: Case Summary & One Unsecured Creditor
GREELY LAND: Has Deal on Cash Collateral Access Thru March 31
GREENWORKS SERVICE: Unsecureds Will Get 100% of Claims in 3 Years
HALL CATTLE: Case Summary & 20 Largest Unsecured Creditors
HELIUS MEDICAL: Incurs $14.1 Million Net Loss in 2022
HIGH STREET: Unsecureds Will Get 7.09% via Quarterly Payments
HIGHLAND CAPITAL: Novelist Judge Won't Recuse From Case
HOT'Z POWER: Court OKs Cash Collateral Access Thru March 21
IMMANUEL SOBRIETY: Seeks Cash Collateral Access
INSIGHT MANAGEMENT: Seeks to Hire Vilarino & Associates as Counsel
INSIGHT MANAGEMENT: Taps Dage Consulting CPA's as Financial Advisor
INTERNATIONAL PETROLEUM: S&P Affirms 'B' ICR, Outlook Stable
INVACARE CORP: DIP Loans from Cantor, PNC Win Final Court OK
INVACARE CORPORATION: Taps Ernst & Young as Tax Services Provider
J&B EXPRESS: Seeks to Hire Jan Pierce as Special Counsel
JAF 27: Wins Cash Collateral Access Thru May 8
KENNESAW LOFTBNB: Seeks to Hire Hilco Real Estate as Broker
KROLLMOTION TECHNOLOGIES: Court OKs Deal on Cash Collateral Access
LAURA'S ORIGINAL: Case Summary & 20 Largest Unsecured Creditors
LECLAIRRYAN PLLC: Board Members Settle Trustee Clawback Claims,
LTL MANAGEMENT: Professors, Retired Judge Oppose Chapter 11 Bid
MADERA COMMUNITY: Files Emergency Bid to Use Cash Collateral
MADERA COMMUNITY: Interest by Suitors Delayed Chapter 11 Filing
MANZELLA PROP: Trustee Taps Malcolm Cisneros as Special Counsel
MANZELLA PROPERTIES: Property Sale Proceeds to Fund Trustee's Plan
MARCH ON HOSPITALITY: May Use $15,894 of Cash Collateral
MATTEL INC: Fitch Affirms LongTerm IDR at 'BB+', Outlook Positive
MERIDIAN RESTAURANTS: Another Burger King Franchisee in Chapter 11
MERIDIAN RESTAURANTS: Gets OK to Hire BMC Group as Noticing Agent
MERIDIAN RESTAURANTS: Taps Markus Williams Young as Legal Counsel
MERIDIAN RESTAURANTS: Taps Ray Quinney & Nebeker as Local Counsel
METROHAVANA TOWN: Seeks to Hire Joel M. Aresty as Legal Counsel
MOMENTIVE PERFORMANCE: Moody's Raises CFR to 'B1', Outlook Stable
MOMENTIVE PERFORMANCE: S&P Rates New First-Lien Term Loan 'B+'
NATURAL PAWZ: Saved from Bankruptcy by Founders
NEONODE INC: Incurs $4.9 Million Net Loss in 2022
NEW BEGINNING: Voluntary Chapter 11 Case Summary
NEWCO LLC: Case Summary & Two Unsecured Creditors
NICK'S CREATIVE: Wins Cash Collateral Access Thru July 11
NIELSEN & BAINBRIDGE: Seeks to Hire Hilco as Real Estate Advisor
NIELSEN & BAINBRIDGE: Taps A&M as Restructuring Advisor, Names CTO
NIELSEN & BAINBRIDGE: Taps Guggenheim as Investment Banker
NIELSEN & BAINBRIDGE: Taps Kirkland & Ellis as Bankruptcy Counsel
NIELSEN & BAINBRIDGE: Taps PricewaterhouseCoopers as Auditor
NIGHTMARE GRAPHICS: Case Summary & 19 Unsecured Creditors
NORMAN'S INVESTMENTS: Seeks Cash Collateral Access
NOVA WILDCAT: Committee Taps Archer & Greiner as Legal Counsel
NOVA WILDCAT: Committee Taps Dundon Advisers as Financial Advisor
OLYMPUS WATER: Diamond Transaction No Impact on Moody's 'B3' CFR
ONEDIGITAL BORROWER: Moody's Affirms 'B3' CFR, Outlook Stable
PACIFIC BEND: Files Emergency Bid to Use Cash Collateral
PARTY CITY: Committee Seeks to Hire Pachulski as Legal Counsel
PARTY CITY: Committee Taps FTI Consulting as Financial Advisor
PG&E CORP: Victims Ask Court for Additional Damages
PLATFORM II LAWNDALE: Wins Cash Collateral Access Thru March 31
PRECAST LLC: Seeks to Hire Dulin Ward & DeWald as Accountant
PREMIER CAJUN: Case Summary & 20 Largest Unsecured Creditors
PURIFYING SYSTEMS: May Use Cash Collateral Thru March 21
PWM PROPERTY: West Madison Slated for April 4 Confirmation
R&W CLARK: Case Summary & 20 Largest Unsecured Creditors
RECONDITION PROS: Seeks to Hire Bernstein-Burkley as Legal Counsel
REMODEL 615: Wins Cash Collateral Access Thru April 4
REVLON INC: Faces Hair Relaxer Cancer Claims as Case Nears End
ROBERSON CARTRIDGE: Matador Brass' Move to Convert Case Denied
ROCKING M MEDIA: Unsecureds to Get Litigation Trust Proceeds
ROOSEVELT UNIVERSITY: Fitch Affirms 'B' Issuer Default Rating
RUEL T. STOESSEL: Gets Interim OK to Hire Furr Cohen as Counsel
SAMEH H. AKNOUK: US Trustee's Bid for PCO Denied
SAN JORGE CHILDREN'S: Court OKs Deal on Cash Collateral Access
SBW PROPERTIES: Court Approves Disclosure Statement
SCHARN INDUSTRIES: Court OKs Cash Collateral Access Thru April 6
SECURE ENERGY: S&P Alters Outlook to Stable, Affirms 'B' ICR
SEMINOLE HARD: Moody's Rates New $550MM Secured Loans 'B1'
SIERRA ENTERPRISES: S&P Assigns CCC+ Rating on 1st-Lien Term Loan
SIGNATURE BANK: Fitch Lowers IDR to 'D' & Then Withdraws Rating
SIGNATURE BANK: Shut by Regulators; Bridge Bank Opens Doors
SILICON VALLEY BANK: Aehr Says Less Than 6% of Cash in SVB
SILICON VALLEY BANK: BioLife Reports Immaterial Financial Exposure
SILICON VALLEY BANK: Everest Medicines Says Exposure Immaterial
SILICON VALLEY BANK: Pharming Has $19M in Deposits at SVB UK
SILICON VALLEY BANK: Unity Software Says Exposure Minimal
SILICON VALLEY BANK: Zealand Pharma Says 15% of Cash at SVB
SILVERGATE CAPITAL: Winds Down Bank Operations
STARNET LLC: Taps Kevin McDonald of United Real Estate as Broker
TECHNICAL ORDNANCE: Files Emergency Bid to Use Cash Collateral
TEXAS COASTAL: Gets Interim OK to Hire Shraiberg Page as Counsel
TOP SPORTS: Case Summary & Nine Unsecured Creditors
TRANSDERMAL SPECIALTIES: April 19 Plan Confirmation Hearing Set
TRICIDA INC: Heads to Mediation Over Plan Issues
TRINITY LEGACY: Seeks Cash Collateral Access
TRU GRIT FITNESS: Coulter Ventures' Lawsuit Stayed
UNITED ROAD: $331.3M Bank Debt Trades at 56% Discount
UPLAND SOFTWARE: S&P Downgrades ICR to 'B-', Outlook Stable
VENUE CHURCH: Bid to Use Cash Collateral Moot
VESTA HOLDINGS: Files Amendment to Combined Plan & Disclosures
VILLAGE OF FOREST PARK: Moody's Lowers Issuer Rating to Ba1
VOLEL PROFESSIONAL: Court OKs Cash Collateral Access Thru April 6
WAVECREST ENTERPRISES: Voluntary Chapter 11 Case Summary
WPI WATER: Seeks Cash Collateral Access
WW INT'L: Moody's Cuts CFR to B3 & Alters Outlook to Stable
[*] 11 Digitally Native Retailers at Risk of Bankruptcy
*********
1272775 B.C.: Goldman Sachs Marks $919,000 Loan at 19% Off
----------------------------------------------------------
Goldman Sachs BDC, Inc. has marked its $919,000 loan extended to
1272775 B.C. LTD. (dba Everest Clinical Research) to market at
$745,000 or 81% of the outstanding amount, as of December 31, 2022,
according to a disclosure contained in Goldman Sachs's Form 10-K
for the fiscal year ended December 31, 2022, filed with the
Securities and Exchange Commission on February 23, 2023.
Goldman Sachs BDC, Inc. is a participant in a First Lien Senior
Secured Debt Loan to 1272775 B.C. LTD. (dba Everest Clinical
Research). The loan accrues interest at a rate of 11.46% (P+6.00%)
per annum. The loan matures on November 6, 2026.
Goldman Sachs BDC, Inc. was initially established as Goldman Sachs
Liberty Harbor Capital, LLC, a single member Delaware limited
liability company, on September 26, 2012 and commenced operations
on November 15, 2012 with The Goldman Sachs Group, Inc. as its sole
member. On March 29, 2013, the Company elected to be regulated as a
business development company under the Investment Company Act of
1940, as amended. Effective April 1, 2013, the Company converted
from a SMLLC to a Delaware corporation.
In addition, the Company has elected to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code
of 1986, as amended, commencing with its taxable year ended
December 31, 2013. Goldman Sachs Asset Management, L.P., a Delaware
limited partnership and an affiliate of Goldman Sachs & Co. LLC, is
the investment adviser of the Company.
1272775 B.C. LTD does business as Everest Clinical Research.
Everest Clinical Research is a full-service contract research
organization providing a broad range of expertise-based clinical
research services to worldwide pharmaceutical, biotechnology, and
medical device industries. It serves some of the best-known
companies and work with many of the most advanced drugs, biologics,
and medical devices in development today.
1272775 B.C.: Goldman Sachs Marks CAD454,000 Loan at 27% Off
------------------------------------------------------------
Goldman Sachs BDC, Inc. has marked its CAD454,000 loan extended to
1272775 B.C. LTD. to market at CAD331,000 or 73% of the outstanding
amount, as of December 31, 2022, according to a disclosure
contained in Goldman Sachs's Form 10-K for the fiscal year ended
December 31, 2022, filed with the Securities and Exchange
Commission on February 23, 2023.
Goldman Sachs BDC, Inc. is a participant in a First Lien Senior
Secured Debt Loan to 1272775 B.C. LTD. The loan accrues interest at
a rate of 11.45% (CDN P+4.75%) per annum. The loan matures on
November 6, 2026.
Goldman Sachs BDC, Inc. was initially established as Goldman Sachs
Liberty Harbor Capital, LLC, a single member Delaware limited
liability company, on September 26, 2012 and commenced operations
on November 15, 2012 with The Goldman Sachs Group, Inc. as its sole
member. On March 29, 2013, the Company elected to be regulated as a
business development company under the Investment Company Act of
1940, as amended. Effective April 1, 2013, the Company converted
from a SMLLC to a Delaware corporation.
In addition, the Company has elected to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code
of 1986, as amended, commencing with its taxable year ended
December 31, 2013. Goldman Sachs Asset Management, L.P., a Delaware
limited partnership and an affiliate of Goldman Sachs & Co. LLC, is
the investment adviser of the Company.
1272775 B.C. LTD does business as Everest Clinical Research.
Everest Clinical Research is a full-service contract research
organization providing a broad range of expertise-based clinical
research services to worldwide pharmaceutical, biotechnology, and
medical device industries. It serves some of the best-known
companies and work with many of the most advanced drugs, biologics,
and medical devices in development today.
2340 ND: Lender Seeks to Prohibit Cash Collateral Access
--------------------------------------------------------
U.S. Bank Trust National Association, solely in its capacity as
Trustee of LSRMF MH Master Participation Trust II, asks the U.S.
Bankruptcy Court for the Middle District of New York, Brooklyn
Division, to prohibit 2340 ND Corp. from using cash collateral.
On January 16, 2007, Gene Burshstein executed and delivered, or is
otherwise obligated with respect to a promissory note in the
original principal amount of $420,000.
Pursuant to the Mortgage, all of Burshstein's obligations as
borrower under and with respect to the Note and Mortgage are
secured by the Debtor's property. The Mortgage contains an
Assignment of Rents provision providing the Creditor with a
security interest in any rental income generated by the Property.
On March 5, 2019, an unauthorized Bargain and Sale Grant Deed was
recorded wherein Burshstein purported to transfer interest in the
Property to the Debtor.
Burshstein defaulted under the terms of the Loan Documents and
Creditor commenced a Foreclosure proceeding. On January 10, 2019,
the Creditor obtained a Final Foreclosure Judgment.
On January 9, 2023, the Creditor issued a Notice of Sale to enforce
the Judgment, listing a sale date of February 9, 2023.
On February 7, 2023, two days before the scheduled foreclosure
sale, the Debtor filed the Chapter 11 case in the Eastern of New
York.
The Debtor listed a lease for the Property on Schedule G, listing
Burshstein as the tenant.
To date, the Debtor has yet to file a Motion to Use Cash Collateral
and yet to file monthly operating reports for the month of February
2023.
The Debtor has failed to obtain permission to use cash collateral.
U.S. Bank contends the unauthorized use of cash collateral alone
constitutes cause to dismiss or convert a Chapter 11 Case, citing
11 U.S.C. section 1112(b)(4)(D).
The Mortgage includes an "Assignment of Rents" provisions granting
U.S. Bank a security interest in the rental income derived from the
property. The Creditor holds a security interest not only in the
real property, but also in the rental income derived from the
property. Pursuant to 11 U.S.C. section 363(a), the Debtor is
prohibited from using the rental income without court authorization
or creditor consent.
The bank objects to any use of the cash collateral unless the
Debtor commences adequate protection payments. To the extent the
Property has been producing rental income, it appears the Debtor
has been using cash collateral in violation of the Bankruptcy Code.
The Creditor is being harmed by the Debtor's use of cash collateral
as the Subject Loan remains in default while the Creditor maintain
taxes and insurance for the Property.
Based on the foregoing, the bank an immediate accounting and
turnover of all income generated by the Property from the petition
date to present. At a minimum, the Creditor asserts it is entitled
to adequate protection payments equal to the gross income less
expenses.
The Creditor requests that it be granted replacement liens in the
Debtor's post-petition rents, cash, accounts receivable and
inventory, and all proceeds thereof, to the same extent and
priority as any duly perfected and unavoidable liens in cash
collateral held by Creditor as of the Petition Date.
A hearing on the matter is set for April 14, 2023 at 10:30 a.m.
A copy of the motion is available at https://bit.ly/3l34xWa from
PacerMonitor.com.
About 2340 ND Corp.
2340 ND Corp. owns in fee simple title a real property located at
2340 National Drive, Brooklyn, N.Y., valued at $1.6 million.
2340 ND filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-40412) on Feb. 7,
2023, with total assets of $1,600,000 and total liabilities of
$931,124. Eugene Burshtein, president and owner of 2340 ND, signed
the petition.
Judge Nancy Hershey Lord oversees the case.
The Debtor is represented by Robert J. Musso, Esq., at Rosenberg
Musso & Weiner, LLP.
ABACUS DATA: Goldman Sachs Marks $1.2M Loan at 52% Off
------------------------------------------------------
Goldman Sachs BDC, Inc. has marked its $1,220,000 loan extended to
Abacus Data Holdings, Inc. to market at $586,000 or 48% of the
outstanding amount, as of December 31, 2022, according to a
disclosure contained in Goldman Sachs's Form 10-K for the fiscal
year ended December 31, 2022, filed with the Securities and
Exchange Commission on February 23, 2023.
Goldman Sachs is a participant in a First Lien Senior Secured Debt
Loan to Abacus Data Holdings, Inc. The loan accrues interest at a
rate of 10.64% (L+6.25%) per annum. The loan matures on March 10,
2027.
Goldman Sachs BDC, Inc. was initially established as Goldman Sachs
Liberty Harbor Capital, LLC, a single member Delaware limited
liability company, on September 26, 2012 and commenced operations
on November 15, 2012 with The Goldman Sachs Group, Inc. as its sole
member. On March 29, 2013, the Company elected to be regulated as a
business development company under the Investment Company Act of
1940, as amended. Effective April 1, 2013, the Company converted
from a SMLLC to a Delaware corporation.
In addition, the Company has elected to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code
of 1986, as amended, commencing with its taxable year ended
December 31, 2013. Goldman Sachs Asset Management, L.P., a Delaware
limited partnership and an affiliate of Goldman Sachs & Co. LLC, is
the investment adviser of the Company.
Abacus Data offers cloud digital transformation application
platform that delivers automate accounting billing, payments,
operations, and data analysis software for lawyers. It serves
customers in the United States, United Kingdom, and Canada.
ACQUIA INCORPORATION: Goldman Sachs Marks $3.2M Loan at 43% Off
---------------------------------------------------------------
Goldman Sachs BDC, Inc has marked its $3,268,000 loan extended to
Acquia Inc to market at $1,848,000 or 57% of the outstanding
amount, as of December 31, 2022, according to a disclosure
contained in Goldman Sachs's Form 10-K for the fiscal year ended
December 31, 2022, filed with the Securities and Exchange
Commission on February 23, 2023.
Goldman Sachs is a participant in a First Lien Senior Secured Debt
Loan to Acquia Inc. The loan accrues interest at a rate of 12.16%
(L+7.00%) per annum. The loan matures on October 31, 2025.
Goldman Sachs BDC, Inc. was initially established as Goldman Sachs
Liberty Harbor Capital, LLC, a single member Delaware limited
liability company, on September 26, 2012 and commenced operations
on November 15, 2012 with The Goldman Sachs Group, Inc. as its sole
member. On March 29, 2013, the Company elected to be regulated as a
business development company under the Investment Company Act of
1940, as amended. Effective April 1, 2013, the Company converted
from a SMLLC to a Delaware corporation.
In addition, the Company has elected to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code
of 1986, as amended, commencing with its taxable year ended
December 31, 2013. Goldman Sachs Asset Management, L.P., a Delaware
limited partnership and an affiliate of Goldman Sachs & Co. LLC, is
the investment adviser of the Company.
Acquia Inc. provides software services. The Company offers site and
campaign studio, cloud, lightning, lift, commerce, marketing, and
other digital software solutions. Acquia serves clients worldwide.
AD1 URBAN: Seeks to Hire RobertDouglas as Investment Banker
-----------------------------------------------------------
AD1 Urban Palm Bay, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire
RobertDouglas as their investment banker.
The firm's services include:
a. soliciting proposals for (i) the placement of new debt or
the restructuring of existing debt, in either case in an amount
sufficient to repay the HPS Investment Partners loan in full in
cash, or (ii) any other transaction for the Debtors' properties,
including a sale or an equity recapitalization;
b. regularly informing the Debtors as to the status of
discussions concerning any sale or financing by regular written
report;
c. preparing marketing materials for the properties containing
such information as the Debtors and RobertDouglas deem appropriate;
and
d. providing consulting and analytical services to support
filings or any other actions requested by the Debtors or their
counsel, including those that may require testifying or being
deposed.
RobertDouglas will charge these hourly fees:
Managing Director $750
Senior Vice President $500
Vice President $400
Associate/Analyst $300
The firm received a retainer of $50,000.
As disclosed in court filings, RobertDouglas is a "disinterested
person" as defined by Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Douglas P. Hercher
RobertDouglas
350 5th Ave #5310
New York, NY 10118
Phone: +1 212-993-7424
About AD1 Urban Palm Bay
AD1 Urban Palm Bay, LLC and affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10074) on Jan. 22, 2023. In the petition signed by Alex
Fridzon, as responsible fiduciary, the Debtor disclosed up to $50
million in both assets and liabilities.
Judge Karen B. Owens oversees the case.
The Debtor tapped Ian J. Bambrick, Esq., at Faegre Drinker Biddle
and Reath, LLP as legal counsel and RobertDouglas as investment
banker.
AEMETIS INC: Incurs $107.8 Million Net Loss in 2022
---------------------------------------------------
Aemetis, Inc. has filed with the Securities and Exchange Commission
its Annual Report on Form 10-K disclosing a net loss of $107.76
million on $256.51 million of revenues for the year ended Dec. 31,
2022, compared to a net loss of $47.15 million on $211.95 million
of revenues for the year ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $207.11 million in total
assets, $88.28 million in total current liabilities, $320.68
million in total long-term liabilities, and a total stockholders'
deficit of $201.85 million.
"Revenues for 2022 increased 21% compared to 2021, largely due to
price increases in ethanol feed co-products in the United States
and demand from oil marketing companies in India," said Todd Waltz,
chief financial officer of Aemetis. "Revenues during 2022
increased to $257 million compared to $212 million during 2021.
Capital expenditures for carbon intensity reduction projects were
$49.5 million for 2022 as our engineering and construction teams
moved forward with the initiatives outlined in our Five Year Plan,"
added Waltz.
"In addition to achieving operational milestones during 2022, we
closed three new credit facilities for an aggregate of up to $125
million to fund the completion of the carbon reduction projects at
the Keyes ethanol plant, engineering and permitting for the
jet/diesel plant, and engineering and permitting of the two carbon
sequestration wells at the Riverbank and Keyes plant sites. New
financing includes the first USDA-guaranteed, 20-year financing to
construct dairy digesters and other biogas project assets," said
Eric McAfee, Chairman and CEO of Aemetis. "We invite investors to
review the updated Aemetis Corporate Presentation on the Aemetis
home page prior to the earnings call."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/738214/000143774923005872/amtx20221231_10k.htm
About Aemetis
Headquartered in Cupertino, California, Aemetis, Inc. --
http://www.aemetis.com-- is an international renewable natural
gas, renewable fuels and byproducts company focused on the
acquisition, development and commercialization of innovative
technologies that replace traditional petroleum-based products. The
Company operates in two reportable geographic segments: "North
America" and "India."
AEMETIS INC: Registers 1.4M Common Shares Under 2019 Stock Plan
---------------------------------------------------------------
Aemetis, Inc. has filed a Form S-8 registration statement with the
Securities and Exchange Commission for the purpose of registering
1,434,764 shares of the Company's common stock, $0.001 par value
per share, under the Amended and Restated Aemetis, Inc. 2019 Stock
Plan, which Common Stock is in addition to the shares of Common
Stock registered on the Company's Form S-8 filed on March 10, 2022,
March 14, 2021, August 28, 2020 and March 12, 2020.
The total number of shares of the Company's Common Stock issuable
under the 2019 Plan, as of March 9, 2023, is 107,770 shares, plus
an additional number of shares of Common Stock subject to options
or other awards granted under the Company's Second Amended and
Restated 2007 Stock Plan, as amended, and Zymetis, Inc. 2006 Stock
Incentive Plan that were outstanding as of the effective date of
the 2019 Plan and that on or after the effective date of the 2019
Plan, are forfeited, cancelled, returned to the Company for failure
to satisfy vesting requirements, settled for cash or otherwise
terminated without payment being made thereunder. A full-text copy
of the prospectus is available for free at:
https://www.sec.gov/Archives/edgar/data/738214/000143774923005873/amtx20230302_s8.htm
About Aemetis
Headquartered in Cupertino, California, Aemetis, Inc. --
http://www.aemetis.com-- is an international renewable natural
gas, renewable fuels and byproducts company focused on the
acquisition, development and commercialization of innovative
technologies that replace traditional petroleum-based products.
The Company operates in two reportable geographic segments: "North
America" and "India."
Aemetis reported a net loss of $107.76 million for the year ended
Dec. 31, 2022, compared to a net loss of $47.15 million for the
year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had
$207.11 million in total assets, $88.28 million in total current
liabilities, $320.68 million in total long-term liabilities, and a
total stockholders' deficit of $201.85 million.
AGUA HOLDINGS: Bankr. Court Lacks Jurisdiction Over Adversary Case
------------------------------------------------------------------
Bankruptcy Judge David W. Hercher for the District of Oregon has
issued a Memorandum Decision on the Motion to Remand filed by David
Burns in the adversary case styled In re Agua Holdings, Inc., fka
PPV, Inc., aka AHI, Debtor. David Burns, an individual, Plaintiff,
v. James Thuney, an individual, and Joe Thuney, an individual,
Defendants, Case No. 19-34517-dwh11 (Lead Case), Adversary
Proceeding No. 23-03003-dwh, (Bankr. D. Or.).
This action was removed from the Multnomah County Circuit Court by
the Defendants, James and Joe Thuney, who filed a notice of removal
in the bankruptcy court, resulting in the opening of this
bankruptcy court adversary proceeding. The primary asserted basis
for removal is that this action is related to the chapter 11
bankruptcy case of Agua Holdings, Inc. (then known as PPV, Inc.),
pending in the bankruptcy court as Case No. 19-34517.
In December 2022, David Burns filed this action in state court. It
includes the allegation that, in a prior Multnomah County Circuit
Court action (No. 17CV30250), the court ordered that PPV buy
Burns's shares in PPV. The Thuneys attached to their remand motion
a copy of the purchase order. The findings of that order make no
reference to the guaranties that are the subject of the removed
action, but the order does include a finding that the Thuneys, as
controlling shareholders of PPV, engaged in oppressive conduct of
Burns by terminating dividend payments to him and demanding that he
guarantee a creditor of PPV.
Now, Burns moves to remand this action to the state court for lack
of subject-matter jurisdiction or, alternatively, on equitable
grounds.
Judge Hercher determines that the bankruptcy court lacks
jurisdiction over this action, and any jurisdiction is only in the
district court under 1332(a). He said that "I will make a report
and recommendation to the district court, recommending that. . . a
district judge consider whether the Thuneys' notice of removal
sufficed in form to remove this action under 1441(a). . . and. . .
whether, in view of the bankruptcy court's status as a statutory
unit of the district court, the Thuneys' filing of the notice of
removal in the bankruptcy court also constituted filing it in the
district court under 1446(a). If the answer to both questions is
yes, a district judge could consider this action to have been
removed to the district court under 1441(a) and then proceed to
administer this action, including the other pending motions, as a
district court action. If the answer to either question is no, the
district court could either remand this action or notify me of its
decision, after which I would remand it."
A full-text copy of the Memorandum Decision dated March 2, 2023 is
available at https://tinyurl.com/yuvyvys5 from Leagle.com.
About PPV, Inc.
PPV, Inc. -- https://www.ppvnw.com/ -- is a waste management
services provider in Portland, Oregon. The company offers
industrial cleaning, recycling, treatment, and technical waste
management services.
PPV, Inc., filed a petition under Chapter 11 of the Bankruptcy Code
(Bankr. D. Ore. Lead Case No. 19-34517) on Dec. 10, 2019. In the
petition signed by Joseph J. Thuney, president, the Debtor
disclosed between $1 million and $10 million in both assets and
liabilities.
Douglas R. Ricks, Esq. at Vanden Bos & Chapman, LLP, is the
Debtor's counsel.
Affiliate Bravo Environmental NW, Inc., also filed for Chapter 11
bankruptcy (Bankr. D. Ore. Case 19-34518) on Dec. 10, 2019.
The cases are jointly administered before the Honorable David W.
Hercher. No creditors' committee has been appointed in this case.
ANTHYMTV CO: Seeks to Tap Fitzgerald Law as Bankruptcy Counsel
--------------------------------------------------------------
AnthymTV Co. seeks approval from the U.S. Bankruptcy Court for the
District of Massachusetts to hire Fitzgerald Law, P.C. as its
bankruptcy counsel.
The firm's services include:
(a) advising the Debtor regarding its powers, rights, and
duties in the continued management and operation of its business;
(b) advising the Debtor regarding the legal and administrative
requirements of its Chapter 11 case;
(c) taking all necessary actions to protect and preserve the
Debtor's estate;
(d) preparing legal papers;
(e) representing the Debtor's interests at creditors' meeting
and at any other hearing scheduled before the bankruptcy court
related to the Debtor;
(f) assisting in the formulation, negotiation, and
implementation of a Chapter 11 plan and all documents related
thereto;
(g) assisting the Debtor in the negotiation, documentation,
implementation, consummation, and closing of corporate
transactions;
(h) assisting the Debtor with respect to the use of cash
collateral;
(i) reviewing and analyzing all claims filed against the
Debtor's bankruptcy estate and representing the Debtor in
connection with the possible prosecution of objections to claims;
(j) advising the Debtor concerning any executory contract and
unexpired leases;
(k) coordinating with other professionals employed in the case
to rehabilitate the Debtor's affairs; and
(l) other bankruptcy-related legal services.
The firm received a retainer in the amount of $37,500.
Andrea O'Connor, Esq., an attorney at Fitzgerald Law, disclosed in
a court filing that the firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Andrea M. O'Connor, Esq.
Fitzgerald Law, PC
46 Center Square
East Longmeadow, MA 01028
Telephone: (413) 486-1110
Email: amo@fitzgeralatlaw.com
About AnthymTV Co.
AnthymTV Co. sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Mass. Case No. 23-10324) on March 3,
2023, with $500,001 to $1 million in both assets and liabilities.
Nicholas Cartier, president of AnthymTV, signed the petition.
Judge Janet E. Bostwick oversees the case.
Andrea M. O'Connor, Esq., at Fitzgerald Law, P.C. represents the
Debtor as counsel.
APEX LEGACY: Files Emergency Bid to Use Cash Collateral
-------------------------------------------------------
Apex Legacy TX, LLC asks the U.S. Bankruptcy Court for the Eastern
District of Texas, Sherman Division, for authority to use cash
collateral to make payroll and pay other immediate expenses.
Fannie Mae asserts a lien on the Debtor's apartment property and
the rents generated. The Debtor says this Collateral may
constitute the cash collateral of Fannie as that term is defined in
the Bankruptcy Code.
An emergency exists in that the entire chance of the Debtor's
reorganizing depends on its ability to immediately access the
alleged Fannie Collateral to continue operations while effectuating
a plan of reorganization.
As adequate protection, the Debtor proposes to grant Fannie
replacement liens under 11 U.S.C. section 552, and other and
further relief as the Debtor may show itself justly entitled.
A copy of the motion and the Debtor's budget is available at
https://bit.ly/3YJ4xIx from PacerMonitor.com.
The Debtor projects $20,000 in income for 30 days.
About Apex Legacy TX, LLC
Apex Legacy TX, LLC's business consists of the ownership and
operation of a 41-unit apartment complex in Sherman, Texas.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Tex. Case No. 23-40428) on March 7,
2023. In the petition signed by Oron Zarum, managing member, the
Debtor disclosed up to $50,000 in both assets and liabilities.
Eric A. Liepins, Esq., represents the Debtor as legal counsel.
ARCADE BEAUTY: Davis Polk Advises Lenders on Restructuring
----------------------------------------------------------
Davis Polk advised an ad hoc group of secured lenders in connection
with an out-of-court restructuring and recapitalization of Arcade
Beauty and its affiliates. The transaction closed on March 8, 2023,
with the support of 100% of the company's lenders and shareholders.
As part of the recapitalization, Arcade Beauty extinguished a
substantial amount of debt and received a new capital infusion.
Arcade Beauty is now owned by a consortium of leading global
investment firms.
Arcade Beauty is a leading provider of solutions to the beauty
industry, including sampling and retail solutions. The company has
a global footprint, with its 12 facilities servicing more than 400
beauty brands worldwide. It was formed in 2014 via the merger of
Arcade Marketing and Bioplan, two prominent sample packaging
businesses based in New York and Paris, respectively.
The Davis Polk restructuring team included partner Damian S.
Schaible, counsel Aryeh Ethan Falk and associate Abraham Bane. The
finance team included counsel Christian Fischer and associate Gene
Goldmintz. The corporate team included partner Stephen Salmon and
associates Tierney O'Rourke and Sarah Catherine Chouinard. Partner
Patrick E. Sigmon provided tax advice. Counsel Daniel P. Herrmann
provided advice on executive compensation. Members of the Davis
Polk team are based in the New York and Northern California
offices.
Davis Polk refers to Davis Polk & Wardwell LLP, a New York limited
liability partnership, and its associated entities.
ARSENAL INTERMEDIATE: Unsecureds to Recover 5% to 25% in Plan
-------------------------------------------------------------
Arsenal Intermediate Holdings, LLC, and its Affiliated Debtors
filed with the U.S. Bankruptcy Court for the District of Delaware a
Joint Chapter 11 Plan of Liquidation dated March 9, 2023.
The Debtors' business was founded in 2006 as an independent captive
management and alternative-risk manager. It provides customer
solutions in risk management for captive insurance companies and
various other insurance entities through its office location in
Alabama.
As of Dec. 31, 2022, the Debtors' assets, as listed on their
consolidated unaudited balance sheet, were worth negative $351,080,
which was comprised of negative $2,775 in cash, $112,401 in
accounts receivable, $89,390 in prepaid expenses and other assets,
$159,744.00 in property and equipment, and a negative $709,840 of
intercompany transfers.
On the date thereof, the Debtors' liabilities included $235,709.00
in accounts payable, $326,778.00 in accrued liabilities,
$137,495.00 in liabilities with respect to their office lease, and
other liabilities in an amount of $137,495.00, for a total of
$699,982.00 in liabilities as of December 31, 2022. As reflected in
the Debtors' consolidated balance sheet, the value of the Debtors'
assets as of 2022's year-end stand in stark contrast to the value
of the Debtors' assets at 2021's year-end, due to a write off of
$45,345,561.00 of good will and intangible assets as a result of
the events.
The Debtors filed the Bidding Procedures and Sale Motion seeking
entry of an order (a)(i) approving bidding procedures relating to
the sale of substantially all of their assets, (ii) scheduling an
auction for, and a hearing to approve, the sale, (iii) approving
notice of the auction and hearing (iv) approving procedures for
assumption and assignment of executory contracts and Unexpired
Leases, and (b)(i) approving the sale of their assets free and
clear of all liens, claims, and encumbrances, (ii) approving
assumption and assignment of executory contracts and Unexpired
Leases, and (iii) granting related relief.
The Debtors' Sale Process is running parallel with the Debtors'
Plan process, and is intended to culminate in a hearing to approve
one or more Sales and to confirm the Plan in mid-April. The Debtors
believe that conducting their marketing and Sale Process through
the Chapter 11 Cases with the attendant protections and
transparency required by the Bankruptcy Code is the best path
forward for maximizing Creditor recoveries.
Class 4 consists of General Unsecured Claims. Unless the holder of
a Class 3 General Unsecured Claim agrees to different treatment,
each holder of an Allowed General Unsecured Claim shall receive its
pro rata share of the GUC Distribution Amount. This Class will
receive a distribution of 5-25% of their allowed claims. This Class
is impaired.
Class 5 consists of Intercompany Claims. On the Effective Date, all
Intercompany Claims shall be cancelled and discharged, with the
holders of such Intercompany Claims receiving no distribution on
account of such Intercompany Claims.
Class 6 consists of Interest Holders. On the Effective Date, all
Interests in the Debtors shall be extinguished as of the Effective
Date, and the owners thereof shall receive no distribution on
account of such Interest.
On or before the Effective Date, the Debtors and the prevailing
purchasers will have consummated the Sale or Sales, as applicable,
pursuant to the terms and conditions of the forthcoming purchase
agreements, including, without limitation, selling their assets
free and clear of certain liens and encumbrances to the extent set
forth in the purchase agreements, and assuming and assigning to the
prevailing purchasers certain Executory Contracts and Unexpired
Leases.
The Debtors shall receive the Cash Proceeds of the Sale(s) and
distributing or retaining the Cash Proceeds of the Sale(s). On the
Effective Date, the Debtors shall fund from the Cash Proceeds the
Wind Down Budget Reserve Account with the Wind Down Budget Cash
Amount. The balance of Cash Proceeds from any Sale shall be held by
the Debtors and distributed in accordance with the Plan on the
Effective Date.
On the Effective Date, the Beyond Risk Settlement shall be approved
and effective, without the need for any further approvals, and
without any requirement for further action by the Debtors or any
other person or entity other than as expressly stated in this
Plan.
A full-text copy of the Joint Liquidating Plan dated March 9, 2023
is available at https://bit.ly/3TgScKk from PacerMonitor.com at no
charge.
Counsel to the Debtors:
Sean M. Beach, Esq.
Elizabeth S. Justison, Esq.
S. Alexander Faris, Esq.
Shella Borovinskaya, Esq.
Young Conaway Stargatt & Taylor, LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Telephone: (302) 571-6600
Facsimile: (302) 571-1256
E-mail: sbeach@ycst.com
ejustison@ycst.com
afaris@ycst.com
sborovinskaya@ycst.com
About Arsenal Intermediate Holdings
Arsenal Intermediate Holdings, LLC was founded in 2006 as an
independent captive management and alternative-risk manager. It
provides broad customer solutions in risk management for captive
insurance companies and various other insurance entities through
its office location in Alabama.
Arsenal Intermediate Holdings and its affiliates filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Del. Case No. 23-10097) on Jan. 26, 2023, listing up to
$500,000 in assets and up to $10 million in liabilities. Michael
Wyse, chief restructuring officer, signed the petition.
Judge Craig T. Goldblatt oversees the cases.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP as legal
counsel; Polsinelli PC as special regulatory counsel; and Wyse
Advisors LLC to provide chief restructuring officer and additional
personnel. Kroll Restructuring Administration LLC is the Debtors'
claims and noticing agent and administrative advisor.
ARTS DISTRICT: Case Summary & Five Unsecured Creditors
------------------------------------------------------
Debtor: Arts District Real Estate # 1 LLC
1995 E Diaz Drive
Amargosa Valley, NV 89020
Business Description: The Debtor is engaged in activities
related to real estate.
Chapter 11 Petition Date: March 14, 2023
Court: United States Bankruptcy Court
District of Nevada
Case No.: 23-10963
Debtor's Counsel: Mitchell S. Bisson, Esq.
LAW OFFICES OF MITCHELL S. BISSON, ESQ.
911 N Buffalo Dr., Ste. 202
Las Vegas, NV 89128
Tel: 702-602-4990
Email: mbisson@bissonlegal.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Robert Ford as manager.
A copy of the Debtor's list of five unsecured creditors is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/RMOVH5A/ARTS_DISTRICT_REAL_ESTATE__1_LLC__nvbke-23-10963__0002.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/RD73FWY/ARTS_DISTRICT_REAL_ESTATE__1_LLC__nvbke-23-10963__0001.0.pdf?mcid=tGE4TAMA
ASSOCIATED MATERIALS: Fitch Affirms B LongTerm IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed the ratings of New AMI I, LLC (dba
Associated Materials), including the company's Long-Term Issuer
Default Rating (IDR) at 'B', its $200 million ABL facility at
'BB'/'RR1' and its $550 million term loan B at 'B+'/'RR3'. The
Rating Outlook is Stable.
The 'B' IDR reflects the company's market position and competitive
pressures in the highly fragmented windows, cladding and building
products distribution markets. The company's modest EBITDA and FCF
margins, the volatility of raw material costs, and the cyclicality
of the residential construction market are also factored into the
rating. Associated Materials' IDR also reflects its broad product
offering of exterior building products, its extensive manufacturing
and distribution footprint and unique dual-distribution strategy,
meaningful exposure to the less cyclical repair and remodel sector,
adequate liquidity position and modest leverage levels. The Stable
Rating Outlook is supported by the company's current low leverage,
which provides sufficient rating headroom ahead of an expected
weaker demand environment in the next 12-18 months.
KEY RATING DRIVERS
Rating Headroom Expected to Shrink: Associated Materials (AM)
currently has solid credit metrics for its 'B' IDR, which provide
adequate rating headroom relative to the negative rating
sensitivities, including EBITDA leverage above 5.5x and EBITDA
interest coverage below 2.0x. Fitch-calculated EBITDA leverage is
forecast to be about 3.7x at YE 2022, while EBITDA interest
coverage is forecast to settle around 3x in 2022.
Fitch expects AM's rating headroom to shrink in the next two years
due to weaker housing activity and repair and remodel (R&R)
spending. Fitch expects EBITDA leverage will increase to 4.8x-5.3x
in 2023 and 2024, before declining below 4.5x in 2025. EBITDA
interest coverage is forecast to be 2.0x-2.5x in the next few
years. These credit metrics would continue to support the 'B' IDR,
although a weaker than expected housing environment could result in
higher leverage and lower coverage, which could pressure the
ratings.
Weaker Operating Environment: Fitch forecasts a weaker demand
environment in the next 12-18 months as new residential
construction and R&R activity are projected to decline amid an
uncertain economic backdrop and affordability issues. Fitch expects
AM's revenues will fall 9.5%-10.5% during 2023, driven by
meaningfully lower housing starts and a modest decline in R&R
activity. Fitch's rating case forecast assumes revenues are
relatively flat in 2024 due to continued weakness in new
residential construction through at least the first half of 2024.
Fitch projects EBITDA margin declines 150bps-200 bps in 2023 due to
lower volumes and Fitch's expectation of somewhat diminished
pricing power in the face of still-elevated input costs. EBITDA
margins are forecast to flatten in 2024 and improve modestly in
2025.
Volatility of Raw Material Costs: The company has historically been
able to pass along higher input costs through selling price
increases, including in 2022 when the industry experienced
meaningfully higher material, labor and freight costs. Fitch
believes that it may be more challenging to continue to increase
pricing if input costs inflate further, given meaningful increases
already realized in the past year and expectations of a weaker
demand environment in the next 12-18 months. These factors are
risks to Fitch's forecast and could result in worse margin
performance and weaker metrics than Fitch currently anticipates.
End-Market Diversification Tempers Cyclicality: Fitch views AM's
well-diversified end-market exposure positively, with about 70% of
revenues directed to the repair and remodel segment, which is less
cyclical than new construction activity. The remaining 30% of
revenues are directed to the new construction market. While Fitch
views exposure to the R&R segment positively, Fitch notes that AM's
window and cladding products are generally higher-priced products
and more discretionary compared to less volatile non-discretionary
building products like roofing and lower priced products like paint
and plumbing products.
Nevertheless, Fitch expects the company to generate relatively
stable revenues and margins through the cycle. During the great
financial recession, AM's revenues fell 16% between 2006 and 2009
and EBITDA declined 27% from 2006 to 2008, although the company at
that time had a heavier exposure to the new construction, with 40%
of sales derived from this market.
Broad Product Offering and Distribution Footprint: AM has a
comprehensive offering of exterior home products, allowing the
company to be a single-source provider of these products.
Manufactured products include windows and a portfolio of cladding
and complementary products. This is supplemented by AM's Outside
Purchased Products (OPP) and installation services, which provides
various exterior building products including roofing, other
cladding products, insulation and other complementary products.
AM has a broad manufacturing and distribution footprint and a
unique dual-distribution strategy that combines a network of
company-operated supply centers (75% of sales) with a complementary
network of independent distributors and dealers (25%). Fitch
believes this approach is a credit positive as AM has more
operational control through its company-operated supply centers
while also expanding and diversifying its customer base and
geographic reach through its direct sales channel. However, this
approach also results in higher fixed costs for the company
compared with other manufacturers who sell to direct sales
channels, which could pressure margins disproportionately in a weak
operating environment.
Modest Profitability and FCF: AM's EBITDA and FCF margins are
weaker than Fitch-rated competitors in the exterior building
products sector. The company's EBITDA margins are somewhat weighed
down by lower margins from its OPP and Other Services, which have
lower contribution margins compared to AM's manufactured products.
AM's Fitch-calculated EBITDA margin of around 8% is below those of
similarly and higher-rated manufacturer peers, whose EBITDA margins
are in the low double-digit to mid-teen percentages. Additionally,
Fitch-rated building products distributors have EBITDA margins in
the high-single digit to low-teen percentages, which generally
reflect their large scale.
Fitch expects AM will generate FCF (cash flow from operations less
capex and dividends) margin of negative 1.5% to 2.0% in 2022 due to
higher working capital investments. Fitch projects the company will
generate FCF margin of 2%-3% in 2023 on slightly positive working
capital, offset by modestly higher capex. Longer term, Fitch
expects FCF margins of 2% or higher on more normalized capex
levels. This should allow the company to strengthen liquidity or
modestly pay down debt.
SVPGlobal Ownership: Fitch views the moderate leverage employed by
the sponsor for its acquisition of Associated Materials as an
indication of a more-conservative posture compared with many LBO
transactions in the building products space in recent years, which
generally had high initial leverage levels. Nevertheless, Fitch
views the ownership concentration and lack of board independence as
a potential risk to sound capital allocation strategies. Fitch's
rating case forecast does not assume dividend payments to the
sponsor during the rating horizon, with cash flow from operations
directed towards growth capex and scheduled debt amortization.
DERIVATION SUMMARY
AM's Fitch-calculated EBITDA leverage is higher compared with MIWD
Holding Company LLC (BB-/Stable). AM and MIWD are relatively
similar in size, but AM has a broader product offering. AM's EBITDA
and FCF margins are lower compared to MIWD but has significantly
greater exposure to the less-cyclical repair and remodel segment
than MIWD.
KEY ASSUMPTIONS
- Housing starts fall 20% in 2023 and decline low single-digits
in 2024;
- Repair and remodel spending contracts 6% in 2023 and is flat
to slightly lower in 2024;
- Revenues grow 15%-16% in 2022, decline 9.5%-10.5% in 2023,
and remain flat in 2024;
- EBITDA margin of around 8%-8.5% in 2022 and 6%-7% in 2023
and 2024;
- FCF margin of negative 1.5%-2% in 2022, 2%-3% in 2023 and
1%-2% in 2024;
- EBITDA leverage of 3.7x at YE 2022 and around 5x at the
end of 2023 and 2024.
RECOVERY ANALYSIS ASSUMPTIONS
The recovery analysis assumes that AM would be reorganized as a
going-concern (GC) in bankruptcy rather than liquidated. Fitch has
assumed a 10% administrative claim.
AM's GC EBITDA of $95 million estimates a post-restructuring
sustainable level of EBITDA. The GC EBITDA is based on Fitch's
assumption that distress would arise from weakening in the
residential construction market combined with a loss of a major
customer or several smaller customers. Fitch estimates that annual
revenues would be about 25% below 3Q22 LTM levels and
Fitch-adjusted EBITDA margins of about 7% would capture the lower
revenue base of the company following the distress, plus a
sustainable margin profile after right-sizing, which results in
Fitch's $95 million GC EBITDA assumption. During the last cycle,
AM's revenues fell 16% peak to trough while its EBITDA declined
about 27%.
Fitch assumed a 5.5x enterprise value (EV) multiple to calculate
the GC EV in a recovery scenario. The company was acquired by funds
managed by SVPGlobal at a 6.6x pro forma adjusted EBITDA multiple
or 7.4x adjusted EBITDA multiple. The 5.5x multiple is similar to
the multiple applied in the analysis of Doman Building Products
Group and lower than the EV multiples used for LBM Acquisition, LLC
(6.0x), Park River Holdings, Inc. (6.0x) and Chariot Holdings, LLC
(dba Chamberlain Group; 6.5x).
Fitch assumes that the borrowing base under the company's $200
million ABL would shrink in a recovery scenario as inventory and
receivable balances would likely decline in tandem with revenues
and EBITDA. To determine the ABL amount outstanding at the time of
a potential recovery scenario, Fitch assumes the borrowing base
would be about 70% of total ABL capacity of $200 million. The
analysis results in a recovery corresponding to an 'RR1' for the
ABL revolver and a recovery corresponding to an 'RR3' for the term
loan B.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch's expectation that EBITDA leverage will be sustained
below 4.0x;
- EBITDA margins are consistently above 9%;
- Fitch's expectation that the company will maintain FCF
margins above 2%;
- The company increases its scale.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Fitch's expectation that EBITDA leverage will be sustained
above 5.5x;
- EBITDA interest coverage consistently below 2.0x;
- Fitch's expectation that FCF generation will be sustained
at neutral or negative levels.
LIQUIDITY AND DEBT STRUCTURE
Good Liquidity Position: The company has good liquidity position,
supported by $16 million of cash as of Oct. 1, 2022 and $135.2
million of borrowing availability under its $200 million ABL
facility that matures in 2027. AM had about $55 million borrowed
under its ABL facility as of Oct. 1, 2022. The company does not
have any debt maturities until 2029, and quarterly amortization of
0.25% of the original principal amount of the term loan B is
manageable given Fitch's expectation of low-single-digit FCF
generation in the next few years.
ISSUER PROFILE
New AMI I, LLC (dba Associated Materials) is a vertically
integrated manufacturer and distributor of exterior building
products in the U.S. and Canada. Manufactured products include
entry and mid-level vinyl windows and vinyl and composite cladding
and metal coil and cladding. The company also sells complementary
products that are sourced from other manufacturers, such as roofing
materials, cladding materials, insulation, exterior doors and
equipment and tools.
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
----------- ------ -------- -----
New AMI I, LLC LT IDR B Affirmed B
senior secured LT BB Affirmed RR1 BB
senior secured LT B+ Affirmed RR3 B+
ATLAS HEAVY: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Atlas Heavy Engine Co.
DBA DBA Worldwide Diesel
1515 Old US Highway 31 North
Niles, MI 49120
Business Description: The Debtor provides diesel engines and
diesel engine parts.
Chapter 11 Petition Date: March 14, 2023
Court: United States Bankruptcy Court
Western District of Michigan
Case No.: 23-00530
Judge: Hon. Scott W. Dales
Debtor's Counsel: Steven M. Bylenga, Esq.
CBH ATTORNEYS & COUNSELORS, PLLC
Main Office
25 Division Avenue S., Suite 500
Grand Rapids, MI 49503
Tel: 616-608-3061
Fax: 616-719-3782
Email: nikki@chasebylenga.com
Total Assets: $1,107,418
Total Liabilities: $4,253,558
The petition was signed by Richard J. Campbell as
president/member.
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/GAJGMOY/Atlas_Heavy_Engine_Co__miwbke-23-00530__0001.0.pdf?mcid=tGE4TAMA
BEATO AUTO SALES: Lines Up $1.5 Million Funding
-----------------------------------------------
Beato Auto Sales, Inc. asks the U.S. Bankruptcy Court for the
District of New Hampshire for authority to use cash collateral in
light of its agreement for post-petition borrowing to fund future
operations.
The Court denied the Debtor's ex parte motion to use cash
collateral on February 17, 2023. Since then the Debtor has ceased
all operations and sought lending to fund future purchases and
operations. The Debtor has now found such a loan.
The Debtor has so-called floor plan lenders with secured claims in
the Debtor's used car inventory. The remaining secured creditors
are the US Small Business Administration and two so-called merchant
cash advance lenders who have liens in Debtor's future receipts and
other collateral. They have not assented to the relief requested
but, will not suffer an impairment of their collateral position as
a result of the Debtor's operations.
The Debtor contends access to cash collateral is necessary to
operate the Debtor's business through confirmation of a subchapter
V chapter 11 plan of reorganization. Specifically, the Debtor
needs funding to (i) make payroll to the Debtor's employees
essential to its continued operations; (ii) pay insurance premiums
as necessary to ensure continuation of the necessary insurance
coverage, (iii) pay vendors, suppliers and utilities for ongoing
supplies and services; (iv) pay other ordinary and necessary
expenses to prevent an immediate cessation of the business; and (v)
pay the Debtor's professionals and the fees of the United States
Trustee.
The Debtor is finalizing the documentation of a $1.5 million line
of credit and will file a motion to approve the loan. The Debtor
plans to use $300,000 of those proceeds for working capital and the
balance for the purchase of used automobiles for sale in its retail
business.
Since the Debtor intends to sell its used car inventory in the
normal course of its business operations during the Use Period and
correspondingly reduce its secured debt, but not reduce either its
cash or other assets, none of its secured creditors are harmed
during the Use Period.
A copy of the motion is available at https://bit.ly/402bFkk from
PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3TcqmPz from
PacerMonitor.com.
About Beato Auto Sales, Inc.
Beato Auto Sales, Inc. is engaged in the retail sale of used cars.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.H. Case No. 23-10064) on February 13,
2023. In the petition signed by Rafael Beato, president, the
Debtor disclosed up to $50,000 in assets and up to $10 million in
liabilities.
Judge Bruce A. Harwood oversees the case.
Peter N. Tamposi, Esq., at the Tamposi Law Group, P.C., is the
Debtor's legal counsel.
BED BATH & BEYOND: Amends Equity Offering Agreement
---------------------------------------------------
Bed Bath & Beyond Inc. on March 14, 2023, announced an amendment to
its warrants to purchase Series A Convertible Preferred Stock
previously issued on February 7, 2023. Under the amendment, the
Company is temporarily adjusting the Price Failure threshold
("Price Failure") to $1.00 until April 3, 2023. In addition, the
Threshold Share Amount referenced in the Price Failure definition
is increased to 24,739. This amendment will further facilitate up
to $100 million of additional funding in April 2023, for a
cumulative total of $460 million to date.
Sue Gove, President & CEO of Bed Bath & Beyond Inc. said, "The
funding we have raised over the past month has supported our
ongoing operations and enabled us to begin reinvesting in valuable
inventory to fulfill customer demand. We will continue to consider
thoughtful and essential actions that can enhance our business
operations and accelerate results for customers, associates,
suppliers and shareholders over the long-term."
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.
BERKTREE LLC: March 16 Hearing on Continued Cash Collateral Use
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of North
Carolina, Durham Division, authorized Berktree, LLC and K Medical
Supplies LLC to use cash collateral on an interim basis in
accordance with the budget, with a 10% variance. A further hearing
on the matter is set for March 16 at 9:30 a.m.
The use of cash collateral is necessary to allow the Debtors to pay
their operational needs including the cost of maintaining the
business.
The Debtors are parties to several loan agreements including a Note
dated as of September 25, 2019 between the Debtors and West Town
Bank & Trust in the original principal amount of $1.6 million and a
Note dated as of October 15, 2021, with Blue Ridge Bank, N.A. as
lender in the original principal amount of $425,000.
The Debtors believe that the balance of the West Town Loan is
approximately $ 1.3 million.
The Debtors had no cash on hand at the filing date, and were owed
$2,437 in prepetition charges from by their credit card processor.
In addition, they have approximately $181,000 in inventory, $1720
in furniture and $2,980 in equipment.
The Debtors are authorized to use the cash collateral in the
ordinary course of the Debtors' business pursuant to the Budget
through the earliest of (i) the entry of a final order authorizing
the use of cash collateral, or (ii) the entry of a further interim
order authorizing the use of cash collateral, or (iii) March 16,
2023 or (iv) the entry of an order denying or modifying the use of
cash collateral, or (v) the occurrence of a Termination Event.
As adequate protection, the lien claimants are granted a
replacement lien equal in extent, validity, and priority to the
lien held by the UCC Claimants as of the Petition Date.
The security interests and liens granted to the Secured Parties:
(i) are in addition to all security interests, liens and rights of
set-off existing in favor of the Secured Parties on the Petition
Date, if any; and (ii) will secure the payment of the indebtedness
owing to the UCC Claimant in an amount equal to the aggregate cash
collateral used or consumed by the Debtors.
These events constitute a "Termination Event":
(i) The effective date of any confirmed Chapter 11 plan in
the proceeding;
(ii) Conversion of the case to another Chapter of the
Bankruptcy Code or removal of the Debtors from possession;
(iii) The entry of further orders of the Court regarding the
subject matter hereof;
(iv) Dismissal of the proceeding; or
(v) Occurrence of an event of default that is not timely
cured.
A copy of the order is available at https://bit.ly/3lgJSOj from
PacerMonitor.com.
About Berktree, LLC
Berktree, LLC offers medical, health, rehab, dental, and laboratory
supplies. Berktree, LLC and K Medical Supplies LLC sought
protection under U.S. Bankruptcy Code (Bankr. M.D.N.C. Lead Case
No. 23-80037) on February 28, 2023. In the petition signed by
Stephen Kovacs as owner and managing member, the Debtor disclosed
$100,000 in assets and up to $10 million in liabilities.
Judge Lena Mansori James oversees the case.
James C. White, Esq., at J.C. White Law Group, PLLC, represents the
Debtor as legal counsel.
BERTUCCI'S RESTAURANTS: Wins Cash Collateral Access Thru April 11
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division, authorized Bertucci's Restaurants, LLC to use
cash collateral on an interim basis in accordance with the budget
through the date of the final hearing set for April 11, 2023 at
1:30 p.m.
The Debtor is permitted to use cash collateral to pay:
a. amounts expressly authorized by the Court, including
payments to the United States Trustee for quarterly fees; and
b. the current and necessary expenses set forth in the budget,
plus an amount not to exceed 10% for the expenses.
During the interim period, PHL Holdings, LLC and Rewards Network
will each have a perfected post-petition lien against cash
collateral to the same extent and with the same validity and
priority as its respective prepetition lien, without the need to
file or execute any documents as may otherwise be required under
applicable non-bankruptcy law. The replacement liens granted will
secure all obligations owing from the Debtor to PHL and Rewards
Network, as the case may be.
Pursuant to the Stipulation between the Debtor and C.H. Robinson
Worldwide, Inc, the Debtor has agreed to pay $50,000 per week
against Robinson's pre-petition claims related to claims under the
PACA Trust.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/423RlAU from PacerMonitor.com.
The budget provides for total operating cash inflows, on a weekly
basis as follows:
$1,407 for the week ending March 5, 2023;
$2,040 for the week ending March 12, 2023;
$1,274 for the week ending March 19, 2023; and
$2,040 for the week ending March 26, 2023.
About Bertucci's Restaurants, LLC
Bertucci's Restaurants, LLC is a Florida limited liability company
that was formed in May 2018. The Company owns and operates
approximately 47 Italian-themed restaurants under the name
Bertucci's Brick Oven Pizza & Pasta.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-04313) on December 5,
2022. In the petition signed by Jeffrey C. Sirolly, secretary, the
Debtor disclosed up to $50,000 in assets and up to $100 million in
liabilities.
Judge Grace E. Robson oversees the case.
R. Scott Schuker, Esq., at Shuker and Dorris, P.A., is the Debtor's
legal counsel.
BETANXT INC: Moody's Assigns B2 CFR, Outlook Stable
---------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating and
B2-PD Probability of Default Rating to BetaNXT, Inc. The company's
proposed senior secured credit facilities were assigned a rating of
B2. The rating outlook is stable.
BetaNXT has potential to accelerate growth in an attractive market
segment, with good profitability. However, the company is committed
to platform investment for growth, limiting free cash flow
generation in the near term.
The following rating actions were taken:
Assignments:
Issuer: BetaNXT, Inc.
Corporate Family Rating, Assigned B2
Probability of Default Rating, Assigned B2-PD
Backed Senior Secured 1st Lien Revolving Credit Facility, Assigned
B2 (LGD3)
Backed Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3)
Outlook Actions:
Issuer: BetaNXT, Inc.
Outlook, Assigned Stable
RATINGS RATIONALE
BetaNXT's credit profile benefits from a strong niche position in a
growing wealth management vended self-clearing market segment,
constructive wealth management industry trends with share gains by
its independent broker dealer customers, ingrained long-standing
customer positions, and opportunities to expand customer
relationships. The credit profile is constrained by limited
business scale, high concentration of both product portfolio and
customer base, and high capital intensity and investments required
to support growth.
Moody's projects BetaNXT to grow revenues in the mid-single digits
in the near term, with strong adjusted EBITDA margins after
reduction for carveout standalone infrastructure costs. The high
trading volume environment of recent years has increased BetaNXT's
scale and profitability, but slower near-term market volume growth
may limit the pace of the company's growth from the recent higher
revenue levels. Accelerating the growth trajectory would likely
require incremental investments to add features and capabilities,
further increasing capital intensity.
BetaNXT's pro forma total leverage (Moody's adjusted) at closing is
approximately 5x, projected to decline to the higher 4x area by the
end of 2023 through EBITDA growth and assuming no debt-financed
acquisitions that increase leverage. Cash liquidity benefits from a
one-time post-carveout working capital release in 2022, and the
cash balance was $50 million at 2022 fiscal year end. However, free
cash flow generation in 2023 will be neutral to negative due to
investment requirements and carveout integration costs amid a
higher rate environment.
Free cash flow generation is projected to expand in 2024 as
spending gradually moderates and profits grow. BetaNXT is not
likely to prepay debt in the near term, and may increase debt to
fund acquisitions over time, although the company does not plan to
increase leverage materially.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation of organic growth
and stable profitability with adjusted total leverage remaining
around 5x over the next 12-18 months. The ratings could be upgraded
if BetaNXT increases scale and customer diversification, sustains
organic growth and improves free cash flow generation, and
maintains leverage below 4.5x. The ratings could be downgraded if
revenues or EBITDA margins decline, adjusted total leverage exceeds
6x for an extended period, free cash flow stays breakeven to
negative, or liquidity materially weakens.
The credit facilities are expected to contain aggressive covenant
flexibility for transactions not disclosed at this time that could
adversely affect creditors, including the omission of certain
material lender protections.
Governance is a key consideration for the ratings. BetaNXT's Credit
Impact Score is highly negative. BetaNXT's financial policy is
aggressive, reflecting its concentrated private equity ownership.
BetaNXT's exposure to environmental risk is low. Social risks are
moderately negative, reflecting cyber risk related to consumer data
and access to highly skilled workers with modest benefit from
societal trends supporting the wealth management industry.
BetaNXT has neutral-to-low exposure to environmental risks. The
company is a technology solutions provider to wealth managers.
Given the nature of the business, with assets that consist
primarily of intellectual property, people and facilities, the
company is not exposed to environmental hazards.
BetaNXT's exposure to social risks is moderately negative. Social
risks include cybersecurity risk related to consumer data, and
dependence on highly skilled technology talent, with modest benefit
from US demographic trends that have supported the strength of
retail-focused wealth management service providers.
BetaNXT's governance risk is highly negative. The company,
controlled by a financial sponsor, without an independent board,
has an aggressive financial strategy.
With net revenues of approximately $300 million for the last twelve
months ended September 30, 2022, BetaNXT, Inc. is a provider of
technology solutions to wealth management brokerages.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
BETANXT INC: S&P Assigns 'B-' Issuer Credit Rating, Outlook Pos.
----------------------------------------------------------------
S&P Global Ratings assigned its 'B-' issuer credit rating to New
York-based self-clearing broker services provider BetaNXT Inc.
(BetaNXT), reflecting its high starting leverage and minimal free
cash flow as the company stabilizes its cost structure and
continues the development of stand-alone capabilities.
S&P said, "We also assigned our 'B-' issue-level rating and '3'
recovery rating to the senior secured debt, reflecting average
recovery prospects in the event of a payment default.
"The positive outlook reflects our expectation for improving free
cash flow beyond 2023 as one-time costs diminish and revenue growth
persists, despite heavier-than-normal capital expenditures.
"Our ratings on BetaNXT reflect its small scale and niche
capabilities in the fragmented wealth management industry.With
revenue for the last 12 months ended December 2022 of about $321
million, BetaNXT derived over 90% of revenue from its Beta
Platform, which helps automate transaction processing requirements
for wealth managers, brokers, and investment banks that self-clear
rather than settling through a clearing firm. Currently about half
of the total addressable clearing market does not self-clear.
Approximately 40% of the remaining half use an internal back-office
rather than a platform like the one provided by BetaNXT or its
peers, FIS and Broadridge, that have comprehensive product suites
across the wealth management sector. BetaNXT also provides niche
services such as tax and client portal technologies to investment
advisers that service retail investors. The company achieved
revenue growth in the high single digits during 2022, compared to
the flat- to low-single-digit percent area while it was owned by
The London Stock Exchange Group. The recent higher growth
trajectory is attributable to professional services revenues on
platform migrations, with greater transaction volume expected to
come in the following year. Longer term, with the help of
technological advancement, we expect more brokers and wealth
managers to shift to a self-clearing model because of savings on
back-office functions. Furthermore, in a rising interest rate
environment, self-clearing firms can capitalize on fees from cash
sweeps and margin lending when those capabilities become available
in-house.
"BetaNXT has high customer concentration, with its top six clients
accounting for the majority of its revenues. A meaningful
percentage of customer contracts will expire in the next two to
three years. However, we recognize these are long-standing clients
and are committed to self-clearing transactions due to the control
benefits and modestly improving revenue opportunities under rising
rates. BetaNXT offers core self-clearing functionalities across
eight asset classes, which cover substantially all of the clearing
needs of its clients. It operates on a subscription-based model
with volume overages in excess of contract minimums. Management is
implementing a multi-year initiative to increase the percentage of
subscription revenue and improve revenue visibility.
"BetaNXT could face challenges as it stabilizes its cost base and
further develops its stand-alone capabilities. In our opinion, as a
small subsidiary, BetaNXT was underinvested historically. Since the
separation, multiple business functions have been established to
improve operations. It also has transition service agreements with
its former parent (the London Stock Exchange Group) until July 2024
to support data center migrations and other technology related
build-outs, critical for the success of the stand-alone firm. The
risk of margin declines could arise from additional internal
investments, cost overrun, or inflationary pressure on the labor
force. We conservatively model EBITDA margins to be around flat for
the next two years as we expect operational leverage from revenue
growth to be offset by the need to re-invest in the business.
"Our assessment of the financial risk profile reflects low but
improving free cash flow prospects as the business operates as a
standalone company.We note that 2023 will be a transition year for
the company as it incurs a significant amount of one-time cash
outflows (to be spread between expenses and capital expenditure
outlays) to operate as a stand-alone entity. We project slightly
negative free operating cash flow (FOCF) during 2023, with
improvements in 2024 as these one-time outlays phase out.
"The positive outlook reflects our expectation for improving
operating cash flow beyond 2023 as one-time costs diminish and
revenue increases. We assume successful execution of contract
renewals with no significant customer degradation.
S&P could revise the outlook to stable if it believes free cash
flow will not improve beyond 2023, and the company funds a portion
of its heavier-than-normal capital expenditure in 2023 with
revolver borrowings. This scenario could occur from:
-- Missteps in execution resulting in higher-than-anticipated
costs and capital expenditure needs;
-- Interest rates increase beyond expectations such that free cash
flow generation is challenged;
-- Failure to renew large contracts; or
-- Large debt-funded acquisitions or shareholder distributions
such as cash outflows to help fund other portfolio companies owned
by Beta's financial sponsors.
S&P could raise the rating if it expects S&P Global
Ratings-adjusted leverage to stay around 6x along with a path
toward free cash flow to debt in the mid-single-digit percentage
range.
This could occur from:
-- Organic revenue growth continuing over the next year;
-- Successful reduction in one-time spending to support
stand-alone business operation; and
-- Visibility into lower and normalized capital expenditure.
ESG credit indicators: E-2, S-2, G-3
Governance is a moderately negative consideration, as it is for
most rated entities owned by private-equity sponsors. S&P believes
the company's highly leveraged financial risk profile points to
corporate decision-making that prioritizes the interests of
controlling owners. This also reflects private-equity sponsors'
generally finite holding periods and focus on maximizing
shareholder returns.
BIRCHINGTON LLC: Court OKs Cash Collateral Access
-------------------------------------------------
The U.S. Bankruptcy Court for the District of Columbia authorized
Birchington, LLC to use cash collateral on an interim basis in
accordance with the budget.
On May 2, 2019, the Debtor, by and through Bembridge and Sequar as
manager, entered into a $55 million Real Estate Note with SSHCOF II
Washington DC, LLC, a Georgia limited liability company. The
amortization commencement date is May 3, 2022, on a 25-year
amortization schedule, using LIBOR plus 875 basis points and at
11.00% per annum as the contract rate. The default rate is 5% above
the Contract rate, absent a violation of law. The maturity date is
May 3, 2022, subject to extension by Note provisions through May 3,
2023 or May 3, 2024. Payments are due on the first day of the
month. Any unpaid interest under the Note may be recapitalized as
principal at the discretion of the Lender. Late payments after 5
days accrue a 5% late fee on the unpaid amount, but in no event
under applicable law will be less than $25 per event. Prepayment
penalties exist and are explained in the Note.
On May 2, 2019, the Debtor, by and through Bembridge and Sequar as
manager, entered into a Construction Loan Agreement. Therein, the
Lender agreed to provide $55 million principal amount for
construction of a 247-room hotel, with an initial advance of
$20.032 million. Completion was to occur in two years from the
ratification date; namely, May 2, 2021; however, the Debtor could
timely request a further two additional 12 months for an extension
fee of $525,000. A private equity broker to be paid 1.5% initial
fee at closing and 1% exist fee on the principal amount of the
loan.
Pursuant to the Court Order, all cash collateral that the Debtor
had on hand as of the Petition Date or has received since the
Petition Date, including without limitation in the depository
account maintained at Capital Bank, N.A., or has received since the
Petition Date, including all products and proceeds of all
Collateral -- but specifically excluding cash maintained at United
Bank by Debtor as of the Petition Date -- constitute cash
collateral. No money will be withdrawn by the Debtor from the
Capital Bank, N.A. depository account or any other account
maintained by the Debtor -- including any debtor-in-possession
account established by Debtor -- (a) except as expressly provided
in the Interim Order or by further Court order, and (b) excluding
pre-petition cash at United Bank in the amount of $170,217. The
Debtor will only make those disbursements as expressly provided in
the Interim Order.
Unless an extension is otherwise agreed to in writing by the Debtor
and the Lender, or the Court directs otherwise on subsequent
request and pursuant to a further Court order, the Debtor is
authorized to use cash collateral as set forth in the Interim Order
commencing from the Petition Date through and including (but not
beyond) the earliest to occur of (i) the date on which a
Termination Event will occur, (ii) any order modifying the Debtor's
authority to use cash collateral and (iii) the close of business on
March 31, 2023; provided that the use of cash collateral will be in
accordance with the Budget.
As adequate protection, the Lender is granted a continuing
replacement liens security interest in, and lien, effective as of
the Petition Date without the necessity of Lender taking any
further action, upon the right, title and interest in the following
property of the Debtor.
The Replacement Liens provided will be deemed automatically valid
and perfected with such priority as provided in the Interim Order,
without any further notice or act by any party that may otherwise
be required under any other law.
As additional adequate protection, beginning on the day that is one
business day following entry of the Interim Order and the first day
of each month thereafter, the Debtor will make monthly payments of
interest-only to the Lender at the non-default rate of interest in
the amounts set forth and provided for in the Budget.
Notwithstanding the foregoing, the Debtor will pay to the Lender
$250,000 within one business day of entry of the Interim Order.
These events constitute a Termination Event:
a. Failure of the Debtor to abide by the terms, covenants, and
conditions of the Interim Order or the Budget (subject to any
permitted variances);
b. The use of cash collateral for any purpose not authorized
by the Interim Order;
c. Failure of the Debtor to pay fees of the U.S. Trustee
pursuant to the requirements of the U.S. Trustee, including under
11 U.S.C. section 1129(a)(12), subject to any cure periods
permitted or allowed by the U.S. Trustee;
d. Appointment of a chapter 11 trustee or the appointment of
an examiner with expanded powers;
e. Conversion of the Chapter 11 Case to a case under chapter 7
of the Bankruptcy Code;
f. The Chapter 11 Case is dismissed;
g. The entry of an order of this or any other Court (other
than the Final Order) reversing, staying, vacating or otherwise
modifying in any material respect the terms of the Interim Order;
h. The Debtor seeks to obtain financing that does not fully
satisfy the indebtedness owed to Lender and seeks to prime the
Lender's lien on any of the Collateral; or
i. The Debtor closing the sale of substantially all of its
assets as authorized by the Court under section 363 of the
Bankruptcy Code without an order of the Bankruptcy Court approving
such sale (after notice and hearing) or consent by the Lender
thereto or by confirmation of a plan of reorganization (all of
which Lender reserves the right to oppose if, as and when Debtor
proceeds with any such action(s)).
A final hearing on the matter is set for March 30, 2023 at 11 a.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3ZLt7tO from PacerMonitor.com.
The Debtor projects $1.387 million in total receipts and $49,493 in
total administrative expenses for the period from February 21 to
March 31, 2023.
About Birchington, LLC
Birchington, LLC operates a hotel in Washington, D.C. The Debtor
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D.D.C. Case No. 23-00057) on February 20, 2023. In the
petition signed by Habte Sequar, manager, the Debtor disclosed
$500,000 in assets and up to $100 million in liabilities.
Judge Elizabeth L. Gunn oversees the case.
John D. Burns, Esq., at the Burns Law Firm, Inc., represents the
Debtor as legal counsel.
BJ SERVICES: Keystone's Bid for Withdrawal of Reference Denied
--------------------------------------------------------------
In the adversary proceedings 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 recommends
that the District Court not withdraw this adversary proceeding's
referral.
Keystone Oilfield Fabrication LLC seeks withdrawal of the reference
of this adversary proceeding. GACP Finance Co., LLP objects.
The Court finds that GACP has filed numerous adversary proceedings
to obtain relief under the Plan. These adversary proceedings were
substantially focused on the orders confirming GACP's priming
liens. The Court best serves notions of uniformity in bankruptcy
administration by continuing to preside over this adversary
proceeding. The Court reasons that "this Court has significant
experience dealing with disputes over lien priority. . . is also
already intimately familiar with this case and BJ Services'
bankruptcy. Much has already progressed. . . including the
adjudication of two motions to dismiss and an agreed order settling
several of the claims."
The Court confirmed BJ Services' Plan on Nov. 6, 2020. Following
confirmation, BJ Services' assets were transferred to the Wind-Down
Trust. GACP argues that it must determine whether it has a
deficiency or a surplus after liquidation of its collateral in
order for BJ Services' estate to fully wind-down. Thus, the Court
believes that this matter must be determined before the bankruptcy
process can terminate. The Court's reservation of an early May 2023
trial date will assist in expediting the bankruptcy process, and
retaining this matter would save the District Court time coming up
to speed.
Keystone argues it is entitled to a jury trial on the conversion
claim and the attorneys' fees counterclaim. The Court determines
that while Keystone is entitled to a jury trial on the conversion
claim, the lack of the jury trial right on two of the three
remaining matters supports denial of the motion to withdraw the
reference of this adversary proceeding at this time.
The Court explains that "proceedings to determine the priority of
liens (including whether Keystone converted property to which GACP
has a superior right and whether Keystone is entitled to a
declaratory judgment) are core. . . adjudicating whether Keystone
prevented GACP from implementing the terms of the Lift Stay Order
is core when an alleged violation of the Lift Stay Order could only
arise in the context of a bankruptcy case. . . counterclaims for a
declaratory judgment and for attorneys' fees are core for the same
reason -- as these counterclaims could not arise outside the
bankruptcy context when the dispute requires the examination of
GACP's rights pursuant to the Court's orders against Keystone's
state law rights." Hence, none of the factors support withdrawal of
the reference of this adversary proceeding at this stage.
A full-text copy of the Memorandum Opinion dated March 6, 2023 is
available at https://tinyurl.com/4bmm4vxw 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.
BK RACING: Parties' Consent Motion to Consolidate Appeals Granted
-----------------------------------------------------------------
District Judge Frank D. Whitney for the Western District of North
Carolina, on March 6, 2023, has issued an order consolidating the
case captioned as the Race Engines Plus, LLC, Appellant, v. Matthew
W. Smith, Chapter 11 Trustee for BK Racing, LLC, Appellee, Case
Nos. 3:23-cv-19, 3:23-cv-80, (W.D.N.C.), and the first filed case
of 3:23-cv-19 will be treated as the lead matter. He has granted
Race Engines Plus, LLC an extension of the deadline for submitting
a Brief and Appendix in this bankruptcy appeal for a period of
seven (7) days.
A full-text copy of the Order dated March 6, 2023 is available at
https://tinyurl.com/mpd2vbdv from Leagle.com.
About BK Racing
BK Racing, LLC, is a Monster Energy NASCAR Cup Series Toyota Racing
team headquartered in Charlotte, North Carolina. The team was
founded in 2012 after owners Ron Devine and Wayne Press acquired
Red Bull Racing.
BK Racing sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. W.D.N.C. Case No. 18-30241) on Feb. 15, 2018. In its
petition signed by Kathy Burch, power of attorney for managing
member Brenda Devine, the Debtor estimated assets and liabilities
of $10 million to $50 million.
Judge Craig J. Whitley oversees the case.
The Debtor hired The Henderson Law Firm PLLC as its legal counsel.
Matthew W. Smith was appointed to serve as Chapter 11 trustee for
the Debtor. The Trustee hired Grier Furr & Crisp, PA as his legal
counsel, and The Finley Group, Inc., as his financial advisor.
BMI WELLNESS: Seeks Cash Collateral Access
------------------------------------------
BMI Wellness Concepts, PLLC asks the U.S. Bankruptcy Court for the
Eastern District of North Carolina, Raleigh Division, for authority
to use cash collateral.
The Debtor believes Wells Fargo Bank, N.A. assert an interest in
the cash collateral by way of Security Agreement and UCC-1
financing statement number 20190072496A, filed on July 8, 2019 with
the North Carolina Secretary of State.
At the time of the petition, the Debtor had cash on hand of
approximately $3,230 in its bank accounts, all of which was
transferred to the Debtor's DIP account after filing and personal
property valued at approximately $65,500.
The Debtor needs to use the funds in the DIP account to continue
normal operations and to maintain its going concern value.
The Debtor proposes to adequately protect Potential Secured
Creditors by giving them a replacement lien on post-petition cash
and personal property to the same extent, and with the same
priority, as any pre-petition perfected lien. The Debtor further
proposes an adequate protection payment to Wells Fargo $1,295, an
amount equal to the contractual interest payment on the balance of
Wells Fargo's loan.
A copy of the motion is available at https://bit.ly/3LhSQWe from
PacerMonitor.com.
About BMI Wellness Concepts, PLLC
BMI Wellness Concepts, PLLC is a North Carolina professional
limited liability company that has operated as a general medical
practice, specializing in weight loss and general wellness
counseling.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. N.C. Case No. 23-00666) on March 9,
2023. In the petition signed by Sherri James, member, the Debtor
disclosed up to $100,000 in assets and up to $1 million in
liabilities.
Danny Bradford, Esq., at Paul D. Bradford, PLLC, represents the
Debtor as legal counsel.
C S I ROOF: Unsecured Creditors Will Get 70% of Claims in 5 Years
-----------------------------------------------------------------
C S I Roof Removal, Inc., filed with the U.S. Bankruptcy Court for
the Eastern District of California a Plan of Reorganization.
The Debtor is engaged in the residential roofing business. The
source of Debtor's business is from roofing contractors who hire
Debtor to do the dismantling and tearing down of the roof prior to
the contractor installing a new roof.
In or around 2019, Debtor's owner discovered that the leasing
company that he was using to process the workers compensation
premium had his business miscategorized. This miscategorization
caused the workers compensation premium to be underpaid. Debtor was
eventually sued by the State Compensation Insurance Fund for the
underpaid premium amount and a judgment was entered. Debtor's
contractor's license with the California State Licensing Board was
suspended due to the unpaid judgment, which prompted the Debtor to
file Chapter 11 bankruptcy.
The Debtor's financial projections show that the Debtor will have
projected disposable income of $118,240.39. The final Plan payment
is expected to be paid on the end of the fifth year of the
Effective Date.
This Plan of Reorganization proposes to pay creditors of the Debtor
from future disposable income received from Debtor's operation of
residential roof removal and limited roof construction.
This Plan provides for 1 class of non-priority unsecured claims.
This Plan also provides for the payment of administrative and
priority claims. Non-priority unsecured creditors holding allowed
claims will receive distributions, which the proponent of this Plan
has valued at approximately 70 cents on the dollar. This Plan also
provides for the payment of administrative and priority claims.
Class 1 consists of Unsecured Nonpriority Claims. The Debtor
estimates that the total amount of general unsecured claims to be
approximately $167,205.69. The Debtor shall repay no more than 70%,
or $117,045.00, of allowed unsecured claims over 5 years from the
Effective Date of the Plan. On the first day of the month following
the month in which the Effective Date of the Plan occurs, the
Debtor shall begin monthly payments in the amount of $1,950.75 on
the Class 1 Unsecured Nonpriority Claims.
Class 2 consists of Debtor's Equity Security Holder, Alejandro
Flores. Equity Security Holders shall not receive a dividend until
the payments contemplated by this Plan are completed. However,
Equity Security Holders may receive payment for their services to
the Debtor. In the event that an Equity Security Holder forgoes
post confirmation pay that pay shall accrue to the Equity Security
Holder as a post-confirmation liability payable when cash flow
permits or upon the sale or transfer of the Debtor.
The Debtor shall fund the Plan with the proceeds and profits of
residential roof removal and limited roof construction.
A full-text copy of the Plan of Reorganization dated March 9, 2023
is available at https://bit.ly/3JDAEF6 from PacerMonitor.com at no
charge.
Attorney for Debtor:
Matthew DeCaminada, Esq.
Stutz Law Office, P.C.
9343 Tech Center Dr Suite 160
Sacramento, CA 95826
Phone: +1 916-884-2235
About C S I Roof
C S I Roof Removal, Inc., is engaged in the residential roofing
business. The Debtor sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Calif. Case No. 22-23186) on Dec. 9,
2022, with between $50,001 and $100,000 in assets and between
$100,001 and $500,000 in liabilities. Judge Fredrick E. Clement
oversees the case.
The Debtor is represented by Matthew J. DeCaminada, Esq., at Stutz
Law Office, P.C.
CALIFORNIA RESOURCES: Appoints New CEO as Part of Restructuring
---------------------------------------------------------------
Howard Fine of Los Angeles Business Journal reports Long
Beach-based oil and natural gas giant California Resources Corp.
recently announced a new chief executive as part of a corporate
restructuring aimed at accelerating the development of its new
carbon-storage business.
Francisco Leon, California Resources' current chief financial
officer, will take over as chief executive at the company's annual
meeting in April 2023, the company announced on Feb. 24, 2023.
Current Chief Executive Mark McFarland will become non-executive
board chair of the company’s Carbon Terra Vault unit.
Leon, 46, has been chief financial officer since 2020. He has been
with the company since before it was spun off from Houston-based
Occidental Petroleum Corp. in 2014; he joined Occidental in 2008.
McFarland, 53, became chief executive in 2021. He joined the
company in 2020 as interim chief executive during the company’s
nearly year-long bankruptcy; prior to that he held several
executive posts with other energy companies.
Concurrent with the C-suite restructuring, California Resources
also announced some cost-cutting measures, including the reduction
of new drilling activity and a reduction of up to 10% in non-energy
operating costs. The company also announced it plans to increase
its share buyback program by 30% to $1.1 billion.
"While the company's financial performance has been strong, our
market has evolved and therefore we are adjusting accordingly by
optimizing our capital plan and increasing our focus on reducing
costs," Leon said.
But it's the company's carbon-storage business that is drawing much
of its attention. Launched in the summer of 2021 shortly after
California Resources emerged from bankruptcy, the Carbon Terra
Vault program aims to store enough carbon underground at the
company's Elk Hills oil field holdings to completely offset carbon
emissions from oil and gas operations by 2045.
In December 2022, California Resources announced its first carbon
storage project with Tulsa, Oklahoma-based Lone Cypress Energy
Services to store 100,000 metric tons of carbon dioxide at the Elk
Hills oil field as part of a plant that would produce at least 30
tons per day of hydrogen by 2025.
The company plans several more similar projects this year.
It's all part of a plan to eventually spin off the carbon storage
unit as a separate company, the company said in its restructuring
announcement. In the first step toward that eventual goal, the
company has established a new board for the Carbon Terra Vault
unit, with McFarland as its chair.
Last summer, California Resources enlisted Toronto, Canada-based
Brookfield Renewable as its financial partner. The two companies
formed a joint venture – 51% controlled by California Resources
and 49% by Brookfield Renewable – to implement the massive carbon
dioxide injection program. Brookfield, through its global
transition fund, committed to contributing $500 million upfront and
as much as $1 billion in total to the joint venture, called the
California Carbon Management Partnership.
About California Resources Corp.
California Resources Corporation (NYSE: CRC) is an oil and natural
gas exploration and production company headquartered in Los
Angeles. The company operates its resource base exclusively
within
California, applying complementary and integrated infrastructure
to
gather, process and market its production. Visit
http://www.crc.com/for more information.
On July 15, 2020, California Resources and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Tex. Lead Case No. 20-33568). At the time of the filing,
California
Resources estimated assets of between $1 billion and $10 billion
and liabilities of the same range.
Judge David R. Jones oversaw the cases.
The Debtors tapped Sullivan & Cromwell, LLP and Vinson & Elkins
LLP
as their bankruptcy counsel, Perella Weinberg Partners as
investment banker, Alvarez & Marsal North America, LLC as
restructuring advisor, and Epiq Corporate Restructuring, LLC, as
claims agent.
* * *
California Resources Corporation in October 2020 emerged from the
bankruptcy process after cutting $5.91 billion in debt to $725
million. CRC's Joint Plan of Reorganization in its Chapter 11
case
cancelled pre-existing debt, consolidated CRC's ownership in the
Elk Hills power plant and cryogenic gas plant, and provided for
the
payment in full of all valid and undisputed trade and contingent
claims in the ordinary course of business.
CARLA'S PASTA: Lenders Motion for Summary Judgment Granted
----------------------------------------------------------
In the adversary proceeding entitled IN RE: Old CP, Inc., et al.,
Chapter 11, Debtors. The Dennis Engineering Group, LLC, Plaintiff,
v. People's United Bank, N.A. and BMO Harris Bank, N.A.,
Defendants, Case No. 21-20111 (JJT), Jointly Administered, Adv.
Pro. Case No. 21-02004 (JJT), (Bankr. D. Conn.), Bankruptcy Judge
James J. Tancredi has issued a Supplemental Ruling and Judgment
granting summary judgment in favor of the Lenders.
On Jan. 4, 2023, the Court issued its First Memorandum of Decision
and Ruling on Partial Cross-Motions for Summary Judgment wherein
the Court denied summary judgment for the Plaintiff, The Dennis
Engineering Group, LLC. Meanwhile, the Court granted partial
summary judgment for the Lenders -- People's United Bank, N.A. and
BMO Harris Bank, N.A. -- but only as to the presumptive validity
and enforceability of Dennis Group's subordination of its
mechanic's lien. Dennis Group's remaining claims in avoidance of
the presumptive validity of the subordination of its claims were
reserved for trial.
Dennis Group has conceded that entry of summary judgment in favor
of the Lenders on Counts Six and Seven of its Complaint is
appropriate and consistent with the Court's First Summary Judgment
Decision.
As to Count Two, however, Dennis Group asserts that the First SJ
Decision only narrows the theories Dennis Group can advance in
pursuit of that claim. Dennis Group argues that the Lenders, while
not required to provide notice of the Debtors' default under the
Credit Agreement pursuant to the terms of the Consent Agreement,
were nonetheless obligated to and represented they would consider
giving Dennis Group such notice. Dennis Group points out that the
Lenders had previously admitted they had never intended to provide
such notice and were in fact prohibited from doing so. Dennis Group
asserts it can, therefore, "still proceed on a theory that the
Lenders fraudulently induced Dennis Group to enter into the Consent
Agreement by making the knowingly false representation that the
Lenders would consider giving notice of [the Debtors'] default. . .
."
The Court finds "nothing in the Consent Agreement that imposes any
affirmative obligation on the Lenders whatsoever to provide or
consider providing notice to Dennis Group of the Debtors' defaults.
The so-called obligation of the Lenders to provide notice, pursuant
to the terms of the Consent Agreement itself, was entirely
discretionary, which logically entails the potential for
non-action." The Court explains that "it is well within the
discretion of the Lenders, pursuant to the terms of the Consent
Agreement itself, to not consider giving notice to Dennis Group of
the Debtors' defaults under the Credit Agreement. For this reason,
Dennis Group's Response as to Count Two must fail."
A full-text copy of the Supplemental Ruling and Judgment dated
March 2, 2023 is available at https://tinyurl.com/2n5d3ft2 from
Leagle.com.
About Carla's Pasta and Suri Realty
Carla's Pasta Inc. is a family-owned and operated business
headquartered in South Windsor, Conn. It manufactures food
products including pasta sheets, tortellini, ravioli, and steam bag
meals for branded and private label retail, foodservice
distributors, and restaurant. Founded in 1978 by Carla Squatrito,
Carla's Pasta's stock is held by members of the Squatrito family.
On Dec. 31, 2016, Carla's Pasta acquired 100% of Suri Realty, LLC's
membership interests. Suri's business is limited to the ownership
of two adjoining parcels of real property located at 50 Talbot Lane
and 280 Nut, meg Road, South Windsor, Conn.
Carla's Pasta operates its business from an approximately the
150,000-square-foot BRC+ certified production facility.
On Oct. 29, 2020, an involuntary petition for relief under Chapter
7 of the Bankruptcy Code was filed against Suri by Dennis Group, HJ
Norris, LLC, Renaissance Builders, Inc., and Elm Electrical, Inc.
On Dec. 17, the Court approved Suri's request and converted the
involuntary Chapter 7 case to one under Chapter 11.
Carla's Pasta filed a Chapter 11 petition (Bankr. D. Conn. Case No.
21-20111) on Feb. 8, 2021. It estimated assets of $10 million to
$50 million and liabilities of $50 million to $100 million.
The cases are jointly administered under Case No. 21-20111. Judge
James J. Tancredi oversees the cases.
The Debtors tapped Locke Lord LLP as their legal counsel, Verdolino
& Lowey, PC as accountant, Cowen & Co. as investment banker, and
Novo Advisors, LLC as financial advisor. Sandeep Gupta of Novo
Advisors is the Debtors' chief restructuring officer.
CELSIUS NETWORK: Creditors Get Court Okay to Sue Executives
-----------------------------------------------------------
Steven Church of Bloomberg News reports that creditors of Celsius
Network LLC won court permission to sue company co-founder Alex
Mashinsky and other former top executives, whom customers blame for
costing the bankrupt crypto lender billions of dollars.
US Bankruptcy Judge Martin Glenn approved an agreement between the
new management team of Celsius and an official committee of company
creditors to allow them to pursue Mashinsky and the rest of his
former management team. Attorneys for Celsius and the committee
told Glenn the actions of the former executives were
"reprehensible."
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. 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 legal counsels; Centerview Partners, LLC as
investment banker; and Alvarez & Marsal North America, LLC as
financial advisor. Stretto, the claims agent and administrative
advisor, maintains the page https://cases.stretto.com/celsius
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.
CELSIUS NETWORK: Still Open for Other Bids After NowaWulf Offer
---------------------------------------------------------------
Dietrich Knauth of Reuters reports that bankrupt crypto lender
Celsius Network revealed that it was speaking to another potential
buyer and will seek additional bids, despite having an offer in
hand from asset manager NovaWulf Digital Management.
Celsius attorney Chris Koenig said at a hearing in bankruptcy court
in Manhattan that the company remains open to better offers, and
that it and its creditors committee met with a potential buyer two
days ago to review an alternate proposal.
At the hearing, the New Jersey-based lender asked U.S. bankruptcy
judge Martin Glenn, who is overseeing Celsius' Chapter 11, for more
time to submit a bankruptcy restructuring plan built around the
NovaWulf deal, which would cash out customers with less than $5,000
in crypto deposits and hand ownership of the company's remaining
assets to customers with larger accounts.
Glenn agreed to give Celsius an extra three weeks to file a Chapter
11 plan.
With NovaWulf's offer in hand, Celsius should be able to exit from
bankruptcy by June, less than a year after it filed for Chapter 11,
Koenig said.
If Celsius chooses an alternate bidder, Koenig said, it intends to
offer NovaWulf up to $20 million in breakup fees.
"If there is a higher offer, it will be because of the floor set by
NovaWulf," Koenig said.
NovaWulf declined to comment on Celsius's solicitation of other
bids.
Crypto lenders such as Celsius boomed during the COVID-19 pandemic,
but many companies in the highly interconnected sector went
bankrupt in 2022.
Celsius filed for U.S. bankruptcy in July after freezing customer
withdrawals. Celsius said at the time that it had more than 1.7
million registered users and approximately 300,000 active users
with account balances greater than $100.
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. 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 legal counsels; Centerview Partners, LLC as
investment banker; and Alvarez & Marsal North America, LLC as
financial advisor. Stretto, the claims agent and administrative
advisor, maintains the page https://cases.stretto.com/celsius
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.
CHINOS INTERMEDIATE: S&P Alters Outlook to Neg., Affirms 'B' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on specialty apparel
retailer Chinos Intermediate 2 LLC (Chinos) to negative from stable
and affirmed all of its ratings, including the 'B' issuer credit
rating and the issue-level rating on the company's term loan.
The negative outlook reflects the potential for lower ratings if
pressure on operating margins leads leverage to approach 4x.
The outlook revision reflects a challenging macroeconomic
environment that could weaken Chino's operating performance and
credit metrics. Chinos faced increasing competition through the
third quarter of 2022. Operating margins declined due to heightened
levels of promotional activities. S&P expects these headwinds to
persist because of challenging macroeconomic conditions, including
a shallow recession expected in 2023.
S&P said, "In addition, we expect comparable sales trends to soften
in 2023 as consumers become more selective with discretionary
spending, in contrast with the growth trends after the economy
reopened post-pandemic. We also forecast working capital inflow.
This follows the significant free cash flow deficit reported
through the third quarter, mostly due to inventory pull forward and
higher freight costs amid supply chain disruption. Now, we expect
S&P Global Ratings-adjusted leverage of about 3x compared with our
previous expectation of about 2x.
"We expect increased competition and poor operating leverage to
pressure operating margins in 2023. Reported EBITDA margin
decreased about 600 basis points to 7.6% in the third quarter due
to increasing promotional activity across all brands and higher
costs. Despite supply chains stabilizing, we expect softening
demand and elevated inventory levels to lead to increased
competition and weaker operating margins. High inflation levels and
mixed merchandise execution could pressure margins further.
However, to partially offset that, the company is focusing on
minimizing carryover inventory, which we expect will result in
significant working capital inflow.
"We expect reported free cash flow of $70 million-$90 million in
2023 with support from working capital inflow. The company reported
a free operating cash flow (FOCF) deficit of about $165 million and
a working capital drag of about $205 million through the third
quarter, which we expect to improve over the next 12 months. This
is due to pulling forward inventory and higher freight costs. In
the current year, we expect working capital will return to normal
levels but cash flow will remain weak. In addition, we expect
higher capital expenditure (capex) in 2023 as the company continues
to explore growth opportunities. Since the beginning of the last
year, the company started to add new stores to its fleet with a
strategic focus on value-oriented consumers, and we remain cautious
about this approach.
"We expect S&P Global Ratings-adjusted leverage to sustain above 3x
in 2023. Adjusted leverage increased in the third quarter to 3.2x
compared with 2.5x in fiscal 2021 due to pressure on operating
margins. We believe the company will maintain its current debt
level as it has more than enough liquidity to meet its commitments
in the near term, including capex.
"We continue to view the company's credit profile as holistically
weaker than those of higher-rated peers, given the company's
vulnerability to discretionary consumer spending, participation in
the intensely competitive and highly volatile apparel retail
segment, exposure to fashion risk, and the company's short track
record since emerging from bankruptcy. These risks lead us to
maintain a negative comparable rating analysis modifier.
The negative outlook reflects the risk of a downgrade within the
next 12 months if the company faces performance challenges and
cannot execute successfully on its growth plans.
S&P could lower the rating on Chinos if:
-- Chinos underperforms our base case, potentially because of
increased competition that leads to greater-than-anticipated
promotional activities, inventory challenges, or a significant
decline in apparel demand;
-- The company faces execution issues on its strategic initiatives
that could challenge its ability to generate meaningful free cash
flow; or
-- A more aggressive financial policy worsens credit metrics, with
adjusted leverage approaching 4x.
S&P could revise the outlook to stable if:
-- The company sustains operating margins with positive comparable
sales, likely while successfully engaging its customer base; and
-- The company maintains relatively consistent credit metrics,
with adjusted leverage well below 4x.
ESG credit indicators: E-2, S-2, G-2
CLOVIS ONCOLOGY: Taps Ernst & Young as Tax Services Provider
------------------------------------------------------------
Clovis Oncology, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ Ernst
& Young, LLP to provide tax services.
Ernst & Young will perform the following services:
(a) Routine Tax Services Statement of Work
Tax advisory services in connection with routine tax
advisory and compliance services and assistance concerning issues
as requested by the client when such projects are not covered by a
separate statement of work and do not involve any significant tax
planning or projects.
(b) Section 382 Statement of Work
Ernst & Young will analyze shifts in the ownership of the
Debtors to determine whether the Debtors have experienced one or
more ownership changes during the period from Dec. 31, 2021, and
ending on Dec. 31, 2022, using the Full Value Methodology as
described in IRS Notice 2010 50.
(c) 2022 Tax Compliance Services Statement of Work
Ernst & Young will prepare the U.S. federal income tax
return, Form 1120, for the Debtors for the year ended Dec. 31,
2022. The firm will also prepare the required Forms 5471 (up to 8)
and 8858 (1), and certain state tax returns.
Ernst & Young will be compensated as follows:
A. Routine Tax Services Statement of Work
-- The fees for routine on-call tax advisory services will be
based on the actual time that Ernst & Young professionals spend
performing such services, billed at the agreed upon rates.
B. Section 382 SOW
-- The fees for the Section 382 services will be based on the
actual time that Ernst & Young's professionals spend performing
them, billed at the agreed upon rates.
-- S&P estimates its fees will not exceed $25,000.
C. 2022 Tax Compliance Services SOW
-- The fee for federal tax compliance services will be
$120,000.
-- The fee for the international tax services will be
$51,000.
-- State returns not listed in the SOW will be charged an
additional fee of $1,650 per return filed.
-- The fees for any additional compliance services will be
based on the actual time that Ernst & Young's professionals spend
performing them, billed at the agreed upon rates.
The firm's hourly rates are as follows:
National Partner or
Managing Director $975
Partner/Principal $900
Managing Director $775
Senior Manager $635
Manager $500
Senior $365
Staff $240
Douglas Scheetz, a partner at Ernst & Young, 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:
Douglas D. Scheetz, CPA
Ernst & Young, LLP
370 17th Street, Suite 3300
Denver, CO 80202
Phone: 720-931-4000
About Clovis Oncology
Clovis Oncology, Inc. is an American pharmaceutical company, which
mainly markets products for treatment in oncology. The company is
based in Boulder, Colo.
Clovis Oncology and its affiliates sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bank. D. Del. Lead Case No.
22-11292) on Dec. 11, 2022. In the petition signed by Paul E.
Gross, executive vice president and general counsel, Clovis
Oncology disclosed $319,164,834 in assets and $754,564,457 in
liabilities.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped Morris Nichols Arsht and Tunnell, LLLP and
Wilkie Farr & Gallagher, LLP as bankruptcy counsels; Alixpartners,
LLP as financial advisor; Perella Weinberg Partners, LP as
investment banker; and Ernst & Young, LLP as tax services provider.
Kroll Restructuring Administration, LLC is the claims, noticing and
solicitation agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors in the Debtors' cases. The committee tapped
Morrison & Foerster, LLP as lead bankruptcy counsel; Potter
Anderson & Corroon, LLP as Delaware counsel; Alvarez & Marsal North
America, LLC as financial advisor; and Jefferies, LLC as investment
banker.
COBRA PIPELINE: Unsecureds to Recover 10% to 15% in Plan
--------------------------------------------------------
Cobra Pipeline Co., Ltd., filed with the U.S. Bankruptcy Court for
the Northern District of Ohio a Chapter 11 Disclosure Statement
describing Plan of Liquidation dated March 9, 2023.
The Debtor was in the business of owning and operating a natural
gas transmission pipeline in Ohio.
During the bankruptcy case, the Debtor filed a motion to establish
procedures for the sale of the pipeline and related equipment. The
motion also included procedures to assign substantially all
contracts and leases to the purchaser of the pipeline assets. The
Bankruptcy Court granted the motion to sell the property on July 1,
2021. The Buyer was Utility Pipeline, Ltd. ("UPL"), who purchased
the pipeline and related assets for a designee company related to
UPL.
A critical portion of the order approving the sale entered by the
Bankruptcy Court required approval of the sale by the Public
Utilities Commission of Ohio (the "PUCO"). Although Bankruptcy
Court approval of the sale was granted on July 1, 2021, approval
from the PUCO was not received until July 30, 2022. The sale closed
on August 1, 2022. It shows that the purchase price for the
pipeline assets was $3,550,000.
From the total sale proceeds, the Debtor's primary secured
creditor, Huntington National Bank, received $1,642,490.85 in full
satisfaction of its claims against Cobra and its estate. A second
priority secured creditor, Wuliger & Wuliger, received $72,000 in
full satisfaction of its claims against Cobra and its estate. After
a credit in the amount of $5,419.95 for interest earned on the
money in the escrow account established to hold a portion of the
sale proceeds, and a deduction of $350.00 representing half of the
escrow agent’s fee, Cobra, itself, received $1,840,579.10 from
the sale proceeds.
In addition to the sale of pipeline assets, Cobra was able to sell
excess gas remaining in the pipeline after all gas supplied by
customers was transmitted. In the industry, such excess gas is
typically referred to as a gas imbalance. Cobra made two sales of
gas imbalances in the ordinary course of business, generating total
proceeds of $1,904,129.01.
Cobra's operations have now terminated, with the exception of
certain final work necessary to liquidate remaining assets and make
final payments to creditors. The most significant asset remaining
in the estate consists of the funds from the sale of the pipeline
and related equipment and the sale of gas imbalances. The most
recent monthly operating report, for the period ending on January
31, 2023, shows that funds in Cobra's main account totaled
$3,263,625.29.
Prior to filing the Plan of Liquidation, the Debtor filed a motion
to approve payment of administration tax claims to the 16 county
taxing authorities to whom Cobra owes property taxes incurred
during the bankruptcy case. The Debtor estimates that the total
post-petition taxes due to the county taxing authorities will be
approximately $1,375,000. Although debtors in bankruptcy cases are
generally not required to file motions to pay administrative claims
generated during the case, Cobra has elected to file the motion to
pay the taxing authorities in this case because of the large
aggregate total of the claims to be paid.
After payment of the administrative tax claims, Cobra expects to
distribute approximately $1.9M to creditors who hold claims
classified in Classes I and II. Claims classified in Class I are
all priority level tax claims under the definition set forth in
Section 507 of the Bankruptcy Code. Those claims must be paid in
full before money or property can be distributed to subordinate
classes of claims or interests. The Debtor believes that claims
entitled to priority status and classified in Class I total
approximately $723,117. Creditors whose claims are classified in
Class I of the Plan are presumed to have voted to accept the Plan
and are therefore not entitled to vote.
Class I consists of Priority Unsecured Creditors. Allowed Claims of
Priority Unsecured Creditors will be paid in full, without
interest, on the Effective Date of the Plan. The amount of claim in
this Class total $723,117.00. This Class will receive a
distribution of 100% of their allowed claims.
Class II consists of General Unsecured Creditors. Allowed Claims of
General Unsecured Creditors will each be paid their pro-rata share
of the funds remaining after administrative claims and Claims
classified in Class I of the Plan are paid in full. The amount of
claim in this Class total $7,552,815.00. This Class will receive a
distribution of 10-15% of their allowed claims.
Class III consists of Equity Interests of the Debtor's Members. The
existing equity interests of the Debtor's Members will be cancelled
on the effective Date of the Plan. Holders of equity interests will
not receive or retain any money or property under the Plan
A full-text copy of the Disclosure Statement dated March 9, 2023 is
available at https://bit.ly/3ld2uyO from PacerMonitor.com at no
charge.
Counsel for the Debtor:
Thomas W. Coffey
Coffey Law LLC
2430 Tremont Avenue
Cleveland, OH 44113
Tel: (216) 870-8866
E-mail: tcoffey@tcoffeylaw.com
About Cobra Pipeline
Cobra Pipeline Co., Ltd., an Ohio-based intrastate natural gas
pipeline company, filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No.
19-15961) on Sept. 25, 2019. In the petition signed by Jessica
Carothers, general manager, the Debtor disclosed up to $50,000 in
assets and up to $50 million in liabilities.
Judge Arthur I. Harris oversees the case.
Thomas W. Coffey, Esq., at Coffey Law LLC serves as the Debtor's
counsel.
CORIZON HEALTH: Court Halts Proceedings in Benjamin Oryang's Case
-----------------------------------------------------------------
District Judge W. Keith Watkins for the Middle District of Alabama,
on March 7, 2023, has issued an order staying proceeding against
Tehum Care Services, Inc. d/b/a Corizon Health, Inc./Corizon, LLC
in the case styled Benjamin Bedogwar Oryang, AIS # 168 079,
Plaintiff, v. MS. Waugh, et al., Defendants, Case No.
2:21-CV-23-WKW, (M.D. Ala.).
On Feb. 28, 2023, Corizon Health, a defendant in this action, filed
a Suggestion of Bankruptcy and Notice of Automatic Stay.
A full-text copy of the Order dated March 7, 2023 is available at
https://tinyurl.com/yc4adfw6 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.
CORIZON HEALTH: Proceedings in Joshua Wade Ray's Lawsuit Stayed
---------------------------------------------------------------
In the case styled Joshua Wade Ray, AIS # 222 665, Plaintiff, v.
Dr. John McFarland, et al., Defendants, Case No. 3:20-CV-910-WKW,
(M.D. Ala.), District Judge W. Keith Watkins for the Middle
District of Alabama, on March 7, 2023, has issued an order staying
proceedings against Tehum Care Services, Inc. d/b/a Corizon Health,
Inc./Corizon, LLC.
A full-text copy of the Order dated March 7, 2023 is available at
https://tinyurl.com/36rxd3rb 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.
CREEPY COMPANY: Wins Cash Collateral Access Thru April 9
--------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized Creepy Company, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 10% variance through April 9, 2023.
In return for the Debtor's continued interim cash collateral use,
these parties are granted adequate protection for their purported
secured interests in cash collateral equivalents:
Bizfund, LLC
CFT Clear Finance Technology Corp.
Cloud fund
Goldman Sachs Bank USA, Sail Lake
Ouiby Inc. d/b/a Kickfurther
PayPal Working Capital
Shopify Capital Inc.
SBA/EIDL
U.S. Bank - SBA Paycheck Protection Loan
U.S. Bank/SBA
Union Funding Source, Inc.
The Debtor is directed to permit the Secured Parties and the
Subchapter V Trustee to inspect, upon reasonable notice and within
reasonable business hours. The Debtor must maintain and pay
premiums for insurance to cover the collateral from fire, theft,
and water damage.
The Secured Parties are granted replacement liens, attaching to the
Collateral, but only to the extent of their pre-petition liens,
with any valid liens attaching to the Collateral and its proceeds
until further Court order.
A further interim hearing on the matter is scheduled for April 6 at
10:30 a.m.
A copy of the order is available at https://bit.ly/3l0KA2d
fromPacerMonitor.com.
About Creepy Company LLC
Creepy Company LLC sells horror-themed blankets, rugs, lapel pins,
apparel and other products.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-08660) on August 1,
2022. In the petition signed by Susanne C. Goethals, owner and
manager, the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge Carol A. Doyle oversees the case.
Scott R. Clar, Esq., at Crane, Simon, Clar & Goodman, is the
Debtor's counsel.
CWI ENTERPRISES: Files for Chapter 11 After Landfill Shutdown
-------------------------------------------------------------
Addison Willmon of News19 reports that CWI Enterprises has filed
for bankruptcy less than a week after the Alabama Department of
Environmental Management (ADEM) placed a cease and desist order on
the Cherokee Industrial Landfill (CIL).
The Tri-Cities Waste Disposal Authority asked a Colbert County
circuit court judge to remove CWI as the primary operator of the
CIL. A hearing was scheduled for Wednesday, March 8, 2023.
The hearing was suspended indefinitely after CWI filed for
bankruptcy on Tuesday, March 7, 2023.
Court records show that CWI filed for Chapter 11 Bankruptcy, often
called "Reorganization Bankruptcy."
According to a Colbert County judge, all legal proceedings will be
suspended until after the filing has been resolved, or until the
stay is lifted.
Court records show a meeting with creditors is scheduled for
Tuesday, April 11, 2023.
Trash from Colbert County residents will continue to be sent to a
landfill in Franklin County.
About CWI Enterprises
CWI Enterprises -- https://www.cwienterprises.com/ -- offers
Commercial & Industrial waste disposal services that
municipalities, local haulers, and suppliers can count on.
CWI Enterprises sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-52262) on March 8,
2023. In the petition filed by Stephen E. Whitmer, CWI Alabama
member and manager, the Debtor reports estimated assets and
liabilities between $10 million and $50 million each.
The Debtor is represented by:
John A. Christy, Esq.
Schreeder, Wheeler & Flint, LLP
3284 Northside Parkway, Suite 600
Atlanta, GA 30327
CYTOSORBENTS CORP: Posts $32.8 Million Net Loss in 2022
-------------------------------------------------------
Cytosorbents Corporation has filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss
attributable to common stockholders of $32.81 million on $34.69
million of total revenue for the year ended Dec. 31, 2022, compared
to a net loss attributable to common stockholders of $24.56 million
on $43.16 million of total revenue for the year ended Dec. 31,
2021.
As of Dec. 31, 2022, the Company had $63.23 million in total
assets, $27.85 million in total liabilities, and $35.37 million in
total stockholders' equity.
Liquidity and Capital Resources
Since inception, the Company's operations have been primarily
financed through the private and public placement of its debt and
equity securities. At Dec. 31, 2022, the Company had current
assets of approximately $33,760,000 including cash, cash
equivalents and restricted cash on hand of approximately
$23,832,000 and had current liabilities of approximately
$9,715,000. All of the $25 million of its total shelf amount
allocated to its ATM facility was available as of Dec. 31, 2022.
On Dec. 27, 2022, the Company drew down the first $5 million
tranche of the Term C loans available under the terms of its
Amended Loan and Security Agreement with Bridge Bank. Also, the
Company expects to receive approximately $1,093,000 in cash from
the approved sale of its net operating losses and research and
development credits from the State of New Jersey in the first half
of 2023.
As of Dec. 31, 2022, cash, cash equivalents and restricted cash
were $23.8 million compared to $53.8 million as of Dec. 31, 2021.
After taking into account the $5 million related to its debt
drawdown, the Company's 2022 cash burn was approximately $35.0
million. This cash burn was due to lower-than-expected sales
volumes, product gross margins that were lower due to decreased
production volumes and operating efficiencies associated with the
move to its new manufacturing facility, capital expenditures of
approximately $6.3 million related to its new facility and other
factors (e.g. a delay in realizing savings from cost cutting due to
notice periods and labor laws in Europe). A reduction in product
gross margins from 80% in 2021 to 70% in 2022, unfavorably impacted
our cash burn by approximately $2.9 million. The Company expects
product gross margins to return to previous levels as we transition
production fully to the new facility by the end of this year, end
the lease at its Deer Park Drive facility, and begin to capture
anticipated manufacturing efficiencies driven by expected
improvement in market conditions and increased product demand.
Cytosorbernts said, "We are also managing our resources
proactively, continuing to invest in key areas such as our U.S.
clinical program. while driving cost-cutting throughout our
Company. At the beginning of Q2 2022, we began instituting tighter
cost controls and have reduced our headcount (including full and
part-time employees and consultants) internationally by 10%, with
the goal of reducing our cash burn. In addition, we have shifted
our R&D headcount to funded grant programs, where we have an $11.5
million backlog as of December 31, 2022. Some of our costs savings
of our headcount reduction are not yet visible in our results due
to notice periods and labor laws in Europe but will be reflected in
our 2023 operating budget. Meanwhile, we are working diligently to
prioritize activities that we believe have a near-term return on
investment and advance our strategic priorities, which cutting
non-core or non-essential activities and spend. Our goal is,
through a combination of driving an increase in sales and gross
margin, and cutting costs, to significantly reduce our cash burn
and to extend our operating runway with the resources we have.
"Based upon the foregoing, we believe that we have sufficient cash
to fund the Company's operations beyond twelve months from the
issuance of the consolidated financial statements included
elsewhere in this Annual Report on Form 10-K."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1175151/000141057823000234/ctso-20221231x10k.htm
About CytoSorbents
Based in Monmouth Junction, N.J., CytoSorbents Corporation is
engaged in critical care immunotherapy, specializing in blood
purification. Its flagship product, CytoSorb, is approved in the
European Union with distribution in more than 75 countries around
the world as an extracorporeal cytokine adsorber designed to reduce
the "cytokine storm" or "cytokine release syndrome" seen in common
critical illnesses that may result in massive inflammation, organ
failure and patient death.
CytoSorbents reported a net loss of $24.56 million for the year
ended Dec. 31, 2021, a net loss of $7.84 million for the year ended
ec. 31, 2020, a net loss of $19.26 million for the year ended Dec.
31, 2019, and a net loss of $17.21 million for the year ended Dec.
31, 2018. As of Sept. 30, 2022, the Company had $62.27 million in
total assets, $23.13 million in total liabilities, and $39.14
million in total stockholders' equity.
* * *
This concludes the Troubled Company Reporter's coverage of
CytoSorbents until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
D&D BAKER: Court OKs Cash Collateral Access Thru April 4
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana,
Indianapolis Division, authorized D&D Baker Enterprises LLC to use
cash collateral on an interim basis through April 4, 2023.
The court said the Debtor may use up to $10,000 of cash collateral
only for necessary business expenses.
Unless extended by the Court upon the written agreement of the
Debtor, the Debtor's authorization to use the cash collateral will
immediately terminate on the earlier of: (a) the date on which any
creditor provides, via facsimile, e-mail or overnight mail, written
notice to the Debtor or Debtor's counsel, of the occurrence of an
Event of Default, and the expiration of a 10 business day cure
period; or (b) April 4, 2023.
These events constitute an Event of Default:
(i) the Debtor's case is converted to a Chapter 7 case or
dismissed;
(ii) the Debtor fails to comply with any term of the Order,
including but not limited to its payment obligations and compliance
with the Budget; and
(iii) the Debtor makes any payment not set forth in the Budget.
To the extent the Debtor uses cash collateral, the Debtor will
grant the SBA valid and perfected replacement liens against all of
its pre-petition and post-petition assets (other than any causes of
action arising under Chapter 5 of the Bankruptcy Code) with the
same validity, dignity, priority and extent as the SBA's
pre-petition liens against the Debtor's cash collateral, as
additional collateral to secure repayment of the amounts due to the
SBA. The SBA's replacement liens against the Debtor's assets will
be deemed properly perfected and enforceable without the need for
any further actions by the Debtor or SBA. The SBA's replacement
liens against the Debtor's cash collateral will extend to any
account holding such cash collateral, regardless of whether the SBA
has control over such account, and encumbers any cash collateral
held in debtor-in-possession accounts required by applicable law.
The Debtor will also grant Kapitus LLC and Kapitus Servicing Inc.,
as agent of Kapitus LLC, valid and perfected replacement liens
against all of its pre-petition and post-petition assets with the
same validity, dignity, priority and extent as Kapitus'
pre-petition liens against the Debtor's cash collateral, as
additional collateral to secure repayment of the amounts due to
Kapitus. Kapitus' replacement liens against the Debtor's assets
will be deemed properly perfected and enforceable without the need
for any further actions by the Debtor or Kapitus. Kapitus's
replacement liens against Debtor's cash collateral will extend to
any account holding such cash collateral, regardless of whether
Kapitus has control over such account, and encumbers any cash
collateral held in a debtor-in-possession accounts required by
applicable law.
A final hearing on the matter is set for April 4, 2023 at 10:30
a.m.
A copy of the order is available at https://bit.ly/3Fho3EW from
PacerMonitor.com.
About D&D Baker Enterprises LLC
D&D Baker Enterprises LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Ind. Case No. 23-00563) on
February 20, 2023. In the petition signed by Demetrius Baker,
member, the Debtor disclosed up to $50,000 in assets and up to
$500,000 in liabilities.
Judge Jeffrey J. Graham oversees the case.
Preeti Gupta, Esq. represents the Debtor as legal counsel.
DAREN C. DALY: Bid to Dismiss Amended Complaint Granted in Part
---------------------------------------------------------------
Bankruptcy Judge Scott M. Grossman of the Southern District of
Florida grants in part and deny in part the motion to dismiss filed
by the Debtor Daren Daly.
As part of a larger dispute with their son Daren Daly, Patrick and
Elizabeth Daly -- along with plaintiffs All Paving and Sealcoating,
LLC and Patrick and Elizabeth Daly as the (alleged) majority
shareholders of All Paving, Inc. -- have sought a determination
that Daren's alleged debts to them are excepted from any discharge
he might receive in his bankruptcy case. The larger dispute centers
around ownership of All Paving, Inc., a Florida corporation.
Daren has answered his parents' Amended Complaint and asserted
affirmative defenses. But as to All Paving, Inc. and All Paving and
Sealcoating LLC, he has moved to dismiss their Amended Complaint
for failure to state a claim upon which relief may be granted and
for lack of standing.
Daren's parents contend that Daren engaged in a scheme to gain
control of All Paving, Inc. by false pretenses and actual fraud.
Assuming Daren did engage in a fraudulent scheme to wrest control
of All Paving, Inc. from his parents, the Amended Complaint
contains no plausible allegations as to how All Paving, Inc. has a
claim against Daren for this conduct. Based on the Amended
Complaint's allegations, All Paving, Inc. is the subject of the
dispute, but is not the person or entity who allegedly suffered
damages as a result of Daren's conduct. The Court finds and
concludes that the Amended Complaint fails to state a claim by All
Paving, Inc. under section 523(a)(2)(A), and Daren's Motion to
Dismiss Count I as to All Paving, Inc. will be granted.
As to All Paving and Sealcoating, LLC, Count I contains no
allegations whatsoever that Daren owes a debt to All Paving and
Sealcoating, LLC, let alone that such debt was obtained by false
pretenses, a false representation, or actual fraud. Accordingly,
the Court grants Daren's Motion to Dismiss Count I as to All Paving
and Sealcoating, LLC. Evaluating Count II by All Paving and
Sealcoating, LLC only as to embezzlement, then, there are simply no
allegations that Daren owes any debt to this entity for
embezzlement. The Motion to Dismiss Count II as to All Paving and
Sealcoating, LLC is therefore well-taken and will be granted.
As to All Paving, Inc., the Amended Complaint does plausibly allege
that All Paving, Inc. has a claim against Daren for embezzlement.
It alleges, among other things, that Daren embezzled $500,000 from
an All Paving, Inc. account, and although he repaid $450,000, he
still owes $50,000.
As to All Paving and Sealcoating, LLC, the Amended Complaint does
plausibly allege that Daren willfully and maliciously hacked into
Patrick's email account and transferred control of the
Allpaving.com website -- which allegedly had been purchased by All
Paving and Sealcoating, LLC, and was used by both All Paving and
Sealcoating, LLC and All Paving, Inc. -- to himself. Thus, to the
extent the Allpaving.com website was property of All Paving and
Sealcoating, LLC, the Court finds that All Paving and Sealcoating,
LLC has plausibly alleged that Daren willfully and maliciously
injured All Paving and Sealcoating, LLC through his alleged
actions, and the Motion to Dismiss will be denied as to All Paving
and Sealcoating, LLC. But because the Plaintiffs did not contest
Daren's arguments for dismissal of Count III as to All Paving,
Inc., the Motion to Dismiss Count III as to All Paving, Inc. will
be granted.
The Court has scheduled a multi-day trial beginning on April 10,
2023, to resolve (among other issues), who owns All Paving, Inc.;
how much (if anything) Daren owes to the Plaintiffs; and whether
the Plaintiffs' claims are dischargeable (the subject of this
adversary proceeding).
The adversary proceeding is In re: Daren C. Daly, Chapter 11,
Debtor. Patrick Daly, Elizabeth Daly, All Paving and Sealcoating,
LLC, and Patrick Daly and Elizabeth Daly as the Majority
Shareholders of All Paving, Inc., Plaintiffs, v. Daren C. Daly,
Defendant, Case No. 22-15694-SMG, Adv. No. 22-1391-SMG, (Bankr.
S.D. Fla.).
A full-text copy of the Order dated March 6, 2023 is available at
https://tinyurl.com/yc6kr37v from Leagle.com.
Daren C. Daly sought Chapter 11 protection (Bankr. S.D. Fla. Case
No. 22-15694) on July 26, 2022. The Debtor is represented by Isaac
M. Marcushamer, Esq. at DGIM LAW PLLC.
DIOCESE OF CAMDEN: Court Declines Chapter 11 Settlement Conference
------------------------------------------------------------------
Rick Archer of Law360 reports that a New Jersey bankruptcy judge
has denied a request by insurers of the Roman Catholic Diocese of
Camden for a settlement conference, saying he wouldn't be
comfortable presiding over talks before he rules on the diocese's
Chapter 11 plan.
About The Diocese of Camden, NJ
The Diocese of Camden, New Jersey is a nonprofit religious
corporation organized pursuant to Title 16 of the Revised Statutes
of New Jersey. The Diocese is the secular legal embodiment of the
Roman Catholic Diocese of Camden, a juridic person recognized under
Canon Law.
The Diocese of Camden sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.N.J. Case No. 20-21257) on Oct. 1, 2020.
The petition was signed by Reverend Robert E. Hughes, vicar General
and vice president. At the time of the filing, the Debtor had
total assets of $53,575,365 and liabilities of $25,727,209. Judge
Jerrold N. Poslusny Jr. oversees the case. McManimon, Scotland &
Baumann, LLC, is the Debtor's legal counsel.
DIOCESE OF ROCKVILLE CENTRE: Says $5M Not Gift to TV Channel
------------------------------------------------------------
Rick Archer of Law360 reports that the unsecured creditors of the
Roman Catholic Diocese of Rockville Centre on Monday, March 6,
2023, asked a New York bankruptcy judge to reject a $5 million
"gift" to the diocese's television channel out of the proceeds of a
proposed sale of diocese-owned cellphone towers.
After a four-month sale process, the Debtor has completed its
auction of its Cell Tower Assets and has announced a successful bid
that contemplates total consideration of $13.75 million.
As part of the sale process, the Debtor provided prospective
bidders (and the Committee) with copies of certain Cell Tower
Leases (which leases would likely be assumed and assigned to a
buyer in any Cell Tower sale transaction). Also as part of the
sale process, non-debtor affiliate Catholic Faith Network ("CFN"):
(a) argued that it has the right to payment of revenues under the
Cell Tower Leases (the "Lease Revenues") and (b) demanded payment
(initially $16 million) for CFN's consent to the extinguishment of
such payment rights and to the assignment of the Cell Tower Leases
to any successful bidder. In addition, during the sale process,
certain bidders expressed concern regarding CFN's rights under the
Cell Tower Leases, and sought assurances from the Debtor that CFN
would in fact be assigning its rights to any Cell Tower Asset
buyer.
In an effort to preserve value for the estate, the Debtor explored
non-consensual options to address CFN's asserted payments rights,
including, for instance, a strategy of "selling" the Cell Tower
Leases "free and clear" of CFN's rights under section 363(f) of the
Bankruptcy Code. But to avoid litigation with CFN, the Debtor
initially offered to resolve CFN's rights to the Lease Revenues for
a payment of $3 million. Although this offer was rejected by CFN,
good-faith, arm's-length negotiations continued and the parties
ultimately agreed to a $5 million payment to CFN out of the total
consideration set forth in the successful bid. This resolution is
memorialized in the Successful Bidder APA, which provides that
$8.75 million of the consideration thereunder will be provided to
the Debtor, while the other $5 million of consideration will be
provided to CFN.
In the Supplemental Committee Objection, the Official Committee of
Unsecured Creditors objects to this $5 million payment to CFN. The
Committee argues that such payment is a "gift" by the Debtor to a
non-debtor affiliate that violates the Debtor's fiduciary duties.
"This is untrue. The reality is that CFN put the Debtor in between
a rock and a hard place. CFN demanded substantial consideration
for the extinguishment of its asserted payment rights under the
Cell Tower Leases and certain bidders raised these rights to the
Debtor as a substantial issue to be resolved as part of any
transaction. After evaluating its legal options, the Debtor
determined, in its business judgment, that proceeding down a
consensual path, as opposed to a risky and potentially
value-destructive litigation path, would be the best way to
maximize the value of the Cell Tower Assets for the Debtor's
stakeholders. Thus, the Debtor agreed to resolve CFN's issues for
a payment of $5 million, which the Debtor viewed as reasonable
given that (a) such payment unlocks $8.75 million in value for the
Debtor’s estate, (b) such $5 million amount is near the present
value of the Lease Revenues (assuming a range of discount rates
from 6 - 10%); and (c) the Debtor has concerns that CFN could cause
considerable harm to the Debtor's sale process if CFN sought to
preserve (and enforce post-closing) its rights against the Lease
Revenues," the Diocese said in its response to the Committee's
objection.
About The Roman Catholic Diocese
of Rockville Centre, New York
The Roman Catholic Diocese of Rockville Centre, New York, is the
seat of the Roman Catholic Church on Long Island. The Diocese has
been under the leadership of Bishop John O. Barres since February
2017. The State of New York established the Diocese as a religious
corporation in 1958. The Diocese is one of eight Catholic dioceses
in New York, including the Archdiocese of New York. The Diocese's
total Catholic population is approximately 1.4 million, roughly
half of Long Island's total population of 3.0 million. The Diocese
is the eighth largest diocese in the United States when measured by
the number of baptized Catholics.
The Roman Catholic Diocese of Rockville Centre, New York, filed a
Chapter 11 petition (Bankr. S.D.N.Y. Case No. 20-12345) on Sept.
30, 2020, listing as much as $500 million in both assets and
liabilities. Judge Martin Glenn oversees the case.
The Diocese tapped Jones Day as legal counsel, Alvarez & Marsal
North America, LLC, as restructuring advisor, and Sitrick and
Company, Inc., as communications consultant. Epiq Corporate
Restructuring, LLC is the claims agent.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors in the Diocese's Chapter 11 case. The
committee tapped Pachulski Stang Ziehl & Jones, LLP and Ruskin
Moscou Faltischek, PC, as its bankruptcy counsel and special real
estate counsel, respectively.
Robert E. Gerber, the legal representative for future claimants of
the Diocese, is represented by the law firm of Joseph Hage
Aaronson, LLC.
DIOCESE OF SACRAMENTO: Sexual Abuse Suits Could Bankrupt Diocese
----------------------------------------------------------------
Alley Einstein of US Times Post reports that hundreds of recently
filed sex abuse lawsuits could bankrupt the Catholic Diocese of
Sacramento, the diocese's bishop said in a letter to the
congregation this week.
The diocese's financial distress stems from a law signed into law
by Gov. Gavin Newsom in 2019 that temporarily lifts the statute of
limitations on child sex abuse lawsuits. The law extended the age
at which victims can file civil charges of abuse to 40 years. It
was 26 years old.
The law also opened a three-year window for victims of any age to
file suits. The window was closed on December 31, 2022.
As a result of the law, more than 200 lawsuits alleging child
sexual abuse have been filed against the diocese, 80% of which date
back to abuse in the 1980s or earlier.
By the end of 2022, more than 2,000 lawsuits had been filed against
the Catholic Church nationwide.
"It is truly heartbreaking to learn of this overwhelming number of
claims," Bishop Jaime Soto wrote. "These claims represent real
people whose lives have been marred by the sins of people they were
taught to trust."
Soto said he was determined to resolve all claims fairly, but
acknowledged the issues that could arise.
"Given the number of claims filed ... their resolution may exceed
the diocese’s budget available to settle such claims," he
wrote.
"This financial challenge is unlike anything we have experienced
before. I have to consider what options we have if the diocese
becomes insolvent."
The lawsuits filed against the Diocese of Sacramento and other
Northern California dioceses are being overseen by an Alameda
County judge, and the lawsuit process is still in its early stages,
Soto said.
But the Diocese of Sacramento is responsible for paying claims from
a fund set aside for the purpose, and Soto reckons it would have to
sell some of its assets.
"Very little insurance coverage remains to cover abuse over the
past few decades," the diocese said on its website, and financial
help from the Vatican "is not an option."
"We have no Vatican funds available to us in this situation," the
diocese said.
One option, Soto said, would be for the diocese to file for Chapter
11 bankruptcy, which would allow it to operate while it tries to
pay off the remaining lawsuits.
"It is important that in the context of a diocesan bankruptcy,
victims of clergy sex abuse are represented in bankruptcy
proceedings and a fund is established that is distributed as
equitably as possible," Soto said.
Without this, Soto said, the first cases that go to court and
result in damages could financially ruin the diocese and leave the
remaining plaintiffs stranded.
"We are in this situation because of serious sins committed by
individual priests ... and a smaller number of lay people in the
diocese," the diocese said on its website. "It is these evil acts
that have brought us to this place -- not the victims of sexual
abuse seeking justice."
About Sacramento Diocese
Sacramento Diocese is a Latin Church ecclesiastical territory or
diocese of the Catholic Church in the northern California region of
the United States.
* * *
More than two dozen U.S. catholic dioceses, including two in U.S.
overseas territories, have entered into bankruptcy proceedings due
to clergy sexual abuse claims. Thus far, 15 of these dioceses have
reached settlement agreements with victims and other claimants. In
total, Catholic dioceses across the country have paid out $4
billion in claims from people who alleged abuse since the 1980s.
DIOCESE OF SANTA ROSA: Case Summary & 20 Largest Unsecured Creditor
-------------------------------------------------------------------
Debtor: The Roman Catholic Bishop of Santa Rosa
985 Airway Court
Santa Rosa, CA 95403
Case No.: 23-10113
Business Description: The Debtor is a tax-exempt religious
organization.
Chapter 11 Petition Date: March 13, 2023
Court: United States Bankruptcy Court
Northern District of California
Judge: Hon. Charles Novack
Debtor's Counsel: Paul J. Pascuzzi, Esq.
FELDERSTEIN FITZGERALD WILLOUGHBY PASCUZZI &
RIOS LLP
500 Capitol Mall
Suite 2250
Sacramento, CA 95814
Tel: (916) 329-7400
Email: ppascuzzi@ffwplaw.com
Debtor's
Claims &
Noticing
Agent: DONLIN, RECANO & COMPANY, INC.
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Bishop Robert F. Vasa as bishop.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/I62MPSQ/The_Roman_Catholic_Bishop_of_Santa__canbke-23-10113__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Archiocese of San Francisco Note Payable $1,410,000
c/o Weintraub Tobin Chediak
Coleman Grodin Law Corp.
475 Sansome St., Ste 510
San Francisco, CA 94111
Paul Gaspari, Esq.
Tel: (415) 772-9618
Email: pgaspari@weintraub.com
Paula Carney
1 Peter Yorke Way
San Francisco, CA 94109
Email: carneyp@sfarch.org
Tel: (415) 614-5500
2. Healdsburg Printing Trade $7,535
30 Mill Street
Healdsburg, CA 94558
Joe Vetter
Tel: (707) 433-1680
Email: joev_headsburgprinting@outlook.com
3. Nicolay Consulting Group Professional $6,583
231 Sansome St. Services
Suite 300
San Francisco, CA 94104
Anthony Nicolay
Tel: (415) 705-6133
Email: anicolay@nicolayconsulting.com
4. Minuteman Press Trade $1,024
112 Commercial Court #4
Santa Rosa, CA 95407
Tel: (707) 578-6004
Email: santarosa@minutemanpress.com
5. Autom Trade $894
5226 S31st Place
Phoenix, AZ 85040
Tel: (800) 521-2914
6. Pacific Gas & Electric Utility $812
P.O. Box 997300
Sacramento, CA 95899-7300
Tel: (800) 743-5000
7. Denver Bookbinding Co Inc. Trade $485
1401 W. 47th Avenue
Denver, CO 80211
Tel: (303) 455-5521
Email: dbbc@denverbook.com
8. American Bible Society Trade $143
101 N Independence Mall E
Floor 8
Philadelphia, PA 19106-2155
Tel: (800) 322-4253
9. Federal Express Trade $131
P.O. Box 7221
Pasadena, CA 91109-7321
Tel: (800) 622-1147
10. AT&T Teleconference Services Utility $75
P.O. Box 5002
Carol Stream, IL 60197-5002
Tel: (800) 722-3481
11. Cotter Church Supplies Trade $74
1701 James M Wood Blvd.
Los Angeles, CA 90015-1001
Tel: (213) 385-3366
12. Together & Asamblea Trade $53
3852 E. First St.
Los Angeles, CA 90063
Tel: (323) 266-3771
Email: together@sspusa.org
13. Dennis Purificacion Employee $35
130 Kennison Ct Expense
Vallejo, CA 94589 Reimbursement
Tel: (707) 704-9944
14. John Doe 129 Tort Claimant Unknown
c/o Joseph George Jr. Law Corp.
601 University Ave
Suite 270
Sacramento, CA 95825
Joseph George, Jr., Esq.
Email: jgeorgejr@psyclaw.com
Tel: (916) 623-4914
15. John Doe 130 Tort Claimant Unknown
c/o Joseph George Jr. Law Corp.
601 University Ave
Suite 270
Sacramento, CA 95825
Joseph George, Jr., Esq.
Email: jgeorgejr@psyclaw.com
Tel: (916) 623-4914
16. John Doe SR 1136 Tort Claimant Unknown
c/o Jeff Anderson & Associates
12011 San Vicente Blvd
Suite 700
Los Angeles, CA 90049
J. Michael Reck, Esq
Email: mreck@andersonadvocates.com
Tel: (949) 919-5693
17. John Doe SR 1536 Tort Claimant Unknown
c/o Jeff Anderson & Associates
12011 San Vicente Blvd
Suite 700
Los Angeles, CA 90049
J. Michael Reck, Esq.
Email: mreck@andersonadvocates.com
Tel: (949) 919-5693
18. John Doe SR 424 Tort Claimant Unknown
c/o The Zalkin Law Firm
10590 W. Ocean Air Drive
Suite 125
San Diego, CA 92130
Irwin Zalkin, Esq.
Email: irwin@zalkin.com
Tel: (619) 330-1120
19. John Doe SR 477 Tort Claimant Unknown
c/o The Zalkin Law Firm
10590 W. Ocean Air Drive
Suite 125
San Diego, CA 92130
Irwin Zalkin, Esq.
Email: irwin@zalkin.com
Tel: (619) 330-1120
20. John Doe SR 99 Tort Claimant Unknown
c/o Mary Alexander & Assoc.
19100 Von Karman Ave
Suite 800
Irvine, CA 92612
Mary Alexander, Esq.
Email: malexander@maryalexanderlaw.com
Tel: (415) 433-4440
DIXIE HOME: Court OKs Cash Collateral Access Thru Aug 31
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Utah, Central
Division, authorized Dixie Home Solutions, Inc. to use cash
collateral on an interim basis, pending the final hearing set for
March 22, 2023 at 3 p.m.
The Debtor is authorized, but not required, to make payments only
as and when due in the ordinary course of its business and
according to the agreements and only in accordance with the
Cash-Flow Budget.
As previously reported by the Troubled Company Reporter, the Debtor
has identified four secured creditors it believes have a potential
interest in its personal property:
-- Consolidated Electrical Distributors, Inc.;
-- Corporation Service Company, as Representative, which the
Debtor believes to be agent for Austin Business Finance;
-- Corporation Service Company, as Representative, which the
Debtor believes to be agent for Kalamata Capital Group; and
-- Capybara Capital, LLC.
Based on the filing dates, CED appears to be the senior creditor,
however, its security interests are limited to the purchase money
security it holds in inventory purchased from it as well as the
proceeds "received and owed to the Debtor as a result of the sale,
transfer or exchange of any of the Debtor's inventory" purchased
from CED. The Debtor is proposing to return to CED the remaining
solar inventory subject to its UCC-1 lien and is not proposing to
make adequate protection payments currently.
The next senior lien holder appears to be Austin Business, which
the Debtor believes has a claim with a balance of $699,388 as of
the Petition Date. This leaves no remaining security for any other
lienholders. The Debtor proposes, in exchange for the use of cash
collateral, if appropriate, to grant replacement liens on new
income to ensure a creditor is adequately protected.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3l59ZHR from PacerMonitor.com.
The Debtor projects $125,204 in total receipts and $47,400 in total
disbursements for March 2023.
About Dixie Home Solutions, Inc.
Dixie Home Solutions, Inc. is an umbrella company which has several
subsidiaries including a solar sales and installation company
(Ionix Smart Solutions) and a roofing repair and maintenance
company (Eagle Eye Roofing). These operations are in both Saint
George, Utah, and Grand Junction, Colorado.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Utah Case No. 23-20557) on February 20,
2023. In the petition signed by Chris Grover, authorized
representative, the Debtor disclosed up to $500,000 in assets and
up to $10 million in liabilities.
Judge William T. Thurman oversees the case.
Geoffrey L. Chesnut, Esq., at Red Rock Legal Services, PLLC,
represents the Debtor as legal counsel.
EMERGENT FIDELITY: Taps Morgan, Lewis & Bockius as Legal Counsel
----------------------------------------------------------------
Emergent Fidelity Technologies seeks approval from the U.S.
Bankruptcy Court for the District of Delaware to hire Morgan, Lewis
& Bockius, LLP as its legal counsel.
The firm's services include:
a) taking all necessary action to protect and preserve the
estate of the Debtor, including the prosecution of any actions on
the Debtor's behalf, the defense of any actions commenced against
the Debtor, the negotiation of disputes in which the Debtor is
involved, and the preparation of objections to claims filed against
the Debtor's estate;
b) providing legal advice with respect to the Debtor's powers
and duties in the continued operation of its business;
c) assisting the Debtor in investigating all potential estate
causes of action;
d) advising the Debtor with respect to the potential sale of
its assets and negotiating and preparing on the Debtor's behalf all
agreements related thereto;
e) attending meetings and negotiating with representatives of
creditors and other parties in interest;
f) negotiating, preparing, soliciting, and otherwise pursuing
confirmation of a Chapter 11 plan and any other restructuring
alternative;
g) preparing legal papers;
h) advising the Debtor on corporate, financing and tax matters
as requested by the Debtor;
i) appearing in court;
j) reviewing all pleadings filed in the Debtor's bankruptcy
case; and
k) other necessary legal services.
Morgan's hourly rates are as follows:
Partners $995 - $1,885
Of Counsel $955
Associates $690 - $870
Paraprofessionals $200 - $415
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Craig Wolfe, Esq., a partner at Morgan, 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:
Craig A. Wolfe, Esq.
Joshua Dorchak, Esq.
David K. Shim, Esq.
101 Park Avenue
New York, NY 10178
Telephone: (212) 309-6000
Email: craig.wolfe@morganlewis.com
Email: joshua.dorchak@morganlewis.com
Email: david.shim@morganlewis.com
About Emergent Fidelity Technologies
Emergent Fidelity Technologies is a holding company owned by Sam
Bankman-Fried that is based in Antigua and Barbuda. It owns 55
million shares of Robinhood Markets, Inc., and $20.7 million cash,
which is apparently proceeds from the sale of additional such
shares. The company 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, with $500 million to $1 billion in both assets and
liabilities. Angela Barkhouse, as provisional liquidator of
Emergent, signed the petition.
Morgan, Lewis & Bockius, LLP, led by Jody C. Barillare, is the
Debtor's legal counsel.
EMPEREON MARKETING: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Empereon Marketing, LLC
Assumed: Empereon-Constar
10400 N 25th Avenue
Suite 100
Phoenix, AZ 85021
Business Description: Empereon Constar is a business process
outsourcing company providing end-to-end
customer engagement and customer management
solutions through two distinct, but
affiliated, privately held entities.
Chapter 11 Petition Date: March 14, 2023
Court: United States Bankruptcy Court
District of Arizona
Case No.: 23-01592
Debtor's Counsel: Gerald Shelley, Esq.
FENNEMORE CRAIG PC
2394 E Camelback Road Suite 600
Phoenix, Arizona 85016
Tel: 602-916-5000
Email: gshelley@fclaw.com
Total Assets as of Dec. 31, 2022: $6,385,218
Total Liabilities as of Dec. 31, 2022: $1,777,954
The petition was signed by Travis Bowley as C.E.O.
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/Y5SHATI/EMPEREON_MARKETING_LLC__azbke-23-01592__0001.0.pdf?mcid=tGE4TAMA
EXCL LOGISTICS: Seeks Interim Cash Collateral Access
----------------------------------------------------
Excl Logistics, LLC asks the U.S. Bankruptcy Court for the Western
District of Washington for authority to use cash collateral on an
emergency basis to pay ordinary and necessary operating expenses
including adequate protection payments that come due.
The Debtor also requests entry of an immediate order authorizing
the payment of Debtor's March 15, 2023, payroll and related
employment taxes, and the Debtor's March 15, 2023, payment of
independent contractor driver obligations.
The Debtor requires the use of cash collateral to operate the
business.
Based on a UCC search performed on February 28, 2023, the Debtor
has identified 12 secured creditors with a potential interest in
the Debtor's personal property, more specifically:
-- First Corporate Solutions, as representative for TBS
Factoring Services, LLC,
-- Ernies Fueling Network (Termination filed 03/06/23),
-- Kautilya Capital, LLC,
-- Defined Benefit Plan,
-- Commercial Credit Group, Inc.,
-- Pape Material Handling (Termination filed 03/06/23),
-- Exertion 221 Trust, and
-- Commercial Credit Group, Inc.
As of the petition date, the Debtor's cash on hand of approximately
$5,632; accounts receivable of approximately $125,466; personal
property valued at approximately $10,388, fully encumbered vehicles
valued at approximately $771,233 and free and clear vehicles valued
at approximately $60,000.
A copy of the motion is available at https://bit.ly/3FiPdvo from
PacerMonitor.com.
About Excl Logistics, LLC
Excl Logistics, LLC operates a trucking operation providing freight
carrying and logistic services to its customers from its
headquarters located in Snohomish Washington.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-10364) on February
27, 2023. In the petition signed by Anil Bhambi, managing member,
the Debtor disclosed up to $1 million in assets and up to $10
million in liabilities.
Thomas D. Neeleman, Esq., at Neeleman Law Group, P.C., represents
the Debtor as legal counsel.
FENIX GROUP: Gets OK to Hire Richard F. Avellone as Accountant
--------------------------------------------------------------
Fenix Group, LLC received approval from the U.S. Bankruptcy Court
for the District of Arizona to employ Richard F. Avellone, LLC as
its accountant.
The firm will charge the Debtor a flat fee of $975 to prepare the
2021 income tax returns and $975 to prepare the 2022 income tax
returns.
Richard F. Avellone does not represent any interest adverse to the
Debtor or the estate, as disclosed in court filings.
The firm can be reached through:
Richard F. Avellone, CPA
Richard F. Avellone, LLC
4350 E Camelback Road, Suite B-150
Phoenix, AZ 85018
Phone: (602) 944-5511
Fax: (602) 445-9331
Email: RichardA@phxtax.com
About Fenix Group
Fenix Group, LLC provides services to children and adults with
developmental disabilities. This includes a day program (two
locations), group supported employment, transportation, after
school and summer programs for children, and adult development
homes programs. They are funded through the State of Arizona
Division of Development Disabilities.
Fenix Group sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ariz. Case No. 23-00155) on Jan. 11,
2023, with up to $50,000 in assets and up to $500,000 in
liabilities. Ron Tilley, a Fenix Group member and manager, signed
the petition.
Judge Madeleine C. Wanslee oversees the case.
The Debtor tapped D. Lamar Hawkins, Esq., at Guidant Law, PLC as
legal counsel and Richard F. Avellone, LLC as accountant.
FIELDWOOD ENERGY: Court Declines Bond Firms' Plan Appeal
--------------------------------------------------------
Rick Archer of Law360 reports that a Texas federal judge rejected a
challenge by a group of surety bond companies to offshore oil and
gas driller Fieldwood Energy's Chapter 11 plan, telling them
Wednesday, March 8, 2023, that restoring their claimed subrogation
rights could undo a plan that went into effect more than a year
ago.
As previously reported, attorneys for several surety bond companies
told a Texas federal court Feb. 16, 2023, that it should overturn a
portion of Fieldwood Energy's Chapter 11 bankruptcy plan that freed
the company that purchased its oil and gas assets from subrogation
obligations, telling the court that "bonds will be hard to come by"
across the industry if
the plan is upheld.
Fieldwood Energy's Plan was confirmed by the Bankruptcy Court on
June 25, 2021. This restructuring was accomplished through a
"divisive merger" -- FWE (a Delaware LLC) would sell its deepwater
assets to Newco via a bankruptcy sale under Section 363 of the
Bankruptcy Code, then FWE
would convert to a Texas LLC. From there, through the Texas merger
statute, 34 FWE would "allocate" its assets and liabilities
divisively to FWE I and FWE III as needed by the Plan proponents to
accomplish their goals.
About Fieldwood Energy
Fieldwood Energy -- https://www.fieldwoodenergy.com/ -- is a
portfolio company of Riverstone Holdings focused on acquiring and
developing conventional assets, primarily in the Gulf of Mexico
region. It is the largest operator in the Gulf of Mexico owning an
interest in approximately 500 leases covering over two million
gross acres with 1,000 wells and 750 employees.
Fieldwood Energy and its 13 affiliates previously sought Chapter 11
protection (Bankr. S.D. Tex. Lead Case No. 18-30648) on Feb. 15,
2018, with a prepackaged plan that would deleverage $3.286 billion
of funded by $1.626 billion.
On Aug. 3, 2020, Fieldwood Energy and its 13 affiliates again filed
voluntary Chapter 11 petitions (Bankr. S.D. Tex. Lead Case No.
20-33948). Mike Dane, senior vice president and chief financial
officer, signed the petitions.
At the time of the filing, the Debtors disclosed $1 billion to $10
billion in both assets and liabilities.
Judge David R. Jones oversees the cases.
The Debtors tapped Weil, Gotshal & Manges LLP as their legal
counsel, Houlihan Lokey Capital, Inc. as investment banker, and
AlixPartners, LLP as financial advisor. Prime Clerk LLC is the
claims, noticing, and solicitation agent.
The first-lien group employed O'Melveny & Myers LLP as its legal
counsel and Houlihan Lokey Capital, Inc. as its financial advisor.
The RBL lenders employed Willkie Farr & Gallagher LLP as their
legal counsel and RPA Advisors, LLC as their financial advisor.
Meanwhile, the cross-holder group tapped Davis Polk & Wardwell LLP
and PJT Partners LP as its legal counsel and financial advisor,
respectively.
On Aug. 18, 2020, the Office of the U.S. Trustee appointed a
committee of unsecured creditors. Stroock & Stroock & Lavan, LLP
and Conway MacKenzie, LLC, serve as the committee's legal counsel
and financial advisor, respectively.
FISHBONE SAFETY: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Fishbone Safety Solutions LTD
212 East X Street
Deer Park, TX 77536
Chapter 11 Petition Date: March 10, 2023
Court: United States Bankruptcy Court
Western District of Washington
Case No.: 23-10453
Judge: Hon. Timothy W. Dore
Debtor's Counsel: Richard Lee Fuqua II, Esq.
FUQUA & ASSOCIATES, P.C.
8558 Katy Freeway
Suite 119
Houston, TX 77024
Tel: (713) 960-0277
Fax: (713) 960-1064
Email: RLFuqua@FuquaLegal.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by William S. Cain, manager of BSC
Interest, LLC, general partner.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/QWBP35Q/Fishbone_Safety_Solutions_LTD__txsbke-23-60011__0002.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/QLMDVLA/Fishbone_Safety_Solutions_LTD__txsbke-23-60011__0001.0.pdf?mcid=tGE4TAMA
FREE SPEECH: Alex Jones to Get $520K Salary Under Chapter 11 Plan
-----------------------------------------------------------------
Dave Collins of The Washington Post reports that Alex Jones would
get $520,000 salary under bankruptcy plan.
Alex Jones' media company has proposed a plan in its bankruptcy
case to pay the conspiracy theorist $520,000 a year while leaving
$7 million to $10 million annually to pay off creditors, including
relatives of Sandy Hook shooting victims.
The Sandy Hook families won nearly $1.5 billion in lawsuits last
year against the Infowars host, for his calling the 2012 shooting
that killed 20 children and six educators in Newtown, Connecticut,
a hoax perpetrated by crisis actors. The families also said they
were harassed and threatened by Jones' followers.
But it remains unclear how much money the Sandy Hook families will
actually get from Jones and Infowars' parent company, Free Speech
Systems. Jones is appealing the verdicts and has said on his show
that he has $2 million or less to his name.
Free Speech Systems, owned solely by Jones, filed a proposed
reorganization plan Tuesday, March 7, 2023, in its Chapter 11
bankruptcy case in Houston that predicts it will have $7 million to
$10 million annually after expenses to pay creditors from 2023 to
2027. The judge in the case, which was filed last 2022, would
determine who gets that money and how much.
A bankruptcy lawyer for Jones did not respond to an email message
Tuesday, March 7, 2023. Lawyers in Texas and Connecticut for the
Sandy Hook families declined to comment.
The new filing shows the company expects to sell more than $30
million a year in dietary supplements, which Jones hawks on his
show and are the company’s main source of income.
Meanwhile, Jones and an expected new chief operating officer would
each be paid $520,000 per year. The company also would hand out
$560,000 to nearly $1.3 million per year in executive incentives
and another $352,000 to $677,000 in employee bonuses annually.
Free Speech Systems, which has more than 40 employees, would pay
$780,000 to $940,000 per year all together to its workers. It would
pay another $839,000 to $1 million annually to contract employees.
Jones, who lives and works in Austin, Texas, also has filed for
personal bankruptcy.
"I'm officially out of money, personally," Jones said on Infowars
in December. "It's all going to be filed. It's all going to be
public. And you will see that Alex Jones has almost no cash."
That contradicted testimony at one of last 2022’s trials by a
forensic economist who said Jones and his company had a combined
net worth as high as $270 million.
The Sandy Hook families are contesting parts of Free Speech
System’s bankruptcy, including a more than $50 million debt the
company says it owns to another creditor, PQPR Holdings Limited
LLC. Free Speech Systems buys dietary supplements from PQPR to sell
on the Infowars website.
Jones has an ownership stake in PQPR, which is managed by his
father, David Jones, according to the filing by Free Speech
Systems.
During a hearing related to Jones' personal bankruptcy case on
Wednesday, lawyers for both Jones and his creditors expressed
frustration with difficulties in obtaining accurate financial
information from Jones that have caused delays in the filing of
required court documents.
About Free Speech Systems
Free Speech Systems LLC is a broadcast media production and
distribution company that provides broadcasting aural programs by
radio to the public. Free Speech Systems is a family-run business
founded by Alex Jones.
FSS is presently engaged in the business of producing and
syndicating Jones' radio and video talk shows and selling products
targeted to Jones' loyal fan base via the Internet. Today, FSS
produces Alex Jones' syndicated news/talk show (The Alex Jones
Show) from Austin, Texas, which airs via the Genesis Communications
Network on over 100 radio stations across the United States and via
the internet through websites including Infowars.com.
Due to the content of Alex Jones' shows, Jones and FSS have faced
an all-out ban of Infowars from mainstream online spaces. Shunning
from financial institutions and banning Jones and FSS from major
tech companies began in 2018.
Conspiracy theorist Alex Jones has been sued by victims' family
members over Jones' lies that the 2012 Sandy Hook Elementary School
shooting was a hoax.
Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet
TV, LLC, filed petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-60020) on April
18, 2022.
The Debtors agreed to the dismissal of the Chapter 11 cases in June
2022 after the Sandy Hook victim families dismissed the three
bankrupt companies from their lawsuits.
Free Speech Systems filed a voluntary petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex.
Case No. 22-60043) on July 29, 2022. In the petition filed by W.
Marc Schwartz, as chief restructuring officer, the Debtor reported
assets and liabilities between $50 million and $100 million.
Melissa A Haselden has been appointed as Subchapter V trustee.
Alexander E. Jones filed for personal bankruptcy under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 4:22-bk-60043) on
Dec. 2, 2022, listing $1 million to $10 million in assets against
liabilities of $1 billion to $10 billion in liabilities.
Raymond William Battaglia, of Law Offices of Ray Battaglia, PLLC,
is FSS's counsel. Raymond W. Battaglia and Crowe & Dunlevy, P.C.,
led by Vickie L. Driver, Christina W. Stephenson, Shelby A. Jordan,
and Antonio Ortiz are representing Alex Jones.
FREE SPEECH: Jones Ordered to File Financial Docs by March 30
-------------------------------------------------------------
Alex Wolf of Bloomberg Law reports that a bankruptcy judge ordered
right-wing online program host Alex Jones to submit updated and
accurate financial disclosures by March 30 or risk the future of
his Chapter 11 case.
Jones will be called into court for a "serious hearing" about his
case unless a complete account of assets and financial status is
filed, Judge Christopher Lopez of the US Bankruptcy Court for the
Southern District of Texas said at a Wednesday, March 8, 2023,
hearing.
"We don't have a case if there aren't accurate schedules," Lopez
said. "The process demands transparency."
About Free Speech Systems
Free Speech Systems LLC is a broadcast media production and
distribution company that provides broadcasting aural programs by
radio to the public. Free Speech Systems is a family-run business
founded by Alex Jones.
FSS is presently engaged in the business of producing and
syndicating Jones' radio and video talk shows and selling products
targeted to Jones' loyal fan base via the Internet. Today, FSS
produces Alex Jones' syndicated news/talk show (The Alex Jones
Show) from Austin, Texas, which airs via the Genesis Communications
Network on over 100 radio stations across the United States and via
the internet through websites including Infowars.com.
Due to the content of Alex Jones' shows, Jones and FSS have faced
an all-out ban of Infowars from mainstream online spaces. Shunning
from financial institutions and banning Jones and FSS from major
tech companies began in 2018.
Conspiracy theorist Alex Jones has been sued by victims' family
members over Jones' lies that the 2012 Sandy Hook Elementary School
shooting was a hoax.
Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet
TV, LLC, filed petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-60020) on April
18, 2022.
The Debtors agreed to the dismissal of the Chapter 11 cases in June
2022 after the Sandy Hook victim families dismissed the three
bankrupt companies from their lawsuits.
Free Speech Systems filed a voluntary petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex.
Case No. 22-60043) on July 29, 2022. In the petition filed by W.
Marc Schwartz, as chief restructuring officer, the Debtor reported
assets and liabilities between $50 million and $100 million.
Melissa A Haselden has been appointed as Subchapter V trustee.
Alexander E. Jones filed for personal bankruptcy under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 4:22-bk-60043) on
Dec. 2, 2022, listing $1 million to $10 million in assets against
liabilities of $1 billion to $10 billion in liabilities.
Raymond William Battaglia, of Law Offices of Ray Battaglia, PLLC,
is FSS's counsel. Raymond W. Battaglia and Crowe & Dunlevy, P.C.,
led by Vickie L. Driver, Christina W. Stephenson, Shelby A. Jordan,
and Antonio Ortiz are representing Alex Jones.
FTX GROUP: Advisers Billed $38 Million for January
--------------------------------------------------
Sam Reynolds of Coin Desk reports that the army of professionals
working on the FTX bankruptcy case has billed a collective $38
million plus expenses for the month of January 2023, according to
court records.
Bankruptcy administrators have retained law firm Sullivan &
Cromwell as counsel. They have also retained Quinn Emmanuel
Urquhart & Sullivan as well as Landis Rath & Cobb to act as special
counsel for the proceedings.
Consultancy AlixPartners was retained to primarily conduct forensic
analysis on decentralized finance (DeFi) products and tokens in
FTX's possession.
Meanwhile, the financial services firms Alvarez & Marsal as well as
Perella Weinberg Partners were retained to sort through FTX's
accounting records and determine which assets it can sell.
According to court filings, Sullivan & Cromwell billed $16.8
million for January while Quinn Emanuel Urquhart & Sullivan billed
$1.4 million and Landis Rath & Cobb billed $663,995.
Collectively, the three firms have over 180 lawyers assigned to the
case and over 50 nonlawyer staff such as paralegals.
Court filings show Sullivan & Cromwell lawyers and staff billed a
total of 14,569 hours for January 2023. The largest project
Sullivan & Cromwell worked on was discovery, followed by asset
disposition and asset analysis and recovery.
Initially the U.S. Department of Justice had objected to FTX hiring
Sullivan & Cromwell, claiming potential conflicts of interest.
Former CEO Sam Bankman-Fried also objected to bankruptcy
administrators hiring the firm, claiming that the law firm's staff
had pressured him into filing for bankruptcy protection in
November. In late January 2023 the firm was approved by a U.S.
bankruptcy court judge in Delaware to continue to represent FTX.
In early February, Sullivan & Cromwell submitted a bill for $7.5
million for the first 19 days of bankruptcy work after FTX filed in
November 2022.
The majority of billed time for Quinn Emanuel Urquhart & Sullivan
was spent on Asset Analysis and Recovery as well as Avoidance
Action – legalese for attempts to undo certain transactions that
the debtor engaged in before bankruptcy.
For Landis Rath & Cobb, a significant amount of time was billed for
hearings, litigation and asset disposition.
AlixPartners billed $2.1 million for 2,454 hours of work.
Investment bank Perella Weinberg Partners billed $450,000 (its
monthly fee), and court documents show it spent a significant
amount of time on developing a restructuring strategy as well as
correspondence with third parties.
According to its billing breakdown, the bank spent a large amount
of time working on the sale of FTX assets LedgerX and FTX Japan. In
January, a bankruptcy judge gave the sale the green light in order
to create liquidity to pay back creditors.
Alvarez & Marsal billed $12.3 million, the second-largest charge
for the month behind Sullivan & Cromwell. Some of the largest items
it billed for were Avoidance Actions, at 3,370 hours, financial
analysis, at 1,168 hours and accounting at 1,106 hours.
In November 2022, shortly after FTX declared bankruptcy, CEO John
J. Ray III said the crypto exchange had a "complete failure of
corporate controls and such a complete absence of trustworthy
financial information."
Ray, who oversaw the liquidation of Enron and Nortel Networks,
called the FTX situation "unprecedented" and something he had never
seen in his career.
Ray, for his part, submitted a bill for $305,565 for his work
during the month of February 2023.
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: LedgerX Auction Delayed to March 22
----------------------------------------------
Jeremy Hill of Bloomberg News reports that an auction for LedgerX,
a crypto derivatives platform owned by bankrupt FTX, has been
delayed by about two weeks.
The auction, initially slated for March 7, 2023, has been
rescheduled for March 22, 2023, court papers show. A notice about
the delay offers scant details about its cause. Bankrupt companies
sometimes push out sale deadlines to better evaluate and refine
bids.
Advisers for FTX are trying to sell off assets as part of an effort
to return money to the insolvent crypto empire's creditors. In
addition to LedgerX, it's soliciting bids for FTX Japan, FTX Europe
and stock-clearing company Embed.
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 TRADING: UST Appeals Ruling Rejecting Independent Examiner
--------------------------------------------------------------
Turner Wright of Coin Telegraph reports that the legal team for
U.S. Trustee Andrew Vara petitioned to have the U.S. District Court
consider an appeal for a ruling on an independent examiner in FTX's
bankruptcy case.
Lawyers for Andrew Vara, the United States Trustee representing the
interests of the Department of Justice in crypto exchange FTX’s
bankruptcy proceedings, has filed an appeal against a federal
judge's denial of a motion appointing an independent examiner in
the case.
In a March 6, 2023 filing in U.S. Bankruptcy Court for the District
of Delaware, the legal team petitioned to have the U.S. District
Court consider an appeal of a February ruling from Judge John
Dorsey. The federal judge said in a February 15, 2023 hearing that
he would deny a motion to appoint an examiner in the FTX bankruptcy
case, saying it would be an "unnecessary burden" on the firm’s
debtors and creditors.
At the time, Judge Dorsey said the costs of an examiner "would
likely exceed one hundred million dollars" and "not be in the best
interest of the creditors". Both Vara as well as a group of four
U.S. senators called on the court to appoint an independent
examiner, citing the need for transparency and suggesting potential
conflicts of interest. The judge called the letter from the
lawmakers an "inappropriate ex parte communication" that he would
not consider in his decision.
FTX's bankruptcy proceedings have been ongoing since the company
filed for Chapter 11 protection in November. The criminal case
against Sam Bankman-Fried, whose trial is expected to begin in
October, has recently been focused on the former CEO's bail
conditions -- prosecutors have been seeking to limit or remove his
ability to contact current and former FTX and Alameda employees.
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.
FUELCELL ENERGY: Incurs $21.1 Million Net Loss in First Quarter
---------------------------------------------------------------
FuelCell Energy, Inc. has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $21.10 million on $37.07 million of total revenues for the three
months ended Jan. 31, 2023, compared to a net loss of $46.12
million on $31.79 million of total revenues for the three months
ended Jan. 31, 2022.
As of Jan. 31, 2023, the Company had $892.38 million in total
assets, $157.15 million in total liabilities, $59.86 million in
redeemable series B preferred stock, and $675.37 million in total
equity.
"For the first quarter of fiscal year 2023, we reported strong
revenue growth, up 17% compared to the comparable prior year
quarter," said Mr. Jason Few, president and chief executive
officer. "We delivered positive gross margin of approximately 14%
and ended the quarter with a strong total cash and short-term
investment position of over $400 million. Revenues in the quarter
included service revenues recognized for four new module exchanges,
two at our Woodbridge, Connecticut project and another two at Korea
Southern Power Company ("KOSPO"). We also saw an increase of
recurring generation revenues of 27% in the quarter. Generation
revenues now include revenues generated by the operation of our
platform at the U.S. Navy Submarine Base in Groton, CT, which began
commercial operations during the first quarter."
"We remain focused on executing our project backlog and growing our
generation operating portfolio and expect the Toyota and Derby
projects to achieve commercial operation during calendar year
2023," continued Mr. Few. "Regarding our continued work with
ExxonMobil Technology and Engineering Company, or EMTEC, we
announced in December that we have extended the term of our Joint
Development Agreement through August 31, 2023, and increased the
maximum amount of contract consideration to be reimbursed by EMTEC
by 20%, from $50 million to $60 million. This important, long-term
partnership supports our efforts to commercialize large scale fuel
cell carbon capture and storage technology."
Mr. Few added, "We continue to make progress towards scaling
manufacturing with the goal of delivering our solid oxide fuel cell
platform, which can create energy from a number of available energy
sources - from renewables, hydrogen, biogas, or natural gas. We
have amended our existing lease to more than double the square
footage of our Calgary-based manufacturing facility and are
continuing our capital investment in equipment needed to complete
our first phase of scaling our production capacity. Subsequent to
the quarter end, we announced a memorandum of understanding
regarding our intent to collaborate with a subsidiary of Malaysia
Marine and Heavy Engineering Holdings Berhad (KLSE: MHB) on the
development of large-scale electrolyzer facilities based on our
solid oxide technology for the Asian, New Zealand and Australian
markets. Together, we expect to increase the efficiency and
simultaneously reduce the cost of green hydrogen production, with
the goal of making large-scale clean hydrogen production an easily
accessible and viable energy option."
Mr. Few concluded, "As mentioned previously, we expect the U.S.
Inflation Reduction Act to be a key driver of growth in renewable
technologies, and we continue to see broad support for the energy
transition through legislation and economic incentives globally.
For example, the European Union recently proposed an approximately
$270 billion program that would offer tax breaks for businesses
investing in net-zero technology, and in Korea, the Korean Hydrogen
Economy Roadmap aims to produce 6.2 million fuel cell electric
vehicles and deploy at least 1,200 hydrogen refueling stations by
2040. We believe that future demand for technologies like those we
are developing will create a significant opportunity upon which we
believe we will bewell positioned to capitalize. We continue to
execute on our strategy to Grow, Scale and Innovate, and we look
forward to an exciting inflection point in the future as we focus
on commercialization activities and work to achieve long-term
profitable growth."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/886128/000155837023003256/fcel-20230131x10q.htm
About FuelCell Energy
Headquartered in Danbury, Connecticut, FuelCell Energy, Inc. --
http://www.fuelcellenergy.com-- is a global developer of
distributed baseload power solutions through its proprietary fuel
cell technology. The Company's current commercial technology
produces electricity, heat, hydrogen, and water while separating
carbon for utilization and/or sequestration.
FuelCell reported a net loss of $147.23 million for the year ended
Oct. 31, 2022, a net loss of $101.02 million for the year ended
Oct. 31, 2021, a net loss of $89.11 million for the year ended Oct.
31, 2020, a net loss of $77.57 million for the year ended Oct. 31,
2019, and a net loss of $47.33 million for the year ended Oct. 31,
2018.
* * *
This concludes the Troubled Company Reporter's coverage of FuelCell
Energy until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
FUSION: Summary Judgment Granted in Favor of Ashley Furniture
-------------------------------------------------------------
District Judge Cathy Seibel for the Southern District of New York
grants the motion for summary judgment filed by the Defendant
Ashley Furniture Industries, Inc. and denies the cross-motion for
summary judgment of filed by the Plaintiffs Solutions Express Ltd.
d/b/a Solex and Technology Opportunity Group, Ltd. in the case
captioned as Solutions Express Ltd. d/b/a Solex and Technology
Opportunity Group, Ltd., Plaintiffs, v. Ashley Furniture
Industries, Inc., Defendant, Case No. 20-CV-7843 (CS) (S.D.N.Y.).
In March 2015, the Defendant and non-party BCN Telecom Inc. entered
into a Term Agreement, under which BCN became the Defendant's agent
for purposes of acquiring telecommunications services.
On or about Nov. 18, 2016, the Plaintiffs entered into an asset
purchase agreement with Network Billing Systems, LLC d/b/a Fusion.
Under the APA, Fusion purchased certain customer contracts from the
Plaintiffs. As of March 2017, via an Asset Purchase and Transition
Services Agreement, BCN sold to Fusion the accounts receivable of
certain customers -- including the Defendant's receivable, as well
as the right to service those customers.
Now, both parties move for summary judgment on the Plaintiffs'
unjust enrichment and quantum meruit claims. In the amended
complaint, the Plaintiffs allege that the Defendant has been
unjustly enriched at the Plaintiffs' expense because the Defendant
received telecommunication services without paying for and the
Plaintiffs are entitled to reimbursement for satisfying the
Defendant's obligation to Fusion.
The Plaintiffs claim to be entitled to the Defendant's outstanding
balance of $126,373, even though Fusion withheld only $122,802 from
the Plaintiffs' commissions, and the Defendant's receivable remains
on Fusion's books. Even assuming Fusion withheld from the
Plaintiffs the full outstanding balance, and assuming that the
money withheld was a result of the Defendant's failure to pay its
account receivable and not for another reason, the Plaintiffs have
simply not discharged the Defendant's debt. According to both
parties, the Defendant is still obligated to pay Fusion for the
full amount of its outstanding balance.
The Court finds a mismatch inherent in the Plaintiffs' theory is
illustrated by two contradictions. First, the Plaintiffs seek
$126,373, which is what the Defendant allegedly failed to pay, but
under the Guaranty they would be entitled only to the $122,802
allegedly withheld from McCrosson's commission. Second, while the
Plaintiffs allege under their new theory that the benefit to the
Defendant is the value of using telecommunication services without
having to settle an outstanding balance, they have provided no
reason to believe that that value is equivalent to the amount of
the outstanding balance, which has not been taken off of Fusion's
books and which the Defendant is still obligated to pay.
Accordingly, the Court concludes that the Plaintiffs' claims of
unjust enrichment and quantum meruit must fail.
The Court further finds that the Plaintiffs simply did not bargain
for an agreement that would allow it to bring Fusion's breach of
contract claim against the Defendant in these circumstances. But
Fusion did, in the Guaranty, undertake to use its best efforts to
assist the Plaintiffs in collection efforts, as long as the TOG APA
had not been terminated and as long as the Guaranty was
enforceable. The Court points out that if the Plaintiffs' inability
to collect from the Defendant on Fusion's behalf (and thereby
receive reimbursement from Fusion for what Fusion withheld from
Plaintiffs' commissions) was due to a failure of assistance on
Fusion's part, and if the two contracts are still in effect, and if
there were no release or other barrier, the Plaintiffs' remedy
would be against Fusion. Accordingly, the Court concludes that the
Plaintiffs' claim against the Defendant for equitable subrogation
must fail.
A full-text copy of the Opinion & Order dated March 7, 2023 is
available at https://tinyurl.com/yj9t3fk9 from Leagle.com.
About Fusion
Fusion (Nasdaq: FSNN) -- http://www.fusionconnect.com/-- a
provider of integrated cloud solutions to small, medium and large
businesses, is the industry's Single Source for the Cloud(R).
Fusion's advanced, proprietary cloud services platform enables the
integration of leading edge solutions in the cloud, including cloud
communications, contact center, cloud connectivity, and cloud
computing. Fusion's innovative, yet proven cloud solutions lower
our customers' cost of ownership, and deliver new levels of
security, flexibility, scalability, and speed of deployment.
GARDNER AGENCY: Case Summary & Six Unsecured Creditors
------------------------------------------------------
Debtor: Gardner Agency of Texas, LLC
8505 Technology Place, Ste. 503
The Woodlands TX 77381
Business Description: The Debtor is an insurance agency in
Woodlands, Texas.
Chapter 11 Petition Date: March 13, 2023
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 23-30883
Judge: Hon. Jeffrey P. Norman
Debtor's Counsel: Dean W. Greer, Esq.
WEST & WEST ATTORNEYS AT LAW, P.C.
2929 Mossrock, Suite 204
San Antonio, TX 78230
Tel: (210) 342-7100
Email: dean@dwgreerlaw.com
Total Assets: $10,643
Total Liabilities: $1,909,966
The petition was signed by Steven C. Gardner as managing member.
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/ARDFNVA/Gardner_Agency_of_Texas_LLC__txsbke-23-30883__0001.0.pdf?mcid=tGE4TAMA
GIRARDI & KEESE: Prosecutors, Ex-CFO Seek Nov. 7 Fraud Trial
------------------------------------------------------------
Joyce E. Cutler of Bloomberg Law reports that Ex-Girardi Keese
chief financial officer Christopher Kamon and Los Angeles federal
prosecutors are seeking November 7, 2023 trial date on charges the
law firm CFO stole millions of dollars from the collapsed
plaintiffs' law firm.
Kamon is charged with what prosecutors called a $10 million "side
fraud" for allegedly embezzling from the firm led by the
now-disbarred attorney Thomas V. Girardi. The parties suggested the
trial date in a joint filing on Tuesday, March 7, 2023, estimating
proceedings will last eight to 10 days. His trial was initially set
for March 14, 2023.
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
GOTSPACE EQUITY: Involuntary Chapter 11 Case Summary
----------------------------------------------------
Alleged Debtor: Gotspace Equity Fund 1, LLC
268 Newbury Street
Boston, MA 02116
Involuntary Chapter
11 Petition Date: March 13, 2023
Court: United States Bankruptcy Court
District of Massachusetts
Case No.: 23-10367
Petitioners' Counsel: Neil Kreuzer, Esq.
LAW OFFICE OF NEIL KREUZER
268 Newbury St. 4th Floor
Boston, MA 02116
Tel: (617) 872-5347
Email: nkreuzer@aol.com
A full-text copy of the Involuntary Petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/2FS5ZIY/Gotspace_Equity_Fund_1_LLC__mabke-23-10367__0001.0.pdf?mcid=tGE4TAMA
Alleged creditors who signed the petition:
Petitioner Nature of Claim Claim Amount
1. Gotspace Beverly, LLC Debt $2,250,000
268 Newbury Street, 4th Floor
Boston, MA 02116
2. Gotspace Gloucester, LLC $2,250,000
268 Newbury Street, 4th Floor
Boston, MA 02116
3. Fiorillo Family Revocable Trust $50,000,000
3 Kales Way
Harwich Port, MA 02646
4. Gotspace Management, LLC Debt $4,500,000
268 Newbury Street, 4th Floor
Boston, MA 02116
GREATER FELLOWSHIP: Case Summary & One Unsecured Creditor
---------------------------------------------------------
Debtor: Greater Fellowship Ministries, Inc.
2401 South Main
Pine Bluff, AR 71603
Business Description: The Debtor is a tax-exempt religious
organization.
Chapter 11 Petition Date: March 13, 2023
Court: United States Bankruptcy Court
Eastern District of Arkansas
Case No.: 23-10710
Judge: Hon. Bianca M. Rucker
Debtor's Counsel: Frank H. Falkner, Esq.
DILKS LAW FIRM
P.O. Box 34157
Little Rock, AR 72203
Tel: (501) 244-9770
Fax: (888) 689-7626
Email: frank@dilkslawfirm.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Esau Watson as CEO.
The Debtor listed Meadow River Investments, LLC as its sole
unsecured creditor holding a claim of $722,704.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/DWKV5IA/Greater_Fellowship_Ministries__arebke-23-10710__0001.0.pdf?mcid=tGE4TAMA
GREELY LAND: Has Deal on Cash Collateral Access Thru March 31
-------------------------------------------------------------
Greeley Land, LLC and creditors Pathfinder 501, LLC and Pathfinder
Crismon, LLC advised the U.S. Bankruptcy Court for the District of
Colorado that they have reached an agreement regarding the Debtor's
use of cash collateral and now desire to memorialize the terms of
this agreement into an agreed order.
The parties agreed the Debtor may use cash collateral to continue
operating its student housing complex in accordance with a budget,
with a 15% variance, from March 1 to 31, 2023.
Pathfinder 501 asserts a senior security interest in all the
Debtor's assets pursuant to a Deed of Trust, Assignment of Rents,
and Security Agreement.
Crismon also asserts an interest in the cash collateral that is
junior to 501's interest pursuant to a Deed of Trust, Assignment of
Rents, and Security Agreement. The Loan matured on November 1,
2021. On October 20, 2022, Pathfinder filed a Complaint and
Verified Ex Parte Motion for Order Appointing Receiver in the
District Court for Weld County, Case No. 2022CV30788.
On October 24, 2022, the State Court appointed Randel Lewis of
Foundation, Ltd. as Receiver. The Receiver did not take possession
of the Property and instead managed the Debtor's cash, working with
the Debtor's property management team. Specifically, the Receiver
did not replace the Debtor's employees so the Debtor has continued
to use its same property management company.
Crismon sought to foreclose on the Property. In accordance with
Colorado law, the foreclosure sale date was set for December 14,
2022 at 10:00 a.m. Before the foreclosure sale, the Debtor filed
for protection under Chapter 11 of the Bankruptcy Code and
initiated the bankruptcy case.
The Receiver was not in possession of the Property on the Petition
Date, but he was (and remains) in possession of the Debtor's cash.
On December 19, 2022, the Debtor filed a Motion to Compel Turnover
of Property by the Receiver. There were no objections to the
motion.
On January 4, 2023, the Receiver filed his Notice Pursuant to 11
U.S.C. section 543(b), in which he stated that he has turned over
and delivered to the Debtor all property of the Debtor held by or
transferred to the Receiver. According to the accounting filed in
connection with the notice, the Receiver turned over the Debtor's
cash by sending the Debtor a check on January 4, 2023, which the
Debtor deposited in its bank account.
Payment of operating expenses is the Debtor's responsibility now
that the Receiver transferred the cash back to the Debtor. The
Debtor has confirmed receipt of the Receiver's payment and
deposited the check in its debtor-in-possession bank account.
A copy of the stipulated motion is available at
https://bit.ly/3FdtapO from PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3JbM6Gx from
PacerMonitor.com.
The Debtor projects $99,891 in total revenue and $34,716 in total
operating expenses.
About Greeley Land, LLC
Greeley Land, LLC, an apartment building operator, filed its
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D. Colo. Case No. 22-14864) on Dec. 13, 2022, listing
$10 million to $50 million in both assets and liabilities.
Judge Michael E. Romero presides over the case.
Michael J. Pankow, Esq., and Amalia Y. Sax-Bolder, Esq., at
Brownstein Hyatt Farber Schreck, LLP are the Debtor's bankruptcy
attorneys.
GREENWORKS SERVICE: Unsecureds Will Get 100% of Claims in 3 Years
-----------------------------------------------------------------
GreenWorks Service Company Inc. filed with the U.S. Bankruptcy
Court for the Northern District of Texas a Plan of Reorganization
dated March 7, 2023.
GreenWorks started operations in November 2011. The Debtor operates
a residential and commercial inspection and engineering services
business.
GreenWorks had to file bankruptcy due aggressive tactics of the
multiple merchant cash advance companies. These tactics and the
lockup of the business bank account by the merchant cash advance
companies put an impossible strain on the finances of the company,
including the withdrawal of funds and the inability to allow it to
pay employees or operate.
The Debtor filed this case on December 7, 2022, to seek protection
from aggressive collection efforts by creditors that, if continued,
would be to the detriment of other creditors by crippling business
operations. Debtor proposes to pay allowed unsecured based on the
liquidation analysis and cash available. Debtor anticipates having
enough business and cash available to fund the plan and pay the
creditors pursuant to the proposed plan. Based upon the
projections, the Debtor believes it can service the debt to the
creditors.
The Debtor will continue operating its business. The Debtor's Plan
will break the existing claims into seven classes of Claimants.
These claimants will receive cash repayments over a period of time
beginning on the Effective Date. While Debtor's Plan proposes to
pay claims not to exceed 3 years, nothing prevents Debtor from
prepaying its claims.
Class 7 consists of Unsecured Claims. This Class is impaired. All
allowed unsecured creditors shall receive a pro rata distribution
at zero percent per annum over the next 3 years beginning not later
than the 15th day of the first full calendar month following 30
days after the effective date of the plan and continuing every year
thereafter for the additional 2 years remaining on this date.
Debtor may begin on the 15th day of the month after the effective
date of confirmation, to begin disbursements to the Class 7
claims.
Debtor will distribute up to $59,842.96 to the general allowed
unsecured creditor pool over the 3-year term of the plan. The
Debtor's General Allowed Unsecured Claimants will receive 100% of
their allowed claims under this plan. Any creditors listed in the
schedules of GreenWorks Service Company Inc. as disputed and did
not file a claim will not receive distributions under this plan.
Class 8 consists of Equity Interest Holders. This Class is not
impaired under the Plan. The current owner will receive no payments
under the Plan; however, they will be allowed to retain their
ownership in the Debtor. Class 8 Claimants are not impaired under
the Plan.
Debtor anticipates the continued operations of the business to fund
the Plan.
All guarantees and other obligations shall be deemed modified to
reflect the restructuring of the primary obligations under the
Plan. If the plan is confirmed, a creditor may not enforce
liability under a guaranty or other third-party claim unless the
Debtor defaults under the Plan for that creditor. In the event of
default, only the amount owing under the Plan shall be recovered
from the guarantor. This provision is intended to apply to
creditors who had previously recovered judgments against the
guarantor.
A full-text copy of the Plan of Reorganization dated March 7, 2023
is available at https://bit.ly/426jRBS from PacerMonitor.com at no
charge.
Debtor's Counsel:
Robert C. Lane, Esq.
Joshua D. Gordon, Esq.
The Lane Law Firm
6200 Savoy, Suite 1150
Houston, TX 77036
Tel: (713) 595-8200
Fax: (713) 595-8201
Email: notifications@lanelaw.com
Joshua.gordon@lanelaw.com
About GreenWorks Service Company
GreenWorks Service Company provides inspections, structural
engineering, environmental testing, handyman services, and pest
control services for residential and commercial properties.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 22-32290) on Dec. 7,
2022. In the petition signed by Harmony Brown, member, the Debtor
disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Judge Michelle V. Larson oversees the case.
Robert C. Lane, Esq., at the Law Lane Firm, is the Debtor's
counsel.
HALL CATTLE: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Hall Cattle Feeders LLC
16590 Interstate 40 E
Shamrock TX 79079
Business Description: The Debtor primarily operates in the
cattle feedlots business.
Chapter 11 Petition Date: March 14, 2023
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 23-20039
Debtor's Counsel: Van W. Northern, Esq.
NORTHERN LEGAL, PC
3545 S. Georgia
Amarillo TX 79109
Tel: (806) 374-2266
Email: northernlegalpc@gmail.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Dakota Hall as managing member.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/4YGK3GY/Hall_Cattle_Feeders_LLC__txnbke-23-20039__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Capital Farm Credit Note $4,788,830
PO Box 302
Pampa, TX 79066
2. Capital Farm Credit Loan $694,787
PO Box 302
Pampa, TX 79066
3. Capital Farm Credit Loan $540,772
PO Box 302
Pampa, TX 79066
4. Dimmitt Flaking LP $175,079
1380 US-385
Dimmitt, TX 79027
5. Livestock Nutrition $169,140
Center LLC
5200 TX-136
Amarillo, TX 79108
6. Caterpillar Financial Loan $163,394
Services
P.O. Box 730681
Dallas, Texas 75373-0681
7. Small Business Loan $160,486
Administration
409 3rd St. Southwest
Washington, DC 20416
8. Diversified Financial Loan $144,257
14010 First National Bank
Parkway
Suite 400
Omaha, NE 68154
9. Animal Health Internation Inc $125,389
9602 Fm Rd 1541
Amarillo, TX 79118
10. Happy State Bank Note $107,859
200 Main St
Canadian, TX 79014
11. Happy State Bank Loan $83,642
200 Main St
Canadian, TX 79014
12. Caterpillar Financial Skid Steer $50,379
Services
P.O. Box 730681
Dallas, Texas 75373-0681
13. Caterpillar Financial Loan $32,959
Services
P.O. Box 730681
Dallas, Texas 75373-0681
14. 3T Drilling Inc $12,480
10870 Cluck Rd
Dumas, TX 79029
15. Blue Cross Blue Shield $6,960
1001 E Lookout Dr
Richardson, TX 75082
16. Caterpillar Financial $5,129
Services
2120 Westend Ave
Nashville, TN 37203
17. Cat Financial Car Card $811
2120 Westend Ave
Nashville, TN 37203
18. Ameriflex $52
19. D&D Cattle $0
461 N I-45
Fairfield, TX 75840
20. Cowen Cattle Company $0
PO Box 256
Benjamin, TX 79505
HELIUS MEDICAL: Incurs $14.1 Million Net Loss in 2022
-----------------------------------------------------
Helius Medical Technologies, Inc. has filed with the Securities and
Exchange Commission its Annual Report on Form 10-K disclosing a net
loss of $14.07 million on $787,000 of total revenue for the year
ended Dec. 31, 2022, compared to a net loss of $18.13 million on
$522,000 of total revenue for the year ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $17.28 million in total
assets, $9.14 million in total liabilities, and $8.15 million in
total stockholders' equity.
Minneapolis, Minnesota-based Baker Tilly US, LLP, the Company's
auditor since 2022, issued a "going concern" qualification in its
report dated March 9, 2023, citing that the Company has recurring
losses from operations, an accumulated deficit, expects to incur
losses for the foreseeable future and requires additional working
capital. These are the reasons that raise substantial doubt about
their ability to continue as a going concern.
Management's Commentary
"We finished our launch year strong, with 44% sequential quarterly
revenue growth and the introduction of several programs to increase
access to PoNS Therapy for patients suffering from balance and gait
impairment. Earlier in the year, we implemented an online training
module to standardize the training process and enable faster
onboarding of physical therapists. More recently, we launched the
ponstherapy.com e-commerce site and also expanded our PTAP program,
which provides qualifying MS patients access to PoNS Therapy at a
nearly 85% discount to list price. These efforts are already
beginning to pay off, and it's gratifying to see patients who are
suffering from MS more quickly receive the relief that they need,"
said Dane Andreeff, president and chief executive officer of
Helius.
"We are also thrilled to add gait deficit due to mild and moderate
symptoms from stroke as another indication for which PoNS has
received market authorization in Canada, as announced earlier
today. PoNS is a breakthrough technology, and we are excited about
the tremendous opportunity to help patients suffering from balance
and gait impairment. With the positive reception to PoNS in the
North American marketplace and our strong balance sheet and reduced
cash burn, we are well-positioned to build on our momentum in
2023," Andreeff concluded.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1610853/000155837023003338/hsdt-20221231x10k.htm
About Helius Medical
Helius Medical Technologies, Inc. -- http://www.heliusmedical.com
-- is a neurotech company focused on neurological wellness. Its
purpose is to develop, license or acquire non-invasive technologies
targeted at reducing symptoms of neurological disease or trauma.
HIGH STREET: Unsecureds Will Get 7.09% via Quarterly Payments
-------------------------------------------------------------
The High Street, Inc., filed with the U.S. Bankruptcy Court for the
Southern District of New York a Subchapter V Plan dated March 9,
2023.
The Debtor is a multi-line women's contemporary clothing wholesale
showroom, based in the NYC garment district. Since the Debtor's
formation in 2008, the Debtor has cultivated relationships across
the globe with top retailers from department stores to boutiques.
The Debtor filed this Chapter 11 case in order to remove the
restraint against its bank account and restructure its affairs and
propose a plan of reorganization to repay its creditors.
Prior to the Petition Date, the Debtor booked approximately
$200,000 of sales from the Spring/Summer Collection, which is
shipped and paid in the first quarter of 2023. During the off
season in the late Fall/early Winter of 2022, the Debtor was able
to sell $60,000 of merchandise, which will be shipped and paid in
the second quarter of 2023.
The Debtor's sales of its designers' collections at NY Coterie
Trade Show in February 2023 is the best indicator to forecast the
Debtor's revenue for 2023. The Debtor attended the NY Coterie Trade
Show from February 21-23, 2023 and had its own sales booth, and
also booked pre and post-trade show appointments and orders. During
the trade show, the Debtor booked approximately $160,000 in sales
of the Pre-Fall/Fall Collection. There are also regional trade
shows in Boston, Massachusetts and Westchester, New York. Between
the post Coterie and regional trades show sales, the Debtor
projects to book another $150,000, which would be shipped in the
Summer, and commissions paid in August and September 2023.
The Debtor's commissions range between 10-12% of the sales. In
2022, the Debtor's gross income was $91,312.83, and after expenses
of $89,997.83, there was a net profit of $1,315.00. Based on the
Debtor's sales in the 4th quarter of 2022 and first quarter of
2023, the Debtor projects a modest net profit of $500 quarterly
($2,000 annually) as set forth in the projection.
Class 2 shall consist of the Allowed Unsecured Claims. Each holder
of an Allowed Unsecured Claim shall receive a distribution, Pro
Rata, from the Debtor's net income in an amount no less than $500
per quarter. The allowed unsecured claims total $141,088.36. The
Debtor estimates an approximate 7.09% distribution to Class 2
Claims, with the first pro rata distribution being made on the
Effective Date. Class 2 Claims are Impaired and holders are
entitled to vote under the Plan.
Class 3 consists of the Holders of Equity Interests in the Debtor,
including any warrants or convertible securities in the Debtor.
Upon the Effective Date, the Class 3 Equity Interests shall be
deemed cancelled and extinguished. Holders of Class 3 Equity
Interests shall not receive any distribution under the Plan on
account of any Class 3 Equity Interests. 100% of the common stock
equity interests in the Reorganized Debtor shall be issued to
Allison Wilbur in partial consideration for her contributions to
the Reorganized Debtor's operations. Class 3 Equity Interests are
impaired.
The Plan will be financed from the Debtor's projected net income.
On or before the Effective Date of the Plan, the Debtor shall
deposit into an escrow account maintained by its counsel the amount
of $6,412.01, to fund the initial distribution under the Plan.
A full-text copy of the Subchapter V Plan dated March 9, 2023 is
available at https://bit.ly/3yCHy7n from PacerMonitor.com at no
charge.
Attorneys for the Debtor:
Julie Cvek Curley, Esq.
Kirby Aisner & Curley, LLP
700 Post Road, Suite 237
Scarsdale, NY 10583
Phone: (914) 401-9502
Email: jcurley@kacllp.com
About The High Street
The High Street, Inc., sought protection for relief under Chapter
11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-11655) on
Dec. 9, 2022, with up to $50,000 in assets and $100,001 to $500,000
in liabilities.
Judge Martin Glenn presides over the case.
Julie Cvek Curley, Esq., at Kirby Aisner & Curley, LLP, serves as
the Debtor's counsel.
HIGHLAND CAPITAL: Novelist Judge Won't Recuse From Case
-------------------------------------------------------
The Texas federal judge overseeing the bankruptcy case of Highland
Capital Management LP has refused to recuse herself from the case
at the request of the investment firm's former CEO and others,
saying Monday, March 6, 2023, there's no "objective" evidence of
bias or animus and calling claims over her published novels a
"sideshow.".
There have been multiple motions to recuse the presiding bankruptcy
judge in the main bankruptcy case of Highland Capital Management,
L.P. Each one has been filed by James Dondero, Highland Capital
Management Fund Advisors, L.P., NexPoint Advisors, L.P., The
Dugaboy Investment Trust, The Get Good Trust, and NexPoint Real
Estate Partners, LLC, f/k/a HCRE.
"Distilled to its essence, the Third Motion to Recuse has failed to
present any objective manifestations of bias or prejudice. The
court does not believe any of the assertions of the Movants rise to
"the threshold standard of raising a doubt in the mind of a
reasonable observer" as to the judge's impartiality. This court
does not believe that any objective person would find that the
Movants are the victims of improper judicial conduct rising to the
extraordinary remedy of recusal," Judge Stacey G. Jernigan said in
her ruling on March 6, 2023.
The judge denies claims by the Movants that due to the Acis
bankruptcy case, the Presiding Judge gained extrajudicial knowledge
and developed opinions of Mr. Dondero and the Affected Entities
that created animus or bias towards them in the Highland bankruptcy
case and related adversary proceedings.
Acis Capital Management, L.P., a Delaware limited partnership, and
Acis Capital Management GP, L.L.C., a Delaware limited liability
company—were two entities within the approximately 2,000-entity
organizational structure of Highland that were forced into an
involuntary bankruptcy case in January 2018. The Presiding Judge
presided over the Acis case. Mr. Dondero was the president of the
two Acis debtors, as well as the CEO of Highland at the time.
"The extrajudicial knowledge -- if it should be considered that --
the Presiding Judge gained from the Acis case, that is now
suggested to have created bias or animus, was knowledge about the
highly complex CLO products industry, knowledge about the forms of
agreements that typically set forth parties' rights and
obligations, and some knowledge about the Highland business
structure and the shared services and sub-advisory services model
it typically used. The Presiding Judge, at all times, has been
aware that Mr. Dondero was a founder of Highland and was the
President of Acis and CEO of Highland at relevant times. To be
clear, a Chapter 11 Trustee was appointed in the Acis case soon
after an order for relief was entered, and the Presiding Judge only
recalls Mr. Dondero testifying once in court during the Acis case.
The Presiding Judge has a vague recollection that deposition
testimony may have been presented at another time. The court
cannot recall any of the other Affected Entities ever being parties
appearing in the Acis case or providing testimony," Judge Jernigan
said.
She added that the fact that the Presiding Judge commented on
litigiousness (often -- by the way -- in the context of yearning
for settlement) should not be interpreted as "bias" or "prejudice"
toward Movants or any other party, for that matter. Not only was
there significant credible evidence of this, but it is simply about
rule enforcement and managing a docket consistent with this court's
duty to the public.
Further, Movants have claimed that that the Presiding Judge's
fiction novels "contain derisive commentary about financial
industry executives, the financial industry generally, and the
financial instruments specifically at issue in HCMLP's bankruptcy"
and that the second novel in particular "appears based on Judge
Jernigan's experiences with HCMLP and Mr. Dondero in the Bankruptcy
Proceedings."
"The Presiding Judge's novels -- again entirely fiction -- are not
about Mr. Dondero or the hedge fund industry in general. The first
novel (He Watches All My Paths) is entirely about a federal judge
who receives death threats and the impact of that on her family, as
well as the U.S. Marshals who provide protection. The ultimate
perpetrator of the threats in the novel is not a person in the
hedge fund industry but, rather, a young, former tort victim who
feels wronged by the American justice system. The second novel
(Hedging Death) is partly a sequel to the first— in that it
involves a manhunt for a criminal from the first book—and it also
happens to involve a bio-medical research firm in a Chapter 11 case
in the protagonist judge's court, whose president is a Chechen
immigrant to the U.S. and received funding from a hedge fund
manager named Cade Graham. Cade Graham is the book character that
Movants believe is "patterned" after Mr. Dondero. The character
Cade Graham is an individual who fakes his own death in Mexico
("pseudocide") after linking up with Mexican drug cartels. He is
described as a Dallas native, raised by an oil man, who graduated
from Princeton. He has a Brazilian girlfriend with whom he has a
son, Ethan, with whom he engages in business. The book mentions a
"Ranger Capital" exactly seven times (on six pages in more than 300
pages) as a company of Cade Graham's. There is another hedge fund
mentioned in the book called Toro Capital. Movants state now that
Highland once did business under the name of "Ranger." This was
never mentioned in the bankruptcy case. It is not in the Highland
disclosure statement. The Presiding Judge cannot find the name in
any of the numerous organizational charts that were presented to
her in the last three years. The Presiding Judge has never once
heard this," Judge Jernigan said in her ruling.
Judge Jernigan added, "The Presiding Judge regrets this sideshow.
Many sitting judges write books -- albeit it is more common for
them to write legal nonfiction books than fiction books.
Ironically, the former can be much more fraught with peril --
creating the possibility that someone is going to infer a legal
viewpoint that might signal how the judge might rule in a future
case. The Presiding Judge made clear that everything in the two
books should be viewed as fiction. "
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.
Texas 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.
HOT'Z POWER: Court OKs Cash Collateral Access Thru March 21
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Hot'z Power Wash, Inc. to use cash
collateral on an interim basis in accordance with the budget
through the date of the final hearing set for March 21, 2023 at 4
p.m.
The Internal Revenue Service, Corporation Service Company, as
Representative, and SOS Capital will continue to have the same
liens, encumbrances and security interests in the cash collateral
generated or created post filing, plus all proceeds, products,
accounts, or profits thereof, as existed prior to the filing date.
At a Lender's request, the Debtor will provide copies of all
insurance policies currently in force, and further continue to keep
all collateral of the Lenders fully insured against all loss, peril
and hazard with substantially similar coverage as in the past.
The Debtor will keep the Lenders' collateral free and clear of
post-petition liens, encumbrances, and security interests except
for such claims as may accrue but are not currently owed such as ad
valorem and similar taxes; provided, however, that nothing in the
Interim Order will prohibit the Debtor from seeking credit pursuant
to 11 U.S.C. section 364.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3JbxDKJ from PacerMonitor.com.
The Debtor projects $34,883 in income and $35,371 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.
Judge Eduardo V. Rodriguez oversees the case.
Reese Baker, Esq., at Baker & Associates, represents the Debtor as
legal counsel.
IMMANUEL SOBRIETY: Seeks Cash Collateral Access
-----------------------------------------------
Immanuel Sobriety Inc. asks the U.S. Bankruptcy Court for the
Central District of California, Riverside Division, for authority
to use cash collateral and provide adequate protection.
The Debtor requires immediate use of its cash collateral to
continue its business operations, including payroll for its
employees, and avoid irreparable harm to the Debtor's business and
ability to reorganize.
The Debtor's assets (worth approximately $124,000) are minimal
compared to its debts (total approximately $716,652) and most of
the security interests in the Debtor's assets are undersecured. As
a result, the majority of the secured creditors will only receive
payment if the Debtor continues to operate and earn post-petition
income.
Prior to the COVID-19 pandemic, the Debtor successfully operated
its business free of financial dilemmas. The pandemic significantly
disrupted the Debtor's business operations while also increasing
its overall expenses. In response, the Debtor was forced to seek
and enter into high interest-bearing merchant loans in order to
maintain its overhead costs, including payroll expenses, and keep
its business afloat. The Debtor can no longer afford to service
these high interest-bearing merchant loans and sought Chapter 11
bankruptcy relief.
In response to the Debtor's substantial cash flow issues, the
Debtor entered into accounts receivable financing agreements
(merchant loans) in order to pay its expenses and keep its doors
open. The Debtor entered merchant agreements with four merchant
lenders a nd received cash advances totaling approximately
$270,000. While the Debtor was able to service the merchant loans
for a period of time, it eventually was unable to sustain the loan
payments and realized its current financial state was not
sustainable, including, but not limited to the Debtor's inability
to simultaneously maintain its current payroll expenses, monthly
lease payments and service the merchant loans.
As adequate protection, the Secured Creditors will receive adequate
protection of their interests though a continuing lien in the
Assets, and a post-petition replacement lien in the post-petition
rents, profits, and proceeds therefrom.
A copy of the Debtor's motion and budget is available at
https://bit.ly/3JD53mX from PacerMonitor.com.
The Debtor projects total operational expenses, on a monthly basis,
as follows:
$21,090 for March 2023;
$67,309 for April 2023;
$68,669 for May 2023;
$63,669 for June 2023;
$64,169 for July 2023; and
$64,169 for August 2023.
About Immanuel Sobriety Inc.
Immanuel Sobriety Inc. provides drug and alcohol rehabilitation
programs and treatment services. The Debtor sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No.
23-10806) on March 2, 2023. In the petition signed by Erizabeth
Reid, chief executive officer, the Debtor disclosed up to $500,000
in assets and up to $1 million in liabilities.
Crystle J. Lindsey, Esq., at Law Office of Crystle J. Lindsey,
represents the Debtor as legal counsel.
INSIGHT MANAGEMENT: Seeks to Hire Vilarino & Associates as Counsel
------------------------------------------------------------------
Insight Management Group Incorporated seeks approval from the U.S.
Bankruptcy Court for the District of Puerto Rico to hire Vilarino &
Associates, LLC as its legal counsel.
The firm's services include:
a) advising the Debtor with respect to its duties, powers and
responsibilities in this Chapter 11 case under the laws of the
United States and Puerto Rico in which it conducts its operations,
does business or is involved in litigation;
b) advising the Debtor to determine whether reorganization is
feasible and, if not, helping the Debtor in the orderly liquidation
of its assets;
c) assisting the Debtor in negotiations with creditors for the
purpose of proposing and confirming a viable plan of
reorganization;
d) preparing legal papers;
e) appearing before the bankruptcy court or any court in which
the Debtor asserts a claim interest or defense directly or
indirectly related to its bankruptcy case; and
f) performing such other legal services for the Debtor as may
be required in these proceedings or in connection with the
operation of and involvement with the Debtor's business, including
but not limited to, notarial services.
The firm will be paid at these rates:
Javier Vilarino, Esq. $350 per hour
Associates $275 per hour
Paralegals $150 per hour
As disclosed in court filings, Vilarino & Associates is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Javier Vilarino, Esq.
Vilarino & Associates, LLC
P.O. Box 9022515
San Juan, PR 00902-2515
Tel: (787) 565-9894
Email: jvilarino@vilarinolaw.com
About Insight Management Group Incorporated
Insight Management Group Incorporated provides specialized services
in radiology in Canovanas, P.R.
Insight Management Group filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No.
23-00506) on Feb. 22, 2023, with $500,000 to $1 million in assets
and $10 million to $50 million in liabilities. Jose A. Romero Cruz,
president of Insight Management Group, signed the petition.
Judge Maria De Los Angeles Gonzalez presides over the case.
Javier Vilarino, Esq., at Vilarino & Associates, LLC and Dage
Consulting CPA's, PSC serve as the Debtor's legal counsel and
financial advisor, respectively.
INSIGHT MANAGEMENT: Taps Dage Consulting CPA's as Financial Advisor
-------------------------------------------------------------------
Insight Management Group Incorporated seeks approval from the U.S.
Bankruptcy Court for the District of Puerto Rico to hire Dage
Consulting CPA's, PSC as its financial advisor.
The Debtor requires a financial advisor to gather court-required
information; provide consulting services; assist in documenting the
reorganization plan to be filed in its Chapter 11 case; prepare
monthly operating reports and all necessary tax forms; and assist
in all matters related to court instructions, transactions,
meetings or information requests of an accounting or financial
nature.
The firm will be paid at these rates:
Jose A. Diaz Crespo, CPA $175 per hour
Senior Accountant $95 per hour
Staff accountant $75 per hour
The firm received a retainer fee in the amount of $5,000.
As disclosed in court filings, Dage Consulting and its certified
public accountants and support staff are "disinterested persons"
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Jose A. Diaz Crespo, CPA, CVA, CFF, Esq.
Dage Consulting CPA's, PSC
340 Industrial Victor Fernandez, Suite 201B
San Juan, PR 00926
P.O. Box 367457
San Juan, PR 00936-7457
Tel: 787-428-3388
About Insight Management Group Incorporated
Insight Management Group Incorporated provides specialized services
in radiology in Canovanas, P.R.
Insight Management Group filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No.
23-00506) on Feb. 22, 2023, with $500,000 to $1 million in assets
and $10 million to $50 million in liabilities. Jose A. Romero Cruz,
president of Insight Management Group, signed the petition.
Judge Maria De Los Angeles Gonzalez presides over the case.
Javier Vilarino, Esq., at Vilarino & Associates, LLC and Dage
Consulting CPA's, PSC serve as the Debtor's legal counsel and
financial advisor, respectively.
INTERNATIONAL PETROLEUM: S&P Affirms 'B' ICR, Outlook Stable
------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on
Canadian oil and gas exploration and production (E&P) company
International Petroleum Corp. (IPC) and 'B+' issue-level rating on
the company's senior unsecured debt, supported by the company's
stable production profile, stronger net proven reserves base, and
substantial cash on hand, providing downside cushion to the current
financial metrics.
S&P said, "The stable outlook reflects our expectation that
projected financial metrics will continue to support the rating,
despite additional gross debt in the company's pro forma capital
structure and the announced increase in projected capital
spending.
"Increased absolute debt has weakened the company's financial risk
profile assessment. We previously expected fully adjusted gross
debt over our forecast period of about US$470 million. Pro forma
the proposed issue upsize, we now expect IPC's gross unadjusted
debt to increase to just under US$700 million. As a result, our
two-year (2023-2024) weighted-average funds from operations
(FFO)-to-debt ratio has decreased from just above 75% at the time
of our last publication (Feb. 23, 2023) to just under 55%, which is
below the level needed to support a significant financial risk
profile. Although IPC has substantial cash on hand (about US$490
million at Dec. 31, 2022), we do not net projected cash balances
against debt, as we believe IPC will likely use cash on hand to
support organic and acquisition-related growth, as well as
shareholder remuneration. IPC previously indicated its intent to
distribute up to 40% of free cash flow to shareholders when its
reported net debt-to-EBITDA ratio is at or below 1.0x. Given the
company's C$75 million revolver was undrawn at year-end 2022, we
expect IPC's total debt will remain almost entirely composed of the
2027 senior unsecured notes. Moreover, we do not expect IPC would
allocate free cash flow during our 2023-2024 forecast period to
reduce its long-term debt, due to its significant capital
spending."
The increased capital spending program further weakens cash flow
and leverage metrics. Earlier this year, IPC announced the
sanctioning of Phase 1 of its 100%-owned greenfield thermal bitumen
project, Blackrod, which is expected to cost approximately US$850
million before first oil in late 2026. S&P said, "About US$110
million of the total announced capital cost is allocated to
contingencies; however, we have assumed the full US$850 million
will be spent over the next four years in our forecasts.
Accordingly, our capital spending forecast for 2023 and 2024
tripled relative to previous expectations, reducing our two-year
weighted-average discretionary cash flow (DCF)-to-debt ratio to
just below 5% at the time of our last publication. Now, given the
higher debt profile, we expect this ratio will weaken further, to
slightly below 0% over our forecast period." Given first oil is not
expected until late 2026 at the earliest, financial metrics will
likely remain constrained by high capital spending with no
corresponding increases to production for the near-to-medium term.
Furthermore, IPC's mature Canadian assets have natural production
declines outpacing incremental organic production growth. The
impact of these declines is evident in the recently closed Cor4 Oil
Corp. acquisition, which is expected to add about 4,000 barrels of
oil equivalent (boe) per day to the company's Suffield area
production in 2023; however, total 2023 production will remain
relatively in line with full-year 2022 production of about 49,000
boe per day.
Despite weakened financial metrics, overall credit quality is
unchanged. Although the company's heavy oil exposure amplifies
revenue and cash flow volatility, particularly with a larger amount
of gross debt on the balance sheet, S&P Global Ratings believes
IPC's business risk and revised financial risk profiles continue to
support the 'B' credit rating. The company's approximately 50,000
boe per day production is in line with that of similarly rated
peers, and the well-diversified product mix and exposure to Brent
oil pricing from its international operations support its
profitability assessment in the midrange of the global E&P peer
group ranking. The company's total net proved reserves base has
also almost doubled relative to 2021 to about 320 million boe at
year-end 2022, primarily related to the contingent bitumen
resources associated with Blackrod becoming proved undeveloped
reserves. Although there is a risk of capital cost overruns with
greenfield development projects, the US$490 million of cash on hand
at year-end 2022, as well as the proceeds from the announced US$200
million debt add-on provide additional liquidity cushion to absorb
unanticipated cost increases and hydrocarbon price volatility, or
to fund opportunistic acquisitions.
S&P said, "The stable outlook reflects our view that cash flow
generation relative to IPC's increased forecast capital spending,
and our updated projected credit metrics will continue to support
the 'B' credit rating, despite increased gross debt and materially
higher capital spending. Specifically, we project adjusted FFO to
debt will average just over 50% and adjusted debt to EBITDA of just
over 1.6x during the 2023-2024 forecast period.
"We would likely lower the rating if IPC's cash flow generation
decreased and leverage increased such that the two-year average
FFO-to-debt ratio fell below 20%. As heavy oil accounts for half of
IPC's daily average production, the company's cash flow metrics
could weaken to this level during a prolonged period of very weak
West Texas Intermediate (WTI) prices or wider-than-anticipated
heavy oil price discounts. Cash flow and leverage ratios could also
weaken with material unanticipated cost increases to Blackrod Phase
1 or acquisitions that require additional debt funding.
"In the absence of a material expansion of the company's
operational scale, or strengthened profitability, we could
nevertheless raise the issuer credit rating to 'B+', if IPC is able
to strengthen and sustain its weighted-average FFO-to-debt ratio
above 45%, including at our moderate long-term oil and gas price
assumptions. Alternatively, expanded operational diversification
that increases its scale and reduces the portion of heavy oil in
IPC's product mix, and the company's ability to consistently
generate profitability metrics in the upper quartile of the E&P
peer group ranking, could strengthen IPC's business risk profile,
and support a 'B+' credit rating."
ESG credit indicators: E-4, S-3, G-2
INVACARE CORP: DIP Loans from Cantor, PNC Win Final Court OK
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Invacare Corporation and its
debtor-affiliates to use cash collateral and obtain postpetition
financing, on a final basis.
The Debtors have obtained funding commitments of:
* $35 million in term loans under in an aggregate principal
amount pursuant to the terms and conditions set forth in the
Superpriority Secured Debtor-in-Possession Credit Agreement with
banks and other financial institutions or entities led by Cantor
Fitzgerald Securities, as administrative agent, and GLAS Trust
Corporation Limited, as collateral agent;
* $27.7 million under a superpriority, senior secured and
priming debtor-in-possession asset-based revolving credit facility,
subject to the terms and conditions set forth in the ABL DIP Credit
Agreement, by and among the Borrower, Freedom Designs, Inc.,
Medbloc, Inc., Invacare Canada L.P., Motion Concepts L.P. and
Perpetual Motion Enterprises Limited, as borrowers; the banks and
other financial institutions or entities from time to time party
thereto as "Lenders"; and PNC Bank, National Association, as agent
for the ABL DIP Lenders.
The DIP Term Loan consists of:
-- new money term loans in the aggregate principal amount of
$35 million from the Term DIP Lenders, of which $17.5 million will
be available immediately upon entry of the Interim Order, and the
remainder to be available upon entry of the Final Order; and
-- term loans in an aggregate principal amount of $35 million,
which will consist of the Interim Rolled-Up Term Loans and the
Final Rolled-Up Term Loans.
On the date of the Interim Order, concurrently with the making of
the Initial Draw of the DIP New Money Term Loans, $17.5 million in
aggregate principal amount of Prepetition Term Loans will be deemed
substituted and exchanged for DIP Roll-Up Term Loans, and $17.5
million of DIP Roll-Up Term Loans will be deemed funded on the date
of the Interim Order, without constituting a novation, and will
satisfy and discharge $17.5 million in aggregate principal amount
of Interim Rolled-Up Term Loans.
Subject to the entry of and the terms of the Final Order, on the
Final Funding Date, concurrently with and automatically upon the
Final Draw of the DIP New Money Term Loans, $17.5 million in
aggregate principal amount of Prepetition Term Loans will be deemed
substituted and exchanged for DIP Roll-Up Term Loans, and $17.5
million of DIP Roll-Up Term Loans will be deemed funded on the
Final Funding Date, without constituting a novation, and will
satisfy and discharge $17.5 million in aggregate principal amount
of Final Rolled-Up Term Loans.
The DIP Revolving Loan consists of new money asset-based revolving
credit facility loans in the aggregate principal amount of the
unused Revolving Commitments in an aggregate principal amount equal
to $17.4 million from the ABL DIP Secured Parties, which amount
will be available immediately upon entry of the Interim Order.
The roll up and conversion of all Prepetition Revolving Obligations
and any unused Revolving Commitments into the ABL DIP Facility
pursuant to commitments of the ABL DIP Lenders in an aggregate
principal amount equal to $10.3 million, consisting of revolving
advances and letters of credit issued or deemed issued under the
ABL DIP Facility, with the entire amount of the ABL DIP Loans to be
fully drawn in accordance with the terms of the ABL DIP Credit
Agreement and applied automatically in full satisfaction of the
outstanding Prepetition Revolving Obligations.
The loans mature on May 1, 2023.
The Debtors are required to comply with these milestones:
(a) Obtain court approval of the Final Order within 40 days of
the Petition Date;
(b) On or before the date that is 110 days -- or, (i)
following the occurrence of an Initial Maturity Extension, 140
days, and (ii) following the occurrence of a Second Maturity
Extension, 200 days -- after the Petition Date, the Bankruptcy
Court will have entered an order confirming the Reorganization
Plan; and
(c) Within 15 days -- or, (i) following the occurrence of an
Initial Maturity Extension, 45 days, and (ii) following the
occurrence of a Second Maturity Extension, 105 days -- after entry
of the Confirmation Order, the confirmed Reorganization Plan will
have been consummated.
Before filing for bankruptcy, the Debtors were parties to these
loan agreements:
A. July 2022 Prepetition Term Loan Credit Facility with a
syndicate of lenders led by Cantor Fitzgerald Securities, as
administrative agent, and GLAS Trust Corporation Limited, as
collateral agent;
B. July 2022 Prepetition Secured Notes Indentures with
Invacare Corporation, as Prepetition Secured Tranche I Issuer;
Computershare Trust Company, N.A., as trustee; and GLAS Trust
Corporation Limited, as notes collateral agent, wherein Invacare
issued 5.68% Convertible Senior Secured Notes due 2026, Tranche I;
C. July 2022 Prepetition Secured Tranche II Notes Indenture
with Invacare Corporation, as Prepetition Secured Tranche II
Issuer; Computershare as trustee; and GLAS as notes collateral
agent, wherein Invacare issued 5.68% Convertible Senior Secured
Notes due 2026, Tranche II; and
D. Second Amended and Restated Revolving Credit and Security
Agreement, dated as of July 26, 2022, among (a) Invacare
Corporation, Freedom Designs, Inc., Medbloc, Inc., Invacare Canada
L.P., Motion Concepts L.P. and Perpetual Motion Enterprises
Limited, as borrowers, (b) the Guarantors party thereto, (c) PNC
Bank as agent for the Lenders, (d) the Lenders party thereto.
The Debtors owed these amounts under the prepetition credit
facilities:
-- not less than $90.5 million under the Prepetition Term
Loan;
-- not less than $41.475 million under the Prepetition Secured
Notes, including (a) $20.739 million in outstanding principal
amount of Prepetition Secured Tranche I Notes; and (b) $20.736
million in outstanding principal amount of Prepetition Secured
Tranche II Notes; and
-- not less than $10.257 million, including, without
limitation, (a) $5.828 million in outstanding principal amount of
Prepetition Revolving Loans, (b) outstanding letters of credit in
the aggregate amount of $4.428 million, and (c) all accrued and
accruing charges and obligations in respect of Cash Management
Products and Services.
As adequate protection, the Prepetition Secured Parties are granted
a valid, perfected replacement security interest in and lien upon
all of the DIP Collateral.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3yD1YNn from PacerMonitor.com.
The Debtor projects total operating disbursements, on a weekly
basis, as follows:
$2,931,000 for the week ending March 3,2023;
$2,501,000 for the week ending March 10,2023;
$4,888,000 for the week ending March 17,2023; and
$2,101,000 for the week ending March 24,2023.
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.
The Debtors 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.
Judge Christopher Lopez oversees the case.
The Debtors tapped Kirkland and Ellis, LLP and Kirkland and Ellis
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.
INVACARE CORPORATION: Taps Ernst & Young as Tax Services Provider
-----------------------------------------------------------------
Invacare Corporation and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of Texas to hire Ernst &
Young, LLP.
Ernst & Young has agreed to perform the following tax and audit
services:
A. Tax Compliance Services
-- Review procedures for the Form 1120, U.S. Federal
Income Tax Return for Invacare Corporation and Subsidiaries,
including disclosures;
-- Prepare or review procedures of State and Local Income
and Franchise Tax Returns for the entities included in Appendix A
to the Tax Compliance SOW; and
-- Ernst & Young will sign and e-file all returns after
the returns have been reviewed and approved by the Debtors.
B. Tax Advisory Services
-- Advise the Debtors personnel in developing an
understanding of the tax issues and options related to the Debtors'
Chapter 11 filing, taking into account the Debtors' specific facts
and circumstances, for U.S. federal and state and local tax
purposes;
-- Advise on the federal and state and local income and
indirect tax consequences of proposed plans of reorganization,
including, if necessary, assisting in the preparation of IRS ruling
requests regarding the tax consequences of alternative
reorganization structures and tax opinions;
-- Understand and advise on the tax implications of
reorganization or restructuring alternatives the Debtors are
evaluating with existing creditors that may result in a change in
the equity, capitalization or ownership of the shares of the
Debtors and their assets;
-- Gather information and prepare calculations to model
out the tax implications of applying Section 382(l)(5) or Section
382(l)(6) for net operating losses, disallowed business interest
expense, and other tax attribute carryforward that may survive
following an emergence from Chapter 11 or similar proceeding;
-- As applicable, gather information, prepare
calculations and apply the appropriate federal and state and local
tax law to historic information regarding changes in the ownership
of the Debtors' stock prior to emergence from the Debtors' Chapter
11 filing to calculate whether any of the shifts in stock ownership
may have caused an ownership change that will restrict the use of
tax attributes (such as net operating loss, capital loss, credit
carry forwards, and built in losses) and the amount of any such
limitation;
-- Participate in discussions with the Debtors and their
legal counsel regarding any measures that can be taken to protect
the availability of tax attributes (e.g., rights agreements,
trading orders, etc.);
-- Prepare calculations and apply the appropriate federal
and state and local tax law to determine the amount of tax
attribute reduction related to debt cancellation income and
modeling of tax consequences of such reduction for the Debtors' tax
compliance use;
-- If necessary, prepare or assist in tax basis balance
sheets and computations of stock basis and earnings and profits as
of certain relevant dates for purposes of analyzing the tax
consequences of alternative reorganization structures;
-- Analyze federal and state and local tax treatment of
the costs and fees incurred by the Debtors in connection with the
bankruptcy proceedings, including tax return disclosure and
presentation;
-- Analyze federal and state and local tax treatment of
interest and financing costs related to debt subject to automatic
stay, and new debt incurred as the Debtors emerge from bankruptcy,
including tax return disclosure and presentation;
-- Analyze federal and state and local tax consequences
of restructuring and rationalization of inter-company accounts, and
upon written request, analyze tax impacts of transfer pricing and
related cash management;
-- Analyze federal and state and local tax consequences
of restructuring in the U.S. or internationally as a result of
entering into, during, and upon emergence from bankruptcy,
including tax return disclosure and presentation;
-- Analyze local country foreign tax implications related
to the Debtors' Chapter 11 filing in the U.S. including discussion
of opportunities to streamline the global structure post
emergence;
-- Analyze federal and state and local tax consequences
of potential bad debt and worthless stock deductions, including tax
return disclosure and presentation;
-- Analyze federal and state and local tax consequences
of employee benefit plans, as requested in writing;
-- Advise Debtors' personnel on the bankruptcy tax
process and procedure lifecycle, the typical tax issues, options
and opportunities related to a Chapter 11 filing, the typical
impact of a Chapter 11 filing on a corporate tax department's
operations, and leading practices for addressing such impact areas
while operating in bankruptcy and the post-emergence period;
-- Assist with various tax, compliance, tax account
registration/deregistration and/or audit issues arising in the
ordinary course of business while in bankruptcy, including but not
limited to: IRS or state and local income and indirect tax audit
defense, voluntary disclosure assistance or compliance questions,
notices or issues related to: federal, state and local income or
franchise tax, sales and use tax, excise tax, property tax,
employment tax, credit & incentive agreements and other
miscellaneous taxes or regulatory assessments and fees;
-- Advise as requested and as permissible, with
determining the validity and amount of bankruptcy tax claims or
assessments, including but not limited to the following types of
taxes: income taxes, franchise taxes, sales taxes, use taxes,
employment taxes, property taxes, severance taxes, excise taxes,
credit & incentive agreements, and other miscellaneous taxes or
regulatory assessments and fees;
-- Scope, assist and advise on the potential for seeking
cash tax refunds, including but not limited to the following types
of taxes: income taxes, franchise taxes, sales taxes, use taxes,
employment taxes, property taxes, tax credit & incentive agreements
and other miscellaneous taxes or regulatory assessments and fees;
and
-- Provide documentation, as appropriate or necessary, of
tax matters, tax analysis, opinions, recommendations, conclusions
and correspondence for any proposed restructuring alternative,
bankruptcy tax issue, or other tax matter described above,
including as it relates to any historical transactions (e.g.,
acquisitions, mergers, dispositions, liquidations, or any
materially similar transactions, associated with Debtors' internal
restructuring or otherwise).
C. Routine on Call Tax Advisory Services
-- Routine on-call tax advisory and compliance services
concerning issues as requested by the Debtors when such projects
are not covered by a separate statement of work and do not involve
any significant tax planning or projects, including:
-- Assistance with tax issues by answering one-off
questions, drafting memos describing how specific tax rules work,
assisting with general transactional issues, and assisting the
Debtors in connection with its dealings with tax authorities (other
than representing the Debtors in an examination or an appeal before
the IRS or other taxing authority); and
-- Participating in meetings and telephone calls with the
Debtors; participating in meetings and telephone calls with taxing
authorities and other third parties where Ernst & Young is not
representing the Debtors in an examination or an appeal before the
taxing authority; reviewing transaction-related documentation;
researching technical issues; and preparing technical memoranda,
letters, e-mails, and other written documentation.
D. Global Mobility Services
For the period of February 14, 2023 through and February
14, 2024:
-- Prepare federal tax returns for expatriates;
-- Preparation of tax equalization calculation in
accordance with the Debtors' tax equalization policy;
-- Coordinate with the Debtors to collect and review
assignment-related compensation detail and facilitate the U.S.
payroll process;
-- Computation of the taxable income and taxes due per
commuter;
-- Assist MX Maquila (Invamex) entity in set up of Annual
Affidavit for Taxable Commuters;
-- Assist MX Maquila (Invamex) in setup of Quarterly
Affidavit for NonTaxable Commuters; and
-- Upon written request, provide additional, on-call tax
services to the Debtors' mobility program when such services are
not specifically identified as in-scope services above or otherwise
covered by a separate statement of work, and do not involve any
significant tax planning or projects.
E. Puerto Rico Compliance Services
For the period of February 16, 2023 through Dec. 31,
2023:
-- Prepare the tax returns listed below for the Debtors
for the year ended Dec. 31, 2022:
-- 2022 Puerto Rico Corporate Income Tax Return
(including electronic filing)
-- 2023 Estimated Income Taxes
-- 2022 Puerto Rico Personal Property Tax Return
(including electronic filing)
-- 2023 Estimated Personal Property Taxes;
-- Request for extension of time file the listed returns,
if necessary; and
-- Original estimated tax payment computations.
F. Audit Services
-- Audit and report on the consolidated financial
statements of Invacare Corporation for the year ended Dec. 31,
2022;
-- Review Invacare Corporation's unaudited interim
financial information before Invacare Corporation files its Form
10-Q for the interim periods included in the year ending Dec. 31,
2022, and for the interim period ending on March 31, 2023; and
-- Upon request, as mutually agreed under the terms of
the Audit Services Engagement Letter, or a separate engagement
letter, perform other audit services, including, without
limitation, SEC filings, comfort letters, securitizations,
accounting consultations, regulatory audits, and the adoption of
new accounting standards.
The firm will be compensated as follows:
A. Tax Compliance Services
Ernst & Young will provide the tax compliance services,
pursuant to the Tax Compliance SOW, for a fixed fee of $295,000.
In addition to the fees set forth above, the Debtors have
agreed to reimburse Ernst & Young for any expenses, applicable
taxes, or other charges.
B. Tax Advisory Services
Ernst & Young will charge the Debtors for tax advisory
services based on the actual time spent by its professionals, as
follows:
Partner/Principal $1,250
Managing Director $1,150
Senior Manager $950
Manager $850
Senior $600
C. Routine on Call Tax Advisory Services
The hourly rates for services to be rendered by Ernst &
Young under the ROCA SOW are as follows:
Level National and International Federal, Indirect,
Transaction Tax Services and Other
Tax Services Tax Services
Partner/Principal $1,040 $985 $810
Managing Director $1,040 $850 $730
Senior Manager $800 $675 $675
Manger N/A $625 $625
Senior N/A $485 $485
Staff N/A $175 $175
D. Global Mobility Services
Annual Expatriate Federal Return $1,550
US Tax Equalization Calculation $470
Home Country Hypothetical Tax Calculation $450
Form 673 Statement for Claiming
Withholding Exemption $250
Form W-4 Calculation & Tax
Withholding Estimate $450
Compensation Accumulation $500
Preparation of monthly non-resident
tax calculations $360
Annual Affidavit for Taxable Commuters $1,250
Quarterly Affidavit for
Non-taxable Commuters $1,250
E. Puerto Rico Compliance Services
-- Ernst & Young charges a flat fee of $9,600 for Puerto
Rico compliance services.
-- For additional services, Ernst & Young will charge
these hourly rates:
Partner/Principal $700
Executive Director $650
Senior Manager $595
Manager $520
Senior $350
Staff $215
F. Audit Services
-- Ernst & Young estimates that the U.S.-based fees for
the audit of the 2022 consolidated financial statements and its
review of the unaudited interim financial information will be
approximately $1.7 million, including $1.3 million of which was
billed to and paid by the Debtors prior to the Petition Date.
-- In addition, Ernst & Young estimates that its fee for
its review of the Q1 2023 unaudited interim financial information
will be approximately $65,000.
Carlo Serraiocco, a partner at Ernst & Young, 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:
Carlo Serraiocco
Ernst & Young, LLP
One Kennedy Square
777 Woodward Avenue, Suite 1000
Detroit, MI 48226
Direct: +1 313 628 7100
Fax: +1 313 628 7013
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.
J&B EXPRESS: Seeks to Hire Jan Pierce as Special Counsel
--------------------------------------------------------
J&B Express, LLC seeks approval from the U.S. Bankruptcy Court for
the Eastern District of Wisconsin to employ Jan Pierce, S.C. to act
as its special counsel on general business matters unrelated to the
Chapter 11 case.
The firm will charge $330 per hour for its legal services.
Jan Pierce is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code, according to court
filings.
The firm can be reached through:
Jan Pierce, Esq.
Jan Pierce, S.C.
2018 S. 1st Street, #517
Milwaukee, WI 53207
Phone: (414) 755-2258
Email: jan@janpiercelaw.com
About J&B Express
J&B Express, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Wis. Case No. 23-20494) on Feb. 7,
2023, with up to $10 million in both assets and liabilities. Mark
S. Werner, manager, signed the petition.
Judge Rachel M. Blise oversees the case.
The Debtor tapped Nicholas W. Kerkman, Esq., at Kerkman and Dunn as
bankruptcy counsel; Jan Pierce, S.C. as special counsel; and
Steph's Bookkeeping Service, LLC as accountant.
JAF 27: Wins Cash Collateral Access Thru May 8
----------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts
authorized JAF 27, LLC to continue using cash collateral on a final
basis through May 8, 2023.
A further hearing on the matter is set for May 8 at 11 a.m.
As previously reported by the Troubled Company Reporter, the
secured creditors holding a mortgage on 621 Central Street, with
estimated balances, are:
a. Belvidere Capital, LLC, which has a first mortgage in the
amount of $770,000;
b. Carlos Borges, who holds a second mortgage in the amount of
$88,000;
c. Marc P. Gendreau, in the amount of $50,000;
d. Hooshmand S. Afshar and Zarrin S. Afshar, who hold a
mortgage in the amount of $50,000;
e. Christian Doherty, who holds two mortgages in the total
amount of $10,000;
f. JMF Realty, LLC, which holds a mortgage in the amount of
$52,000; and
g. Kevin J. Ahern, Jr. and Brad M. Pacheco, who hold a
mortgage in the amount of $37,000.
The secured creditors holding a mortgage on 175 Dalton Street, with
estimated balances, are:
a. Hardest Working Realty, LLC, which holds a first mortgage
in the amount of $361,000;
b. JMF Realty, LLC, which holds a mortgage in the amount of
$52,000.
The secured creditors holding a mortgage on 44 Billerica Street,
with estimated balances, are:
a. the City of Lowell, which holds a tax lien in the amount of
$689;
b. Belvidere Capital, LLC, which holds a first mortgage with
the amount due of $85,000;
c. Omar Rafik, who holds a mortgage with the amount due of
$20,000.
Belvidere Capital, LLC, as the First Mortgagee on 621 Central
Street, has alleged default under the terms of its Note and a
foreclosure sale was scheduled for 621 Central Street on September
8, 2022. The foreclosure sale was delayed due to the Debtor's
bankruptcy filing. However, the Security Agreement with Belvidere
contains an assignment of rents or receivables.
As adequate protection, all secured creditors were granted
continuing liens in the Debtor's real estate to the extent of the
validity, perfection, priority, enforceability, and sufficiency of
their pre-petition lien or security interest.
A copy of the order is available at https://bit.ly/3Jx1kY5 from
PacerMonitor.com.
About JAF 27 LLC
JAF 27, LLC is a Tewksbury, Mass.-based company engaged in renting
and leasing real estate properties.
JAF 27 filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Mass. Case No. 22-40648) on Sept. 7,
2022, with between $1 million and $10 million in both assets and
liabilities. Steven Weiss serves as Subchapter V trustee.
Judge Elizabeth D. Katz oversees the case.
Christopher Murray, Esq., at Murray Law Firm, P.C. is the Debtor's
legal counsel.
KENNESAW LOFTBNB: Seeks to Hire Hilco Real Estate as Broker
-----------------------------------------------------------
Kennesaw LoftBnB, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Georgia to employ Hilco Real Estate,
LLC as its real estate broker.
The firm's services include marketing and listing the Debtor's real
property for sale, identifying potential buyers, collecting bids
for the property, and assisting the Debtor to close a sale.
The broker will charge a 6 percent buyer's premium to the winning
bidder for the property.
Hilco is a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code, as disclosed in court filings.
The firm can be reached through:
Sarah Baker
Hilco Trading, LLC
5 Revere Drive, Suite 206
Northbrook, IL 60062
Tel: +91 84750 91100
Email: sbaker@hilcoglobal.com
About Kennesaw LoftBnB
Kennesaw LoftBnB, LLC is a unique boutique hotel atop the General
Store Food Hall, with a side of 24/7 Kennesaw Curbside. The company
is based in Kennesaw, Ga.
Kennesaw LoftBnB filed a petition for relief under of Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-60646) on Dec. 30,
2022, with $1 million to $10 million in both assets and
liabilities. Wayne Sisco, sole member, signed the petition.
Judge Jeffery W. Cavender oversees the case.
Will B. Geer, Esq., at Rountree Leitman Klein & Geer, LLC serves as
the Debtor's counsel.
KROLLMOTION TECHNOLOGIES: Court OKs Deal on Cash Collateral Access
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Northern Division, authorized Krollmotion Technologies, Inc., dba
Anytime Fitness, to use cash collateral on an interim basis in
accordance with its agreement with Live Oak Banking Company.
As previously reported by the Troubled Company Reporter, on March
6, 2020, the Debtor issued to Live Oak a $675,000 note to be paid
at 7.65% with a 10-year maturity date.
Concurrently, the Debtor signed a security agreement securing the
Note with certain of its property, including property meeting the
definition of "Cash Collateral" under 11 U.S.C. section 363(a).
Live Oak perfected its security interest with the March 9, 2020
filing of a UCC Financing Statement with the California Secretary
of State as instrument number 20-7766924962.
The Court Order provides that the Debtor will make adequate
protection payments to Live Oak Bank of $1,000 each on March 7,
April 1 and May 1, 2023.
A hearing on the matter is set for April 18, 2023 at 10 a.m.
A copy of the order is available at https://bit.ly/3Lj7HzE from
PacerMonitor.com.
About Krollmotion Technologies
Krollmotion Technologies operates a 24-hour fitness center
featuring exercise machines and free weights, and offers monthly
memberships in addition to personal training, small group workout
classes, and dietary consultation. Members can use the facilities
at any time, any day of the year.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-10113) on February
16, 2023. In the petition signed by George P. Kroll, chief
executive officer, the Debtor disclosed up to $100,000 in assets
and up to $1 million in liabilities.
Judge Ronald A. Clifford III oversees the case.
Michael Jay Berger, Esq., at Law Offices of Michal Jay Berger,
represents the Debtor as legal counsel.
LAURA'S ORIGINAL: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Laura's Original Boston Brownies, Inc.
d/b/a BHU Foods
2735 Cactus Road
Suite 101
San Diego, CA 92154
Business Description: BHU offers low sugar, high fiber, and clean
label products.
Chapter 11 Petition Date: March 13, 2023
Court: United States Bankruptcy Court
Southern District of California
Case No.: 23-00656
Debtor's Counsel: Paul Leeds, Esq.
FRANKLIN SOTO LEEDS LLP
444 West C Street 300
San Diego, CA 92101
Tel: 619-872-2520
Email: pleeds@fsl.law
Total Assets: $6,651,309
Total Liabilities: $6,498,970
The petition was signed by Laura Katleman as chief executive
officer.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/ZL23U2Q/Lauras_Original_Boston_Brownies__casbke-23-00656__0001.0.pdf?mcid=tGE4TAMA
LECLAIRRYAN PLLC: Board Members Settle Trustee Clawback Claims,
---------------------------------------------------------------
Andrew Strickler of Law360 reports that the trustee for the defunct
LeClairRyan has reached a round of settlements with the firm's last
president and a handful of ex-board members, all of whom were
accused of draining millions from the teetering business in its
last years and helping drive it into bankruptcy.
The Trustee Lynn L. Tavenner's Tenth Notice of Proposed Settlements
was filed under seal.
About LeClairRyan PLLC
Founded in 1988, LeClairRyan PLLC is a national law firm with 385
attorneys, including 160 shareholders, at its peak. The firm
represented thousands of clients, including individuals and local,
regional, and global businesses.
Following massive defections by its attorneys LeClairRyan, members
of the firm in July 2019 voted to effect a wind-down of the
Debtor's operations.
LeClairRyan PLLC sought Chapter 11 protection (Bankr. E.D. Va. Case
No. 19-bk-34574) on Sept. 3, 2019, to effect the wind-down of its
affairs.
In its Chapter 11 petition, the firm listed a range of 200-999
creditors owed between $10 million and $50 million. The firm claims
assets of $10 million to $50 million.
The Hon. Kevin R Huennekens is the case judge.
Richmond attorneys Tyler Brown and Jason Harbour of Hunton Andrews
Kurth represented LeClairRyan in the case. Protiviti was the
Debtor's financial adviser for the liquidation.
The bankruptcy case was converted to a Chapter 7 liquidation on
Oct. 24, 20219. Lynn L. Tavenner was named a Chapter 7 trustee, and
then Benjamin C. Ackerly, a successor trustee.
The Chapter 7 trustee Ackerly's counsel:
Tyler P. Brown
Hunton Andrews Kurth LLP
Tel: 804-788-8200
E-mail: tpbrown@huntonak.com
LTL MANAGEMENT: Professors, Retired Judge Oppose Chapter 11 Bid
---------------------------------------------------------------
Carolina Bolado of Law360 reports that a retired bankruptcy judge
and two law professors urged the Third Circuit on Monday not to
revisit its January 2023 ruling dismissing a Johnson & Johnson
unit's bankruptcy, arguing that the unit's Chapter 11 filing
"evidences an abusive invocation of bankruptcy jurisdiction and
impairs the integrity of the bankruptcy system."
A full-text copy of the article is available at
https://www.law360.com/articles/1582721/retired-judge-profs-oppose-j-j-unit-s-chapter-11-bid
Law360 reports that talc claimants also slammed a LTL Management's
request that the full Third Circuit review a panel decision to
throw out its Chapter 11 case, arguing that the panel was right to
reject the "immensely wealthy" company's bankruptcy case.
About LTL Management
LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J),
which was formed to manage and defend thousands of talc-related
claims and oversee the operations of Royalty A&M. Royalty A&M owns
a portfolio of royalty revenue streams, including royalty revenue
streams based on third-party sales of LACTAID, MYLANTA/MYLICON and
ROGAINE products.
LTL Management filed a petition for Chapter 11 protection (Bankr.
W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was
transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov.
16, 2021. The Hon. Michael B. Kaplan is the case judge. At the
time of the filing, the Debtor was estimated to have $1 billion to
$10 billion in both assets and liabilities.
The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as
bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon
LLP as special counsel; McCarter & English, LLP as litigation
consultant; Bates White, LLC as financial consultant; and
AlixPartners, LLP as restructuring advisor. Epiq Corporate
Restructuring, LLC, is the claims agent.
An official committee of talc claimants was formed in the Debtor's
Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S. Trustee
for Regions 3 and 9 reconstituted the talc claimants' committee and
appointed two separate committees: (i) the official committee of
talc claimants I, which represents ovarian cancer claimants, and
(ii) the official committee of talc claimants II, which represents
mesothelioma claimants.
The official committee of talc claimants I tapped Genova Burns LLC,
Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its
legal counsel. Meanwhile, the official committee of talc claimants
II is represented by the law firms of Cooley LLP, Bailey Glasser
LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and
Sherman Silverstein Kohl Rose & Podolsky P.A.
MADERA COMMUNITY: Files Emergency Bid to Use Cash Collateral
------------------------------------------------------------
Madera Community Hospital asks the U.S. Bankruptcy Court for the
Eastern District of California, Fresno Division, for authority to
use cash collateral on an emergency basis for the period of March
11, 2023 to June 10, 2023.
The Debtor has an immediate and ongoing need for use of cash
collateral in which its secured creditor, Saint Agnes Medical
Center asserts an interest.
The Debtor requires cash collateral access to make payments to
vendors for post-petition goods, maintenance of the facilities,
employees, insurances, taxes and other pertinent, ordinary
expenses.
As adequate protection, the Secured Creditor will be granted a
valid, perfected, enforceable and nonavoidable replacement lien on
its existing collateral and the proceeds thereof, and cash flow
generated from operations, but only if and to the extent that (i)
the Secured Creditor's prepetition security interests are valid,
enforceable, properly perfected, and unavoidable, and (ii) the
Debtor's use of cash collateral results in a diminution of value of
the Secured Creditor's collateral.
A hearing on the matter is set for March 16, 2023 at 11 a.m.
A copy of the motion is available at https://bit.ly/3yFLnZz from
PacerMonitor.com.
About Madera Community Hospital
Madera Community Hospital operates a general medical and surgical
hospital. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Cal. Case No. 23-10457) on March 10,
2023. In the petition signed by Karen Paolinelli, chief executive
officer, the Debtor disclosed up to $100 million in assets and up
to $50 million in liabilities.
Judge Rene Lastreto II oversees the case.
Riley C. Walter, Esq., at Wanger Jones Helsley, represents the
Debtor as legal counsel.
MADERA COMMUNITY: Interest by Suitors Delayed Chapter 11 Filing
---------------------------------------------------------------
Madera Community Hospital has finally sought Chapter 11 protection
after shutting down early this year.
Yesebua Amaro of The Fresno Bee reports that an attorney for Madera
Community Hospital shared new details about the hospital's delay in
filing for bankruptcy, saying there was "renewed interest" by
potential partners and the hospital had hoped it wouldn't have to
file for Chapter 11.
Initially, the Madera hospital said it was going to "file
bankruptcy on January 3, 2023 at 12:00 a.m.," the same day the
hospital closed. "Around January 3, 2023 there was renewed
interest by possible suitors and it was decided to postpone the
filing in the hope a deal could be put together that would avoid
need to file Chapter 11," attorney Riley Walter told The Bee in an
email. Walter said he was not "at liberty to discuss names of
suitors," but some of them had shown an interest in the past.
Hospital officials, he said, had hoped a bankruptcy filing wouldn't
be needed, after all. "The filing of the petition and layoffs are
not connected," he said. "The hospital had no funds with which to
pay employees or suppliers so it shut down.
A new operator or owner would need to reengage with laid-off
employees." Jerry Lowe, a bankruptcy attorney in Fresno, earlier
this week told The Bee the Madera hospital "certainly could have"
filed for bankruptcy without having to lay off the majority of its
staff.
After plans with potential suitors didn't come through, the
hospital now plans to file for bankruptcy "soon," Walter said,
without providing a date. The Madera hospital continues to employ
more than 30 workers as of Friday, March 3, 2022, including its
Chief Executive Officer Karen Paolinelli.
During a community event Thursday, March 2, 2023, night, Stell
Manfredi, vice chair of the Madera Community Hospital board, told
those in the audience that the hospital owed former employees about
$2 million, but it will be going toward bankruptcy, according to a
Fresnoland documenter who live-tweeted the event. "I am sitting
here and embarrassed that we cannot pay our former employees,"
Manfredi said, according to the live tweets. Walter wouldn't say
how much the hospital is paying to file for bankruptcy and to
maintain the hospital, noting details will become public "when the
Chapter 11 is filed."
About Madera Community Hospital
Madera Community Hospital is a general hospital in Madera,
California that offers a wide range of sophisticated, high quality
diagnostic and treatment services. In 1966, a group of concerned
Madera leaders formed a coalition directed at developing the
healthcare facilities available in Madera County. Completed in
1971, Madera Community Hospital (MCH) has continued to grow from a
88-bed to a 106-bed adult acute care facility.
Madera Community Hospital sought Chapter 11 protection (Bankr. E.D.
Cal. Case No. 23-10457) on March 10, 2023. The Hospital estimated
assets of $50 million to $100 million and debt of $10 million to
$50 million as of the bankruptcy filing. The Hon. Rene Lastreto II
oversees the case. WANGER JONES HELSLEY, led by Riley C. Walter,
is the Debtor's counsel.
MANZELLA PROP: Trustee Taps Malcolm Cisneros as Special Counsel
---------------------------------------------------------------
Karen Sue Naylor, Chapter 11 trustee for Manzella Properties, LLC,
seeks approval from the U.S. Bankruptcy Court for the Central
District of California to employ Malcolm Cisneros, A Law
Corporation, as her special counsel.
The firm will represent the estate regarding South County Concepts,
Inc.'s default of the lease terms.
The billing rates of Malcolm Cisneros' attorneys range from $375 to
$575 per hour while paralegal rates range from $130 to $200 per
hour.
As disclosed in court filings, Malcolm Cisneros neither represents
nor holds any interest adverse to the Debtor and its estate.
The firm can be reached through:
William G. Malcolm, Esq.
Malcolm Cisneros, A Law Corporation
2112 Business Center Drive
Irvine, CA 92612
Tel: (949) 252-9400
Fax: (949) 252-103
Email: info@mclaw.org
About Manzella Properties
Manzella Properties, LLC, a company in Brea, Calif., filed its
voluntary petition for Chapter 11 protection (Bankr. C.D. Calif.
Case No. 22-11915) on Nov. 9, 2022, with $10 million to $50 million
in assets and $1 million to $10 million in liabilities. Joseph
Manzella signed the petition as the authorized person.
Judge Scott C. Clarkson oversees the case.
Fennemore Wendel and Sonoran Capital Advisors serve as the Debtor's
legal counsel and financial advisor, respectively.
On Jan. 20, 2023, Karen Sue Naylor was appointed as trustee in the
Debtor's Chapter 11 case. Ringstad & Sanders, LLP and Malcolm
Cisneros, A Law Corporation serve as her bankruptcy counsel and
special counsel, respectively.
MANZELLA PROPERTIES: Property Sale Proceeds to Fund Trustee's Plan
------------------------------------------------------------------
Karen Sue Naylor, the trustee appointed in the Chapter 11 case of
Manzella Properties, LLC, filed with the U.S. Bankruptcy Court for
the Central District of California a Disclosure Statement
describing Chapter 11 Plan dated March 9, 2023.
The Debtor is a California limited liability corporation, with two
members – Joseph Manzella and Michele Manzella. The sole asset of
the Debtor is the Property, located at 101 East Imperial Highway,
Brea, CA 92821.
The Property is encumbered by a number of Liens. The second and
third priority Liens of Citizens Business Bank include assignment
of rent provisions, granting Citizens a security interest in and
right to the rents generated from the Property.
The Trustee is informed and believes that the Debtor's bankruptcy
proceeding was precipitated primarily by the efforts of Citizens to
foreclose against the Property. The Trustee is further informed and
believes that disputes between the Debtor's principals, various
related entities, and disputed Creditor WCVR contributed to the
Debtor's financial distress and resulting bankruptcy filing.
This is a liquidation plan, which contemplates the sale of the
Debtor's Property as the source of funds to effectuate
Distributions to Creditors with Allowed Claims.
The Trustee intends to proceed with alacrity to engage a qualified
real estate broker to market and sell the Property, seeking Court
approval of such engagement. Upon receipt of an offer that the
Trustee (or the Plan Agent, if post confirmation), in her business
judgment, believes fair and reasonable, the Trustee (or the Plan
Agent, if post confirmation) will file the necessary motion with
the Court to obtain authorization to proceed with a sale.
Class 10 consists of Priority Unsecured Claims. These types of
claims are entitled to priority treatment as follows: the Code
requires that each holder of such a claim receive cash on the
Effective Date equal to the allowed amount of such claim. However,
a class of unsecured priority claim holders may vote to accept
deferred cash payments of a value, as of the Effective Date, equal
to the allowed amount of such claims. Absent an agreement providing
otherwise, the Allowed Class 10 Priority Unsecured Claims will be
paid in full on the Effective Date. The holders of allowed Class 10
Priority Unsecured Claims are unimpaired under this Plan.
Class 11 consists of General Unsecured Claims. Total amount of
claims estimated by the Trustee to be approximately $1,030,000,
exclusive of any Allowed Deficiency Claims, with a majority of such
Claims subject to dispute or in need of further investigation.
Holders of Allowed Class 11 Claims will receive distributions on
account of their Allowed Claims from the net proceeds of the sale
of the Debtor's Property, after payment in full of all Allowed
Secured Claims, all Allowed Administrative Claims asserted against
the Estate, and all Allowed Class 10 Claims. In the event the net
proceeds from the sale of the Property are insufficient to pay the
Class 11 Allowed Claims in full, holders of Allowed Class 11 Claims
will receive Pro-Rata Distributions on account of their Allowed
Claims. This Class is impaired.
Class 12 Holders of Interest in the Debtor consist of the Insiders
holding membership interests in the Debtor LLC. Prior to or
concurrently with the Confirmation Hearing on this Plan, the
Trustee intends to request conversion of this case to one under
Chapter 7 of the Bankruptcy Code. The Debtor will also cease all
operations on a going-forward basis following the sale of the
Property. The excess Net Sale Proceeds from a sale of the Property,
if any, after satisfaction of all Claims asserted against the
Estate, will be distributed to the Class 12 Interest holders
concurrently with the closure of the Bankruptcy Case and all
membership interests in the Debtor cancelled
The Plan will be funded from the Net Sale Proceeds from the sale of
the Property. The Trustee intends to proceed with a sale of the
Property for the highest possible sale price, distributing the Net
Sale Proceeds on account of Allowed Claims according to the
priorities established by the Bankruptcy Code.
The Plan Agent shall be responsible for the consummation of a sale
of the Property. The Trustee will have engaged a real estate broker
to assist in the marketing and sale of the Property prior to the
Confirmation Hearing. Post-confirmation, the Plan Agent shall be
vested with the authority to negotiate and sign all necessary
documents to complete the sale of the Real Property, including but
not limited to Listing Agreements, Offers for Purchase and Sale,
Agreements for Purchase and Sale, Escrow Instructions and Grant
Deeds.
The Plan Agent will use her best efforts to complete the sale of
the Property within six months following the Confirmation Hearing,
including the filing of an appropriate motion to sell the Property
before the Court. All Allowed Secured Creditors with an interest in
Property sold under the Plan will be paid in full from the proceeds
of sale upon the close of escrow or as otherwise provided by the
terms of the Plan.
A full-text copy of the Disclosure Statement dated March 9, 2023 is
available at https://bit.ly/3FkWzyg from PacerMonitor.com at no
charge.
Counsel for Karen Sue Naylor:
Nanette D. Sanders, Esq.
Ashley M. Teesdale, Esq.
Ringstad & Sanders LLP
4910 Birch Street, Suite 120
Newport Beach, CA 92660
Telephone: (949) 851-7450
Facsimile: (949) 851-6926
Email: nanette@ringstadlaw.com
ashley@ringstadlaw.com
About Manzella Properties
Manzella Properties, LLC, a company in Brea, Cal., filed its
voluntary petition for Chapter 11 protection (Bankr. C.D. Cal. Case
No. 22-11915) on Nov. 9, 2022, with $10 million to $50 million in
assets and $1 million to $10 million in liabilities. Joseph
Manzella signed the petition as the authorized person.
Judge Scott C. Clarkson oversees the case.
Fennemore Wendel and Sonoran Capital Advisors serve as the Debtor's
legal counsel and financial advisor, respectively.
On January 20, 2023, Karen Sue Naylor was appointed as trustee in
this Chapter 11 case. Ringstad & Sanders LLP serves as her
bankruptcy counsel.
MARCH ON HOSPITALITY: May Use $15,894 of Cash Collateral
--------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas, Fort
Worth Division, authorized March On Hospitality, LLC to use cash
collateral in the amount of $15,894 to pay its final post-petition
payroll and certain other employment related expenses to its
employees.
The Debtor requires the use of cash collateral to avoid irreparable
harm to its estate.
As adequate protection to any secured creditor that holds a valid
unavoidable security interest in prepetition cash or cash
equivalents for the Debtor's use of cash collateral, to the extent
the Debtor's use of cash collateral results in a diminution in
value of the Lender's interest in the cash collateral, each Lender
is granted a replacement lien in the Debtor's assets that serve as
collateral under each Lender's applicable agreements, in the same
order of priority that existed as of the Petition Date.
As additional partial adequate protection, to the extent of any
diminution in value and a failure of the other adequate protection
provided by the Order, the Lenders will have an allowed
superpriority administrative expense claim in the case and any
successor case as provided in and to the fullest extent allowed by
11 U.SC. sections 503(b) and 507(b).
The Replacement 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) and (iii) the Subchapter V
Trustee.
The Replacement Liens are valid, perfected, enforceable and
effective as of the Petition Date without the need for any further
action by the Debtor or the Lenders, or the necessity of execution
or filing of any instruments or agreements.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3leNqjY from PacerMonitor.com.
About March on Hospitality LLC
March on Hospitality LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-40140) on
January 17, 2023. In the petition signed by Douglas Whatley, the
Debtor disclosed up to $10 million in both assets and liabilities.
Jude Mark X. Mullin oversees the case.
Suzanne K. Rosen, Esq., at Forshey & Prostok, LLP, represents the
Debtor as legal counsel.
MATTEL INC: Fitch Affirms LongTerm IDR at 'BB+', Outlook Positive
-----------------------------------------------------------------
Fitch Ratings has affirmed all of Mattel, Inc. (Mattel)'s ratings,
including its Long-Term Issuer Default Rating (IDR) at 'BB+'. The
Rating Outlook is Positive.
Mattel's ratings reflect the company's strong portfolio of owned
brands such as Barbie, Hot Wheels, and FisherPrice, which the
company has focused on revitalizing and reenergizing over the last
few years. Together with cost-cutting initiatives, this has
supported strong top line and EBITDA growth and significantly
improved credit metrics.
The Positive Outlook reflects Fitch's view that Mattel's improved
competitive positioning and debt reduction over the past few years
could support its ability to navigate near-term macro-economic
volatility and eventually support an investment grade rating.
KEY RATING DRIVERS
Strong Brands and Market Share: According to The NPD Group, Barbie
and Hot Wheels were two of the top 5 selling toy properties across
G12 economies in 2022. Mattel also reports that it gained global
share in 2020 and 2021 as well as in Q4 of 2022. Since a leadership
change in 2018, Mattel has transitioned to being a more IP-focused
company, enabling it to evolve and re-energize several key brands
while focusing on keeping up with the rapid pace of change in
children's play patterns.
In Fitch's view, this focus has been one of the key contributors of
the company's ability to stabilize and increase market share.
Mattel's competitive position is supported by its continued focus
on being the partner of choice for key brands (as highlighted by
recapturing the Disney Princess licenses). The company is also
expanding the distribution of its intellectual property (IP)
through TV, film and streaming and is developing its e-commerce
presence. Given the potential for changing tastes and shifts in
play patterns such as increased digitization of toys and play,
Fitch believes Mattel will also need to continue investing in
innovation and re-vitalization of IP to maintain its competitive
position.
Operating Pressures in 2023: Mattel's revenue was essentially flat
at around $5.4 billion in 2022, although sales in the second half
of the year declined almost 11% year-over-year. In Fitch's view,
the decline was driven by lower than expected consumer demand and
retailer inventory destocking. Lower than expected sales also led
to the company and retailers exiting 2022 with excess inventory.
Mattel's revenue could decline modestly in 2023, driven by a
decline in orders from retailers as they work through excess
inventory in the first half of the year.
Fitch expects that some of the pressure from excess inventory could
be offset by the incremental revenue from Disney Princess and
Frozen licenses, which have returned to Mattel starting in 2023.
Mattel could return to low single digit topline growth beginning in
2024, as its focus on scaling brands, increased product demand
driven by TV and theatrical releases of key owned and licensed
brands, and the continued introduction of innovative products
support top line growth.
Mid-teens EBITDA Margins: Mattel's EBITDA margins could decline to
the low 16% range in 2023 compared to 17.3% in 2022, as the
elevated promotional activity required to reduce excess inventory
could put downward pressure on the company's gross margins in the
first half of 2023. Mattel has been focused on cost reduction over
the past several years, highlighted by its Optimizing for Growth
program. This focus on cost efficiency could enable the company to
generate EBITDA margins around 17% in 2024 and beyond assuming the
company is able to work past the pressures from excess inventory
and on improved top line growth prospects.
Reasonable Leverage and Good FCF: Mattel's focus on improving its
operating trajectory and debt repayment led to leverage declining
between 2019 and 2022. Mattel ended 2022 with debt/EBITDA of 2.5x,
with the repayment of the remaining $250 million due on its 2023
notes maturity in December of 2022 offsetting the decline in EBITDA
the company experienced as a result of the challenges it faced in
the second half of 2022. Fitch believes Mattel's leverage could
increase to the high 2x range in 2023 as a result of declining
EBITDA, before improving to the mid 2x range thereafter.
DERIVATION SUMMARY
Mattel is rated higher than peer consumer products companies Hasbro
(BBB-/Stable), Levi's (BB+/Stable), ACCO Brands (BB/Stable),
Central Garden and Pet (BB/Stable), and Newell Brands
(BB/Negative).
Hasbro's ratings reflect its position as one of the world's largest
toy companies, good liquidity and cash flow profile, and
expectations that leverage (gross debt to EBITDA) will be in the
low 3x range in 2024 recognizing that it could be elevated in the
mid-3x range in 2023. The company could also use asset sales or FCF
to support deleveraging.
ACCO's rating and Outlook (BB/Stable) reflect the company's
historically consistent FCF and reasonable gross leverage, which
trended around 3x prior to operating challenges in 2020 related to
the coronavirus pandemic. The rating and Outlook are constrained by
secular challenges in the office products industry and channel
shifts within the company's customer mix. ACCO's earnings have been
pressured by supply chain challenges, inflation and a stronger
dollar which lifted leverage into the 4x range in 2022, above
Fitch's negative sensitivity. While Fitch expects margin recovery
combined with debt paydown to drive leverage back below 4x in 2023,
a prolonged downturn could be a rating concern.
Central's rating reflects the company's strong market positions
within the pet and lawn & garden segments, ample liquidity
including robust FCF and moderate leverage, offset by limited scale
with EBITDA in the low-to-mid $300 million range. Over time, Fitch
expects the company to manage gross debt/EBITDA within its targeted
range of 3.0x to 3.5x, though leverage could reach the high-3x area
in fiscal 2023 (ended September 2023) given the challenging
operating environment. A longer and/or deeper economic slowdown
that resulted in leverage exceeding 4x for an extended period would
be a rating concern.
Newell's 'BB'/Outlook Negative rating reflects the material
pressure on top line and EBITDA beginning in 2H22 that is likely to
remain through 2023, given a significant pullback in retail orders
and an overall slowdown in discretionary consumer spending. Beyond
a weakening macro environment, execution risk is a concern as
Newell continues to realign and restructure its business segments
and realign its supply chain which could further disrupt
operations. Newell's Outlook could be stabilized on increased
visibility around management's ability to execute on its turnaround
strategy, and drive top line and EBITDA recovery in 2024, which
along with debt reduction would bring gross debt/EBITDA to under
4.5x.
Levi's BB+/Stable rating consider the company's good execution both
from a topline and a margin standpoint, which support Fitch's
longer-term expectations of low-single digit revenue and EBITDA
growth. Although there could be some near-term pressure to
operating results given ongoing shifts in consumer behavior,
difficult comparisons, and global macroeconomic uncertainty, Fitch
expects that Levi will be able to maintain adjusted leverage
(adjusted debt/EBITDAR, capitalizing leases at 8x) below 3.5x over
time. Levi's ratings reflect its position as one of the world's
largest branded apparel manufacturers, with broad channel and
geographic exposure, while also considering the company's narrow
focus on the Levi brand and in bottoms.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Revenue in 2023 is expected to be around $5.4 billion, down
around 1% from 2022 levels on slower orders from retailers and
partially offset by price increases and the reintroduction of
Disney Princesses. Revenue growth starting in 2024 be in the low
single digits, in line with historical global toy sales growth
heading into the pandemic.
- EBITDA is forecast to decline from $940 million in 2022 to around
$870 million in 2023, driven by factors such as higher promotional
activity required to reduce excess inventory and higher advertising
spend. EBITDA could grow modestly in 2024 and beyond, as the
company benefits from cost savings initiatives, moves past the
negative pressure created by excess inventory and sees growth in
the top line.
- FCF is expected to be in the $400 million to $500 million range
beginning 2023, higher than the $256 million recorded in 2022. The
significant improvement in FCF in 2023 could be driven by positive
working capital as the company reduces its inventory, and Fitch
assumes working capital is approximately neutral in 2024 and
beyond. Fitch's FCF projection assumes dividends, which were last
paid in 2017, continue to be suspended over the medium term. FCF
could be used to resume the company's share repurchase program and
support new growth initiatives.
- Gross leverage (gross debt/EBITDA), which improved to 2.5x in
2022 from 2.6x in 2021 on debt reduction, is projected to remain in
the mid 2x range assuming EBITDA stabilizes in the $900 million
range and flat debt levels. Mattel's next maturity is its $600
million of unsecured notes due April 2026.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch would upgrade Mattel to 'BBB-' on increased confidence in
the sustainability of the company's market share and margin gains
as evidenced by strong performance in its core brands with leverage
sustaining below 3.5x.
- Fitch could stabilize Mattel's Outlook if the company's top line
or EBITDA declined such that leverage remained above 3.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Weaker than expected operating performance highlighted by
declining revenue and market share, leading to leverage (gross
debt/EBITDA) sustained above 4x.
LIQUIDITY AND DEBT STRUCTURE
Solid Liquidity: As of Dec. 31, 2022, Mattel's liquidity totaled
over $2.15 billion including around $761 million of cash and
equivalents and full availability (less $8 million in letters of
credit) on its $1.4 billion senior secured revolving credit
facility due September 2025. This liquidity is further supported by
Fitch's expectation that Mattel could generate FCF in the $400
million to $500 million range annually.
On Sept. 15, 2022, Mattel entered into a revolving credit agreement
for a $1.4 billion revolving credit facility due in September 2025,
which replaced its previous ABL revolving lending facility that
would have matured in March 2024. Mattel's revolving credit
agreement and guaranteed notes indenture contain security fall-away
provisions if Mattel achieves a debt rating of Baa3/BBB- or higher
by two of three selected ratings agencies and no event of default
has occurred.
As of Dec. 31, 2022, Mattel's capital structure consisted of an
undrawn $1.4 billion revolving credit facility, $1.8 billion in
guaranteed senior unsecured notes maturing between 2026 and 2029,
and $550 million in unguaranteed senior unsecured notes maturing
between 2040 and 2041.
Recovery Considerations
Fitch has assigned Recovery Ratings (RRs) to the various debt
tranches in accordance with Fitch criteria, which allows for the
assignment of RRs for issuers with IDRs in the 'BB' category. Given
the distance to default, RRs in the 'BB' category are not computed
by bespoke analysis. Instead, they serve as a label to reflect an
estimate of the risk of these instruments relative to other
instruments in the entity's capital structure.
Fitch Mattel's secured revolving credit facility is rated
'BBB-'/'RR1', notched up one from the IDR and indicating
outstanding recovery prospects in a default scenario. Mattel's
guaranteed unsecured debt is rated 'BB+'/'RR4' given average
recovery prospects. Mattel's nonguaranteed unsecured debt is rated
'BB'/'RR5', indicating below average recovery prospects given the
presence of guaranteed debt in the capital structure.
ISSUER PROFILE
Mattel is a leading global children's entertainment company that
specializes in the design and production of toys and consumer
products. Mattel owns some of the toy industries' leading brands
including Barbie, Hot Wheels and Fisher Price.
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
----------- ------ -------- -----
Mattel, Inc. LT IDR BB+ Affirmed BB+
senior secured LT BBB- Affirmed RR1 BBB-
senior
unsecured LT BB Affirmed RR5 BB
senior
unsecured LT BB+ Affirmed RR4 BB+
MERIDIAN RESTAURANTS: Another Burger King Franchisee in Chapter 11
------------------------------------------------------------------
Laura Michaels of Franchise Times reports that calling out
increased costs, declining foot traffic and low sales, Meridian
Restaurants Unlimited, a 118-unit Burger King franchisee, filed for
Chapter 11 bankruptcy protection earlier this month.
The South Ogden, Utah-based company, one of Burger King’s largest
franchisees, operates restaurants in Utah, Montana, Wyoming, North
Dakota, South Dakota, Minnesota, Nebraska, Kansas and Arizona. Its
filing marks the second major bankruptcy by a Burger King
franchisee this year and follows 90-unit Toms King, which has all
of its restaurants for sale, according to court documents filed in
January 2023.
In its filing March 2 in the U.S. Bankruptcy Court Utah District in
Salt Lake City, Meridian cited increased wages (up 33 percent in
recent years), higher cost of labor, shipping and food inflation
(up 22 percent in the past two years) and staffing shortages as
drivers of its cash flow issues. Meridian has $14 million in
unsecured debt. It owes Burger King royalties, advertising
contributions, rent and other amounts, and has payments due to
landlords. City National Bank is also an unsecured creditor.
Low sales, meanwhile, have been an issue since before James Winder
and his Polar Star Capital Partners acquired a controlling interest
in Meridian from founder David Harper in 2018.
"For many years, Meridian has had lower than the Burger King system
average annual restaurant revenue volumes," Winder, chairman of
Meridian, wrote in the petition. "The original founder acquired
many underperforming restaurants with the unrealized objective to
grow annual volumes. These lower volumes result in smaller profit
margins and thus greater sensitivity to the recent dramatic rise in
labor, commodity and maintenance costs."
Burger King's AUV for franchise locations is $1.4 million, putting
it behind Wendy's ($1.9 million) and McDonald's ($3.3 million).
BK’s average four-wall EBITDA, or cash flow, was roughly $140,000
in 2022.
While some of Meridian's restaurants are profitable, "others
operate at a loss, and have for many years," resulting in an
inability to meet financial obligations, according to the filing.
Winder wrote Meridian management has improved its customer service
scores and third-party restaurant inspection scores, and that
progress, coupled with Burger King's increased marketing efforts,
is expected to drive sales.
Burger King announced its "Reclaim the Flame" program last fall.
The $400-million strategy is aimed at growing sales and driving
operator profitability. It includes $150 million for advertising
and digital investments and $250 million for technology, kitchen
equipment and remodels and relocations. The remodel program itself
targets about 800 locations; BK has more than 7,000 units in the
U.S. Burger King franchisees, who make up 93 percent of the system,
will co-invest advertising dollars.
Waste reduction and "significant opportunities to improve labor
percentage as a cost of sales" were also named by Meridian as
potential opportunities to achieve better margins. "This, combined
with restructuring of some assets and obligations will free up cash
flow to support day-to-day operations and management objectives to
become a healthy and thriving business," the filing states.
Winder did not reply to a request for comment. Meridian is also a
Black Bear Diner franchisee; those units are not involved in the
bankruptcy.
An Employee Wage Motion in the Chapter 11 petition seeks authority
to pay the debtors' approximately 2,495 employees, including 2,266
hourly and 229 salaried workers, the wages, compensation and
benefits earned during the pre-petition period, and going forward.
Wages owed employees is approximately $1.3 million, with $394,972
owed in benefits.
Peak Franchise Capital, a Dallas-based franchise consulting firm,
agreed to provide financial advisory services to the debtors,
according to the petition.
About Meridian Restaurants Unlimited
Meridian Restaurants Unlimited own and operate 118 Burger King
locations in Utah and other states. The South Ogden, Utah-based
company, one of Burger King’s largest franchisees, operates
restaurants in Utah, Montana, Wyoming, North Dakota, South Dakota,
Minnesota, Nebraska, Kansas and Arizona.
Meridian Restaurants Unlimited, LC, and its affiliates sought
relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Utah. Lead Case No. 23-20731) on March 2, 2023. In the petition
filed by James Winder, manager for PSCP Meridian, LLC, the Debtor
reports estimated assets and liabilities between $10 million and
$50 million.
Judge Kevin R. Anderson oversees the cases.
The Debtors tapped Ray Quinney & Nebeker PC as counsel and Peak
Franchise Capital, LLC as their financial advisor.
MERIDIAN RESTAURANTS: Gets OK to Hire BMC Group as Noticing Agent
-----------------------------------------------------------------
Meridian Restaurants Unlimited, L.C. and its affiliates received
approval from the U.S. Bankruptcy Court for the District of Utah to
hire BMC Group, Inc. as their noticing agent.
The firm's services include:
(a) legal noticing and compiling, administering, evaluating,
and producing documents and information necessary to support a
restructuring effort;
(b) receiving and managing creditors' and claimants'
information for the purpose of performing the dissemination of
notices required in the Debtors' Chapter 11 cases;
(c) maintaining an up-to-date mailing list and informational
database for all entities who have been scheduled as creditors and
who have filed proofs of claim or requests for notices in the
bankruptcy cases;
(d) assisting the Debtors with the administrative management
of claims and notice data;
(e) if requested, printing, mailing and tabulating ballots for
purposes of plan voting;
(f) creating and maintaining a case-specific information
website;
(g) assisting with the production of reports, exhibits and
schedules of information or use by the Debtors or to be delivered
to the court, the clerk's office, the U.S. trustee or third
parties;
(h) providing other technical and document management services
of a similar nature requested by the Debtors or the clerk's office;
and
(i) providing any other services agreed upon by the Debtor and
BMC Group.
The Debtor paid $10,000 to the firm as retainer fee.
Tinamarie Feil, co-founder of BMC Group, disclosed in a court
filing that she is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Tinamarie Feil
BMC Group, Inc.
3732 W. 120th Street
Tel: 206-499-2169
Email: tfeil@bmcgroup.com
About Meridian Restaurants Unlimited
Meridian Restaurants Unlimited, LC and its affiliates, owners and
operators of restaurants in Utah, concurrently filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Utah Case No. 23-20731) on March 2, 2023. In the
petitions signed by James Winder, manager for PSCP Meridian, LLC,
Meridian Restaurants Unlimited and LoveLoud Restaurants, LC
disclosed $10 million to $50 million in both assets and
liabilities. AZM Restaurants, LC listed $1 million to $10 million
in assets and $10 million to $50 million in liabilities.
Judge Kevin R. Anderson oversees the cases.
The Debtors tapped Markus Williams Young & Hunsicker LLC as
bankruptcy counsel; Ray Quinney & Nebeker P.C. as local and
litigation counsel; and Peak Franchise Capital, LLC as financial
advisor. BMC Group, Inc. is the noticing agent.
MERIDIAN RESTAURANTS: Taps Markus Williams Young as Legal Counsel
-----------------------------------------------------------------
Meridian Restaurants Unlimited, L.C. and its affiliates seek
approval from the U.S. Bankruptcy Court for the District of Utah to
hire Markus Williams Young & Hunsicker, LLC as their legal
counsel.
The Debtors require legal counsel to:
a. assist in the production of the Debtors' schedules and
statement of financial affairs;
b. assist in the preparation of the Debtors' plan of
reorganization and disclosure statement;
c. prepare legal papers;
d. represent the Debtors in adversary proceedings and
contested matters related to the bankruptcy cases;
e. provide legal advice with respect to the Debtors' rights,
powers, obligations and duties in the continuing operation of their
business and the administration of the estate;
f. investigate the assets, liabilities, and financial affairs
of the estate, including those of various entities which are owned
and controlled by or affiliated with the Debtors;
g. assist the Debtors in analyzing and pursuing any proposed
dispositions of assets of their bankruptcy estates;
h. pursue claims and causes of action of the Debtors'
bankruptcy estates, including but not limited to, claims and causes
of action arising under Chapter 5 of the Bankruptcy Code;
i. defend one or more of the Debtors and their estate in any
litigation matters, which may be asserted, including the defense of
motions seeking relief from the automatic stay; and
j. provide other legal services for the Debtors.
The firm will charge these hourly fees:
Attorneys $395 - $595
Paralegal and assistant $175
The firm received a retainer in the amount of $150,000.
As disclosed in court filings, Markus Williams Young & Hunsicker is
a "disinterested person" within the meaning of Section 101(14) of
the Bankruptcy Code.
James T. Markus, Esq.
William G. Cross, Esq.
Lacey S. Bryan, Esq.
Markus Williams Young & Hunsicker, LLC
1775 Sherman Street, Suite 1950
Denver, CO 80203-4505
Tel: (303) 830-0800
Fax: (303) 830-0809
Email: jmarkus@markuswilliams.com
Email: wcross@markuswilliams.com
Email: lbryan@markuswilliams.com
About Meridian Restaurants Unlimited
Meridian Restaurants Unlimited, LC and its affiliates, owners and
operators of restaurants in Utah, concurrently filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Utah Case No. 23-20731) on March 2, 2023. In the
petitions signed by James Winder, manager for PSCP Meridian, LLC,
Meridian Restaurants Unlimited and LoveLoud Restaurants, LC
disclosed $10 million to $50 million in both assets and
liabilities. AZM Restaurants, LC listed $1 million to $10 million
in assets and $10 million to $50 million in liabilities.
Judge Kevin R. Anderson oversees the cases.
The Debtors tapped Markus Williams Young & Hunsicker LLC as
bankruptcy counsel; Ray Quinney & Nebeker P.C. as local and
litigation counsel; and Peak Franchise Capital, LLC as financial
advisor. BMC Group, Inc. is the noticing agent.
MERIDIAN RESTAURANTS: Taps Ray Quinney & Nebeker as Local Counsel
-----------------------------------------------------------------
Meridian Restaurants Unlimited, L.C. and its affiliates seek
approval from the U.S. Bankruptcy Court for the District of Utah to
hire Ray Quinney & Nebeker P.C. as their litigation and local
bankruptcy counsel.
The firm's services include:
a. investigating the assets, liabilities and financial affairs
of the estate, including those of various entities which are owned
and controlled by or affiliated with the Debtors;
b. investigating and advising the Debtors on issues of
substantive consolidation;
c. preparing legal papers and representing the Debtors in
proceedings or hearings;
d. assisting the Debtors in analyzing and pursuing possible
business reorganizations or liquidations;
e. assisting the Debtors in analyzing and pursuing any
proposed dispositions of assets of their bankruptcy estates;
f. pursuing claims and causes of action of the Debtors'
bankruptcy estates, including but not limited to, claims and causes
of action arising under Chapter 5 of the Bankruptcy Code;
g. defending one or more of the Debtors and their estate in
any litigation matters, which may be asserted including the defense
of motions seeking relief from the automatic stay;
h. reviewing, analyzing, and advising the Debtors regarding
claims or causes of action to be pursued on behalf of their
bankruptcy estates;
i. assisting the Debtors in providing information to creditors
and other parties in interest;
j. reviewing, analyzing, and advising the Debtors regarding
the retention of any further professionals that may be necessary to
investigate and analyze assets of their estates;
k. reviewing, analyzing and advising the Debtors regarding fee
applications or other issues involving professional compensation in
their Chapter 11 cases;
l. preparing and advising the Debtors regarding any Chapter 11
plan filed by them, either separately or as part of a joint plan,
and advising them regarding possible Chapter 11 plans filed by
other constituents;
m. advising the Debtors regarding issues related to possible
requests for conversion or appointment of a trustee or examiner;
n. assisting the Debtors in negotiations with various creditor
constituencies regarding treatment, resolution and payment of
creditor claims;
o. reviewing and analyzing the validity of claims filed, and
advising the Debtors as to the filing of objections to claims, if
necessary;
p. providing necessary corporate and tax advice as may be
necessary concerning the Debtors and other entities owned and
controlled by or affiliated with them;
q. providing continuing legal advice with respect to the
bankruptcy estate, litigation, and all other legal matters; and
r. other necessary legal services.
The firm will charge these hourly fees:
Michael R. Johnson $495
David H. Leigh $425
Elaine A. Monson $350
Shareholders $350 to $495
Associates $250 to $270
Paralegals $195 to $205
The firm received a retainer in the amount of $62,166.
As disclosed in court filings, Ray Quinney & Nebeker is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Michael R. Johnson, Esq.
David H. Leigh, Esq.
Elaine A. Monson, Esq.
Ray Quinney & Nebeker, P.C.
36 South State Street, 14th Floor
Salt Lake City, UT 84111
Tel: (801) 532-1500
Email: mjohnson@rqn.com
Email: dleigh@rqn.com
Email: emonson@rqn.com
About Meridian Restaurants Unlimited
Meridian Restaurants Unlimited, LC and its affiliates, owners and
operators of restaurants in Utah, concurrently filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Utah Case No. 23-20731) on March 2, 2023. In the
petitions signed by James Winder, manager for PSCP Meridian, LLC,
Meridian Restaurants Unlimited and LoveLoud Restaurants, LC
disclosed $10 million to $50 million in both assets and
liabilities. AZM Restaurants, LC listed $1 million to $10 million
in assets and $10 million to $50 million in liabilities.
Judge Kevin R. Anderson oversees the cases.
The Debtors tapped Markus Williams Young & Hunsicker LLC as
bankruptcy counsel; Ray Quinney & Nebeker P.C. as local and
litigation counsel; and Peak Franchise Capital, LLC as financial
advisor. BMC Group, Inc. is the noticing agent.
METROHAVANA TOWN: Seeks to Hire Joel M. Aresty as Legal Counsel
---------------------------------------------------------------
Metrohavana Town Homes, LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of Florida to employ Joel M.
Aresty, P.A. as its legal counsel.
The Debtor requires legal counsel to:
a. give advice with respect to the powers and duties of the
Debtor and the continued management of its business operations;
b. advise the Debtor with respect to its responsibilities in
complying with the U.S. trustee's Operating Guidelines and
Reporting Requirements and with the rules of the court;
c. prepare legal documents;
d. protect the interest of the Debtor in all matters pending
before the court; and
e. represent the Debtor in negotiation with its creditors in
the preparation of a Chapter 11 plan.
The firm will be paid an hourly fee of $440 and will be reimbursed
for out-of-pocket expenses incurred.
The retainer fee is $5,000.
Joel Aresty, Esq., a partner at Joel M. Aresty, P.A., 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:
Joel M. Aresty, Esq.
Joel M. Aresty, P.A.
309 1st Ave S
Tierra Verde, FL 75202
Telephone: (305) 904-1903
Facsimile: (800) 899-1870
Email: Aresty@Mac.com
About Metrohavana Town Homes
MetroHavana Town Homes, LLC, a Miami-based company, sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
S.D. Fla. Case No. 22-11349) on Feb. 18, 2022, with up to $10
million in both assets and liabilities. Kelly Beam, owner of
MetroHavana Town Homes, signed the petition.
Judge Laurel M. Isicoff oversees the case.
Joel M. Aresty, P.A. is the Debtor's legal counsel.
MOMENTIVE PERFORMANCE: Moody's Raises CFR to 'B1', Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service has upgraded Momentive Performance
Materials Inc.'s Corporate Family Rating to B1 from B2 and
probability of default rating to B1-PD from B2-PD. At the same
time, Moody's has assigned a Ba3 rating to the company's proposed
first-lien senior secured term loan. The outlook is changed to
stable from positive.
"The rating upgrade reflects Momentive's improving financial
flexibility thanks to its business restructuring, increasing share
of specialty silicones, close oversight and strong support by KCC,
as well as the anticipated extension of its term loan maturities to
2028. Moody's expect Momentive to accrue business synergies under
KCC's ownership and continue to benefit from KCC's guarantee to its
second lien term loan. Momentive's improved business fundamentals
and its close tie with KCC will help buffer this year's challenging
market conditions and support earnings growth in 2024," says Jiming
Zou, Moody's lead analyst for Momentive.
The Ba3 rating on the proposed first-lien term loan due 2028
reflects its first lien on substantially non-ABL assets and second
lien on all ABL assets and its seniority versus second-lien term
loan. The proceeds of the $850 million first-lien term loan will be
used to repay its existing $804 million first-lien term loan, cover
related issuance fees and expenses and replenish cash reserve.
Concurrently, the company is extending the maturity of its $839
million second-lien term loan, which is guaranteed by KCC and
unrated by Moody's, to 2028.
Governance factor is a key driver for this rating action,
considering KCC's strengthened economic interest in and oversight
over Momentive through asset injection, capital contributions and
guarantees.
Assignments:
Issuer: Momentive Performance Materials Inc.
Backed Senior Secured First Lien Term Loan, Assigned Ba3 (LGD3)
Upgrades:
Issuer: Momentive Performance Materials Inc.
Corporate Family Rating, Upgraded to B1 from B2
Probability of Default Rating, Upgraded to B1-PD from B2-PD
Outlook Actions:
Issuer: Momentive Performance Materials Inc.
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
The rating upgrade factors in KCC's strong support to Momentive
given their close business links and economic ties. Moody's expect
Momentive will prioritize business reinvestment, continue to work
on business synergies with KCC and maintain prudent financial
policy. KCC has strengthened its economic interest in and control
over Momentive through asset injection, capital injections and
guarantees since its initial acquisition of Momentive in 2019. KCC
now controls 60.4% stake in Momentive, owns 49.8% share in the LP
share of SJL's investment in the remaining 39.6% stake in
Momentive, and guarantees Momentive's $839 million second-lien term
loan. Momentive has become KCC's core subsidiary and accounts for
the majority of KCC's profits. Moreover, Momentive's improved
earnings profile helps mitigate the event risk associated with its
39.6% stake owned by SJL, a private equity firm whose exit may
trigger a recapitalization.
The upgrade also reflects Momentive's improving financial
flexibility after debt refinancing. Debt maturities will be
extended to 2028 from 2024 after the issuance of new first-lien
term loan and renewed second-lien term loan. Momentive has already
extended the maturity of its asset-based revolver (unrated) to
January 2028 and expanded the revolver commitment to $340 million
from $300 million.
Momentive's B1 CFR is supported by its status as one of the largest
silicone producers globally, its large number of customers in
different industries including automotive, electronics, consumer
and construction and geographically diversified production
facilities. Momentive has improved its business resilience against
the cyclicality in the silicone industry through the phase-out of
its basic chemicals production and investments in growth areas such
as electronic materials, specialty silanes and urethane additives.
Moody's expect Momentive to sustain its mid-cycle EBITDA at about
$400 million, which will keep adjusted debt leverage (including
pension deficit) close to or below five times over time.
The increasing share of specialty products and potential synergies
with KCC will boost future earnings, although 2023 earnings outlook
is depressed by a slowing economy and higher interest rates. Strong
pricing, favorable demand and tight supply contributed to record
EBITDA levels of $467 million and $455 million in 2021 and 2022,
respectively. Estimated adjusted debt leverage was 4.6x at the end
of 2022. Moody's expect weak demand and price declines starting in
the second half of 2022 will continue in early 2023 before
stabilizing in the second half and a market recovery in 2024. In
the meantime, Momentive has good liquidity to continue its business
transformation and reinvest in specialty products.
Momentive's rating remains constrained by its volaille earnings,
exposure to the cyclical end markets, as well as the ongoing
business restructuring and reinvestment to stay competitive in the
global silicone industry. The company is exposed to the cyclical
and competitive silicone industry that requires large capex and
working capital consumption. The company's ongoing business
restructuring also involve execution risks. However, cooling
inflation and improving supply chain will result in working capital
release and help cash flow generation in 2023 and 2024.
Momentive's good liquidity is supported by its cash balance of $115
million, expected positive free cash flow in the next 12 months and
$189 million availability under the $300 million ABL facility at
the end of December 2022. Its new $340 million ABL facility has a
financial covenant -- a minimum fixed charge coverage ratio of
1.0x, which will be tested if its revolver availability falls below
10% of the borrowing base or $27.5 million. KCC's existing
second-lien term loan agreement requires Momentive to comply with a
net leverage maintenance covenant of not exceeding 5.5x at the end
of 2022 and 2023. A new financial covenant at KCC in lieu of
Momentive is expected for the expected new second-lien term loan.
The stable outlook reflects Moody's expectation that Momentive's
business transformation and reinvestments and continued support
from KCC will buffer challenging market conditions and ensure its
credit profile in line with the rating requirements.
ESG CONSIDERATIONS
Momentive's highly negative credit impact score (CIS-4) mainly
reflects the company's governance risks such as elevated debt
leverage and the partial ownership by a private equity firm. The
company also faces very high environmental risks due to the energy
and water intensity of producing silicones, waste and pollution at
its manufacturing facilities and environmental remediation
requirements at its closed facilities. The company's exposure to
social risks such as health and safety, responsible production is
high, which is in line with the chemical sector. The company could
also be subject to strikes or work stoppages by, or disputes with,
labor unions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Rating upgrade could be considered, if the company continues to
increase its specialty product offerings, improve earnings and
reduce debt leverage on a sustainable basis. An upgrade would
require consistently positive free cash flow, adjusted debt/EBITDA
sustainably below 4.0x, a stable shareholder base.
Momentive's ratings will be downgraded, if the company's adjusted
debt/EBITDA increases above 5.0x or liquidity profile deteriorates
with negative free cash flow or failure to refinance its term
loans. A deterioration in KCC's ability and willingness to support
Momentive's financial wellbeing would also have negative rating
implication.
The principal methodology used in these ratings was Chemicals
published in June 2022.
Momentive Performance Materials Inc., based in New York, US, is one
of the largest global producers of silicones and silicone
derivatives. Silicones, or more accurately, polymerized siloxanes
or polysiloxanes, are mixed inorganic-organic polymers that are
used in a wide variety of industrial and consumer applications
including agriculture, automotive, electronics, healthcare,
personal care, textiles, and sealants. KCC Corporation and SJL
Partners LLC acquired MPM Holdings Inc., the holding company of
Momentive, for approximately $3.1 billion in 2019. Momentive
generated $2.7 billion in revenues in 2021.
MOMENTIVE PERFORMANCE: S&P Rates New First-Lien Term Loan 'B+'
--------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating and '3'
recovery rating to Momentive Performance Materials Inc.'s (MPM)
proposed $850 million first-lien term loan due in 2028. The '3'
recovery rating indicates its expectation for meaningful (50%-70%;
rounded estimate: 65%) recovery in the event of a payment default.
S&P said, "We expect the company will use proceeds to repay its
existing first-lien term loan facility and for fees and expenses
related to the refinancing. We based our rating on preliminary
terms and conditions. Concurrent with its first-lien term loan
refinancing, we expect MPM will complete the refinancing of its
second-lien term loan facility with its Korean banking group."
S&P's 'B+' issuer credit rating and stable outlook are unchanged.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P assigned its 'B+' issue-level rating to Momentive
Performance Material Inc.'s prospective first-lien senior secured
term loan due in 2028.
-- The recovery rating is '3', reflecting its expectation of
meaningful (50%-70%; rounded estimate: 65%) recovery.
-- S&P value the company on a going-concern basis and estimate an
adjusted gross recovery value of $1.21 billion at emergence, using
a 5.5x EBITDA multiple and emergence EBITDA of $244 million. The
5.5x EBITDA multiple is consistent with the multiple applied to
similarly rated specialty chemical peers, such as Ecovyst Catalyst
Technologies LLC.
S&P estimates that for the company to default, EBITDA would need to
decline significantly, potentially stemming from an economic
contraction, client attrition, unplanned downtime, and declining
volume that pressures margins, working capital, and cash flow.
Simulated default assumptions
-- Simulated year of default: 2027
-- EBITDA at emergence: $244 million
-- Implied enterprise valuation multiple: 5.5x
-- Gross recovery value: $1.342 billion
-- Adjusted gross value: $1.211 billion*
*Adjustment includes underfunded pensions at MPM. In S&P's recovery
analysis, it factors in deficits for pensions and other
postretirement liabilities if three-year average tax-adjusted
deficits are more than 10% of debt claims at default and are
expected to be above 10% in future years.
Simplified waterfall
-- EBITDA at emergence: $244 million
-- Implied enterprise valuation multiple: 5.5x
-- Gross recovery value: $1.342 billion
-- Less: Assumed estimated pension claims: $131 million*
-- Adjusted gross recovery value: $1.211 billion
-- Less: 5% administrative expenses
-- Net recovery value: $1.15 billion
-- Recovery allocation§: 31%/25%/47%
--Recovery allocation: $320 million/$232 million/$599 million
-- Less: ABL borrowings: $165 million#
-- Less: 35% of foreign stock not pledged: $55 million
-- Direct collateral for first-lien term lenders: $331 million
-- Foreign nonguarantor recovery value: $599 million
-- 35% unpledged foreign stock: $55 million
-- Total unencumbered value: $654 million
-- Deficiency claim of first-lien debt: $511 million
-- Deficiency claim of second-lien debt: $883 million
-- Total deficiency claims: $1.394 billion
-- Direct recovery for first-lien debt: $331 million
-- Recovery from deficiency claims: $240 million
-- Total recovery for first-lien debt: $571 million
-- Secured first-lien debt claims: $843 million
--First-lien recovery expectation: 50%-70% (rounded estimate:
65%)
*Assumed estimated pension claims consist of $39 million domestic
and $92 million foreign.
§Recovery allocation: U.S./foreign w/65% stock pledge/foreign
nonguarantors.
#ABL borrowings assumed to consist of $91 million domestic and $74
million foreign.
All debt amounts include six months of prepetition interest. The
collateral value includes asset pledges from obligors (after
priority claims) plus equity pledges in nonobligors. S&P generally
assume usage of 60% for ABL revolvers at default.
NATURAL PAWZ: Saved from Bankruptcy by Founders
-----------------------------------------------
Tom Zizka of FOX26 reports that Houston pet-food chain Natural
Pawz, a popular Houston pet-food chain that was set to close,
because its parent company declared bankruptcy, has new life thanks
to its founders, who came out of retirement to save it.
Natural Pawz has 24 locations in Houston, Austin, and San Antonio.
Just a month ago, there were 'liquidation sale' signs hanging on
the door, but the threat of closure is gone, after a few crazy
weeks.
In the Washington Avenue location, people are busy shopping with
inquisitive dogs in tow. Michael Daywood makes frequent visits with
his dog, Chewie, "We take baths here; we get all his food and
treats here; he drags us over here, once a week, for his own
treats."
For these customers, the prospect of losing the natural pet-food
store was sad, "Honestly, I would know where I would get the dog
food I need," says customer Freeman Wyche.
The crisis was averted when Nadine Joli-Coeur and her husband Biff
Picone finalized buying the chain in Delaware bankruptcy court,
nearly five years after they sold the business they founded. The
decision started when they got a call from former employees about
the impending closure.
Now, those 140 people still have a job and are a little amazed at
the effort to jump 'out' of retirement to see the business survive.
"I absolutely love them," says long-time employee Taralynn Smith,
"I've worked with them for a long time and I was really, really
thrilled to hear they were coming back."
There are, understandably, growing pains. A month ago, Joli-Coeur
and Picone were enjoying retirement without any infrastructure, in
place, to run a business. "Starting from retirement, the last four
years, and starting up getting a point of sale, merchant accounts,
benefits, employee payroll system, it's been quite a challenge,"
says Joli-Coeur.
"We could not just see that go away," adds Picone, "Our legacy, and
the hard work for 15 years, we didn't want it to just be wiped off
as an afterthought."
In the short term, the couple is working with distributors to get
the stores restocked and recommitting to being a 'local' place of
business.
Longer term, their sales agreement with the bankruptcy court puts
Kriser's pet-food stores in Texas under their control. Picone says
they'll soon become Natural Pawz locations as well and he and
Joli-Coeur decided they are in the experience for the long haul,
with no thought of ever selling again.
About Natural Pawz
Natural Pawz is a popular pet-food chain in Houston, Texas. It has
24 locations in Houston, Austin, and San Antonio.
NEONODE INC: Incurs $4.9 Million Net Loss in 2022
-------------------------------------------------
Neonode Inc. has filed with the Securities and Exchange Commission
its Annual Report on Form 10-K disclosing a net loss attributable
to the Company of $4.88 million on $5.67 million of total revenues
for the year ended Dec. 31, 2022, compared to a net loss
attributable to the Company of $6.45 million on $5.84 million of
total revenues for the year ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $21.20 million in total
assets, $1.78 million in total liabilities, and $19.42 million in
total stockholders' equity.
Neonode said, "In the future, we may require sources of capital in
addition to cash on hand and our ATM Facility to continue
operations and to implement our strategy. If our operations do not
become cash flow positive, we may be forced to seek equity
investments or debt arrangements. Historically, we have been able
to access the capital markets through sales of common stock and
warrants to generate liquidity. Our management believes it could
raise capital through public or private offerings if needed to
provide us with sufficient liquidity.
"No assurances can be given, however, that we will be successful in
obtaining such additional financing on reasonable terms, or at all.
If adequate funds are not available on acceptable terms, or at all,
we may be unable to adequately fund our business plans and it could
have a negative effect on our business, results of operations and
financial condition. In addition, no assurance can be given that
stockholders will approve an increase in the number of our
authorized shares of common stock if needed. The issuance of
equity securities or securities convertible into equity could
dilute the value of shares of our common stock and cause the market
price to fall, and the issuance of debt securities could impose
restrictive covenants that could impair our ability to engage in
certain business transactions."
THE CEO'S COMMENTS
"During 2022 we continued to execute on our strategy, with a dual
focus on technology licensing and product sales. In our licensing
business we focused on expanding the business with automotive
customers and on solutions for driver and in-cabin monitoring,
head-up display ("HUD") obstruction detection and interior
controls, which generated project-related NRE revenues. We also
continued to support our existing printer and automotive customers,
who license our zForce technology for touch display applications.
In our products business we focused on promoting and selling our
Touch Sensor Module ("TSM") products to customers in the elevator
and interactive kiosk sectors," said Dr. Urban Forssell, Neonode's
CEO
"During the first half of the year our sales and business
development continued to be hampered by pandemic-driven lock-downs
and uncertain market outlooks for several of our customers, causing
them to push new product development and launches into the future.
Global supply chain constraints also affected several of our
customers due to the lack of semi-conductors and other key
components. Both factors had an adverse effect on our growth and
financial performance. During the third and fourth quarters we saw
indications that the situation in several of our key markets, for
instance China, Japan, and Korea, started to normalize, a trend
which we expect to continue in 2023. We therefore remain
optimistic about our ability to significantly grow our business in
2023 and the years to come," continued Dr. Urban Forssell.
"We are confident that the key market segments and application
areas we are active in: touchless interaction with elevator control
panels and interactive kiosks and driver and in-cabin monitoring,
and HUD obstruction detection in vehicles will increase in
relevance and grow in the future, and that we are in a good
position to capitalize on this growth with our TSM products and our
MultiSensing and zForce technology platforms. We also believe we
have good potential to grow in the medtech sector with our TSM
products and zForce licensing offerings. Finally, we believe that
our current sources of liquidity and capital will be sufficient to
execute on our strategy and continue to grow the company and
increase shareholder value," concluded Dr. Forssell.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/87050/000121390023018702/f10k2022_neonodeinc.htm
About Neonode
Neonode Inc. (NASDAQ:NEON) -- http://www.neonode.com-- provides
advanced optical sensing solutions for contactless touch, touch,
gesture control, and in-cabin monitoring. The Company also
provides software solutions for scene analysis that feature
advanced machine learning algorithms to detect and track persons
and objects in video streams for cameras and other types of
imagers.
Neonode reported a net loss attributable to the company of $5.61
million for the year ended Dec. 31, 2020, and a net loss
attributable to the Company of $5.30 million for the year ended
Dec. 31, 2019. As of Sept. 30, 2022, the Company had $17.79
million in total assets, $1.90 million in total liabilities, and
$15.89 million in total stockholders' equity.
* * *
This concludes the Troubled Company Reporter's coverage of Neonode
until facts and circumstances, if any, emerge that demonstrate
financial or operational strain or difficulty at a level sufficient
to warrant renewed coverage.
NEW BEGINNING: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: New Beginning Missionary Baptist Church, Inc.
2125 NE 155 St.
Miami Gardens, FL 33055
Business Description: The Debtor is a tax-exempt religious
organization.
Chapter 11 Petition Date: March 13, 2023
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 23-11933
Judge: Hon. Robert A. Mark
Debtor's Counsel: Peter Spindel, Esq.
PETER SPINDEL, ESQ. P.A.
5775 Blue Lagoon Dr. #300
Miami, FL 33126-2071
Tel: 786-355-4631
Email: peterspindel@gmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Eric Readon 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/UKOSZ3Y/New_Beginning_Missionary_Baptist__flsbke-23-11933__0001.0.pdf?mcid=tGE4TAMA
NEWCO LLC: Case Summary & Two Unsecured Creditors
-------------------------------------------------
Debtor: NewCo, LLC
3 Amalia Drive
Nashua, NH 03063
Business Description: The Debtor is engaged in activities related
to real estate. The Debtor owns duplex
units 41, 53 and 54 in the Forest Woods
Development and an undeveloped property
in the Forest Gardens development for
building three additional 12-unit
buildings. The Properties have an
aggregate appraised value of $8.5 million.
Chapter 11 Petition Date: March 14, 2023
Court: United States Bankruptcy Court
District of New Hampshire
Case No.: 23-10123
Judge: Hon. Bruce A. Harwood
Debtor's Counsel: Jesse Redlener, Esq.
ASCENDANT LAW GROUP, LLC
2 Dundee Park Drive
Suite 102
Andover, MA 01810
Email: jredlener@ascendantlawgroup.com
Total Assets: $8,504,673
Total Liabilities: $3,448,000
The petition was signed by Jared R. Elliott, manager, sole member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's two unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/VXT3FZQ/NewCo_LLC__nhbke-23-10123__0001.0.pdf?mcid=tGE4TAMA
NICK'S CREATIVE: Wins Cash Collateral Access Thru July 11
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
West Palm Beach Division, authorized Nick's Creative Marine, Inc.
to use cash collateral on an interim basis in accordance with the
budget, with a 10% variance, through July 11, 2023.
The Debtor requires the use of cash collateral for an effective
reorganization and to avoid harm to the Debtor's bankruptcy
estate.
GE Commercial Distribution Finance Corporation may have a lien on
the cash collateral of the Debtor by virtue of a UCC-1 filed on
October 9, 2007 (Instrument No. 200706732683) in the Florida
Secured Transaction Registry. Pursuant to the UCC-1 Financing
Statement, the secured assets include all accounts, price
protection payments, factory holdbacks, incentive payments and any
other amounts due to the Debtor.
Northpoint Commercial Finance may have a lien on the cash
collateral of the Debtor by virtue of a UCC-1 filed on October 21,
2019 (Instrument No. 201909951674) in the Florida Secured
Transaction Registry. Pursuant to the UCC-1 Financing Statement,
the secured assets include all of the Debtor's assets.
The U.S. Small Business Administration may have a lien on the cash
collateral of the of the Debtor by virtue of a UCC-1 filed on
February 15, 2022 (Instrument No. 20220049462X) in the Florida
Secured Transaction Registry. Pursuant to the UCC-1 Financing
Statement, the SBA has a security interest in accounts and deposit
accounts of the Debtor.
Seacoast National Bank may have a lien on the cash collateral of
the of the Debtor by virtue of the above referenced UCC-1 filed by
the Small Business Association on February 15, 2022 (Instrument No.
20220049462X) in the Florida Secured Transaction Registry. Pursuant
to the UCC-1 Financing Statement, the SBA has a security interest
in accounts and deposit accounts of the Debtor.
As adequate protection, GE, Northpoint, the SBA and Seacoast are
granted, as of the Petition Date, a replacement lien to the same
extent as any pre-petition lien, pursuant to 11 U.S.C. section
361(2) on the property set forth in its security agreements,
without any prejudice to any rights of the Debtor to seek to void
the lien as to the extent, validity, or priority of the liens.
A final hearing on the matter is set for July 11 at 1:30 p.m.
A copy of the court's order and the Debtor's budget is available at
https://bit.ly/3yxHVjG from PacerMonitor.com.
The Debtor projects $275,000 in income and $150,251 in total
expenses for March 2023.
About Nick's Creative Marine, Inc.
Nick's Creative Marine, Inc. owns a marine supply store in Riviera
Beach, Florida. The Debtor sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-17170) on
September 16, 2022. In the petition signed by Nicholas Scafidi,
vice-president, the Debtor disclosed up to $50,000 in assets and up
to $10 million in liabilities.
Judge Erik P. Kimball oversees the case.
Craig I. Kelley, Esq., at Kelly, Fulton & Kaplan, P.L., is the
Debtor's counsel.
NIELSEN & BAINBRIDGE: Seeks to Hire Hilco as Real Estate Advisor
----------------------------------------------------------------
Nielsen & Bainbridge, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to hire
Hilco Real Estate, LLC as their real estate advisor.
Hilco's services include:
a. meeting with the Debtors to ascertain their goals,
objectives and financial parameters;
b. mutually agreeing with the Debtors with respect to a
strategic plan for restructuring, shortening term, or terminating
the Debtors' leases and the sale of the properties, including
soliciting interested parties for the sale of the properties and
marketing the properties for sale through a managed qualifying bid
process;
c. at the Debtors' direction and on the Debtors' behalf,
negotiating the terms of restructuring, term shortening, and
termination agreements with the landlords under the leases and
purchase and sale agreements for the properties, in accordance with
the strategy;
d. providing written reports periodically to the Debtors
regarding the status of such negotiations; and
e. assisting the Debtors in closing the pertinent lease
restructuring, term shortening, and termination agreements and
property purchase and sale agreements.
The firm will be compensated as follows:
a. For each lease that becomes a restructured lease, Hilco
shall earn a fee equal to the restructured lease savings fee equal
to a base fee of $1,500, plus the aggregated restructured lease
savings multiplied by 5 percent. The amounts payable on account of
a restructured lease shall be paid in a lump sum upon closing of
the transaction having the effect of restructuring the lease, which
may include a transaction subject to entry of an order by the court
approving an assignment to any acquiror of applicable leases (or
any portion thereof), including through a purchase of the Debtors'
or a portion of the Debtors' assets to such acquiror (whether
through a credit bid, plan of reorganization, Section 363 sale or
otherwise), directly or through designation rights.
b. For each lease that becomes a term shortened lease, Hilco
shall earn a fee equal to one and one-half months of gross rent
under such lease. The amounts payable on account of a term
shortened lease shall be paid in a lump sum upon closing of the
transaction that provides the Debtors with an early termination
right or has the effect of terminating or otherwise shortening the
term of such lease, which may include a transaction subject to
entry of an order by the Court approving an assignment to any
acquiror of applicable leases (or any portion thereof), including
through a purchase of the Debtors' or a portion of the Debtors'
assets to such acquiror, whether through a bankruptcy sale process
or otherwise.
c. In the event a property is sold, Hilco shall earn a fee
equal to 3 percent of the aggregate cash or non-cash consideration
received by the Debtors in consideration of the property. If an
outside, third-party broker procures a buyer for any property, the
fee will be increased by 1 percent to 4 percent of gross sale
proceeds, and Hilco will be responsible for compensating the
outside broker out of the total fee. Each such fee shall be payable
at the time of closing on a sale of the property. Except as set
forth in the Services Agreement, Hilco shall not be responsible for
any other fees or commissions in connection with the disposition of
the property, including, but not limited to, any fees or
commissions that may be owed to the Debtors' previous real estate
brokers.
Hilco is a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code, as disclosed in court filings.
The firm can be reached through:
Sarah Baker
Hilco Real Estate, LLC
5 Revere Drive, Suite 206
Northbrook, IL 60062
Tel: (847) 504-2462
Email: sbaker@hilcoglobal.com
About Nielsen & Bainbridge
Nielsen & Bainbridge, LLC together with its debtor and non-debtor
affiliates, is an end-to-end supplier of home decor and hardwire
lighting operating under the trade name NBG Home. NBG Home serves
a portfolio of prominent retail partners in the design,
development, and fulfillment of products such as lighting, accents,
furniture, soft home goods, wall decor, and frames sold under
various brand names. NBG Home operates eight business units
touching the brick-and-mortar and eCommerce spaces.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90071) on Feb.
8, 2023. In the petition signed by Hope Margala, as authorized
signatory, the Debtors disclosed up to $500 million in assets and
up to $1 billion in liabilities.
Judge David R. Jones oversees the cases.
The Debtors tapped Kirkland and Ellis, LP and Kirkland and Ellis
International, LLP as general bankruptcy counsels; Jackson Walker,
LLP as local bankruptcy counsel; Alvarez and Marsal North America,
LLC as restructuring advisor; Guggenheim Securities, LLC as
investment banker; Hilco Real Estate, LLC as real estate advisor;
and PricewaterhouseCoopers, LLP as auditor. Omni Agent Solutions is
the claims, noticing, solicitation agent and administrative
advisor.
KKR Loan Administration Services, LLC, serves as administrative
agent and collateral agent under the DIP Facility. Attorneys to
the DIP Lenders are Dennis F. Dunne, Esq., and Matthew L. Brod,
Esq., at Milbank, LLP.
Wells Fargo Bank, National Association is the administrative agent
and collateral agent under the Prepetition ABL Facility. Attorneys
to the Prepetition ABL Agent are Julia Frost-Davies, Esq., and
Christopher L. Carter, Esq., at Morgan, Lewis & Bockius, LLP.
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 the law firms of Archer & Greiner, P.C.
and Lowenstein Sandler, LLP.
NIELSEN & BAINBRIDGE: Taps A&M as Restructuring Advisor, Names CTO
------------------------------------------------------------------
Nielsen & Bainbridge, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to hire
Alvarez & Marsal North America, LLC as their restructuring advisor
and designate Amy Lee as chief transformation officer.
The Debtors require a restructuring advisor to:
(a) assist the Debtors' counsel and Boards of Directors,
focusing on the coordination of resources related to the
reorganization efforts;
(b) assist in evaluating the Debtors' current and projected
liquidity position and in developing action items to help maximize
liquidity;
(c) assist in the analysis of purchasing requirements and
managing target inventory levels;
(d) assist in the preparation of a cash flow forecast
reflecting potential action items to improve liquidity;
(e) assist in the development of various cost cutting and
profit improvement initiatives; and
(f) assist in the development of a business plan.
The firm will charge these hourly fees:
Managing Directors $1,025 - $1,375
Directors $775 - $975
Analysts / Associates $425 - $775
The Debtors will pay Alvarez & Marsal a flat monthly fee of
$175,000 in return for the services rendered by the CTO.
Alvarez & Marsal received $250,000 as a retainer.
Ms. Lee, managing director at Alvarez & Marsal, disclosed in a
court filing that her firm is "disinterested" as such term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Amy Lee
Alvarez & Marsal North America, LLC
600 Madison Avenue, 8th Floor
New York, NY 10022
Tel: +1 212 759 4433
Fax: +1 212 759 5532
Email: alee@alvarezandmarsal.com
About Nielsen & Bainbridge
Nielsen & Bainbridge, LLC together with its debtor and non-debtor
affiliates, is an end-to-end supplier of home decor and hardwire
lighting operating under the trade name NBG Home. NBG Home serves
a portfolio of prominent retail partners in the design,
development, and fulfillment of products such as lighting, accents,
furniture, soft home goods, wall decor, and frames sold under
various brand names. NBG Home operates eight business units
touching the brick-and-mortar and eCommerce spaces.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90071) on Feb.
8, 2023. In the petition signed by Hope Margala, as authorized
signatory, the Debtors disclosed up to $500 million in assets and
up to $1 billion in liabilities.
Judge David R. Jones oversees the cases.
The Debtors tapped Kirkland and Ellis, LP and Kirkland and Ellis
International, LLP as general bankruptcy counsels; Jackson Walker,
LLP as local bankruptcy counsel; Alvarez and Marsal North America,
LLC as restructuring advisor; Guggenheim Securities, LLC as
investment banker; Hilco Real Estate, LLC as real estate advisor;
and PricewaterhouseCoopers, LLP as auditor. Omni Agent Solutions is
the claims, noticing, solicitation agent and administrative
advisor.
KKR Loan Administration Services, LLC, serves as administrative
agent and collateral agent under the DIP Facility. Attorneys to
the DIP Lenders are Dennis F. Dunne, Esq., and Matthew L. Brod,
Esq., at Milbank, LLP.
Wells Fargo Bank, National Association is the administrative agent
and collateral agent under the Prepetition ABL Facility. Attorneys
to the Prepetition ABL Agent are Julia Frost-Davies, Esq., and
Christopher L. Carter, Esq., at Morgan, Lewis & Bockius, LLP.
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 the law firms of Archer & Greiner, P.C.
and Lowenstein Sandler, LLP.
NIELSEN & BAINBRIDGE: Taps Guggenheim as Investment Banker
----------------------------------------------------------
Nielsen & Bainbridge, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to hire
Guggenheim Securities, LLC as their investment banker.
The Debtors require an investment banker to:
(a) review and analyze the business, financial condition and
prospects of the Debtors;
(b) evaluate the liabilities of the Debtors, their debt
capacity and their strategic and financial alternatives;
(c) In connection with any transaction:
i. evaluate from a financial and capital markets point
of view of alternative structures and strategies for implementing
the transaction;
ii. prepare offering, marketing or other transaction
materials concerning the Debtors and the transaction for
distribution and presentation to the Debtors' creditors, acquirors
or investors;
iii. develop and implement a marketing plan with respect
to such transaction;
iv. identify, solicit and review proposals received
from the investors and other prospective transaction
counterparties; and
v. negotiate the transaction;
(d) If the Debtors determine to pursue or effect any
transaction in connection with their Chapter 11 cases, evaluate and
develop, from a financial point of view, alternative strategies for
implementation and seek approval of any such transaction, including
pursuant to a plan of reorganization or liquidation, which may be a
plan under Chapter 11 of the Bankruptcy Code confirmed in
connection with these Chapter 11 cases; and
(e) such other matters as may be agreed upon by Guggenheim
Securities and the Debtors in writing (including without limitation
via email) during the term of the engagement.
The firm will be paid as follows:
(a) Monthly Fee
i. The Debtors will pay Guggenheim Securities a
non-refundable cash fee of $150,000 per month, which will be due
and paid by the Debtors in advance, promptly upon the effective
date of the engagement letter, and thereafter on the first day of
each calendar month during the period of Guggenheim Securities'
engagement whether or not any transaction is consummated.
ii. Commencing with the fourth full monthly fee actually
paid under the engagement letter, an amount equal to 50 percent of
the monthly fees actually paid to Guggenheim Securities shall be
credited against any transaction fee that thereafter becomes
payable pursuant to Sections 4(b), 4(c) or 4(d) of the engagement
letter.
(b) Restructuring Transaction Fee
i. If any restructuring transaction is consummated,
then, in each case, the Debtors will pay Guggenheim Securities a
cash fee in an amount equal to $5.75 million.
(c) Financing Fee
i. If any financing transaction is consummated, then,
in each case, the Debtors will pay Guggenheim Securities one or
more cash fees in an amount equal to the sum of:
(A) 125 basis points (1.25 percent) of the aggregate
face amount of any debt obligations to be issued or raised by the
Debtors (including the face amount of any related commitments) in
any debt financing that is secured by liens over the Debtors'
assets, plus
(B) 300 basis points (3.00 percent) of the aggregate
face amount of any debt obligations to be issued or raised by the
Debtors (including the face amount of any related commitments) in
any debt financing that is not covered by Section 4(c)(i)(A) of the
engagement letter, plus
(C) 400 basis points (4.00 percent) of the aggregate
amount of gross proceeds raised by the Debtors in any equity
financing (including the face amount of any related commitments);
plus
(D) With respect to any other securities or
indebtedness issued that is not otherwise covered by Sections
4(c)(i)(A) to 4(c)(i)(C) of the engagement letter, such financing
fees, underwriting discounts, placement fees or other compensation
as customary under the circumstances and mutually agreed in advance
by the Debtors and Guggenheim Securities.
ii. Financing fees for any financing transaction will be
payable upon the consummation of the related transaction.
(d) Sale transaction Fee
i. If any sale transaction is consummated, then in each
case, the Debtors will pay Guggenheim Securities a cash fee in an
amount equal to 1.75 percent of the aggregate sale consideration
relating to such sale transaction.
ii. Any such sale transaction fee will be payable
promptly upon the consummation of any sale transaction.
iii. An amount equal to 50 percent of any sale
transaction fee actually paid to Guggenheim Securities under the
engagement letter (excluding any such sale transaction fee paid on
account of a sale of control transaction) shall be credited against
any restructuring transaction fee that thereafter becomes payable
pursuant to Section 4(b) of the engagement letter.
(e) Expense Reimbursement. In addition to any fees payable,
the Debtors promptly reimburse Guggenheim Securities for
out-of-pocket expenses incurred.
As disclosed in court filings, Guggenheim Securities neither holds
nor represents any interest adverse to the Debtors' estates.
The firm can be reached through:
Stuart Erickson
Guggenheim Securities, LLC
330 Madison Avenue
New York, NY 10017
Tel: 212-739-0700
About Nielsen & Bainbridge
Nielsen & Bainbridge, LLC together with its debtor and non-debtor
affiliates, is an end-to-end supplier of home decor and hardwire
lighting operating under the trade name NBG Home. NBG Home serves
a portfolio of prominent retail partners in the design,
development, and fulfillment of products such as lighting, accents,
furniture, soft home goods, wall decor, and frames sold under
various brand names. NBG Home operates eight business units
touching the brick-and-mortar and eCommerce spaces.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90071) on Feb.
8, 2023. In the petition signed by Hope Margala, as authorized
signatory, the Debtors disclosed up to $500 million in assets and
up to $1 billion in liabilities.
Judge David R. Jones oversees the cases.
The Debtors tapped Kirkland and Ellis, LP and Kirkland and Ellis
International, LLP as general bankruptcy counsels; Jackson Walker,
LLP as local bankruptcy counsel; Alvarez and Marsal North America,
LLC as restructuring advisor; Guggenheim Securities, LLC as
investment banker; Hilco Real Estate, LLC as real estate advisor;
and PricewaterhouseCoopers, LLP as auditor. Omni Agent Solutions is
the claims, noticing, solicitation agent and administrative
advisor.
KKR Loan Administration Services, LLC, serves as administrative
agent and collateral agent under the DIP Facility. Attorneys to
the DIP Lenders are Dennis F. Dunne, Esq., and Matthew L. Brod,
Esq., at Milbank, LLP.
Wells Fargo Bank, National Association is the administrative agent
and collateral agent under the Prepetition ABL Facility. Attorneys
to the Prepetition ABL Agent are Julia Frost-Davies, Esq., and
Christopher L. Carter, Esq., at Morgan, Lewis & Bockius, LLP.
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 the law firms of Archer & Greiner, P.C.
and Lowenstein Sandler, LLP.
NIELSEN & BAINBRIDGE: Taps Kirkland & Ellis as Bankruptcy Counsel
-----------------------------------------------------------------
Nielsen & Bainbridge, LLC 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 actions 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 $100,000.
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 Feb. 8, 2023 through April 9, 2023.
Steven Serajeddini, Esq., president of Steven N. Serajeddini, P.C.,
a partner of Kirkland & Ellis, disclosed in court filings that the
firms are "disinterested" within the meaning of Section 101(14) of
the Bankruptcy Code.
The firms can be reached through:
Steven Serajeddini, Esq.
Steven N. Serajeddini, P.C.
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
Phone: +1 212 446 5984
Email: steven.serajeddini@kirkland.com
About Nielsen & Bainbridge
Nielsen & Bainbridge, LLC together with its debtor and non-debtor
affiliates, is an end-to-end supplier of home decor and hardwire
lighting operating under the trade name NBG Home. NBG Home serves
a portfolio of prominent retail partners in the design,
development, and fulfillment of products such as lighting, accents,
furniture, soft home goods, wall decor, and frames sold under
various brand names. NBG Home operates eight business units
touching the brick-and-mortar and eCommerce spaces.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90071) on Feb.
8, 2023. In the petition signed by Hope Margala, as authorized
signatory, the Debtors disclosed up to $500 million in assets and
up to $1 billion in liabilities.
Judge David R. Jones oversees the cases.
The Debtors tapped Kirkland and Ellis, LP and Kirkland and Ellis
International, LLP as general bankruptcy counsels; Jackson Walker,
LLP as local bankruptcy counsel; Alvarez and Marsal North America,
LLC as restructuring advisor; Guggenheim Securities, LLC as
investment banker; Hilco Real Estate, LLC as real estate advisor;
and PricewaterhouseCoopers, LLP as auditor. Omni Agent Solutions is
the claims, noticing, solicitation agent and administrative
advisor.
KKR Loan Administration Services, LLC, serves as administrative
agent and collateral agent under the DIP Facility. Attorneys to
the DIP Lenders are Dennis F. Dunne, Esq., and Matthew L. Brod,
Esq., at Milbank, LLP.
Wells Fargo Bank, National Association is the administrative agent
and collateral agent under the Prepetition ABL Facility. Attorneys
to the Prepetition ABL Agent are Julia Frost-Davies, Esq., and
Christopher L. Carter, Esq., at Morgan, Lewis & Bockius, LLP.
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 the law firms of Archer & Greiner, P.C.
and Lowenstein Sandler, LLP.
NIELSEN & BAINBRIDGE: Taps PricewaterhouseCoopers as Auditor
------------------------------------------------------------
Nielsen & Bainbridge, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to hire
PricewaterhouseCoopers, LLP.
PwC will provide the following audit and tax restructuring
services:
a. 2022 Audit Engagement Letter
i. PwC will perform an audit of the consolidated
financial statements of KNB Holdings Corporation, which comprise
the consolidated balance sheet at Dec. 31, 2022, and related
consolidated statements of operations and comprehensive loss,
changes in stockholder's equity and accumulated deficit, and of
cash flows for the year then ending.
ii. Upon completion of the audit, PwC will provide a
written audit report on the financial statements referred to
above.
iii. As part of the engagement and as is customary as PwC's
role as auditor, PwC may provide various types of insights-whether
oral, written or visual.
b. Tax Restructuring SOW3: The Tax Restructuring SOW covers
tax consulting services in relation to NBG Topco Holdings Inc. and
its subsidiaries' contemplated debt restructuring. As requested,
the PwC services with respect to the restructuring plan may
include, but are not limited to, the following services as
requested and approved by the Debtors:
i. Utilize the advisory process, prepare or review a
calculation which illustrates the significant U.S. federal and
state income tax effects of the proposed restructuring plan based
on inputs and assumptions provided by the Debtors;
ii. Assist NBG Topco with federal and state income tax
analyses relating to cancellation of debt income, including
analyses under IRC Section 108;
iii. Prepare or comment on asset tax basis calculations;
iv. Prepare or comment on stock tax basis calculations;
v. Assist in the preparation of a slide deck that
overviews the significant U.S. federal and state income tax
consequences of the restructuring plan;
vi. Prepare technical memoranda regarding mutually agreed
tax issues of the restructuring plan;
vii. Prepare ownership change analysis under Internal
Revenue Code Section 382, Section 382 limitations calculations, and
net unrealized built-in gain or loss analysis based upon inputs and
assumptions NBG Topco provides;
viii. Comment on transaction cost analysis for transaction
fees related to the restructuring plan;
ix. Participate in meetings as NBG Topco's tax advisor
(e.g., conference calls or in person meetings);
x. Gain an understanding of NBG Topco's intercompany debt
and consider the income tax implications of maintaining or
eliminating such debt;
xi. Read and comment on the tax matters with respect to
the restructuring plan legal agreements;
xii. Assist NBG Topco in evaluating state and local direct
and indirect tax matters related to disposition of claims by state
taxing authorities, including but not limited to: (i) assessing
reasonableness of proof of claims based on historic tax filings and
information NBG Topco otherwise make available; (ii) create a
matrix of responsible person rules by state; (iii) assist in the
bifurcation of state proof of claims as either prepetition or
post-petition;
xiii. Assist NBG Topco in evaluating non-U.S. tax matters
relating to the restructuring plan, including but not limited to
creating a matrix or responsible person rules for relevant
jurisdictions;
xiv. Assist in the review and resolution of U.S. federal
and state tax audits relating to the restructuring plan;
xv. Other U.S. federal, state and local, and non-U.S. tax
consulting, advice, research, planning, and analysis as may be
necessary, desirable, or requested from time to time by NBG Topco.
PwC will be compensated as follows:
a. 2022 Audit Engagement Letter: The 2022 Audit Engagement
Letter is a fixed fee arrangement whereby PwC agreed to be paid
between $790,000 and $805,000, exclusive of expenses. Prior to the
petition date, PwC was paid $490,000 of such fixed fee amount, of
which $24,043.44 remains to be applied against approved
post-petition fees for such post-petition audit services.
b. Tax Restructuring Engagement Letter: The Tax Restructuring
Engagement Letter is an hourly fee arrangement. The hourly fees
are:
Staff Class Rate per hour
Tax Restructuring
Partner/Principal $961 - $1,160
Managing Director $961 - $1,160
Director $800 - $990
Senior Manager $700 - $950
Manager $600 - $820
Senior Associate $450 - $650
Associate $300 - $500
c. Prior to the petition date, NBG Topco paid PwC an initial
retainer of $75,000 and a replenishment of $25,000 for a total
retainer amount of $100,000.
The firm received a retainer in the amount of $100,000.
As disclosed in court filings, PwC is a "disinterested person"
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Mark Antoniello
PricewaterhouseCoopers LLP
400 Campus Drive
Florham Park, NJ 7932
Tel: +1 (973) 236 4000
About Nielsen & Bainbridge
Nielsen & Bainbridge, LLC together with its debtor and non-debtor
affiliates, is an end-to-end supplier of home decor and hardwire
lighting operating under the trade name NBG Home. NBG Home serves
a portfolio of prominent retail partners in the design,
development, and fulfillment of products such as lighting, accents,
furniture, soft home goods, wall decor, and frames sold under
various brand names. NBG Home operates eight business units
touching the brick-and-mortar and eCommerce spaces.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90071) on Feb.
8, 2023. In the petition signed by Hope Margala, as authorized
signatory, the Debtors disclosed up to $500 million in assets and
up to $1 billion in liabilities.
Judge David R. Jones oversees the cases.
The Debtors tapped Kirkland and Ellis, LP and Kirkland and Ellis
International, LLP as general bankruptcy counsels; Jackson Walker,
LLP as local bankruptcy counsel; Alvarez and Marsal North America,
LLC as restructuring advisor; Guggenheim Securities, LLC as
investment banker; Hilco Real Estate, LLC as real estate advisor;
and PricewaterhouseCoopers, LLP as auditor. Omni Agent Solutions is
the claims, noticing, solicitation agent and administrative
advisor.
KKR Loan Administration Services, LLC, serves as administrative
agent and collateral agent under the DIP Facility. Attorneys to
the DIP Lenders are Dennis F. Dunne, Esq., and Matthew L. Brod,
Esq., at Milbank, LLP.
Wells Fargo Bank, National Association is the administrative agent
and collateral agent under the Prepetition ABL Facility. Attorneys
to the Prepetition ABL Agent are Julia Frost-Davies, Esq., and
Christopher L. Carter, Esq., at Morgan, Lewis & Bockius, LLP.
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 the law firms of Archer & Greiner, P.C.
and Lowenstein Sandler, LLP.
NIGHTMARE GRAPHICS: Case Summary & 19 Unsecured Creditors
---------------------------------------------------------
Debtor: Nightmare Graphics, Inc.
6655 Dobbin Road, Suite 13
Columbia, MD 21045
Business Description: The Debtor provides a one stop shop for all
apparel decoration, promotional products and
signage needs.
Chapter 11 Petition Date: March 12, 2023
Court: United States Bankruptcy Court
District of Maryland
Case No.: 23-11647
Debtor's Counsel: Michael Coyle, Esq.
THE COYLE LAW GROUP LLC
7061 Deepage Drive
Suite 101-B
Columbia, MD 21045
Tel: 410-884-3180
Email: mcoyle@thecoylelawgroup.com
Total Assets: $118,407
Total Liabilities: $1,069,343
The petition was signed by Robert Andelman as owner.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 19 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/GOP2GCI/Nightmare_Graphics_Inc__mdbke-23-11647__0001.0.pdf?mcid=tGE4TAMA
NORMAN'S INVESTMENTS: Seeks Cash Collateral Access
--------------------------------------------------
Norman's Investments Services, LLC asks the U.S. Bankruptcy Court
for the Northern District of Georgia, Newnan Division, for
authority to use cash collateral in accordance with the budget,
with a 15% variance.
In order to preserve the estate, the Debtor contends it must have
access to cash to pay the operating expenses of the Business.
Fund-Ex Solutions Group, LLC asserts liens upon the Debtor's assets
as more particularly described in the UCC Financing Statement
number 056-2021-002707 filed on November 4, 2021, in the records of
the Superior Court of Fayette County, Georgia, securing an asserted
outstanding indebtedness in the original principal amount of
$560,000 with an outstanding balance asserted by Fund-Ex of
$590,229.
On the Filing Date, the Debtor's cash on hand consisted of loan
proceeds from creditors or contributions from the Debtor's owner,
which did not constitute cash collateral. However, the Debtor is
collecting rental income of (i) $3,000 per month from Muhammad
Mosque No. 15 Inc. and (ii) anticipates rental income from Graham
Family Adult Daycare, Inc. commencing soon. The Debtor's rental
income constitutes cash collateral.
A copy of the Debtor's motion and budget is available at
https://bit.ly/3YCSlcd from PacerMonitor.com.
The Debtor projects $3,000 in rent and $2,808 in total expenses for
one month.
About Norman's Investments Services
Norman's Investments Services, LLC sought protection for relief
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No.
23-10010) on Jan. 2, 2023, with up to $1 million in both assets and
liabilities. Leon S. Jones, Esq., at Jones & Walden, LLC represents
the Debtor as counsel.
NOVA WILDCAT: Committee Taps Archer & Greiner as Legal Counsel
--------------------------------------------------------------
The official committee of unsecured creditors of Nova Wildcat
Shur-line Holdings, Inc. and its affiliates seeks approval from the
U.S. Bankruptcy Court for the District of Delaware to hire Archer &
Greiner, P.C. as its bankruptcy counsel.
The firm's services include:
a. rendering legal advice to the committee with respect to its
duties and powers in the Debtors' Chapter 11 cases;
b. assisting the committee in its investigation of the acts,
conduct, assets, liabilities and financial condition of the
Debtors, the operation of the Debtors' business, the desirability
of continuance of such business and any other matters relevant to
the cases or to the business affairs of the Debtors;
c. advising the committee with respect to any proposed use of
cash collateral, post-petition financing, sale, lease or other
disposition of the Debtors' assets and any other relevant matters;
d. advising the committee with respect to any proposed Chapter
11 plan and the prosecution of claims against third parties, if
any, and other matters relevant thereto;
e. advising the committee with respect to insiders and
affiliates of the Debtors and taking necessary actions to represent
the interests of unsecured creditors of the estates in respect
thereof;
f. preparing legal papers; and
g. other necessary legal services.
The firm's hourly rates are as follows:
Stephen M. Packman Attorney $725
Bryan J. Hall Attorney $495
James Ou Attorney $425
Mariam Khoudari Attorney $345
Amy M. Huber Paralegal $210
Archer & Greiner provided the following information on a voluntary
basis in response to Section D of the U.S. Trustee Guidelines for
reviewing fee applications filed by attorneys in larger Chapter 11
cases:
a. Archer did not agree to a variation of its standard or
customary billing arrangement for this engagement;
b. None of the professionals included in this engagement have
varied their rate based on the geographic location of these
bankruptcy cases;
c. Archer did not represent the committee prior to the
petition date; and
d. Archer and the committee expect to develop a prospective
budget and staffing plan, recognizing that in light of the complex
issues and highly compressed timetable in the bankruptcy cases,
there may be unforeseeable fees and expenses that will need to be
addressed.
Stephen Packman, Esq., at Archer & Greiner, disclosed in court
filings 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:
Stephen M. Packman, Esq, Esq.
Archer & Greiner, P.C.
1211 Avenue of the Americas, Suite 2750
New York, NY 10036
Telephone: (212) 682-4940
Email: spackman@archerlaw.com
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. It 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 and certain of its affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10114) on Jan. 29, 2023. In the petition filed by Mark
Rostagno, as chief executive officer and director, Nova Wildcat
reported assets between $10 million and $50 million and liabilities
between $50 million and $100 million.
Judge Craig T. Goldblatt oversees the cases.
The Debtors tapped Reed Smith, LLP as bankruptcy counsel; Carl
Marks Advisory Group, LLC as restructuring advisor; and SSG
Advisors, LLC as investment banker. Epiq Bankruptcy Solutions, LLC
is the claims agent.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
Archer & Greiner, P.C. and Dundon Advisers, LLC serve as the
committee's bankruptcy counsel and financial advisor, respectively.
NOVA WILDCAT: Committee Taps Dundon Advisers as Financial Advisor
-----------------------------------------------------------------
The official committee of unsecured creditors of Nova Wildcat
Shur-line Holdings, Inc. and its affiliates seeks approval from the
U.S. Bankruptcy Court for the District of Delaware to hire Dundon
Advisers, LLC as its financial advisor.
The committee requires a financial advisor to:
-- assist in the analysis, review, and monitoring of the
restructuring process, including, but not limited to, an assessment
of the unsecured claims pool and potential recoveries for unsecured
creditors;
-- develop a complete understanding of the Debtors' businesses
and their valuations;
-- determine whether there are viable alternative paths for the
disposition of the Debtors' assets from those being currently
proposed by the Debtors;
-- monitor and, to the extent appropriate, assist the Debtors
in efforts to develop and solicit transactions, which would support
unsecured creditor recovery;
-- assist the committee in identifying, valuing and pursuing
estate causes of action, including, but not limited to, relating to
pre-bankruptcy transactions, control person liability and lender
liability;
-- assist the committee to analyze, classify and address claims
against the Debtors and to participate effectively in any effort in
these Chapter 11 cases to estimate (in any formal or informal
sense) contingent, unliquidated and disputed claims;
-- assist the committee to identify, preserve, value and
monetize tax assets of the Debtors, if any;
-- advise the committee in negotiations with the Debtors,
certain of the Debtors' lenders and third parties;
-- assist the committee in reviewing the Debtors' financial
reports, including, but not limited to, statements of financial
affairs, schedules of assets and liabilities, cash budgets and
monthly operating reports;
-- assist the committee in reviewing the Debtors' cost/benefit
analysis with respect to the assumption or rejection of various
executory contracts and leases;
-- review and provide analysis of the present and any
subsequent proposed debtor-in-possession financing or use of cash
collateral;
-- assist the committee in evaluating and analyzing avoidance
actions, including fraudulent conveyances and preferential
transfers;
-- review and provide analysis of the present and any
subsequent proposed disclosure statement and Chapter 11 plan and,
if appropriate, assist the committee in developing an alternative
Chapter 11 plan;
-- attend meetings and assist in discussions with the
committee, the Debtors, the secured lenders, the U.S. trustee and
other parties in interest and professionals;
-- present at meetings of the committee as well as meetings
with other key stakeholders and parties;
-- perform other advisory services for the committee; and
-- provide testimony as and when may be deemed appropriate.
Dundon Advisers professionals will be billed as follows:
Principals $850 per hour
Managing Directors $760 per hour
Senior Advisers $760 per hour
Senior Directors $700 per hour
Directors $625 per hour
Associate Directors $550 per hour
Senior Associates $475 per hour
Associates $370 per hour
Matthew Dundon, a principal at Dundon Advisers, 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:
Matthew Dundon
Dundon Advisers LLC
Ten Bank Street, Suite 1100
White Plains, NY 10606
Telephone: (917) 838-1930
Email: md@dundon.com
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. It 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 and certain of its affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10114) on Jan. 29, 2023. In the petition filed by Mark
Rostagno, as chief executive officer and director, Nova Wildcat
reported assets between $10 million and $50 million and liabilities
between $50 million and $100 million.
Judge Craig T. Goldblatt oversees the cases.
The Debtors tapped Reed Smith, LLP as bankruptcy counsel; Carl
Marks Advisory Group, LLC as restructuring advisor; and SSG
Advisors, LLC as investment banker. Epiq Bankruptcy Solutions, LLC
is the claims agent.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
Archer & Greiner, P.C. and Dundon Advisers, LLC serve as the
committee's bankruptcy counsel and financial advisor, respectively.
OLYMPUS WATER: Diamond Transaction No Impact on Moody's 'B3' CFR
----------------------------------------------------------------
Moody's Investors Service announced that Olympus Water US Holding
Corporation's (dba Solenis) B3 Corporate Family Rating with a
stable outlook remains unchanged after the announced acquisition of
Diamond (BC) B.V. (dba Diversey, B2 under Review).
On March 8, 2023, Solenis announced that it has entered into an
agreement with Diversey to acquire the latter for an enterprise
value of $4.6 billion. Solenis has yet to detail how the
acquisition will be funded. Business strategy, synergies and
post-acquisition capital structure will be crucial to Solenis'
credit profile. Moreover, financing costs in a rising interest rate
environment and the combined company's ability to generate
meaningful free cash subsequent to the transaction will also be
critical to maintaining Solenis' B3 rating.
Olympus Water US Holding Corporation (dba 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 from Clayton, Dublier, and Rice and BASF and
combined Solenis with its existing portfolio company Sigura to form
Olympus Water. The company generated about $4.4 billion in sales
for the last twelve months ended December 2022.
ONEDIGITAL BORROWER: Moody's Affirms 'B3' CFR, Outlook Stable
-------------------------------------------------------------
Moody's Investors Service has affirmed the B3 corporate family
rating and B3-PD probability of default rating of OneDigital
Borrower LLC along with the B3 ratings on the company's guaranteed
senior secured term loan due 2027 and guaranteed senior secured
revolving credit facility due 2025. The rating outlook for
OneDigital is stable.
RATINGS RATIONALE
According to Moody's, the affirmation of OneDigital's ratings
reflects its expertise in employee benefits, its growing presence
in wealth, retirement and Medicare Advantage products, and its
steady EBITDA margin. OneDigital derives the majority of its
revenue from its national retail employee benefits and HR
consulting business targeting small to middle market employers. The
company serves its customers through multiple distribution channels
including a proprietary technology platform, a national call
center, and locally based insurance professionals in selected
markets.
These strengths are tempered by OneDigital's aggressive financial
leverage, significant cash needs to pay contingent earnout
liabilities that consume a portion of the company's free cash flow,
and execution and integration risks associated with fast-paced,
debt-funded acquisitions.
For the first nine months of 2022, OneDigital reported total
revenues of $661 million. The company has generated mid-to-high
single-digit organic revenue growth over the past two years,
underpinned by solid revenue retention rates in retail employee
benefits. Organic growth rates for OneDigital will likely moderate
in the year ahead based on slower economic growth.
For the 12 months through September 2022, Moody's estimates that
OneDigital had a debt-to-EBITDA ratio of around 7x, (EBITDA –
capex) interest coverage of around 2.5x, and free cash flow to debt
above 2%. These metrics reflect Moody's accounting adjustments for
operating leases, contingent earnout liabilities, and run-rate
earnings from completed acquisitions. The rating agency expects the
company to maintain leverage at or below current levels through
earnings growth from existing and acquired operations.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade of OneDigital's ratings
include: (i) debt-to-EBITDA ratio below 5.5x, (ii) (EBITDA - capex)
coverage of interest consistently exceeding 2x, (iii) free
cash-flow-to-debt ratio exceeding 5% and (iv) successful
integration of acquisitions.
Factors that could lead to a downgrade of OneDigital's ratings
include: (i) debt-to-EBITDA remaining above 7x, (ii) (EBITDA -
capex) coverage of interest below 1.2x and (iii)
free-cash-flow-to-debt ratio below 2%, or negative free cash flow
after contingent earnout payments and scheduled debt amortization.
Moody's has affirmed the following ratings:
Corporate family rating at B3;
Probability of default rating at B3-PD;
$1,573.8 million backed senior secured term loan maturing in
November 2027, at B3 (LGD3);
$200 million backed senior secured revolving credit facility
maturing in November 2025, at B3 (LGD3).
The rating outlook for OneDigital remains stable.
The principal methodology used in these ratings was Insurance
Brokers and Service Companies published in June 2018.
Based in Atlanta, Georgia, OneDigital is a national insurance
agency specializing in the distribution of employee benefits
insurance for small business and midsized companies. The company
also provides investment advisory and management services to
sponsors of retirement plans and participants, in addition to
wealth management services to individual and institutional clients.
OneDigital generated revenues of $854.5 million for the 12 months
through September 2022.
PACIFIC BEND: Files Emergency Bid to Use Cash Collateral
--------------------------------------------------------
Pacific Bend, Inc. asks the U.S. Bankruptcy Court for the Central
District of California, Riverside Division, for authority to use
cash collateral through March 24, 2023.
The Debtor has been able to consistently work on its projects
without need to use cash collateral but admits it will need access
to cash collateral no later than March 17, 2023, in order to
effectively and efficiently continue its operations. The Debtor
explains it needs to pay its next round of payroll no later than
March 17 and needs to purchase additional supplies and other items
in order to continue its operations.
Prior to the bankruptcy filing, the Debtor and Performance Steel,
Inc. entered into a Letter of Intent for Performance Steel's
purchase of 50% of the Company's stock. During the due diligence
period, and in good faith, the Debtor made payments on the
Performance Steel indebtedness per Performance Steel's requests.
During that time, however, Jim Russell, an owner of Performance
Steel, made demands and exerted managerial control over the Debtor
-- to the Debtor's detriment -- before actually acquiring its
stock. By the time the LOI expired, the relationship soured, and
the Debtor decided not to proceed with the proposed sale to
Performance Steel.
In response, Performance Steel declared an "Event of Default" on
the grounds it deemed Debtor was unable to pay its indebtedness and
directed Debtor's customers to pay Performance Steel directly as a
secured creditor on the Debtor's account receivables.
On June 29, 2021, the Debtor obtained a loan from Midfirst Bank.
Midfirst filed a UCC Financing Statement with the Secretary of
State for the State of California on June 29, 2021. As of the
Petition date, the amount due to Midfirst for the loan was
approximately $751,561.
Performance Steel asserts it has a secured claim against the Debtor
in the amount of $6.268 million. Performance Steel filed a UCC
Financing Statement with the Secretary of State for the State of
California on October 20, 2022.
Big Dog Properties, LLC asserts that it has a secured claim against
the Debtor in the amount of $8.7 million. Big Dog is associated
with Performance Steel and shares the same counsel. Big Dog may
also claim an interest in the Debtor's machinery and/or cash
collateral. Big Dog recorded a First Deed of Trust and Security
Agreement in the County of Riverside on or about July 20, 2022.
The Debtor's unsecured claims total approximately $1.640 million.
Therefore, the Debtors' debts (both secured and unsecured) total
approximately $17.360 million, while its assets total approximately
$25.670 million.
As adequate protection of Midfirst's security interest, the Debtor
will pay Midfirst adequate protection payments, in cash, in the
amount of $9,164 each month, commencing immediately (or as soon as
any payment is due under the loan agreement if the loan has not
missed any payments by the time this Motion is granted), and on the
first business day of each month thereafter. This amount is equal
to the amount owing under Midfirst's loan and as stated in the
Budget, which includes both principal and interest payments.
Further, the Debtor will offer a post-petition lien on all of the
Debtor's post-petition personal property in further adequate
protection of Midfirst's interests, subject to the Debtor's ability
to use such collateral upon request and order of the Court.
As adequate protection of Performance Steel's security interest,
the Debtor will pay Performance Steel adequate protection payments,
in cash, in the amount of $15,888 for the monthly interest payment
and $11,349 for the equipment loan repayment, for a total of
$27,237, commencing immediately, and on the first business day of
each month thereafter. This amount is equal to the amount owing
under the agreements between Performance Steel and the Debtor.
As further adequate protection of Performance Steel's asserted
security interest. The Debtor will also pay Performance Steel a sum
of $333,287. This is made in good faith to attempt to obtain
resolution with Performance Steel and resolve the issues with use
of cash collateral.
As adequate protection of Big Dog's asserted security interest, the
Debtor will pay Big Dog adequate protection payments, in cash, in
the amount of $45,587 each month, commencing immediately, and on
the first business day of each month thereafter. This amount is
equal to the amount of monthly rent/payments due under the
agreements between the parties.
While the Debtor asserts that the value of the property securing
Performance Steel's claim is not diminishing in value, to the
extent that Performance Steel asserts that its claim is not
adequately protected from the diminution in value of its security
interest, the Debtor also offers a replacement security interest in
its post-petition acquired property to the extent of any diminution
in value to the estate, which would be determined at a later time
if and when such determination is appropriate.
Further, because the Debtor's Hemet Property and its personal
property far exceed the total claims, especially the total secured
claims, the Debtor asserts that the secured creditors are
adequately protected without additional payments to protect these
interests. Based on what the Debtor believes its property to be
worth, the equity in the real and personal property is
approximately $6 million, which is an equity cushion of
approximately 32%.
A copy of the motion is available at https://bit.ly/3FlPf5H from
PacerMonitor.com.
About Pacific Bend, Inc.
Pacific Bend, Inc. manufactures pallet racking. The Debtor sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D.
Cal. Case No. 23-10761) on February 28, 2023. In the petition
signed by Darlene Barios, the Debtor's CEO, president, officer,
director, and shareholder, the Debtor disclosed up to $50 million
in both assets and liabilities.
Vanessa M. Haberbush, Esq., at Haberbush, LLP, represents the
Debtor as legal counsel.
PARTY CITY: Committee Seeks to Hire Pachulski as Legal Counsel
--------------------------------------------------------------
The official committee of unsecured creditors of Party City Holdco,
Inc. and its affiliates seeks approval from the U.S. Bankruptcy
Court for the Southern District of Texas to hire Pachulski Stang
Ziehl & Jones, LLP as its legal counsel.
The committee requires legal counsel to:
a. give advice with respect to the rights, duties and powers
of the committee in the Debtors' Chapter 11 cases;
b. assist and advise the committee in its consultations with
the Debtors relative to the administration of the cases;
c. assist the committee in analyzing the claims of creditors
and the Debtors' capital structure and in negotiating with holders
of claims;
d. assist the committee in its investigation of the acts,
conduct, assets, liabilities, and financial condition of the
Debtors and of the operation of the Debtors' businesses;
e. assist the committee in its investigation of the liens and
claims of the Debtors' lenders and the prosecution of any claims or
causes of action revealed by such investigation;
f. assist the committee in its analysis of, and negotiations
with, the Debtors or any third party concerning matters related to,
among other things, the assumption or rejection of leases of
nonresidential real property and executory contracts, asset
dispositions, financing or other transactions, and the terms of one
or more plans of reorganization for the Debtors and accompanying
disclosure statements and related plan documents;
g. assist and advise the committee in communicating with
unsecured creditors regarding significant matters in these cases;
h. represent the committee at hearings and other proceedings;
i. review and analyze applications, orders, statements of
operations and schedules filed with the court and advise the
committee as to their propriety;
j. assist the committee in preparing pleadings and
applications as may be necessary in furtherance of its interests
and objectives;
k. prepare legal papers; and
l. perform other necessary legal services.
The firm's standard hourly rates are as follows:
Partners $895 - $1,995
Of Counsel $875 - $1,525
Associates $725 - $895
Paraprofessionals $495 - $545
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases,
Pachulski provided the following in response to the request for
additional information:
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 budget for committee professionals will be
governed by the line item set forth in the court's final order,
which authorized the Debtors' use of cash collateral. The committee
and the firm reserve all rights to seek approval of committee
professional fees in excess of the budgeted amounts.
Bradford Sandler, Esq., a partner at Pachulski, 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:
Bradford J. Sandler, Esq.
Pachulski Stang Ziehl & Jones, LLP
780 Third Avenue, 34th Floor
New York, NY 10017
Telephone: (212) 561-7700
Facsimile: (212) 561-7777
Email: bsandler@pszjlaw.com
About Party City Holdco
Party City Holdco, Inc. (NYSE: PRTY) is the global leader in the
celebrations industry, with its offerings spanning more than 70
countries around the world. It is also the largest designer,
manufacturer, distributor and retailer of party goods in North
America. Party City Holdco had 761 company-owned stores as of
September 2022 and is headquartered in Woodcliff Lake, N.J., with
additional locations throughout the Americas and Asia.
Party City Holdco and its domestic subsidiaries sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
S.D. Tex. 23-90005) on Jan. 17, 2023. As of Sept. 30, 2022, Party
City Holdco had total assets of $2,869,248,000 against total debt
of $3,022,960,000.
Judge David R. Jones oversees the cases.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP as
legal counsel; Moelis & Company, LLC as investment banker;
AlixPartners, LLP as financial advisor; A&G Realty Partners as real
estate advisor; and Kroll as the claims agent.
PricewaterhouseCoopers LLP (PwC) provides accounting and valuation
advisory services, tax-related services, and internal audit
Sarbanes-Oxley Act support services.
Davis Polk & Wardwell, LLP and Lazard serve as legal counsel and
investment banker, respectively, to the ad hoc group of first lien
holders.
The U.S. Trustee for Region 6 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Pachulski Stang Ziehl & Jones, LLP.
PARTY CITY: Committee Taps FTI Consulting as Financial Advisor
--------------------------------------------------------------
The official committee of unsecured creditors of Party City Holdco,
Inc. and its affiliates seeks approval from the U.S. Bankruptcy
Court for the Southern District of Texas to hire FTI Consulting,
Inc. as its financial advisor.
The committee requires a financial advisor to:
(a) assist in the review of financial-related disclosures
required by the court;
(b) assist with the assessment and monitoring of the Debtors'
short-term cash flow, liquidity, and operating results;
(c) assist with the review of the Debtors' proposed key
employee retention and other employee benefit programs;
(d) assist with the review of the Debtors' analysis of core
business assets;
(e) assist with the review of the Debtors' cost/benefit
analysis with respect to the assumption or rejection of various
executory contracts and leases;
(f) assist with the review of the Debtors' identification of
potential cost savings;
(g) assist with the review and monitoring of the asset sale
process;
(h) assist with the review of any tax issues;
(i) assist with the review of claims reconciliation and
estimation process;
(j) assist with the review of other financial information
prepared by the Debtors;
(k) assist with the review and analysis of cryptocurrency and
digital assets;
(l) attend meetings and assist in discussions with the
Debtors, potential investors, banks, other secured lenders, ad hoc
creditor groups, the committee and any other official committees
organized in the Debtors' Chapter 11 proceedings, the U.S. trustee,
and other parties in interest;
(m) assist with the review or preparation of information and
analysis necessary for the confirmation of a Chapter 11 plan and
related disclosure statement;
(n) assist with the evaluation and analysis of avoidance
actions;
(o) assist with the prosecution of committee responses or
objections to the Debtors' motions;
(p) render such other general business consulting or such
other assistance as the committee or its counsel may deem
necessary.
The hourly rates of FTI's professionals are as follows:
Senior Managing Directors $1,045 - $1,495
Directors/Senior Directors/Managing Directors $785 - $1,055
Consultants/Senior Consultants $435 - $750
Administrative/Paraprofessionals $175 - $325
In addition, the firm will seek reimbursement for expenses
incurred.
Clifford Zucker, a senior managing director at FTI, 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:
Clifford A. Zucker
FTI Consulting, Inc.
1166 Avenue of the Americas, 15th Floor
New York, NY 10036
Telephone: (212) 247-1010
Email: cliff.zucker@fticonsulting.com
About Party City Holdco
Party City Holdco Inc. (NYSE: PRTY) is the global leader in the
celebrations industry, with its offerings spanning more than 70
countries around the world. It is also the largest designer,
manufacturer, distributor, and retailer of party goods in North
America. Party City Holdco had 761 company-owned stores as of
September 2022. It is headquartered in Woodcliff Lake, N.J. with
additional locations throughout the Americas and Asia.
On Jan. 17, 2023, Party City Holdco and its domestic subsidiaries
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. S.D. Texas Lead Case No. 23-90005). Party City Holdco
disclosed total assets of $2,869,248,000 against total debt of
$3,022,960,000 as of Sept. 30, 2022.
Judge David R. Jones oversees the cases.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP
and Porter Hedges, LLP as legal counsels; Moelis & Company, LLC as
investment banker; A&G Realty Partners as real estate consultant;
and AlixPartners, LLP as restructuring advisor. David Orlofsky,
managing director at AlixPartners, serves as the Debtors' chief
restructuring officer. Kroll Restructuring Administration, LLC is
the claims, noticing and solicitation agent.
Davis Polk & Wardwell, LLP and Lazard serve as legal counsel and
investment banker, respectively, to the ad hoc group of first lien
holders.
PG&E CORP: Victims Ask Court for Additional Damages
---------------------------------------------------
Brandon Rittiman of abc10 reports tha with payments coming in low
and slow for 70,000 PG&E fire victims, some of them hatched a plan
to try to get more money in the company's bankruptcy.
Still waiting to receive checks that aren't expected to make them
whole, some of PG&E's nearly 70,000 disaster survivors are pressing
the bankruptcy court for additional damages from the power
monopoly.
Attorneys representing 1,400 survivors, most of them victims of
PG&E's crimes in sparking the 2018 Camp Fire, have signed on to the
effort.
"This is to try to create some level of equity… some level of
fairness so that victims are paid what they are rightfully owed,"
said 2017 Tubb Fire survivor Will Abrams, who filed the motion on
the bankruptcy docket. "Unfortunately, we did get duped."
More than 15,000 of PG&E's victims have yet to receive a penny,
even though the utility has been out of bankruptcy for nearly three
years.
"It's enraging," said attorney Tom Tosdal, who filed papers to join
Abrams’ motion on behalf of more than 1,000 survivors. "You have
a lot of angry people who are disgusted by the legal system, as
they should be."
Those who have received money have only been paid 60% of their
damages claims.
Part of the reason for the delay is the fact PG&E didn't simply pay
victims of its 2015-2018 wildfires in cash. Instead, they got a
Wall Street version of an IOU: hundreds of millions of shares of
PG&E stock.
The new motion asks the bankruptcy court to approve additional
damages outside of the current Fire Victim Trust set up to
compensate survivors for their losses and suffering.
The additional money, in the form of supplemental bankruptcy
claims, would be compensation for damage done to the value of PG&E
stock when its own statements about its safety practices were
revealed to be false.
ABC10 asked PG&E to comment on multiple parts of this story: the
allegations of lying about its safety practices, the claim that
those misstatements affected the stock price, and more generally
the company's level of willingness to pay additional money in
bankruptcy court because of it.
PG&E did not respond to our multiple requests for comment.
VICTIMS BEING PAID LOW AND SLOW
After PG&E exited bankruptcy in 2020, fire victims received enough
shares of PCG to make them one-fourth owners of the company.
"What it does is it makes us want [PG&E] to succeed, and I don't,"
said Pamela Richmond, whose Calaveras County property was damaged
in the 2015 Butte Fire. "It is blood money. I'm getting paid in the
blood and the fire and the tears of people's losses, including my
own."
Some of her neighbors are still living in substandard camping
conditions waiting on PG&E's settlement money.
"It's devastating. I'm tired of being here. I'm tired," said Eula
Yetter, who's spent the last seven years living in a trailer where
her house burned in the 2015 Butte Fire. "I think if a person went
to prison, they'd live better than this."
PG&E's victims were the only class of creditors who took
compensation partly in stock shares.
The sticker price of their settlement was $6.75 billion in cash and
stock shares with a stated value of $6.75 billion, an estimate that
Judge Montali approved giving to fire victims when they were asked
to vote on the bankruptcy plan.
In reality, the shares given to the trust fund for fire victims
were only worth $4.3 billion on the day PG&E exited bankruptcy.
It’s taken nearly three years for the stock to appreciate enough
to potentially attain its promised value.
"The process was rigged against the fire victims from the beginning
and they were intentionally shorted," added attorney Steve Kane,
who represents 380 Camp Fire survivors and also signed on to
Abrams' motion.
The $2.43 billion shortfall is far from being closed: the Fire
Victim Trust still owns 187 million shares of PCG.
In the first month of Gov. Gavin Newsom's administration, his task
force on PG&E's wildfires declared "the state should ensure fire
victims are treated fairly and fully compensated."
It's not expected to happen.
About PG&E Corporation
PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a
Fortune 200 energy-based holding company, headquartered in San
Francisco. It is the parent company of Pacific Gas and Electric
Company, an energy company that serves 16 million Californians
across a 70,000-square-mile service area in Northern and Central
California.
PG&E Corporation and its regulated utility subsidiary, Pacific Gas
and Electric Company, faced extraordinary challenges relating to a
series of catastrophic wildfires that occurred in Northern
California in 2017 and 2018. The utility faced an estimated $30
billion in potential liability damages from California's deadliest
wildfires of 2017 and 2018.
On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary,
Pacific Gas and Electric Company, filed voluntary Chapter 11
petitions (Bankr. N.D. Cal. Lead Case No. 19-30088). As of Sept.
30, 2018, the Debtors, on a consolidated basis, had reported $71.4
billion in assets on a book value basis and $51.7 billion in
liabilities on a book value basis.
Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP served
as PG&E's legal counsel, Lazard as its investment banker and
AlixPartners, LLP as the restructuring advisor to PG&E. Prime
Clerk LLC served as the claims and noticing agent.
PG&E has appointed James A. Mesterharm, a managing director at
AlixPartners, LLP, and an authorized representative of AP Services,
LLC, to serve as Chief Restructuring Officer. In addition, PG&E
appointed John Boken also a Managing Director at AlixPartners and
an authorized representative of APS, to serve as Deputy Chief
Restructuring Officer.
Morrison & Foerster LLP served as the Debtors' special regulatory
counsel. Munger Tolles & Olson LLP also served as special counsel.
The Office of the U.S. Trustee appointed an official committee of
creditors on Feb. 12, 2019. The Committee retained Milbank LLP as
counsel; FTI Consulting, Inc., as financial advisor; Centerview
Partners LLC as investment banker; and Epiq Corporate
Restructuring, LLC as claims and noticing agent.
On Feb. 15, 2019, the U.S. trustee appointed an official committee
of tort claimants. The tort claimants' committee is represented by
Baker & Hostetler LLP.
* * *
PG&E Corporation and Pacific Gas and Electric Company announced
July 1, 2020, their emergence from Chapter 11, successfully
completing the restructuring process and implementing PG&E's Plan
of Reorganization that the Bankruptcy Court confirmed on June 20,
2020.
For the benefit of fire victims, the Plan provided for a Fire
Victim Trust, which was funded with an oft-stated value of $13.5
billion, to be half in cash and half in new company PG&E common
stock. The $6.75 billion in cash was paid. With respect to the
stock consideration, 478 million shares of PG&E stock were
delivered to the Fire Victim Trust in accordance with an agreed-to
formula under the Plan.
PLATFORM II LAWNDALE: Wins Cash Collateral Access Thru March 31
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized Platform II Lawndale LLC to use cash
collateral on an interim basis in accordance with the budget for
the period from from March 1, 2022 through March 31, 2022.
The Debtor requires the use of cash collateral to maintain and
preserve its self-storage facility in Chicago's West Logan Square
neighborhood through the payment of ordinary and necessary expenses
related to the operation of the Debtor's property as well as
specific extraordinary maintenance and repair expenses.
GreenLake Real Estate Fund, LLC purports to hold a first priority
lien and security interest in the Property, and the Debtor's cash
and cash receipts received from the leasing of storage units
through a security interest and assignment of rents granted by the
Debtor under an Open-End Mortgage, Security Agreement, Assignment
of Rents and Leases and Fixture Filing dated May 18, 2018, and
recorded with the Cook County Recorder of Deeds on May 22, 2018.
These assets secure the repayment of a promissory note dated May
18, 2018, in the original principal sum of $6.250 million.
As adequate protection, Greenlake is granted a replacement lien on
the Debtor's rents, accounts and accounts receivables. As further
adequate protection for Greenlake's interests in the Pre-Petition
Collateral, and consistent with 11 U.S.C. section 552, the Debtor
will grant Greenlake, to the extent not heretofore granted, a
replacement lien on the Debtor's rents, accounts, and accounts
receivables derived from the Property, which are of the same type
or nature as the Pre-Petition Collateral, coming into existence or
acquired by the Debtor respecting the Property on or after the
Petition Date.
The Post-Petition Liens granted to Greenlake under the terms of the
Order will be valid and perfected as of the date of the Order,
without the need for the execution or filing of any further
document or instrument otherwise required to be executed or filed
under applicable non-bankruptcy law.
The Debtor's authority to use Cash Collateral will terminate on the
earlier of (a) the date of entry by the Court of an order modifying
or otherwise altering the effectiveness of the Order, (b) an Event
of Default, or (c) the expiration of the Budget Period.
These events constitute an Event of Default:
a. Entry of an order converting the Debtor's Chapter 11 case
to a case under Chapter 7 of the Bankruptcy Code, which order is
not stayed within 10 days of the entry of such order;
b. The entry of an order dismissing the Debtor's Chapter 11
case, which is not stayed within 10 days of the entry of such
order; and
c. The Debtor's failure to comply with any provision of the
Order.
A copy of the court's order and the Debtor's budget is available at
https://bit.ly/3T6nMup from PacerMonitor.com.
The Debtor projects $32,200 in total operating revenue and $110,903
in total expenses.
About Platform II Lawndale LLC
Platform II Lawndale LLC is an Illinois limited liability company
that owns a self-storage facility at 1750 North Lawndale Avenue in
Chicago's West Logan Square neighborhood. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
N.D. Ill. Case No. 22-07668) on July 11, 2022. In the petition
signed by Scott Krone, manager, the Debtor disclosed up to $50
million in both assets and liabilities.
Judge Deborah L. Thorne oversees the case.
Gregory J. Jordan, Esq., at Jordan & Zito LLC is the Debtor's
counsel.
PRECAST LLC: Seeks to Hire Dulin Ward & DeWald as Accountant
------------------------------------------------------------
Precast, LLC seeks approval from the U.S. Bankruptcy Court for the
Northern District of Indiana to employ Dulin, Ward & DeWald, Inc.
as its accountant.
The firm will provide accounting and tax services for the year
ended Dec. 31, 2022, and payroll processing services and technology
services for 2023.
Jeff Taner, a certified public accountant and managing partner at
Dulin Ward & DeWald, 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:
Jeff A. Taner, CPA
Dulin, Ward & DeWald, Inc.
9921 Dupont Circle Drive West, Suite 300
Fort Wayne, IN 46825
Tel: (260) 423-2414
Email: jtaner@dwdcpa.com
About Precast LLC
Precast, LLC is a manufacturer of cement concrete product in Fort
Wayne, Ind.
Precast sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N.D. Ind. Case No. 23-10085) on Jan. 30, 2023, with as
much as $1 million in both assets and liabilities. William A.
Kriesel, president of Precast, signed the petition.
Judge Robert E. Grant oversees the case.
HallerColvin, PC serves as the Debtor's bankruptcy counsel while
Dulin, Ward & DeWald, Inc. is the Debtor's accountant.
PREMIER CAJUN: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Premier Cajun Kings, LLC
7078 Peachtree Industrial Blvd.
Suite #800
Peachtree Corners, GA 30071
Chapter 11 Petition Date: March 14, 2023
Court: United States Bankruptcy Court
Northern District of Alabama
Case No.: 23-00656
Judge: Hon. D. Sims Crawford
Debtor's Counsel: Jesse S. Vogtle, Jr., Esq.
HOLLAND & KNIGHT LLP
1901 Sixth Avenue North, Suite 1400
Birmingham, AL 35203
Tel: (205) 226-5700
Email: jesse.vogtle@hklaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Joginder Sidhu, Personal Rep. for Estate
of Manraj Sidhu (deceased).
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/NBZJS2I/Premier_Cajun_Kings_LLC__alnbke-23-00656__0002.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/SP6UHPQ/Premier_Cajun_Kings_LLC__alnbke-23-00656__0001.0.pdf?mcid=tGE4TAMA
PURIFYING SYSTEMS: May Use Cash Collateral Thru March 21
--------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Los Angeles Division, authorized Purifying Systems, Inc. to use
cash collateral on an interim basis in accordance with the budget
until March 21, 2023.
As previously reported by the Troubled Company Reporter, Wells
Fargo on December 29, 2016, made a loan in the principal amount of
$1.178 million to Purifying Systems, Inc. The Loan is evidenced by,
among other instruments, a Promissory Note, Commercial Security
Agreement, UCC-1 filing(s), Subordination Agreement, Addendum to
Subordination Agreement, Modification Agreement, Deed of Trust and
Mortgage.
As of Petition Date, Wells Fargo was owed $723,933, plus
post-petition interest, attorneys fees and costs.
The Court said the Debtor will pay directly to Wells Fargo, the
monthly amount of $5,401 on the first day of each month thereafter
unless extended in writing by Wells Fargo.
A continued final hearing on the matter is set for March 21, 2023,
at 10 a.m.
A copy of the order is available at https://bit.ly/3T8ta00 from
PacerMonitor.com.
About Purifying Systems, Inc.
Purifying Systems, Inc. provides equipment for any water treatment,
from water softeners and chemical pumps to reverse osmosis units.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-16301) on November
16, 2022. In the petition signed by Jaime I. Magana, secretary, the
Debtor disclosed up to $500,000 in assets.
Judge Barry Russell oversees the case.
Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger,
is the Debtor's legal counsel.
PWM PROPERTY: West Madison Slated for April 4 Confirmation
----------------------------------------------------------
Jeff Montgomery of Law360 reports that a Delaware bankruptcy judge
on Tuesday, March 7, 2023, approved supplemental disclosures
covering a trio of options for a 50-story Chicago office tower
lingering in Chapter 11 after settlement on a related New York
high-rise, from loan modification to a 60-day sale effort or
handoff to a receiver.
on March 7, 2023, PWM Property Management LLC and 181 West Madison
Property LLC (together, the "West Madison Debtors") filed (i) the
Second Amended Joint Chapter 11 Plan of Reorganization of PWM
Property Management LLC and Its Debtor Affiliates Pursuant to
Chapter 11 of the Bankruptcy Code, and (ii) the Supplement to
Disclosure Statement for the Second Amended Joint Chapter 11 Plan
of Reorganization of PWM Property Management LLC and Its Debtor
Affiliates ("Second Disclosure Statement Supplement").
The West Madison Debtors and the West Madison Mortgage Lender have
agreed to modifications to their settlement as part of the Amended
Plan. 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, among
other things, the West Madison Mortgage Loan Amendment Effective
Date does not occur by May 31, 2023.
On March 7, 2023, the Court entered an order approving the Second
Disclosure Statement Supplement. The Third Supplemental Disclosure
Statement Order, among other things, authorized the West Madison
Debtors to solicit votes to accept or reject the Second Amended
Plan from Holders of Claims in Class 3B (West Madison Mortgage Loan
Claims) and Holders of Interests in Class 12 (PWM Property
Management LLC Common Equity Interests) and established certain
deadlines and procedures related thereto.
Judge Mary Walrath approved these dates and deadlines in connection
with the solicitation procedures:
* West Madison Voting Record Date: March 7, 2023
* West Madison Solicitation Date: March 8, 2023 (or as soon as
reasonably practicable thereafter)
* West Madison Voting Deadline: March 22, 2023 at 4:00 p.m.
(prevailing Eastern Time)
* West Madison Plan Objection Deadline: March 22, 2023 at 4:00
p.m.
(prevailing Eastern Time)
* Deadline to file Confirmation Brief, Supporting Declarations
and Voting Report: March 29, 2023 at 12:00 p.m.
(prevailing Eastern Time)
* West Madison Confirmation Hearing: April 4, 2023 at 2:00 p.m.
(prevailing Eastern Time)
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&W CLARK: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: R&W Clark Construction, Inc.
8158 West Lincoln Highway
Frankfort, IL 60423
Chapter 11 Petition Date: March 11, 2023
Court: United States Bankruptcy Court
Northern District of Illinois
Case No.: 23-03279
Judge: Hon. Timothy A. Barnes
Debtor's Counsel: Gregory K. Stern, Esq.
GREGORY K. STERN, P.C.
53 West Jackson Boulevard
Suite 1442
Chicago, IL 60604
Tel: (312) 427-1558
Email: greg@gregstern.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Richard Clark as president and sole
shareholder.
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/NT4YTIQ/RW_Clark_Construction_Inc__ilnbke-23-03279__0001.0.pdf?mcid=tGE4TAMA
RECONDITION PROS: Seeks to Hire Bernstein-Burkley as Legal Counsel
------------------------------------------------------------------
Recondition Pros Penn, LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Pennsylvania to hire
Bernstein-Burkley, P.C. to handle its Chapter 11 case.
The firm will charge these hourly fees:
Attorneys $235 - $900
Paralegals $150 - $195
As disclosed in court filings, Bernstein-Burkley does not represent
interests adverse to the Debtor or the estate in the matters upon
which it is to be engaged.
The firm can be reached through:
Lara S. Martin, Esq.
Bernstein-Burkley, P.C.
601 Grant Street, 9th Floor
Pittsburgh, PA 15219
Phone: (412) 456-8102
Fax: (412) 456-8135
Email: lmartin@bernsteinlaw.com
About Recondition Pros Penn
Recondition Pros Penn, LLC sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No.
23-10639) on March 3, 2023, with $100,001 to $500,000 in assets and
$50,001 to $100,000 in liabilities. Judge Patricia M Mayer presides
over the case.
Lara Shipkovitz Martin, Esq., at Bernstein Burkley, PC represents
the Debtor as counsel.
REMODEL 615: Wins Cash Collateral Access Thru April 4
-----------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Tennessee,
Nashville Division, authorized Remodel 615, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 10% variance, and its agreement with Fox Capital Group, Inc.
until a subsequent interim hearing on April 4, 2023 at 9:30 a.m.
The Debtor requires the use of cash collateral to continue its
business without interruption.
The U.S. Small Business Administration; NEWCO Capital Group; IOU
Central, Inc.; Fox Capital Group, Inc., Small Business Financial
Solution, LLC d/b/a Rapid Finance are the only parties believed by
the Debtors to assert a lien on Remodel 615's cash collateral.
As adequate protection, the Secured Parties are granted a
replacement security interest in the Debtor's post- petition
property and proceeds thereof, to the same extent and priority as
their purported security interest in the Debtor's pre-petition
property and the proceeds thereof.
Any replacement lien will be to the same extent and with the same
validity and priority as the secured creditors' pre-petition liens,
without the need to file or execute any document as may otherwise
be required under applicable non-bankruptcy law.
A copy of the court's order and the Debtor's budget is available at
https://bit.ly/3Jxw1wg from PacerMonitor.com.
The Debtor projects total disbursements, on a weekly basis, as
follows:
$55,093 for the week ending March 10, 2023;
$115,934 for the week ending March 17, 2023;
$106,148 for the week ending March 24, 2023; and
$142,265 for the week ending March 31, 2023.
About Remodel 615, LLC
Remodel 615, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Tenn. Case No. 23-00435) on February
6, 2023. In the petition signed by Robert Adam Baughman, sales and
marketing director and co-owner, the Debtor disclosed up to
$500,000 in assets and up to $10 million in liabilities.
Judge Randal S. Mashburn oversees the case.
Michael G. Abelow, Esq., at Sherrard Roe Voigt & Harbison, PLC, is
the Debtor's legal counsel.
REVLON INC: Faces Hair Relaxer Cancer Claims as Case Nears End
--------------------------------------------------------------
Amelia Pollard of Bloomberg Law reports that Revlon Inc. is
grappling with a growing number of allegations that some of its
hair products cause cancer as the cosmetics company looks to exit
Chapter 11 bankruptcy.
Thousands of consumers are alleging Revlon owes them money because
they used the company's hair relaxer products and later developed
cancer. But a deadline to formally lodge such claims against the
bankrupt company elapsed in October -- just after the National
Institutes of Health published a study showing a correlation
between some chemical hair relaxers and uterine cancer.
About Revlon Inc.
Revlon Inc. manufactures, markets and sells an extensive array of
beauty and personal care products worldwide, including color
cosmetics; fragrances; skin care; hair color, hair care and hair
treatments; beauty tools; men's grooming products; antiperspirant
deodorants; and other beauty care products. Today, Revlon's
diversified portfolio of brands is sold in approximately 150
countries around the world in most retail distribution channels,
including prestige, salon, mass, and online.
Since its breakthrough launch of the first opaque nail enamel in
1932, Revlon has provided consumers with high-quality product
innovation, performance and sophisticated glamour. In 2016, Revlon
acquired the iconic Elizabeth Arden company and its portfolio of
brands, including its leading designer, heritage and celebrity
fragrances.
Revlon is among the leading global beauty companies, with some of
the world's most iconic and desired brands and product offerings in
color cosmetics, skin care, hair color, hair care and fragrances
under brands such as Revlon, Revlon Professional, Elizabeth Arden,
Almay, Mitchum, CND, American Crew, Creme of Nature, Cutex, Juicy
Couture, Elizabeth Taylor, Britney Spears, Curve, John Varvatos,
Christina Aguilera and AllSaints.
Revlon sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.
22-10760) on June 15, 2022. Fifty affiliates, including Almay,
Inc, Beautyge Brands USA, Inc., and Elizabeth Arden, Inc., also
sought bankruptcy protection on June 15 and June 16, 2022.
Revlon disclosed total assets of $2,328,093,000 against total
liabilities of $3,689,240,395 as of April 30, 2022.
The Hon. David S. Jones is the case judge.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP as
bankruptcy counsel; Mololamken, LLC as special litigation counsel;
PJT Partners, LP as investment banker; KPMG, LLP as tax services
provider; and Alvarez & Marsal North America, LLC as restructuring
advisor. Robert M. Caruso and Matthew Kvarda of Alvarez & Marsal
serve as the Debtors' chief restructuring officer and interim chief
financial officer, respectively. Meanwhile, Kroll Restructuring
Administration, LLC is the
Debtors' claims agent and administrative advisor.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors on June 24, 2022. Brown Rudnick, LLP, Province,
LLC and Houlihan Lokey Capital, Inc. serve as the committee's legal
counsel, financial advisor and investment banker, respectively.
ROBERSON CARTRIDGE: Matador Brass' Move to Convert Case Denied
--------------------------------------------------------------
Bankruptcy Judge Robert L. Jones for the Northern District of Texas
issues his findings of fact and conclusions of law in the case
captioned as In Re: Roberson Cartridge Co., LLC, Debtor, Case No.
22-20192-rlj7, (Bankr. N.D. Tex.).
Without Matador Brass Partners, LLC's consent, Jeff Roberson, in
his capacity as manager of Roberson Cartridge Co. LLC, entered a
resolution to allow Roberson Cartridge to file a bankruptcy
petition. Debtor Ex. 1. That same day, October 18, 2022, Roberson
Cartridge filed its chapter 7 petition.
Consequently, Matador Brass filed a motion to convert the case from
chapter 7 to chapter 11 (and specifically to subchapter V of
chapter 11) or, alternatively, to dismiss the case. Its basis for
dismissal is that Roberson Cartridge filed for bankruptcy without
proper authority.
Roberson Cartridge and the Chapter 7 Trustee, Kent Ries, oppose the
motion.
Judge Jones finds that "the Amended and Restated Company Agreement
lists Trey Barrientos as a member of Roberson Cartridge. But
Roberson Cartridge and Matador Brass refer to Jeff Roberson as the
"100% owner" of Roberson Cartridge. Matador Brass. . . was created
for the sole purpose to provide financing to Roberson Cartridge."
Judge Jones further finds that "the parties agreed that Matador
Brass would provide between $1 million and $10 million to Roberson
Cartridge. . . Of Matador Brass's $10 million credit line, it
advanced about $4.4 million from May 2021 to September 2022. . .
Roberson Cartridge later defaulted on its payments to Matador
Brass."
Judge Jones cannot, as Matador Brass requests, convert a chapter 7
case directly to a subchapter V case under chapter 11. He reasons
that "the provision of the Amended Company Agreement that required
Matador Brass's approval to liquidate before filing bankruptcy is
void as against public policy. Roberson was not divested of his
authority as a manager upon default. Roberson Cartridge's filing
was properly authorized."
Judge Jones finds and concludes that chapter 11 is fraught with
issues. He is "skeptical that Matador Brass' plan can be
successfully and economically prosecuted in chapter 11. . . Chapter
7 offers the best, most efficient administration of this case. It
allows all rights of the creditors and the debtor to be fully
vetted, if needed."
Judge Jones settles that "the Trustee is charged with administering
the assets of the estate. . . Matador Brass can pursue its rights
as a creditor and is free to explore a new business venture outside
the bankruptcy proceeding."
A full-text copy of the Findings of Fact and Conclusions of Law
dated March 7, 2023 is available at https://tinyurl.com/yckdvn7k
from Leagle.com.
About Roberson Cartridge
Roberson Cartridge Co., LLC, is a Texas limited liability company.
It is a relatively new company that manufactured cartridges for
ammunition.
Amarillo, Texas-based Roberson Cartridge filed its chapter 7
petition (Bankr. N.D. Tex. Case No. 22-20192) on Oct. 18, 2022.
The Debtor's counsel:
Van W. Northern
Northern Legal PC
806-374-2266
northernlegalpc@gmail.com
The Chapter 7 trustee:
Kent David Ries
Kent Ries, Trustee PO Box 3100
Amarillo, TX 79116
ROCKING M MEDIA: Unsecureds to Get Litigation Trust Proceeds
------------------------------------------------------------
Rocking M Media, LLC and its Debtor Affiliates filed with the U.S.
Bankruptcy Court for the District of Kansas a Combined Joint
Chapter 11 Plan of Reorganization and Disclosure Statement dated
March 9, 2023.
Debtors own and operate radio stations, radio networks, and digital
media platforms that provide music, news, sports, and weather to
their listeners and viewers.
Rocking M Radio, Inc. ("RMR"), was formed April 1, 2007, and is
owned by wife and husband, Doris Downing Miller ("Doris") and Merle
"Monte" M. Miller ("Monte") (together, "Doris and Monte") each
owning a one-third interest. Their son, Christopher D. Miller
("Christopher"), owns the other one-third interest. The Millers are
a third and fourth-generation Kansas media family.
Notwithstanding the current economic conditions, the significant
debt burden incurred by the Debtors, and the extensive licensing
and lease fees the Debtors believe that once the sale of the
non-profitable stations close, they can substantially pay all their
obligations over time. However, they need the protection and
benefits available under the Bankruptcy Code to confirm a plan of
reorganization.
The Debtors made the decision to sell certain radio stations and on
June 23, 2022 filed a Motion for an Order (A) Approving (i) Bidding
Procedures and (ii) Form and Manner of Notices; (B) Scheduling the
Time, Date, and Place for the Auction and Hearing to Consider Final
Approval of Sale.
After extensive marketing and advertising of the auction, an
auction was conducted by Gregory J. Guy of Patrick Communications
on October 11, 2022, starting at 10:00 AM. On October 26, 2022, a
hearing to approve the sale came before the Court and an Order
approving the sale was entered on November 10, 2022.
At the time of closing, and from the proceeds of the sale, the
Debtors were authorized and directed to pay the estate's share of
the closing costs, including outstanding real property taxes and
tax liens. The Debtors were further authorized to pay broker
commissions from the proceeds of the five percent buyer's premium
included in the Asset Purchase Agreements ("APA"). The APAs and FCC
License Applications have all been signed and submitted to the FCC
for approval. Once approval is finalized, the net proceeds from the
Sold Stations will be distributed to the following creditors who
has first and prior and validly perfected liens on the Assets.
Prior to and since commencing these Chapter 11 Cases, the Debtor
has evaluated the profitability of the various stations. With the
auction of more than half of the radio stations, the expenses have
been greatly reduced and Debtor believes the cash flow projections
will support the payments required to operate the remaining
stations and meet the plan payments proposed herein. Debtor
believes it has formulated a plan of reorganization that maximizes
recoveries to all creditors and enables the Debtor to emerge from
Chapter 11 as a competitive player in the radio/broadcast industry.
Those efforts and the Plan provide for the sale of the equity
interests of the Debtor and creation of the Reorganized Debtor.
Pursuant to the Plan, 100% of the equity interests in the Chapter
11 Debtors will be cancelled and reissued to NewCo. The balance of
the Debtors will be liquidated and dissolved as of the Effective
Date. Thus, under the Plan, NewCo will be owned indirectly by the
Sponsors, through the Investor or one or more other entities, and
NewCo will own and control the Remaining Radio Station Assets and
all other assets necessary to operate the Debtors' businesses. The
investment paid by the Sponsors to the Debtors' estates will be
used for distributions to creditors, less certain amounts to be
used to, among other things, to fund the Litigation Trust.
The Reorganized Debtors will fund payments proposed under the Plan,
except for the general unsecured creditors. A Litigation Trust will
be established to fund pro rata distribution to allowed general
unsecured claims. The Litigation Trust will be funded from (1)
funds recovered from causes of action, (2) proceeds from the ERTC
claim, and (3) $500,000.00 contributed by the Reorganized Debtor
paid in five annual payments beginning one year after the Effective
Date in the amount of $100,000.00 per year.
Class 8 consists of Convenience Claims. Each holder of an Allowed
Convenience Claim shall be paid 100% of its Allowed Class 8 Claim
on or promptly after the Effective Date or the date such
Convenience Claim is Allowed. Class 8 is Impaired.
Class 9 consists of General Unsecured Claims. Provided that the
holder of an Allowed General Unsecured Claim has not yet been paid,
on the Effective Date for Claims in Class 8 Convenience Claims and
have thereafter become Allowed General Unsecured Claims,
immediately following the Distribution Date subsequent to the date
upon which such Claims became Allowed General Unsecured Claims, or
as soon thereafter as is practicable, each holder of an Allowed
General Unsecured Claim shall receive an interest in the Litigation
Trust to the extent that they are Litigation Trust Beneficiaries.
In the event that Class 9 rejects the Plan, the Debtors reserve the
right to seek to confirm the Plan under section 1129(b) of the
Bankruptcy Code, and, in such event, the Debtors reserve the right,
to alter, amend or modify the Plan, to the extent that the Debtors
determine that such modifications are necessary to comply with the
requirements of section 1129(b) of the Bankruptcy Code. Class 9 is
Impaired.
Class 10 Subordinated General Unsecured Claims consist of any
intercompany claims and all claims asserted by Christopher D.
Miller, Gammon Miller L.L.C., whose sole shareholder is Christopher
D. Miller, and Meridian Media, LLC, whose sole shareholder is
Christopher D. Miller. No distribution shall be made under the Plan
from the Estates, unless and until the Class 9 General Unsecured
Claims are paid in full.
Class 11 consists of the Existing Equity Interests of Monte M.
Miller, Doris J. Miller, Christopher D. Miller, Ice 2012 Children's
Exempt Trust Carl R. Ice, Trustee, and David J. Kreller IRA. No
distribution shall be made under the Plan from the Estates in
respect of the Existing Equity Interests. On the Effective Date,
the certificates that previously evidenced ownership of the
Existing Equity Interests shall be cancelled and shall be null and
void, the holders thereof shall no longer have any rights in
respect of the Existing Equity Interests, and such certificates
shall not evidence any rights under the Plan.
The Plan is premised upon the substantive consolidation of the
Debtors for all purposes related to this Plan, including, without
limitation, for purposes of voting, confirmation, and
distribution.
On and after the Effective Date, the Debtors and their Estates
shall be deemed merged and (i) all assets and liabilities of the
Debtors shall be treated for purposes of the Plan as though they
were merged, (ii) all guarantees of the Debtors of payment,
performance or collection of obligations of any other of the
Debtors shall be eliminated and cancelled, (iii) all joint
obligations of two or more of the Debtors and all multiple Claims
against such entities on account of such joint obligations, shall
be considered a single Claim against the Debtors, and (iv) any
Claim filed against any of the Debtors shall be deemed filed
against the consolidated Debtors and shall be one Claim against and
a single obligation of the consolidated Debtors.
Payments and distributions under the Plan will be funded as
follows:
* Ongoing business operations which are sufficient to fund the
Plan.
* Additionally, Debtors have designated the anticipated
$263,304.69 in Employee Retention Tax Credit ("ERTC") to the
Litigation Trust.
* Reorganized Debtor intends to apply for any additional
available government relief funding that might become available due
to known or unknown economic crises and will use those proceeds for
operating expenses and to fund payments to be made under the Plan.
* Reorganized Debtor will also contribute a total of
$500,000.00 paid over five years in the amount of $100,000.00 per
year beginning one year after the Effective Date to the Litigation
Trust for the benefit of the Litigation Trust Beneficiaries.
* As consideration for the NewCo Common Interests to be issued
pursuant to the Investment Agreement and the purchase of the
business, assets, and properties of the Debtors and to fund the
distributions contemplated by the Plan, the Investor shall
contribute cash to NewCo in the amount of $200,000.00.
A full-text copy of the Combined Plan and Disclosure Statement
dated March 9, 2023 is available at https://bit.ly/40naPPt from
PacerMonitor.com at no charge.
Debtors' Counsel: Sharon L. Stolte, Esq.
SANDBERG PHOENIX & VON GONTARD PC
4600 Madison Ave., Suite 1000
Kansas City, MO 64112
Tel: 816-627-5332
Fax: 816-627-5532
Email: sstolte@sandbergphoenix.com
About Rocking M Media
Rocking M Media, LLC and its affiliates own and operate radio
stations, radio networks, and digital media platforms that provide
music, news, sports, and weather to its listeners and viewers.
Rocking M Media supports local, regional, and national businesses
and organizations across the State of Kansas as well as Nebraska,
Colorado, Oklahoma, and Texas.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Kan. Case No. 22-20242) on March 26,
2022. In the petition signed by Monte M. Miller, chief executive
officer, the Debtors disclosed up to $1 million in assets and up to
10 million in liabilities.
Judge Dale L. Somers oversees the cases.
The Debtors tapped Sharon L. Stolte, Esq., at Sandberg Phoenix &
von Gontard PC as legal counsel and AdamsBrown, LLC as accountant.
Creditors Kansas State Bank of Manhattan, Belate LLC, and Farmers
and Merchants Bank of Colby are represented by Stinson LLP, Spencer
Fane LLP, and Hite, Fanning & Honeyman LLP, respectively.
The U.S. Trustee for Region 20 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on July 7,
2022. Loeb & Loeb, LLP and Dundon Advisers, LLC serve as the
committee's legal counsel and financial advisor, respectively.
ROOSEVELT UNIVERSITY: Fitch Affirms 'B' Issuer Default Rating
-------------------------------------------------------------
Fitch Ratings has affirmed the 'B' Issuer Default Rating (IDR) and
'B' rating on the outstanding series 2007 Illinois Finance
Authority revenue bonds, issued on behalf of Roosevelt University
(Roosevelt or RU).
The Rating Outlook remains Negative.
Entity/Debt Rating Prior
----------- ------ -----
Roosevelt
University (IL) LT IDR B Affirmed B
Roosevelt
University (IL)
/General
Revenues/1 LT LT B Affirmed B
SECURITY
The series 2007 bonds rated by Fitch with approximately $35.4
million outstanding par as of FYE 2022 are an unsecured general
obligation of Roosevelt University, not including its consolidated
affiliate.
The unrated series 2018A, 2018B, 2019A, 2020A and 2020B bonds (the
unrated bonds), with approximately $199.4 million outstanding par
as of FYE 2022 (about 85% of total bonded debt) are secured via a
trust indenture on a parri-passu basis by a gross revenue pledge
and mortgaged property with an appraised value in 2019 of $328
million. Each series maintains its own debt service reserve fund.
The unrated bonds contain a liquidity covenant. Default on the
unrated bonds do not trigger an event of default on the series 2007
bonds.
ANALYTICAL CONCLUSION
The 'B' rating on RU's $35.4 million outstanding series 2007 bonds
and IDR reflect Roosevelt University's progress in reducing its
long-running structural deficit, most clearly starting in fiscal
2023, improving RU's prospects for sufficient cash-flow margins to
support its very high debt obligations. The ratings also
incorporate preliminary signs of meaningful student enrollment
growth in Spring and Fall 2023 resulting from a tuition reset and
other enrollment initiatives, but follow a 20% drop in headcount
enrollment from fall 2020 to fall 2022. Enrollment in fall 2022 was
the lowest in the university's recent history, even after acquiring
programs and students from a neighboring university in 2020.
RU's 'B' IDR and bond rating are also reflective of Roosevelt's
consistently weak debt leverage position as measured by Fitch's
available funds-to-adjusted debt metric. However, the university's
main campus location in central Chicago, valuable real estate,
external support for its mission to serve underserved populations,
and a large portfolio of endowment assets support the university's
profile.
The rationale for the Negative Outlook has shifted since Fitch's
last review, now reflecting the potential for continued enrollment
volatility in the highly-competitive and demographically challenged
area in which Roosevelt operates, which could significantly
undermine its progress toward structural operating balance. The
Outlook also considers the results of a Fitch-modeled,
forward-looking scenario analysis that show RU's already strained
leverage ratios as of FYE 2022 to be vulnerable to deterioration.
Finally, the Outlook incorporates limited head room under a
financial covenant on the unrated bonds, and potential implications
of noncompliance with that covenant.
KEY RATING DRIVERS
Revenue Defensibility: 'bb'
Student-Dependent Revenues in Challenged Market Despite Prospects
from New Strategies
Roosevelt University's recurring revenue base is highly
student-dependent, with historically around 85% derived from net
student revenues. Student demand metrics are weak, with 88%
freshman acceptance and just 15% enrollment in fall 2022. RU has
historically catered to minority and first-generation college
students. RU's student population is price-sensitive, with over 50%
eligible for federal Pell grants. Almost 77% of fall 2022
enrollment is from the metropolitan Chicago area, a region where
competition for students is intense and the number of Illinois high
school graduates is expected to decline over the coming decade.
Total enrollment dropped to a recent low in fall 2022 of 3,153
FTEs, a 22% drop from the fall 2020 FTE high of over 4,000
students. RU acquired assets from Robert Morris University Illinois
(RMUI) in March 2020, when RMUI's enrollment was roughly 1,400
students. RU's enrollment initially benefited from the RMUI
integration, though not as much as expected, and with the new RMUI
students transitioning immediately to an online platform during the
pandemic, long-term retention was also less than expected.
Roosevelt has mostly new enrollment management staff who have
implemented multiple new strategies that are starting to bear
fruit, according to the university, with both Spring and Fall 2023
enrollment showing favorable signs of meaningful growth. RU reset
its tuition sticker price for all new incoming full-time
undergraduates as of fall 2023 to a flat $20,000 annually from the
current $33,068, except in the Chicago College of Performing Arts,
for which the tuition sticker price will be reduced to $29,000 from
the current $41,530. Roosevelt anticipates the tuition reset will
attract students who otherwise would not consider the university,
while the university will aim to maximize revenues by reducing
discount rates.
The university is in the process of switching their athletic
programs to NCAA Division II (from NAIA), which management also
believes will increase student interest. Increased international
recruitment, adoption of the Common App application system, new
programs to start in 2023 including newly-accredited STEM programs,
and Roosevelt's new status as an approved "Hope Chicago" provider
with the Chicago Public School system are among other programs that
support positive enrollment, according to management.
RU benefits from a large endowment measuring over $145 million at
FYE 22. Income and draws from the endowment provide a stable source
of operating support. Endowment distributions are generally below
the 5% annual amount that Fitch considers to be sustainable. RU
historically generates limited revenues from fundraising.
Operating Risk: 'bbb'
Structural Deficit Reduced, but Stronger Margins Needed for Robust
Debt Service Coverage
In fiscal 2022, RU's Fitch-adjusted operating margin was -7%, with
a 12% operating cash flow margin and barely sufficient
Fitch-calculated DSCR of 1.1x. Fiscal 2022 included several
non-recurring revenue and expense items including pandemic aid
funds and bad debt expenses.
Of note, only Roosevelt University, without its consolidated
affiliate, The Auditorium Theater of Roosevelt University, Inc.
(Theater), backs the series 2007 Fitch-rated and other non-rated
bonds. RU comprised over 96% of the consolidated assets, and over
93% of consolidated revenues in fiscal 2022. For analytical
purposes, Fitch calculates operating and leverage metrics based
upon the consolidated entity.
Following several years of structurally unbalanced operations, in
fiscal 2023 YTD, RU reduced personnel expenses by almost $10
million and made other recurring expense corrections that provide a
path to achieving a more structurally balanced budget in years to
come. With the revenue underperformance resulting from below budget
enrollment figures in fall 2022, the university has identified
further reductions to close as much of the remaining fiscal 2023
budget gap as possible. Maintenance of at least balanced operating
performance is critical to producing sufficient cash flow margins
to support RU's heavy debt burden; fiscal 2022 debt service was a
high 12.1% of Roosevelt's expense base, even as an interest-only
obligation.
The university has minimal internally funded capex plans, although
capital needs may be accumulating based on RU's modestly high age
of plant of over 15 years. Positively, the State of Illinois has
announced capital project funding for universities, and Roosevelt
will apply to receive this state support. Previously, Roosevelt
received $9 million from the state over four years for capital
projects.
Financial Profile: 'bb'
High Debt Leverage With Asymmetric Risk From Other Bond Provisions
Roosevelt University is highly levered, based on Fitch's available
funds (AF: cash and investments less permanently restricted net
assets) to adjusted debt metric. At FYE 2022, AF stood at roughly
$107 million, a decrease from FYE 2021, but was generally in line
with amounts from prior years. Adjusted debt includes balance sheet
lease liabilities as a debt equivalents, and totaled just under
$254 million at FYE 2022 ($235 million par debt plus $19 million
lease obligations). AF-to-adjusted debt of 43% is consistent with
the 'bb' Financial Profile assessment.
Roosevelt's 'B' ratings and Negative Outlook are also supported by
the results of a forward-looking, Fitch-modeled scenario that
considers the effects of possible financial market stress and
future assumptions of the university's revenues, expenses, debt and
capital expenditures. Fitch's scenario indicates that some
deterioration in both RU's leverage ratios and its debt service
coverage ratio is plausible.
The university is subject to various provisions on the unrated
bonds, which Fitch considers to be an Asymmetric Additional Risk.
The university met its 150% liquidity covenant requirement of the
unrated bonds in FY 22, reporting an unrestricted cash and
investments to MADS ratio of 156%. The required threshold increases
to 175% in fiscal 2023. If breached, covenant remedies include
things as benign as hiring a consultant or fundraising, to items
more impactful to the credit, such as raising the coupon on the
unrated bonds. The latter remedy may have credit implications from
increased costs that pressure already thin debt service coverage.
A separate provision of the unrated bonds would require gross
revenues of the university to be placed in a trustee-held control
account for the benefit of the unrated bond payments upon a draw
from any of the debt service reserve funds.
Asymmetric Additional Risk Considerations
A 'weaker' Asymmetric Additional Risk Consideration was applied to
Financial Profile.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Inability to stabilize student enrollment at or above current
levels without appropriate expense adjustments to match any revenue
shortfalls;
- Reduction in debt leverage ratios to below 30%;
- Failure to improve cash flow margins and achieve at least 1.0x
MADS coverage without reliance on non-recurring revenues;
- Covenant violations on non-rated bonds leading to increased debt
costs or restriction of assets available to pay series 2017 debt
service.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Improved and sustained recurring operating margins closer that
support MADS coverage of at least 1.2x;
- Debt leverage ratios above 50% and improvement over time.
CREDIT PROFILE
Founded in 1945, Roosevelt's main campus is located in Chicago's
"loop" business district, and includes the auditorium building, a
32-floor Wabash Street "vertical campus" building, and the Goodman
Center. The auditorium theater is both a National Historic and
Chicago landmark, with an appraised value of $200 million in 2019.
The university also owns and operates a 27-acre suburban campus in
Schaumburg, IL, a northwest Chicago suburb. RU offers courses at
and in partnership with Harper Community College.
Roosevelt students primarily come from the Chicago metro area and
are a mix of traditional undergraduate and graduate students. Many
students commute to the Chicago or Schaumburg campuses, or attend
on-line. Currently, about 64% of FTE enrollment is undergraduate
students and 36% is graduate students.
Fall 2022 headcount of 3,725 (3,153 FTEs) is at a recent low.
Enrollment has dropped 20% from fall 2020 headcount of 4,680 (4,037
FTEs), which was a recent high following the integration in March
2020 of neighboring Robert Morris University of Illinois (RMUI).
About 1,300 RMUI students moved to Roosevelt at the time of the
integration. Roosevelt did not acquire any RMUI debt or property.
RU remains fully accredited by the Higher Learning Commission
(HLC). HLC's most recent comprehensive evaluation was completed in
June 2021, when HLC decided to continue RU's accreditation with
monitoring. The next planned monitoring action is a focused visit
to occur in April 2023.
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.
RUEL T. STOESSEL: Gets Interim OK to Hire Furr Cohen as Counsel
---------------------------------------------------------------
Ruel T. Stoessel, M.D., P.A. received interim approval from the
U.S. Bankruptcy Court for the Southern District of Florida to hire
Furr Cohen P.A. as its legal counsel.
The Debtor requires legal counsel to:
(a) give advice regarding the Debtor's powers and duties in
the continued management of its business;
(b) advise the Debtor of its responsibilities in complying
with the U.S. trustee's operating guidelines and reporting
requirements and with the rules of the court;
(c) prepare legal documents;
(d) protect the interest of the Debtor in all matters pending
before the court; and
(e) represent the Debtor in negotiation with its creditors in
the preparation of a Chapter 11 plan.
The firm will charge these hourly fees:
Robert C. Furr $675
Charles I. Cohen $575
Alvin S. Goldstein $575
Alan R. Crane $525
Marc P. Barmat $525
Jason S. Rigoli $425
Jonathan T. Crane $250
Paralegals $150
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Alan Crane, Esq., a partner at Furr & Cohen, 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.
Furr & Cohen can be reached at:
Alan R. Crane, Esq.
Furr & Cohen, P.A.
2255 Glades Road, Suite 301E
Boca Raton, FL 33431
Tel: (561) 395-0500
Fax: (561) 338-7532
Email: acrane@furrcohen.com
About Ruel T. Stoessel, M.D.
Ruel T. Stoessel, M.D., P.A. sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
23-11671) on March 1, 2023, with $100,001 to $500,000 in assets and
$500,001 to $1 million in liabilities. Judge Erik P. Kimball
oversees the case.
Alan R. Crane, Esq., at Furr & Cohen represents the Debtor as
counsel.
SAMEH H. AKNOUK: US Trustee's Bid for PCO Denied
------------------------------------------------
Chief Bankruptcy Judge Martin Glenn for the Southern District of
New York denies the US Trustee's motion for appointment of a
patient care ombudsman in the Subchapter V Chapter 11 case of Sameh
H. Aknouk Dental Services, P.C.
The Motion raises the important question whether the Court should
deny the Motion for appointment of an ombudsman in an SBRA case
where adding administrative expense may make it considerably more
difficult for the Debtor successfully to restructure and no issues
relating to patient care have arisen.
The US Trustee states that a Patient Care Ombudsman is necessary
because the Debtor's record keeping software, Dentrix, does not
provide any oversight or monitoring of the quality of Debtor's
patient services.
The Debtor did not affirmatively acknowledge that it is a health
care business in its voluntary petition. According to the
declaration of Dr. Sameh H. Aknouk, the Debtor is a family owned
and operated full-service general and cosmetic dentistry practice
which has been in operation for approximately twenty-five years and
services between 1,000 and 2,000 patients. The Debtor currently
operates as a debtor-in-possession and manages patient record
keeping using a software program called "Dentrix."
Judge Glenn determines that "the Debtor qualifies as a health care
business under section 333 of the Bankruptcy Code under the more
reasonable disjunctive interpretation of section 101(27A).
Nevertheless, . . . a patient services ombudsman is not necessary
here on the facts."
Judge Glenn explains that a Patient Care Ombudsman is not necessary
because "the cause of the bankruptcy was liability related to the
Debtor's alleged failure to remit employer contributions to the
Union, and not any patient care issues, such as a malpractice. . .
the Debtor, as a dental practice, is monitored by state regulatory
and licensing agencies. . . inspected regularly by New York State
and the dentists complete continuing education to ensure that they
are up to date on the latest skills, treatments, techniques, and
developments in the industry."
Judge Glenn determines that "the Debtor has no history of
compromised patient care or rights. . . no malpractice suits filed
against the Debtor or its dentists and no complaints relating to
deficient patient care. . . its patients are fully informed about
their treatment plan and their rights and have avenues both within
and outside the Debtor's organization to voice questions or
concerns if any exist." Nevertheless, the Court agrees with the US
Trustee that as a practical matter, no party can guarantee that
future patient complaints will not arise. Given that the Court
denies the Motion without prejudice, the US Trustee is free to
bring a renewed motion should patient care concerns arise in the
future.
Moreover, Judge Glenn finds that "in addition to oversight from
regulatory agencies, the Debtor has systems in place to process
complaints or issues with care through its team of dentists and its
office manager." While a Subchapter V trustee does not provide the
same level of oversight as a Patient Care Ombudsman would, the
Subchapter V trustee is an extra safeguard against patient care
issues that gives the Court additional comfort that the Debtor's
operations are being monitored.
Finally, Judge Glenn also explains that "the Debtor does not have
much room for additional administrative expenses. . . the
additional cost of a Patient Care Ombudsman could eat into these
small margins and be the difference between a cash flow positive
and negative business."
A full-text copy of the Memorandum Opinion and Order dated March 3,
2023 is available at https://tinyurl.com/4fev3vkr from Leagle.com.
About Sameh H. Aknouk, Dental Services
Sameh H. Aknouk, Dental Services, P.C. sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
22-11651) on Dec. 8, 2022, with up to $50,000 in assets and up to
$1 million in liabilities. Sameh H. Aknouk, president, signed the
petition.
Judge Martin Glenn oversees the case.
Erica Aisner, Esq., at Kirby Aisner & Curley LLP is the Debtor's
legal counsel.
SAN JORGE CHILDREN'S: Court OKs Deal on Cash Collateral Access
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Puerto Rico
authorized San Jorge Children's Hospital Inc. to use cash
collateral in accordance with its agreement with Oriental Bank
through May 31, 2023.
The parties agreed that all terms, requirements, acknowledgments,
assurances, and adequate protection remedies already granted to the
secured creditor and approved by the Court regarding its rights and
claim will remain unaltered as specifically detailed in the
Stipulation for the interim use of cash collateral dated November
1, 2022 and the Cash Collateral Order dated November 11, 2022.
A copy of the order is available at https://bit.ly/3J2dkiY from
PacerMonitor.com.
About San Jorge Children's Hospital
San Jorge Children's Hospital, Inc. operates a hospital
specializing in pediatrics in San Juan, P.R.
San Jorge Children's Hospital filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case
No. 22-02630) on Sept. 1, 2022, with between $10 million and $50
million in both assets and liabilities. Edward P. Smith, chief
operating officer, signed the petition.
Judge Maria De Los Angeles Gonzalez presides over the case.
The Debtor tapped Wigberto Lugo Mender, Esq., at Lugo Mender Group,
LLC as bankruptcy counsel and Galindez, LLC as external auditor.
Cardona Jimenez Law Offices, P.S.C. represents the official
committee of unsecured creditors appointed in the Debtor's case.
SBW PROPERTIES: Court Approves Disclosure Statement
---------------------------------------------------
The Bankruptcy Court has entered an order approving the Amended
Disclosure Statement explaining the Plan of SBW Properties, LLC.
April 10, 2023, at 2:30 p.m., is fixed for the hearing on
confirmation of the Plan in the Courtroom of the Honorable Stacy
Jernigan, 1100 Commerce Street, 14 Floor, Dallas, Texas.
April 5, 2023, is fixed as the last day for filing and serving
written acceptances or rejections of the Plan in the form of a
ballot
April 5, 2023, is fixed as the last day for filing and serving
written objections to confirmation of the Plan.
About SBW Properties
SBW Properties, LLC, filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Case No.
22-31838) on Oct. 3, 2022, with up to $1 million in both assets and
liabilities. Eric A. Liepins, PC, serves as the Debtor's counsel.
SCHARN INDUSTRIES: Court OKs Cash Collateral Access Thru April 6
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts granted
Scharn Industries, LLC authority to use cash collateral on an
interim basis through April 6, 2023.
A further hearing on the matter is set for April 5 at 10 a.m.
As previously reported by the Troubled Company Reporter, 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.
A copy of the order is available at https://bit.ly/3yD0VwV from
PacerMonitor.com.
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.
Judge Janet E. Bostwick oversees the case.
Gary W. Cruickshank, Esq., at Cruickshank Law, serves as counsel to
the Debtor.
SECURE ENERGY: S&P Alters Outlook to Stable, Affirms 'B' ICR
------------------------------------------------------------
S&P Global Ratings revised the outlook to stable from positive and
affirmed its 'B' issuer credit rating on Secure Energy Services
Inc. At the same time, S&P affirmed its 'BB-' issue-level rating on
the company's senior secured second-lien notes. S&P raised the
issue-level rating on Secure's senior unsecured notes to 'B+' from
'B'.
S&P Said, "The stable outlook reflects our view that the company
will maintain leverage measures commensurate with our current
rating, with adjusted funds from operations (FFO) to debt averaging
40% to 45% over the next two years. We assume loss of EBITDA from
potential dispositions will be offset by sales proceeds allocated
to debt reduction.
"The Competition Tribunal decision creates uncertainty regarding
future cash flow generation. We had previously assumed any
dispositions being considered by the Competition Tribunal on the
merger with Tervita, which closed on July 2, 2021, would be
immaterial. However, the order to divest 17 treatment, recovery,
and disposal facilities, six landfills, four water disposal wells,
and two disposal caverns, is material, in our view, representing
about 27% of the company's assets of this nature. While the company
will appeal the decision and could bring back online some of its
closed facilities, the review creates uncertainty regarding EBITDA
impact and future cash flow generation. We also believe an appeal
is unlikely to be resolved prior to year-end, at the earliest.
Accordingly, in our view, the positive outlook underpinning the
rating is no longer warranted.
"Although not factored in our base-case scenario, we assume impact
on credit measures from EBITDA loss could be limited. Revenues and
EBITDA increased meaningfully in 2022 spurred by higher
energy-related volumes and increased activity led by higher oil and
gas prices. The improvement was also underpinned by the full-year
contribution from Tervita's assets and realization of C$75 million
in targeted synergies. We expect activity levels to remain
supportive over the next two years as commodity prices support the
uptick in capital spending by producers. At the same time, the
company has been disciplined in debt reduction, having paid down
about C$300 million in 2022, about a 25% reduction in gross debt.
Accordingly, under our base-case scenario, we expect adjusted FFO
to debt to average 40% to 45% over the next two years.
"Our base-case scenario does not assume any dispositions relating
to the review by the Competition Tribunal given the lack of
clarity. However, our current assumption is that management will
use sale proceeds from dispositions, if any, to continue
opportunistically repurchasing the high coupon senior secured
second-lien 2025 notes previously issued by Tervita (about C$220
million outstanding as of year-end 2022). Since the close of the
merger, the company has focused on reducing the higher coupon (11%)
notes, with the principal dropping to US$162 million from US$500
million. Although potential asset sales should result in
proportionately lower capital spending, we believe EBITDA loss
could be offset by debt reduction.
"Our current assessment of the company's business risk profile is
supported by Secure's leading market position but is subject to
review after the Competition Tribunal's process is completed.
Secure services a diversified customer base across key active plays
(Montney, Duvernay, Deep Basin, Viking, and Oil Sands). It has a
broad product offering, with a substantial portion of its revenues
derived from production-related activity. In addition, the company
has complementary midstream services, including the Kerrobert Light
Pipeline System and the East Kaybob oil pipeline, both of which are
contracted. The company was also able to recently secure a new
three-year agreement to construct an oil terminal and pipeline
infrastructure in the Clearwater oil region of Alberta. In our
view, the long-term contracts and exposure to production-related
activity provide some degree of resiliency in a volatile
hydrocarbon environment. In addition, the company has a flexible
cost structure, with the majority of the costs being variable
(primarily personnel), which provides the ability to temper margin
volatility. While profitability could weaken as the company brings
back some shut-in facilities to offset asset dispositions, we
believe it should remain at least within the average range of our
rated global oilfield services companies.
"That said, we would have to evaluate final tribunal results and
the impact of any material dispositions on the company's
operational scale and business risk assessment.
"The stable outlook reflects our view that continued momentum in
activity and gross debt reduction will enable Secure to generate an
adjusted FFO-to-debt ratio averaging 40%-45% in the next two years.
The outlook also reflects our expectation that disposition of
assets, if any, following the Competition Tribunal review, will not
have a material impact on the company's leverage. We assume
proceeds from any possible asset sales would be used toward
reducing debt, which could limit the potential impact on leverage
metrics from EBITDA loss.
"We could lower our rating on Secure if its adjusted FFO to debt
falls below 20% with limited prospects of improvement. This would
most likely occur from weakness in commodity prices that leads to
additional and prolonged cutbacks in exploration and production
(E&P) spending, reducing demand for Secure's services.
"We could raise our rating on Secure if the uncertainty regarding
the tribunal review is alleviated, such that dispositions, if any,
do not have a material impact on the company's cash flow and
leverage metrics. Specifically, we expect the adjusted FFO-to-debt
ratio to remain above 30% on a sustained basis. An upgrade would
also be contingent on Secure reducing the drawn amount under its
credit facility, such that the company is able to keep credit
facility availability above 50%."
ESG credit indicators: E-4, S-2, G-2
SEMINOLE HARD: Moody's Rates New $550MM Secured Loans 'B1'
----------------------------------------------------------
Moody's Investors Service assigned B1 ratings to Seminole Hard Rock
Entertainment, Inc.'s ("SHRE") proposed $525 million Senior Secured
Term Loan A Facility and proposed $25 million Senior Secured
Revolving Credit Facility, both of which will mature five years
after the closing date. The company's B1 Corporate Family Rating,
B2-PD Probability of Default Rating, and the B1 rating on the
existing Backed Senior Secured Bank Credit Facility are unchanged.
The outlook remains stable.
Proceeds from the proposed Term Loan A and revolver will be used to
refinance the company's existing credit facility. While the B1 CFR
and stable outlook are not affected by the proposed bank debt
refinancing given the leverage neutral nature, Moody's views the
transaction as a credit positive as it extends the company's
maturity profile and provides additional revolving credit facility
capacity that supports the company's liquidity. The existing B1
rating on the company's existing Senior Secured Term Loan A remains
unchanged and will be withdrawn once the refinancing transaction is
completed.
SHRE is a wholly owned subsidiary of the Seminole Tribe of Florida
("Tribe", Baa2 Stable). While SHRE and the Tribe have their own
distinct restricted group financing, there is a meaningful amount
of economic and strategic linking between the two entities. SHRE
receives fees from the Tribe and unrelated third parties for use of
the Hard Rock name. SHRE has also received a considerable amount of
cash contributions from the Tribe for acquisitions and operations.
The Tribe also provides a payment guarantee on SHRE's term loan
debt.
Assignments:
Issuer: Seminole Hard Rock Entertainment, Inc.
Backed Senior Secured Term Loan A, Assigned B1 (LGD3)
Backed Senior Secured Revolving Credit Facility, Assigned B1
(LGD3)
RATINGS RATIONALE
SHRE's B1 Corporate Family Rating considers the company's
significant geographic diversification, positive free cash flow
profile, and benefits from its ownerships by the Seminole Tribe of
Florida, which provides a payment guarantee on SHRE's term loan
debt. The ownership and guarantee diminish SHRE's default risk and
improve the company's financial flexibility. These factors provide
multiple notches of lift to SHRE's rating relative to the
stand-alone credit profile.
SHRE's ratings are constrained by its modest scale in terms of
number of restaurants and earnings concentration in the casual
dining segment which remains vulnerable to consumer discretionary
economic trends. In addition, SHRE's credit profile is constrained
by its very high leverage.
SHRE's stable outlook acknowledges the financial support that the
company has available to it from its parent, the Seminole Tribe of
Florida along with Moody's expectation that the company will
continue to generate positive free cash flow. The outlook also
considers that SHRE remains vulnerable to travel disruptions and
unfavorable sudden shifts in discretionary consumer spending.
SHRE has good liquidity and Moody's expect the company will
generate positive free cash flow. In addition, the Tribe's
financial support and timely payment guaranty provides incremental
liquidity support.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A ratings upgrade would require SHRE's demonstrated ability to
generate positive free cash flow, maintenance of good liquidity,
debt/EBITDA sustained below 5.0x, and EBIT coverage of interest
sustained above 2.0x. An upgrade of the parent's ratings could also
be viewed positively for SHRE's ratings.
Ratings could be downgraded if the Tribe's rating is downgraded for
any reason or there is a removal or lessening of parent support
agreement.
Seminole Hard Rock Entertainment, Inc. is an owner-operator and
franchisor of Hard Rock cafes, casinos and hotels throughout the
world. The company is a wholly owned subsidiary of the Seminole
Tribe of Florida.
The principal methodology used in these ratings was Restaurants
published in August 2021.
SIERRA ENTERPRISES: S&P Assigns CCC+ Rating on 1st-Lien Term Loan
-----------------------------------------------------------------
S&P Global Ratings assigned its 'CCC+' issue-level rating and '3'
recovery rating to Sierra Enterprises LLC's recently executed $277
million tranche B-2 first-lien term loan due in 2027. The '3'
recovery rating indicates its expectation for meaningful (50%-70%;
rounded estimate: 55%) recovery in the event of a payment default.
The 'CCC+' and '3' ratings on the tranche B-1 term loan remain
unchanged, and it has a remaining balance of $623,000 with an
original maturity date of November 2024.
The amend and extend transaction pushed out the company's key
maturities by two and half years. The company's $35 million
first-lien revolver is now due in February 2027, its $277 million
tranche B-2 term loan is due in May 2027, and its second-lien term
loan (not rated) is now due in May 2028.
S&P said, "Although we view the maturities extension as credit
positive because it pushed out Sierra's near-term maturity risk,
our 'CCC+' issuer credit rating and negative outlook are unchanged.
The negative outlook reflects that the company continues to face
operational challenges and we still view its capital structure as
unsustainable, with leverage well above 10x."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulated default scenario contemplates a default
occurring in 2024, mainly due to the loss of major customers,
competitive pressures, and unanticipated manufacturing disruptions.
These factors significantly deteriorate its EBITDA and cash flow,
eventually causing a payment default.
-- S&P said, "We value the company as a going concern given its
leading market position in the niche global food service market and
its long-standing relationships with blue-chip customers. As such,
we value the company based on an enterprise value approach by
applying our assumed distressed emergence EBITDA of $41 million to
a 5x multiple, reflecting a partial rebound from current very low
levels as the company's operations are turned around from a
restructuring. This multiple is in line with the multiples we use
for its consumer-contract manufacturing peers, which reflects its
minimum brand equity and small scale."
Simulated default assumptions
Sierra Enterprises LLC is based in Fresno, Calif. In the event of
an insolvency proceeding, we anticipate the company would file for
bankruptcy protection under the auspices of the U.S. federal
bankruptcy court system and would not involve other foreign
jurisdictions.
-- Debt service: $29 million (default year interest plus
amortization)
-- Maintenance capital expenditure: $12 million
-- Emergence EBITDA: $41 million
Simplified waterfall
-- Emergence EBITDA: $41 million
-- Multiple: 5x
-- Gross recovery value: $206 million
-- Net recovery value for waterfall after administrative expenses
(5%): $196 million
-- Obligor/nonobligor valuation split: 100%/0%
-- Estimated priority claims: $0
-- Estimated first-lien claims: $334 million
-- Value available for first-lien claims: $196 million
--Recovery expectations for first-lien claims: 50%-70% (rounded
estimate: 55%)
Note: All debt amounts include six months of prepetition interest.
Revolving credit facility assumed 85% drawn at default.
SIGNATURE BANK: Fitch Lowers IDR to 'D' & Then Withdraws Rating
---------------------------------------------------------------
Fitch Ratings has downgraded Signature Bank's (SBNY) Long-Term
Issuer Default Rating (IDR) to 'D' from 'BBB+' following its
closure by the New York State Department of Financial Services. In
addition, SBNY's Short-Term IDR has been downgraded to 'D' from
'F2'. All assets and deposits have transferred to Signature Bridge
Bank N.A., a full-service bank that operated by the FDIC.
Fitch Ratings is subsequently withdrawing the ratings of Signature
Bank as the bank is under regulatory supervision. Accordingly,
Fitch Ratings will no longer provide ratings or analytical coverage
for Signature Bank.
KEY RATING DRIVERS
IDRs and VR
The Long- and Short-Term IDRs have been downgraded to 'D', in
accordance with Fitch's Bank Rating Criteria, which deems a bank in
default when placed into receivership. Similarly, SBNY's VR has
been downgraded to 'f' from 'bbb+' indicating the institution has
failed.
Long- and Short-Term Deposits: Long- and Short-Term deposit ratings
have been withdrawn reflecting insufficient information to maintain
the ratings subsequent to the transfer of deposits under an
announced systemic risk exception approved by regulators, under
which all depositors will be made whole.
Subordinated Debt and Other Hybrid Securities: SBNY's subordinated
debt and preferred stock rating have been downgraded to 'C' from
'BBB' and 'BB, respectively, consistent with Fitch's Bank Rating
criteria, which states that for a bank rated 'RD' or 'D', a
non-performing hybrid obligation will be rated 'C', unless Fitch
expects above average (above 50%) recoveries on the instrument, in
which case it can be rated up to 'CCC'. Fitch has not factored in
the potential for any recoveries as there is insufficient
information to do so.
Government Support Rating: SBNY's GSR of 'ns' remains unchanged and
is affirmed and withdrawn.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
Rating Sensitivities are no longer relevant as the ratings have
been withdrawn.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
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
----------- ------ -----
Signature Bank LT IDR D Downgrade BBB+
LT IDR WD Withdrawn D
ST IDR D Downgrade F2
ST IDR WD Withdrawn D
Viability f Downgrade bbb+
Viability WD Withdrawn f
Government Support ns Affirmed ns
Government Support WD Withdrawn ns
Subordinated LT WD Withdrawn C
subordinated LT C Downgrade BBB
long-term
deposits LT WD Withdrawn A-
preferred LT WD Withdrawn C
preferred LT C Downgrade BB
short-term
deposits ST WD Withdrawn F2
SIGNATURE BANK: Shut by Regulators; Bridge Bank Opens Doors
-----------------------------------------------------------
On March 13, 2023, Signature Bridge Bank, N.A., a New York-based,
full-service commercial bank, announced it is opening its doors. As
stated in a press release on March 12 by the Federal Deposit
Insurance Corp. (FDIC), Greg D. Carmichael has joined the bank as
Chief Executive Officer. With all of the deposits and substantially
all of the assets of former Signature Bank, the bank will continue
to take care of its clients, providing a full suite of loan,
deposit, and banking services.
"Because of the swift actions of the U.S. Treasury, Federal
Reserve, and FDIC, our clients' deposits are not at risk," said Mr.
Carmichael. "We value our clients, and we believe our single point
of contact model will continue to deliver the best-in-class
products and services they desire."
"I want to thank all of our colleagues for their dedication to our
business and their unwavering commitment to serving our clients. I
look forward to working with them to realize the full potential of
Signature Bridge Bank."
SILICON VALLEY BANK: Aehr Says Less Than 6% of Cash in SVB
----------------------------------------------------------
Aehr Test Systems, a worldwide supplier of semiconductor test and
reliability qualification equipment, on March 10 provided comments
on the news of the closure by regulators of Silicon Valley Bank
(SVB).
Gayn Erickson, President and CEO of Aehr Test Systems, commented,
"There's been a lot of questions related to the closure of SVB
[Fri]day and the exposure of Aehr Test Systems. Aehr Test does have
a checking account at SVB with a current balance of under $2.5
million, which is less than 6% of our total of $41.8M in cash and
short-term liquid assets. Aehr has over $39.3 million in another
financial institution which includes over $9.7 million in cash and
$29.6 million in short term US Government backed Treasury Bonds.
Aehr has no outstanding balance on its line of credit with Silicon
Valley Bank and foresees no need to draw on the line in the near
future. Aehr believes that there is no impact to our operations,
customers, vendors, or employees. We are taking all appropriate
steps to prevent any impact on our operations."
About Aehr Test Systems
Headquartered in Fremont, California, Aehr Test Systems (NASDAQ:
AEHR) -- http://www.aehr.com-- is a worldwide provider of test
systems for burning-in semiconductor devices in wafer level,
singulated die, and package part form, and has installed over 2,500
systems worldwide. Increased quality and reliability needs of the
Automotive and Mobility integrated circuit markets are driving
additional test requirements, incremental capacity needs, and new
opportunities for Aehr Test products in package, wafer level, and
singulated die/module level test. Aehr Test has developed and
introduced several innovative products, including the ABTS™ and
FOX-P™ families of test and burn-in systems and FOX WaferPak™
Aligner, FOX WaferPak Contactor, FOX DiePak(R) Carrier and FOX
DiePak Loader. The ABTS system is used in production and
qualification testing of packaged parts for both lower power and
higher power logic devices as well as all common types of memory
devices. The FOX-XP and FOX-NP systems are full wafer contact and
singulated die/module test and burn-in systems used for burn-in and
functional test of complex devices, such as leading-edge silicon
carbide-based power semiconductors, memories, digital signal
processors, microprocessors, microcontrollers, systems-on-a-chip,
and integrated optical devices. The FOX-CP system is a new low-cost
single-wafer compact test and reliability verification solution for
logic, memory and photonic devices and the newest addition to the
FOX-P product family. The WaferPak Contactor contains a unique full
wafer probe card capable of testing wafers up to 300mm that enables
IC manufacturers to perform test and burn-in of full wafers on Aehr
Test FOX systems. The DiePak Carrier is a reusable, temporary
package that enables IC manufacturers to perform cost-effective
final test and burn-in of both bare die and modules.
SILICON VALLEY BANK: BioLife Reports Immaterial Financial Exposure
------------------------------------------------------------------
BioLife Solutions, Inc., a leading supplier of class-defining
bioproduction tools and services for the cell and gene therapies
("CGT") and broader biopharma markets, on March 10 provided
commentary on its current banking relationship with Silicon Valley
Bank ("SVB"). BioLife is monitoring the situation at SVB carefully
and does not believe there is any current risk to its business.
BioLife's deposit accounts held at SVB in excess of the $250,000
FDIC-insured limits are less than $1 million which the company does
not believe is a material portion of its cash and cash equivalents.
Multiple institutions serve as custodians for third-party
investments held in BioLife's name, and those investments are not
directly exposed to any consequences of a liquidity concern at SVB.
Additionally, BioLife is assessing the implications of SVB's
receivership of the company's credit facility with SVB but does not
foresee any near-term needs to draw amounts under the facility.
About BioLife Solutions
BioLife Solutions (NASDAQ: BLFS) -- http://www.biolifesolutions.com
-- is a leading supplier of class-defining bioproduction tools and
services for the cell and gene therapy and broader biopharma
markets. Its tools portfolio includes our proprietary CryoStor(R)
and HypoThermosol(R) biopreservation media for shipping and
storage, the ThawSTAR(R) family of automated, water-free thawing
products, evo(R) cold chain management system, high capacity
cryogenic storage freezers, Stirling Ultracold mechanical freezers,
SciSafe biologic storage services, and Sexton Biotechnologies cell
processing tools.
SILICON VALLEY BANK: Everest Medicines Says Exposure Immaterial
---------------------------------------------------------------
Everest Medicines, a biopharmaceutical company focused on
developing, manufacturing and commercializing transformative
pharmaceutical products and vaccines in Greater China and other
parts of Asia, would like to announce that it considers its
exposure to any liquidity concerns at Silicon Valley Bank (SVB) to
be immaterial. The company's cash held at SVB is substantially less
than 1% of its total cash balance, and amounts not covered by the
Federal Deposit Insurance Corporation (FDIC) is approximately $1
million.
The company expects to recover most of the cash on deposit at SVB
through a combination of FDIC insurance coverage and other
compensation actions. Everest Medicines has received full upfront
payment of $280 million from Immunomedics, Inc., a wholly-owned
subsidiary of Gilead Sciences, Inc., for the transaction around
Trodelvy(R) rights in Asia territories, and none of the upfront
payment is deposited at SVB.
Everest Medicines has a strong balance sheet of approximately $430
million of cash. The Company adopts a robust process to diversify
assets across multiple financial institutions and believes that the
situation at SVB has minimal impact on the company's business.
About Everest Medicines
Everest Medicines (HKEX 1952.HK) -- http://www.everestmedicines.com
-- is a biopharmaceutical company focused on developing,
manufacturing and commercializing transformative pharmaceutical
products and vaccines that address critical unmet medical needs for
patients in Asian markets. The management team of Everest Medicines
has deep expertise and an extensive track record from both leading
global pharmaceutical companies and local Chinese pharmaceutical
companies in high-quality discovery, clinical development,
regulatory affairs, CMC, business development, and operations.
Everest Medicines has built a portfolio of potentially global
first-in-class or best-in-class molecules in the company's core
therapeutic areas of renal diseases, infectious diseases and
autoimmune disorders.
SILICON VALLEY BANK: Pharming Has $19M in Deposits at SVB UK
------------------------------------------------------------
Pharming Group N.V. is aware that Silicon Valley Bank Limited
("SVB UK") has been sold to HSBC UK Bank plc. This transaction has
been facilitated by the Bank of England, in consultation with the
Treasury, using powers granted by the Banking Act 2009.
The announcement by the UK government states that customer deposits
have been protected and that customers of SVB UK will be able to
access their deposits and banking services as normal from Monday,
March 13, 2023.
As a result of these actions, Pharming expects to have access to
the US$19 million it has on deposit at SVB UK, and to not bear any
losses on these deposits.
About Pharming Group N.V.
Pharming Group N.V. (EURONEXT Amsterdam: PHARM/Nasdaq: PHAR) --
http://www.pharming.com-- is a global biopharmaceutical company
dedicated to transforming the lives of patients with rare,
debilitating, and life-threatening diseases. Pharming is
commercializing and developing an innovative portfolio of protein
replacement therapies and precision medicines, including small
molecules, biologics, and gene therapies that are in early to
late-stage development. Pharming is headquartered in Leiden,
Netherlands, and has employees around the globe who serve patients
in over 30 markets in North America, Europe, the Middle East,
Africa, and Asia-Pacific.
SILICON VALLEY BANK: Unity Software Says Exposure Minimal
---------------------------------------------------------
Unity Software Inc., the world's leading platform for creating and
growing real-time 3D (RT3D) content, is providing the following
statement regarding the events surrounding Silicon Valley Bank:
"As Silicon Valley Bank (SVB) has been placed under receivership
with the Federal Deposit Insurance Corp (FDIC), Unity is disclosing
that less than 5% of our cash and cash equivalents are with SVB,
not including any FDIC-insured amounts, and we expect minimal
impact on our operations."
About Unity Software Inc. (Unity)
Unity (NYSE: U) is the world's leading platform for content
creators of all sizes to successfully realize their vision. Our
comprehensive set of software solutions supports them through the
entire development lifecycle as they build, run, and grow
immersive, real-time 2D and 3D content for mobile phones, tablets,
PCs, consoles, and augmented and virtual reality devices. For more
information, visit unity.com.
Unity uses its website (investors.unity.com), filings with the SEC,
press releases, public conference calls, and public webcasts as
means of disclosing material nonpublic information and for
complying with its disclosure obligations under Regulation FD.
SILICON VALLEY BANK: Zealand Pharma Says 15% of Cash at SVB
-----------------------------------------------------------
Zealand Pharma A/S a biotechnology company focused on the discovery
and development of innovative peptide-based medicines, on March 12
issued the following statement:
On March 10, 2023, the California Department of Financial
Protection and Innovation closed Silicon Valley Bank (SVB) and
appointed the Federal Deposit Insurance Corporation (FDIC) as
receiver. As receiver the FDIC will retain all the assets from SVB
for later disposition.
Zealand has approximately DKK 162.6 million in cash deposits held
at SVB as of March 10, 2023, which represents approximately 15% of
its total cash, cash equivalents and marketable securities on that
date. Zealand's deposits with SVB are insured up to the USD
$250,000 (DKK1.75 million) limit with the excess cash being
uninsured, in line with FDIC standards. The FDIC has stated that
all insured depositors will have full access to their insured
deposits no later than Monday morning, March 13, 2023. Uninsured
depositors will be paid an advance dividend within the next week
and receive a receivership certificate for the remaining amount of
their uninsured funds. As the FDIC sells the assets of SVB, future
dividend payments may be made to uninsured depositors. At this
time, Zealand does not know to what extent it will be able to
recover all of its cash in deposit at SVB nor the timing of
recovery.
As of March 10, 2023, Zealand had cash, cash equivalents and
marketable securities totaling DKK1,071.4 million (including
deposits at SVB).
The company will continue to closely monitor the potential impact
of the SVB failure.
About Zealand Pharma A/S
Zealand Pharma A/S (Nasdaq: ZEAL) ("Zealand") --
http://www.zealandpharma.com-- is a biotechnology company focused
on the discovery and development of peptide-based medicines. More
than 10 drug candidates invented by Zealand have advanced into
clinical development, of which two have reached the market and
three candidates are in late-stage development. The company has
development partnerships with several pharma companies as well as
commercial partnerships for its marketed products.
Zealand was founded in 1998 and is headquartered in Copenhagen,
Denmark, with a presence in the U.S. that includes Boston.
SILVERGATE CAPITAL: Winds Down Bank Operations
----------------------------------------------
Silvergate Capital Corporation (NYSE:SI), the holding company for
Silvergate Bank, announced March 8, 2023, 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 that 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.
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.
Liquidation Supervised by California
S&P Global reported March 9, 2023, that a spokesperson for the
California Department of Financial Protection and Innovation
confirmed that Silvergate Capital Corp.'s voluntary liquidation
process is being supervised by the state of California, and the
company has not entered the Federal Deposit Insurance Corp.'s
receivership program at this point.
In an announcement, the California Department of Financial
Protection and Innovation, or DFPI, said it will facilitate "the
safe and expeditious voluntary liquidation" of Silvergate.
With the liquidation being supervised by the DFPI, it is unlikely
that the agency will appoint the FDIC as receiver for Silvergate,
at least for now, said John Popeo, partner at financial regulatory
advisory firm The Gallatin Group, according to S&P Global.
FDIC-insured banks that are ordered to close can appoint the FDIC
as the receiver of their assets and liabilities, and the agency
will liquidate those assets to pay depositors and creditors. If
the remaining assets at a closed bank cannot cover its liabilities,
the FDIC is obligated to cover up to $250,000 for each depositor,
known as deposit insurance.
Typically, the agency would help a closed bank look for buyers to
assume liabilities so it does not have to deploy capital from its
insurance fund.
"The FDIC is always very protective of its insurance fund," said
Ian Katz, managing director at policy research firm Capital Alpha
Partners. "That's what they have and what they need to protect
depositors."
By having the California DFPI administer the liquidation,
Silvergate can get help from the Golden State before it might need
to turn to the FDIC. Also importantly, Silvergate is voluntarily
liquidating the banking unit, as opposed to being forced to shut
down as a failed bank.
Based on the announcements, the Silvergate liquidation process is
subject to California law, Popeo said. Under state law, any bank
that has voluntarily ceased to do banking business will notify the
California Commissioner of Banks and liquidate its affairs.
Deposits not paid out to depositors within six months will be
relinquished to the California Treasury, whereupon depositors can
submit claims accordingly, Popeo said.
If the liquidation is not being conducted safely or in compliance
with California law, the commissioner can seize the business and
its property and then appoint the FDIC as the receiver, Popeo
added.
$6.34 Billion in Deposits
According to S&P Global, Silvergate's liquidation comes after the
cryptocurrency-centric bank got caught up in the crypto industry's
liquidity crunch during the fourth quarter of 2022. The collapse of
cryptocurrency exchange FTX Trading Ltd. left many of its
counterparties in financial distress. Many of those companies,
along with FTX, were Silvergate's customers. In addition, a growing
number of investors lost confidence in the cryptocurrency industry
and pulled back investments.
After deposits declined by 68% in the fourth quarter of 2022,
Silvergate started to shrink its workforce and cut product lines.
It ultimately discontinued its flagship payments offering,
Silvergate Exchange Network, on March 3.
To tackle the severe deposit runoff, Silvergate has been borrowing
from costly funding sources and selling securities at a loss. Those
moves dragged Silvergate into mounting investigations by regulators
and social media campaigns by short sellers, as well as litigation
from investors as its stock price fell.
"In our view, Silvergate operated as any regulated chartered bank
should, but the damage is done," Canaccord Genuity analysts wrote
March 8.
At the end of the fourth quarter of 2022, Silvergate appeared to
have liquidity sources from cash and securities to repay deposits.
As of Dec. 31, 2022, Silvergate had $4.57 billion in cash
equivalents and $5.73 billion in total securities against $6.34
billion in total deposits.
"With most of the remaining securities portfolio likely liquidated
to cover deposit returns, book value will likely take another big
hit from where it stood" as 2022 ended, Canaccord Genuity analysts
wrote.
As it winds down, Silvergate could restore some value of its assets
by selling the intellectual property rights of Silvergate Exchange
Network, said Sam Haskell, managing member at Colarion Partners, an
investment firm focused on bank equity.
"Ultimately, somebody down the road could restart that network,"
Haskell said. "But it seems as though the crypto ecosystem has a
lot of maturing to do."
The company could also sell the assets of the blockchain payment
network Diem Group Ltd., which Silvergate acquired in January 2022
for about $167.4 million, Haskell added.
Banks still appear to be interested in cryptocurrency and
blockchain technology, but compliance risks are getting so high
that banks may not be able to justify them for the return, Haskell
said. In a recent example, Atlanta-based Citizens Trust Bank
announced a partnership with stablecoin issuer Circle Internet
Financial Limited on Feb. 24 to hold $65 million cash reserves for
Circle in a bid to drive deposit growth.
"Those deposits themselves are enormously valuable," Haskell said.
"And that's why it speaks so loudly that almost no banks are
willing to bring those deposits on balance sheet."
About Silvergate Capital Corp.
Silvergate Capital Corp. operates as a bank holding company. The
Company, through its La Jolla, Calif.-based subsidiary Silvergate
Bank provides a banking platform for innovators, especially in the
digital currency industry, and developing product and service
solutions addressing the needs of entrepreneurs.
Bloomberg News reports that Silvergate collapsed amid scrutiny from
regulators and a criminal investigation by the Justice Department's
fraud unit into dealings with fallen crypto giants FTX and Alameda
Research.
Silvergate Capital on March 8, 2023, announced that it will
liquidate La Jolla, Calif.-based subsidiary Silvergate Bank and
plans to fully repay deposits. The California Department of
Financial Protection and Innovation, or DFPI, said it will
facilitate "the safe and expeditious voluntary liquidation" of
Silvergate.
As of Dec. 31, 2022, Silvergate had $4.57 billion in cash
equivalents and $5.73 billion in total securities against $6.34
billion in total deposits.
STARNET LLC: Taps Kevin McDonald of United Real Estate as Broker
----------------------------------------------------------------
Starnet, LLC seeks approval from the U.S. Bankruptcy Court for the
Northern District of Texas to hire Kevin McDonald, a real estate
broker at United Real Estate, to market and sell its property
located at 2413 Briarwood Cove, Cedar Hill, Texas.
The broker will receive a commission equal to 5 percent of the
sales price.
As disclosed in court filings, Mr. McDonald does not represent any
interest adverse to the estate of the Debtor.
The broker can be reached at:
Kevin McDonald
United Real Estate
5931 Greenville Ave #226
Dallas, TX 75206
Phone: (972) 372-0590
Email: mcdonald.m.kevin@gmail.com
About Starnet LLC
Starnet, LLC is a single asset real estate as defined in 11 U.S.C.
Section 101(51B). The Debtor is the owner in fee simple title of a
real property located at 2413 Briarwood Cove, Cedar Hill, Texas,
valued at $1.6 million.
Starnet sought relief under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. N.D. Texas Case No. 23-30210) on Feb. 6, 2023. In the
petition filed by its managing member, Paul Faure, the Debtor
reported total assets of $1,700,000 and total liabilities of
$1,118,534.
Judge Stacey G. Jernigan oversees the case.
Eric A. Liepins, Esq., at Eric A. Liepins PC represents the Debtor
as counsel.
TECHNICAL ORDNANCE: Files Emergency Bid to Use Cash Collateral
--------------------------------------------------------------
Technical Ordnance Solutions, LLC, Atomic Machine and EDM, Inc.,
and Energy Technical Systems, Inc. ask the U.S. Bankruptcy Court
for the Middle District of Florida, Fort Myers Division, for
authority to use cash collateral and provide adequate protection.
The Debtors require access to cash collateral to fund their
necessary postpetition operating expenses.
TOS owns Atomic and ETS. TOS routinely redistributed funds between
its subsidiaries -- by way of shareholder contributions and
distributions -- to ensure short-term financial distress did not
threaten long-term profitability.
The Debtors have a number of secured creditors who have asserted
pre-petition security interests in (i) the Debtors' prepetition
property and (ii) the cash proceeds that are derived from the
Collateral. To the best of the Debtors' knowledge, the Secured
Creditor body consist of the U.S. Small Business Administration,
Newtek Small Business Finance, LLC, Newtek Business Credit
Solutions, US Strategic Capital Advisors LLC, IOU, Kapitus, LLC,
and Small Business Financial Solutions, LLC, a/k/a Rapid Finance.
As adequate protection for the use of Collateral and the cash
collateral, the Debtors offer the Claimants:
a. Post-petition replacement liens to the same extent,
validity and priority as existed pre-petition;
b. The right, upon providing the Debtors five days notice, to
inspect the Collateral, provided that said inspection does not
interfere with the operations of the Debtors; and
c. Copies of monthly financial documents generated in the
ordinary course of business and other information as Claimants may
reasonably request with respect to the Debtors' operations.
The Debtor also requests authority to allow ETS to make monthly
transfers of $50,100 directly to Atomic or, alternatively,
indirectly to Atomic via TOS.
The transfers will ensure Atomic maintains going concern value
sufficient to warrant debtor in possession financing, which in turn
will ensure Atomic can operate profitably after paying its
creditors.
A copy of the Debtor's motion is available at
https://bit.ly/3ZJvopa from PacerMonitor.com.
About Technical Ordnance Solutions LLC
Technical Ordnance Solutions LLC is engaged in the business of
ordnance accessories manufacturing. The Debtor sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case
No. 23-00125) on February 5, 2023. In the petition signed by Clyde
William Colburn, III, owner, the Debtor disclosed up to $100,000 in
assets and up to $10 million in liabilities.
Mike Dal Lago, Esq., at Dal Lago Law, represents the Debtor as
legal counsel.
TEXAS COASTAL: Gets Interim OK to Hire Shraiberg Page as Counsel
----------------------------------------------------------------
Texas Coastal Group, LLC received interim approval from the U.S.
Bankruptcy Court for the Southern District of Florida to hire
Shraiberg Page, P.A. as its bankruptcy counsel.
The Debtor requires legal counsel to:
a. give advice regarding matters of bankruptcy law in
connection with the Debtor's Chapter 11 case;
b. advise the Debtor of the requirements of the Bankruptcy
Code, the Federal Rules of Bankruptcy Procedure, applicable
bankruptcy rules, including local rules, pertaining to the
administration of the case and U.S. Trustee Guidelines related to
the daily operation of its business and administration of the
estate;
c. represent the Debtor in all proceedings before the court;
d. prepare legal documents;
e. negotiate with creditors, prepare and seek confirmation of
a plan of reorganization and related documents, and assist the
Debtor with implementation of any plan; and
f. perform all other necessary legal services for the Debtor.
The firm will be paid at these rates:
Attorneys $350 - $600
Legal Assistants $275
The firm received a fee retainer of $20,000 and a cost retainer of
$1,738.
As disclosed in court filings, Shraiberg Page neither holds nor
represents interests adverse to the Debtor's estate.
The firm can be reached through:
John E. Page, Esq.
Eric Pendergraft, Esq.
Shraiberg Page, P.A.
2385 NW Executive Center Drive, #300
Boca Raton, FL 33431
Tel: 561-443-0800
Fax: 561-998-0047
Email: jpage@slp.law
Email: ependergraft@slp.law
About Texas Coastal Group
Texas Coastal Group, LLC is a single asset real estate as defined
in 11 U.S.C. Section 101(51B). It is the fee simple owner of a
property located at St. Hwy. 361 & Mustang Blvd., valued at $51.1
million.
Texas Coastal Group filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
23-11704) on March 3, 2023, with $51,072,272 in assets and
$9,542,913 in liabilities. Craig J. Millard, Sr., member of Texas
Coastal Group, signed the petition.
Judge Erik P. Kimball presides over the case.
John E. Page, Esq., at Shraiberg Page P.A. represents the Debtor as
legal counsel.
TOP SPORTS: Case Summary & Nine Unsecured Creditors
---------------------------------------------------
Debtor: Top Sports Production LLC
1805 Owen Ct. Suite 109
Mansfield, TX 76063
Business Description: Top Sports is a privately held company in
the sports advertising business.
Chapter 11 Petition Date: March 13, 2023
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 23-40708
Judge: Hon. Mark X. Mullin
Debtor's Counsel: Robert C. Lane, Esq.
THE LANE LAW FIRM
6200 Savoy Dr Ste 1150
Houston TX 77036-3369
Tel: (713) 595-8200
Fax: (713) 595-8201
Email: notifications@lanelaw.com
Total Assets: $35,552
Total Liabilities: $3,862,449
The petition was signed by Adrian Allsman as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's nine unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/ITC566I/Top_Sports_Production_LLC__txnbke-23-40708__0001.0.pdf?mcid=tGE4TAMA
TRANSDERMAL SPECIALTIES: April 19 Plan Confirmation Hearing Set
---------------------------------------------------------------
On January 31, 2023, Transdermal Specialties Global, Inc. ("TSG"),
BKR IP Holdco, LLC ("BKR IP Holdco"), and Transdermal Specialties,
Inc. ("TSI") filed with the U.S. Bankruptcy Court for the Eastern
District of Pennsylvania a motion for order for approval of the
second amended disclosure statement related to the first amended
plan of reorganization.
On March 7, 2023, Judge Magdeline D. Coleman approved the
Disclosure Statement and ordered that:
* April 10, 2023 is set as the last date by which ballots must
be received in order to be considered as acceptances or rejections
of the Plan of Reorganization.
* April 10, 2023 is fixed as the date on or before which any
written objection to confirmation of the Plan of Reorganization is
required to have been filed with the Court and served upon counsel
for the Debtors.
* April 12, 2023, is the deadline for Debtors to file Report
of Plan Voting with the Clerk.
* April 19, 2023 at 11:30 a.m., in the United States
Bankruptcy Court, 900 Market Street, Courtroom #2, Philadelphia,
Pennsylvania is the hearing on confirmation of the Plan.
A copy of the order dated March 7, 2023 is available at
https://bit.ly/401lcIh from PacerMonitor.com at no charge.
Attorneys for the Debtor:
CIARDI CIARDI & ASTIN
Albert A. Ciardi, III, Esq.
Daniel S. Siedman, Esq.
1905 Spruce Street,
Philadelphia, PA 19103
About Transdermal Specialties Global
Transdermal Specialties Global, Inc., sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No.
21-11425) on May 19, 2021. At the time of the filing, the Debtor
had $1 million to $10 million in both assets and liabilities. Judge
Magdeline D. Coleman oversees the case. Ciardi Ciardi & Astin
serves as the Debtor's legal counsel.
TRICIDA INC: Heads to Mediation Over Plan Issues
------------------------------------------------
On March 6, 2023, the United States Bankruptcy Court for the
District of Delaware held a status conference at which drug
developer Tricida Inc. and certain of its stakeholders requested
that the Court appoint a mediator to assist parties in attempting
to resolve various issues raised in connection with the Debtor's
chapter 11 plan and related disclosure statement.
At the behest of the Debtor, on March 10, 2023, the Court appointed
the Honorable Mary F. Walrath as mediator.
The Mediation shall be conducted among the following parties,
either through their authorized representative, through counsel, or
both: (a) the Debtor; (b) the Official Committee of Unsecured
Creditors; (c) the Consenting Noteholders (as such term is defined
in the Plan and Disclosure Statement); and (d) Patheon Austria GmbH
& Co. KG (collectively, the "Parties").
About Tricida Inc.
Tricida Inc. -- https://www.tricida.com/ -- is a pharmaceutical
company working to turn the tide on metabolic acidosis and
progression of chronic kidney disease. The company is based in
South San Francisco, Calif.
Tricida filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 23-10024) on Jan. 12,
2023, It disclosed $93,879,000 in total assets against $229,977,000
in total debt as of Sept. 30, 2022.
The Debtor tapped Sidley Austin, LLP and Young Conaway Stargatt &
Taylor, LLP, as counsels; SerraConstellation Partners, LLC as
financial advisor; and Stifel, Nicolaus & Company, Inc., and Miller
Buckfire, LLC as investment bankers. Kurtzman Carson Consultants,
LLC is the claims agent and administrative advisor.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case.
Womble Bond Dickinson (US) LLP and Rock Creek Advisors, LLC serve
as the committee's legal counsel and financial advisor,
respectively.
TRINITY LEGACY: Seeks Cash Collateral Access
--------------------------------------------
Trinity Legacy Consortium, LLC asks the U.S. Bankruptcy Court for
the District of New Mexico for authority to continue to use cash
collateral to pay expenses which occur in the ordinary and usual
course of business, including employee wages, rent, utilities,
purchase of supplies, purchase of inventory, and any other expenses
which occur in the ordinary and usual course of business. The
Debtor further proposes to continue making cash payments to the US
Small Business Administration in the amount of $750 per month, and
to Forward Financing in the amount of $2,000 per month.
As previously reported by the Troubled Company Reporter, the Debtor
has unsecured creditors owed in the approximate amount of
$315,000.
The Debtor has secured claims with the SBA and Forward Financing.
The SBA has a security interest in all tangible and intangible
personal property. Forward Financing is owed approximately
$120,000.
The Debtor incurred a factoring loan with Forward Financing to help
meet expenses for the business, and in exchange gave a security
interest in future receipts of the Corporation. Payment on these
loans gave rise to the Debtor falling behind on other business
expenses, necessitating the filing of the bankruptcy. In addition,
the Debtor is a defendant in two pending state court litigation
cases in Oregon, one with Plaintiffs Dave Roberts and Debra
Roberts, who are suing the Debtor on a construction contract in
Oregon, the other with Plaintiff Mark Johnston who is suing on a
construction contract. The Debtor is also a defendant in two
pending District Court cases in Ada County, Idaho, which are
similar in nature.
As adequate protection, the Debtor will continue to grant the SBA
and Forward Financing a replacement lien on postpetition
collateral, to the same extent as and with the same priority as
they held valid liens on the collateral pre-petition.
About Trinity Legacy Consortium, LLC
Trinity Legacy Consortium, LLC operates a construction and home
building business with locations in Farmington, NM and Wallowa,
Oregon.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.M. Case No. 22-10973) on December 7,
2022. In the petition signed by Jan Swift and Jacob Swift, managing
members, the Debtor disclosed up to $500,000 in assets and up to $1
million in liabilities.
Dennis A. Banning, Esq., at NM Financial Law, P.C., is the Debtor's
legal counsel.
TRU GRIT FITNESS: Coulter Ventures' Lawsuit Stayed
--------------------------------------------------
District Judge Cynthia Bashant for the Southern District of
California has issued an order staying the case captioned as
Coulter Ventures, LLC, Plaintiff, v. Tru Grit Fitness LLC,
Defendant, Case No. 3:22-cv-01005-BAS-BGS, (S.D. Cal.), pending
resolution of Tru Grit Fitness LLC's bankruptcy proceedings. She
has directed Tru Grit Fitness LLC to file notice in this matter
every six (6) months informing the Court of the status of the
bankruptcy proceedings.
A full-text copy of the Order dated March 2, 2023 is available at
https://tinyurl.com/4r85957p from Leagle.com.
About Tru Grit Fitness LLC
Tru Grit Fitness LLC offers fitness equipment. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Nev. Case No. 22-14320) on December 7, 2022. In the petition signed
by Brandon Hearn, chief executive officer, the Debtor disclosed up
to $50 million in assets and up to $100 million in liabilities.
Judge August B. Landis oversees the case.
Samuel A. Schwartz, Esq., at Schwartz Law, PLLC, is the Debtor's
legal counsel.
UNITED ROAD: $331.3M Bank Debt Trades at 56% Discount
-----------------------------------------------------
Participations in a syndicated loan under which United Road
Services Inc is a borrower were trading in the secondary market
around 43.6 cents-on-the-dollar during the week ended Friday, March
10, 2023, according to Bloomberg's Evaluated Pricing service data.
The $331.3 million facility is a Term loan that is scheduled to
mature on October 19, 2024. About $299 million of the loan is
withdrawn and outstanding.
United Road Services, Inc. provides vehicle transportation
logistics solutions.
UPLAND SOFTWARE: S&P Downgrades ICR to 'B-', Outlook Stable
-----------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Upland
Software Inc. to 'B-' from 'B' based on higher leverage and
weakened financial metrics.
At the same time, S&P lowered its issue-level rating on the
company's senior secured credit facilities to 'B-' from 'B'. The
recovery rating is unchanged at '3'.
The stable outlook reflects S&P's expectation that despite weakened
near-term profitability Upland has adequate liquidity to support
this spending and may gradually restore credit metrics if organic
growth accelerates in the coming years.
Upland's profitability will be constrained in 2023 as incremental
investment pushes EBITDA margins to the low- to mid-20% area in
support of long-term organic growth. During the company's recent
fourth quarter earnings call, management announced a multiyear plan
to accelerate long-term core organic revenue growth of 5%-10%. This
represents a substantial break from historical experience of flat
to modestly declining organic sales with growth coming primarily
from acquisitions. The plan would involve about $15 million of
annual targeted incremental spending to enhance go-to-market
capabilities, drive higher demand generation, and be more
competitive in product offerings. Key focus areas include expanding
digital marketing capability, bolstering the inside sales team, and
increasing the pace of product innovation and investment in the
company's offshore research and development center in India. At the
end of 2022, core organic revenue, defined by management to exclude
primarily acquisitions, sunset assets, and noncore revenues,
declined about 1% on a constant currency basis from 2021. Net
retention rate was about 95%, consistent with its historical
average. While we would view a successful enkindling of organic
growth and less reliance on acquisitions for expansion as credit
positives for Upland, we expect this shift in priorities to take at
least 12 months to bear fruit, particularly given a backdrop of
increasing macroeconomic uncertainty. S&P expects flat to a
low-single-digit percent organic revenue decline in 2023, with some
macroeconomic and currency exchange headwinds, and modest organic
growth in 2024 as sales organization ramps up.
S&P said, "Because the constraint from increased investment
spending on EBITDA margins will be imminent compared to our
forecast of a gradual acceleration in revenue growth, we expect
higher leverage and weakened credit metrics will persist for an
extended period. S&P Global Ratings-adjusted EBITDA margin was
about 25% at year-end 2022 versus about 27% in 2021. We expect
EBITDA margin will trend lower in the low- to mid-20% area in 2023
and 2024, given the higher targeted investment. For 2023, we
forecast S&P Global-Ratings adjusted leverage will increase to the
9x–10x range from about 8x at year-end 2022, including preferred
equity that we treat as a debt-like instrument (excluding preferred
equity, forecast leverage would have been 7x–8x). Leverage will
stay at similar levels at least through the end of 2024.
"Although profitability is constrained in the near term, we expect
Upland will continue to generate modest free operating cash flow
(FOCF). The company guided FOCF generation of $30 million-$40
million for 2023. Despite of lower EBITDA margins and revenue
decline expected, we believe Upland will achieve the FOCF target,
primarily due to a meaningful decline in acquisition-related
expenses. Management clearly articulates strong commitment to
invest for organic growth and would prioritize organic growth
initiatives over acquisitions. We do not expect any meaningful
acquisitions in our forecast for the near term.
"We believe Upland has adequate liquidity to execute the organic
growth plan and withstand minor economic headwinds during 2023.
With about $250 million cash on hand and $60 million availability
from its revolving credit facility, the company should be able to
service debt while continues to spend incrementally to drive its
long-term organic growth target of 5 to 10%. Despite macroeconomic
uncertainties and greater recession risk ahead, we believe the
ongoing trend of digital business transformation will remain
resilient and Upland will continue to benefit from the market
tailwind as the company is well positioned with healthy amount of
liquidity.
"The stable outlook on Upland reflects our expectation that the
company should be able to service debt while it spends
incrementally to drive its long-term organic growth target of
5%-10%. Although S&P Global Ratings-adjusted EBITDA will be
compressed to the low- to mid-20% area in at least the next 18-24
months due to higher investment levels, leading to leverage
sustained over 9x-10x (or about 7x-8x excluding preferred equity
that we treat as debt), we anticipate Upland will continue to
generate modestly positive FOCF, with adequate liquidity to support
growth initiatives."
S&P could lower its rating on Upland if its:
-- Performance suffers from missteps related to its growth plan
initiatives or acquisition strategy, such that free cash flow
deteriorates significantly from current levels, or
-- Cash balances decline to where we would assess its liquidity as
less than adequate; or
-- Although less likely in the near term given the firm's
reinvigorated focus on organic growth, incremental debt-funded
acquisitions that fail to perform as expected and compress cash
generation could also lead to a downgrade.
S&P could upgrade the company if Upland is able to reduce leverage
under 8x (given that the preferred equity remains in its capital
structure) through:
-- Sustainable organic revenue growth, with increasing scale and
EBITDA margin expansions;
-- Successful integration of EBITDA accretive acquisitions; or
Repayment of debt.
ESG credit indicators: E-2, S-2, G-2
ESG factors have no material influence on S&P's credit rating
analysis of Upland.
VENUE CHURCH: Bid to Use Cash Collateral Moot
---------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Tennessee,
Southern Division, denied as moot the motion to use cash collateral
filed by Venue Church, Inc. as the Debtor filed a Report of Sale of
the building that formed the basis of the rental income on March 7,
2023.
On October 28, 2022, the Debtor filed an amended motion for
permanent authorization to use cash collateral in the form of
income from the rental of part of its building space. Access to
cash collateral had been extended temporarily three times by agreed
order, but the request for permanent authorization remained
pending.
A copy of the order is available at https://bit.ly/3yyNcas from
PacerMonitor.com.
About Venue Church Inc.
Venue Church Inc. is a megachurch in Tennessee. Venue Church Inc.
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. E.D. Tenn. Case No. 22-11829) on August 23, 2022. In its
petition, it listed estimated assets less than $5 million and more
than $3 million in mortgage, auto loan, and credit card debt.
The case is overseen by the Hon. Bankruptcy Judge Shelley D.
Rucker.
The Debtor is represented by W. Thomas Bible, Jr, Esq. at Tom Bible
Law as counsel.
VESTA HOLDINGS: Files Amendment to Combined Plan & Disclosures
--------------------------------------------------------------
Vesta Holdings, LLC, and its Debtor Affiliates submitted an Amended
Combined Joint Chapter 11 Plan of Liquidation and Disclosure
Statement dated March 9, 2023.
This Plan is a joint plan for each of the Debtors and presents
together Classes of Claims against, and Interests in, the Debtors.
The Plan does not provide for the substantive consolidation of the
Debtors. Rather, the Plan constitutes a separate Plan proposed by
each Debtor, and each Class constitutes a separate Class of Claims
against, and Interests in, each of the Debtors, as applicable.
The Plan proposes to release the Released Parties and to exculpate
the Exculpated Parties as set forth in Article XIII hereof. The
Debtors believe that the Debtor Release, Third-Party Release, and
Exculpation Provision are an integral part of the Plan. In addition
to the release of the Released Parties and the exculpation of the
Exculpated Parties, there is an injunction against bringing claims
and causes of action from which the Released Parties were released
or the Exculpated Parties exculpated.
Importantly, the Plan Releases and the Exculpation Provision
release and exculpate, as applicable, the Released Company Parties
whose efforts fueled the Debtors' restructuring process. The
Debtors, through their advisors, reviewed corporate records and
discussed various transactions and other matters with senior
management of the Debtors. The Debtors have concluded that the
Released Company Parties were not involved in any of the alleged
misconduct giving rise to the Retained Causes of Action. Rather
than perpetuate Mr. Coleman's alleged fraudulent schemes, the
Released Company Parties were instrumental in saving the Debtors'
business, preserving and rehabilitating the Debtors' reputation,
and preserving the jobs of the Debtors' approximately 130
employees.
The Debtor Release effectuates a release of claims that may be held
by the Debtors, the Post-Effective Date Debtors, and their Estates
against the Released Parties, to the extent such claims were not
sold pursuant to the Purchase Agreement. It is appropriate to
provide the Debtor Release to the Released Parties based on:
* An identity of interest between the Debtors and the Released
Parties. Each of the Released Parties, as a stakeholder and
critical participant in the Plan process, shares a common goal with
the Debtors in seeing the Plan succeed and would have been unlikely
to participate in the negotiations and compromises that led to the
ultimate formation of the Plan without the Debtor Release. Like the
Debtors, these parties seek to confirm the Plan and implement the
Restructuring Transactions.
* The substantial contributions provided by the Released
Parties pursuant to the Plan. Indeed, the Debtors have narrowly
tailored the scope of "Released Parties" to those parties who have
provided substantial contributions to the Plan. Each of the
Released Parties played an integral role in the formation of the
Plan and have expended time and resources analyzing and negotiating
the issues present in the Chapter 11 Cases to finalize the terms of
the Plan. Moreover, the Released Parties have expended time and
resources analyzing and negotiating the issues presented by the
Debtors' corporate history and the material barriers to the
resolution thereof. Without the contributions of the Released
Parties, the Plan and the Restructuring Transactions contemplated
herein would not be possible and these cases would have resulted in
a chapter 7 liquidation, which likely would have reduced potential
recoveries for Beneficiaries of the Liquidating Trust.
* The importance of the Debtor Release to the successful
resolution of the Chapter 11 Cases. Indeed, absent the Debtor
Release, it is unlikely the Released Parties would have agreed to
support the Plan and provide their substantial contributions to
make the Plan and the Restructuring Transactions contemplated
herein a possibility. Each of the Released Parties contributed
substantial value to the Chapter 11 Cases and the Plan and did so
with the understanding that they would receive releases from the
Debtors. In the absence of these parties' support, the Debtors
would not be in a position to confirm the Plan. The Debtor Release,
therefore, is essential to the successful resolution of the Chapter
11 Cases.
All Holders of Claims and Interests in Classes 1, 4, 6, 7, 8, and 9
will receive the Opt-In Form, attached as Exhibits 2-A and 3-A of
the Disclosure Statement Order, and all Holders of Claims in
Classes 2, 3, and 5 will be able to affirmatively check the "Opt
In" election box as part of the Ballots they will receive from the
Debtors, which were attached as Exhibit 4 of the Disclosure
Statement Order. Accordingly, to be subject to the Third-Party
Release, each Holder of a Clam or Interest must affirmatively
consent to the Third-Party Release by completing and returning the
Opt-In Form or Ballot, as applicable, to the Notice, Claims, and
Solicitation Agent. If a Holder of a Claim or Interest does not
timely complete and return the Opt-In Form or Ballot, as
applicable, to the Notice, Claims, and Solicitation Agent, then
such Holder's direct claims against the Released Parties, if any,
will remain unaffected by the Plan and the Confirmation Order.
Article XIII.E of the Plan contains an exculpation provision (the
"Exculpation Provision"). The Debtors believe that the Exculpation
Provision is appropriate under the circumstances of the Chapter 11
Cases, and narrowly tailored to parties actively participating in
the Chapter 11 Cases in good faith to support the Debtors' Estates
and their restructuring efforts. Indeed, the only parties that are
exculpated under the Plan are the Debtors, the Debtors'
Professionals, and the Debtors' current officers, directors,
managers, and employees who served in such capacity between the
Petition Date and the Effective Date, each of which provided
countless hours of service for the benefit of the Debtors' Estates
and their stakeholders throughout the Chapter 11 Cases. Moreover,
notwithstanding anything to the contrary in the Plan, no person or
entity shall be exculpated from any liability resulting from any
act or omission constituting actual fraud or gross negligence.
Class 2 consists of the Prepetition Lender Claims. The Prepetition
Lender Claims, including adequate protection claims held by the
Prepetition Lenders pursuant to the DIP Order, shall be Allowed in
an aggregate amount equal to $22,941,836.39 plus accrued interest
and all other fees, costs, expenses, premiums, and other amounts
provided for under the Prepetition Credit Agreement, in each case
to the extent Allowed, including under section 506 of the
Bankruptcy Code.
Each Holder of an Allowed Prepetition Lender Claim shall receive a
beneficial interest in the Liquidating Trust entitling such Holder
to (a) such Holder's Pro Rata share of the Prepetition Lender
Distribution Proceeds (if any). on account of the secured portion
of its Allowed Prepetition Lender Claim, including its Allowed
adequate protection claims, and, only after the foregoing
distributions have been made, (b) such Holder's Pro Rata share
(calculated based on the total aggregate amount of Allowed Claims
in Class 2, after reducing such amount dollar for dollar for the
amount of any Prepetition Lender Distribution Proceeds, and Class
5) of the Unsecured Claims Distribution Proceeds (if any).
Class 3 consists of all Other Secured Claims. Each Holder of an
Allowed Other Secured Claim that has an Allowed junior priority
adequate protection claim shall receive a beneficial interest in
the Liquidating Trust entitling such Holder to such Holder's Pro
Rata share of the Secured Claims Distribution Proceeds (if any). To
the extent Holders of Allowed Other Secured Claims do not have an
Allowed junior priority adequate protection claim, such Holders
shall have a deficiency claim that will be treated as an Unsecured
Claim and shall share pari passu with all other Holders of
Unsecured Claims in Class 5.
Class 5 consists of the Unsecured Claims. he Liquidating Trust
entitling such Holder to such Holder's Pro Rata share (calculated
based on the total aggregate amount of Allowed Claims in Class 2,
after reducing such amount dollar for dollar for the amount of any
Prepetition Lender Distribution Proceeds, and Class 5) of the
Unsecured Claims Distribution Proceeds (if any). Class 5 is
Impaired under the Plan. The allowed unsecured claims total
$1,459,776.08-$33,431,368.74. This Class will receive a
distribution of 0-100% of their allowed claims.
The Liquidating Trust Assets shall be used to fund the
distributions to Holders of Allowed Claims against the Debtors in
accordance with the treatment of such Claims provided pursuant to
the Plan and subject to the terms provided herein.
On or prior to the Effective Date, the Debtors, on their own behalf
and on behalf of the Beneficiaries, will execute the Liquidating
Trust Agreement and will take all other steps necessary to
establish the Liquidating Trust pursuant to the Liquidating Trust.
On the Effective Date, and in accordance with and pursuant to the
terms of the Plan, the Debtors will transfer to the Liquidating
Trust all of their rights, title, and interests in all of the
Liquidating Trust Assets.
The Confirmation Hearing has been scheduled for April 21, 2023 at
10:00 a.m. at the Bankruptcy Court, 824 North Market Street, 6th
Floor, Courtroom #2, Wilmington, Delaware 19801.
A full-text copy of the Amended Combined Joint Liquidating Plan and
Disclosure Statement dated March 9, 2023 is available at
https://bit.ly/3mTzjRW from PacerMonitor.com at no charge.
Counsel for Debtors:
Jeremy W. Ryan, Esq.
Potter Anderson & Corroon, LLP
1313 N. Market Street, 6th Floor
Wilmington, DE 19801
Telephone: (302) 984-6108
Facsimile: (302) 658-1192
Email: jryan@potteranderson.com
Mark R. Somerstein, Esq.
Lucas W. Brown, Esq.
Christine Joh, Esq.
Ropes & Gray LLP
1211 Avenue of the Americas
New York, NY 10036
Telephone: (617) 951-7474
Email: Mark.Somerstein@ropesgray.com
lucas.brown@ropesgray.com
christine.joh@ropesgray.com
- and -
ROPES & GRAY LLP
Ryan Preston Dahl, Esq.
Benjamin M. Rhode, Esq.
191 North Wacker Drive, 32nd Floor
Chicago, Illinois 60606
Telephone: (312) 845-1200
Facsimile: (312) 845-5500
E-mail: ryan.dahl@ropesgray.com
benjamin.rhode@ropesgray.com
About Vesta Holdings
Historically, Vesta Holdings, LLC and each of its affiliates
provided wealth advisory, risk management services, and insurance
brokerage services to individual and corporate clients across the
United States. In recent years, they have focused on growing their
insurance brokerage services business, which is primarily operated
under Summit Risk Advisors, LLC. Summit primarily concentrates on
property and casualty insurance offerings.
Vesta Holdings and its affiliates sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No.
22-11019) on Oct. 30, 2022. In the petitions signed by their chief
financial officer, Michael Hines, the Debtors disclosed between
$100 million and $500 million in both assets and liabilities.
Judge Laurie Selber Silverstein oversees the cases.
The Debtors tapped Ropes and Grapy, LLP and Potter Anderson &
Corroon, LLP as bankruptcy counsels; Province, LLC as financial
advisor; and Omni Agent Solutions, Inc. as claims, noticing and
administrative agent.
Colbeck Strategic Lending Offshore Mini-Master AIV, L.P., Colbeck
Strategic Lending II Master, L.P., CION Investment Corporation and
34th Street Funding, LLC, as DIP Lenders, are represented by Akin
Gump Strauss Hauer and Feld, LLP and Blank Rome, LLP.
VILLAGE OF FOREST PARK: Moody's Lowers Issuer Rating to Ba1
-----------------------------------------------------------
Moody's Investors Service has downgraded to Ba1 from Baa3 the
Village of Forest Park, IL's issuer and general obligation
unlimited tax (GOULT) ratings. The rating action applies to
approximately $2 million in outstanding GOULT debt. The outlook has
been revised to stable from negative.
RATINGS RATIONALE
The downgrade to Ba1 reflects the village's growing pension burden
and rising contribution costs that are pressuring governmental
operations. Despite annual increases, contributions to the
village's public safety pension plans remain below the state
statutory minimum, which puts stated shared revenue at risk of
interception. Operating reserves are expected to improve in fiscal
2023 from strong non-ad valorem tax receipts, however the village's
limited revenue raising ability from its non-home rule status and
rising fixed costs will hinder any material improvement. The rating
also incorporates the village's healthy liquidity in the water
fund, a low debt burden and growing tax base that supports solid
resident income and property wealth levels.
The Ba1 rating on the village's GOULT bonds is at the same level as
the issuer rating. The GOULT bonds are backed by the village's
pledge to levy a property tax unlimited as to rate and amount on
all taxable property to cover debt service.
RATING OUTLOOK
The stable outlook reflects Moody's view that the village's
liquidity across all funds will provide a buffer to possible
revenue disruptions over the next two years and that pension
contributions will remain below the state minimum requirements.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Contributions to the village's public safety pension
plans that meet the state minimum requirements
-- Moderation of long-term leverage and adjusted fixed costs
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Weakened fund balance or liquidity position
-- Further growth in long-term liabilities and fixed costs
-- Diversion of state revenue to pension funds that creates
additional operating pressure
LEGAL SECURITY
The village's GOULT debt is backed by its full faith and credit
pledge and a dedicated property tax unlimited as to rate and
amount.
PROFILE
The Village of Forest Park is non-home rule municipality located in
Cook County (A2 positive) approximately 10 miles west of downtown
Chicago (Baa3 stable), with an estimated population of roughly
14,500.
METHODOLOGY
The principal methodology used in these ratings was US Cities and
Counties Methodology published in November 2022.
VOLEL PROFESSIONAL: Court OKs Cash Collateral Access Thru April 6
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, authorized Volel Professional Pharmacist Association,
P.A. to use cash collateral on an interim basis, retroactive to
December 29, 2022.
The U.S. Small Business Administration, Cardinal Health 110, LLC as
Agent, AmerisourceBergen Drug Corp, ASD Specialty Healthcare, LLC,
Velocity Capital Group, and Corporation Service Company, as
Representative assert an interest in the Debtor's cash collateral.
The Debtor is permitted to use cash collateral to pay: (a) amounts
expressly authorized by the Court, including payments to the
Subchapter V Trustee fees; (b) the current and necessary expenses
set forth in the budget, plus an amount not to exceed 10% for each
line item; and (c) additional amounts as may be expressly approved
in writing by the Secured Creditors. The authorization will
continue until April 6, 2023.
As adequate protection, the Secured Creditors will have perfected
post-petition liens against cash collateral to the same extent and
with the same validity and priority as their pre-petition liens,
without the need to file or execute any document as may otherwise
be required under applicable non bankruptcy law.
As interim adequate protection the Debtor will pay Cardinal Health
$3,500 for the month of January 2023 and $12,500 for the month of
February 2023, payable on the 20th day of each month.
The Debtor will maintain insurance coverage for its property in
accordance with the obligations under the loan and security
documents with the Secured Creditors.
A continued hearing on the matter is set for April 6 at 2 p.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3JdYk1k from PacerMonitor.com.
The Debtor projects $92,500 in total expenses.
About Volel Professional Pharmacist Association
Volel Professional Pharmacist Association, P.A. operates a pharmacy
in Winter Haven, Florida. The Debtor sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No.
22-05123) on December 29, 2022. In the petition signed by Paul
Volel, Jr., president, the Debtor disclosed $504,659 in total
assets and $5,945,305 in total liabilities.
Judge Catherine Peek McEwen oversees the case.
Buddy D. Ford, Esq., at Buddy D. Ford, P.A., is the Debtor's legal
counsel.
WAVECREST ENTERPRISES: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: Wavecrest Enterprises LLC
19 Wavecrest Ave, Suite 10
Venice, CA 90291
Business Description: Wavecrest Enterprises is primarily engaged
in renting and leasing real estate
properties.
Chapter 11 Petition Date: March 14, 2023
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-11438
Judge: Hon. Julia W. Brand
Debtor's Counsel: Thomas B. Ure, Esq.
URE LAW FIRM
8280 Florence Avenue, Suite 200
Downey, CA 90240
Tel: 213-202-6070
Fax: 213-202-6075
Email: tom@urelawfirm.com
Total Assets: $6,505,000
Total Liabilities: $4,921,659
The petition was signed by Raul Hinojosa as manager.
The Debtor stated it has no creditors holding unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/YFZ2XUY/Wavecrest_Enterprises_LLC__cacbke-23-11438__0001.0.pdf?mcid=tGE4TAMA
WPI WATER: Seeks Cash Collateral Access
---------------------------------------
WPI Water Resources Inc. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of California to use cash collateral
and provide adequate protection to the U.S. Small Business
Administration and the State of California Employment Development
Department.
The Debtor's pre-bankruptcy debt included secured claims of
$790,861, priority unsecured claims of $81,466, and general
unsecured claims of $1,609,393. The Debtor's secured debt includes
debt owed to the SBA and the EDD. The SBA's and the EDD's liens
encumber all of the Debtor's personal property including Debtor's
money on deposit and account receivable.
The Debtor's assets had a value of $569,788 when the Debtor filed
its Chapter 11 case, according to the Debtor's Schedules of Assets
and Liabilities. The Debtor's assets included the money on deposit
and accounts receivable described above in Paragraph 5 and an
"Employee Retention Tax Credit" of $378,000. The Debtor does not
know when, or if, it will receive the Employee Retention Tax Credit
and, for that reason, the Employee Retention Tax Credit is not
included in the SBA's or the EDD's collateral or the subject of the
Motion.
The Debtor's gross revenue decreased by more than $900,000 from
2021 to 2022.
The Debtor will use all of the cash collateral to pay payroll and
rent, and make adequate protection payments to the SBA and EDD. The
Debtor's payroll is about $40,000 per month and its rent is $1,000
per month; while, the adequate protection payments to the SBA and
the EDD will total $2,000 per month.
As adequate protection, the Debtor will operate its business,
generate income, and give replacement liens on post-petition assets
of the like kind and priority to the SBA and the EDD. Debtor will
make payments of $1,000 per month to the SBA and $1,000 per month
to the EDD, pending confirmation of a Plan of Reorganization.
A hearing on the matter is set for April 5, 2023 at 10:30 a.m.
A copy of the motion is available at https://bit.ly/3ZRsqi6 from
PacerMonitor.com.
About WPI Water Resources
WPI Water owns and operates a water well drilling and repair
business in Tulare County, California. WPI Water filed Chapter 11
Petition (Bankr. E.D. Cal. Case No. 23-10219) on February 6, 2023.
The Hon. Rene Lastreto II oversees the case. Leonard K. Welsh, Esq.
of the Law Office of Leonard K. Welsh, is the Debtor's Counsel.
In the petition signed by Amanda Jensen, chief executive officer,
the Debtor disclosed $72,631 in assets as of Feb. 6, 2023 and
$1,186,605 in liabilities as of Feb. 6, 2023.
WW INT'L: Moody's Cuts CFR to B3 & Alters Outlook to Stable
-----------------------------------------------------------
Moody's Investors Service, Inc. downgraded WW International, Inc.'s
(""WW", dba "WeightWatchers") corporate family rating to B3 from
B1, probability of default rating to B3-PD from B1-PD and the
senior secured instrument ratings (the $175 million revolving
credit facility expiring 2026, $945 million term loan maturing 2028
and $500 million notes due 2029) to B3 from B1. WW's speculative
grade liquidity rating was downgraded to SGL-2 from SGL-1. The
outlook was revised to stable from negative.
On March 6, WW announced that 2022 revenue and year-end subscriber
counts both declined by about 14% from 2021 levels. In addition, WW
said that it had agreed to purchase Weekend Health, Inc.
("Sequence"), a digital health platform for clinical weight
management, including tele-health services supporting prescription
weight management medications, for $106 million (net of cash
acquired). WW plans to fund the acquisition with about $40 million
of cash at closing, $35 million of newly-issued WW shares and $30
million of cash payable over the next two years. The purchase is
expected to close before June 30.
"The downgrades reflect Moody's anticipation for very high
financial leverage, modest interest coverage and limited free cash
flow unless the company can reverse subscriber declines, which
could take two years or more, as well as Moody's concern that cash
used to fund the Sequence acquisition and limited access to the
revolver due to the springing financial covenant have reduced
available liquidity," said Edmond DeForest, Moody's Senior Vice
President.
RATINGS RATIONALE
The downgrade of the CFR to B3 from B1 reflects the uncertainty
surrounding WW's ability to return to subscriber, revenue and
profit growth. Moody's anticipates less than $1 billion of revenue
in 2023. WW is attempting to stem subscriber and revenue losses
through new products and programs, including by offering
prescription weight loss medications with the acquisition of
Sequence, more effective marketing investments and an emphasis on
cost control. Several years of double-digit-percentage rate revenue
declines have led to a deterioration in profit rates and credit
metrics. Profitability margins will remain pressured, with only 15%
EBITA margins expected, well below the historical range of around
20% from 2019 to 2021. The anticipated decline in revenue will
cause debt to EBITDA to rise and remain above 8.0 times and EBITA
to interest to stay below 1.5 times over the next 12 to 18 months.
All financial metrics cited reflect Moody's standard adjustments.
WW's market leading scale and high brand recognition support the
credit ratings. The weight management services industry is
competitive, and Moody's anticipates consumer preferences will
continue to evolve and could drive subscriber and revenue
volatility. Although WW has a history of boom and bust cycles, it
has repeatedly adapted to the technological and diet trend changes
it has faced in the past. Moody's believe that WW, given its
history of effective marketing, will continue to find ways to
recruit new subscribers. Despite declines in subscriber over the
last three years, subscriber retention is strong, at about 10
months. The total subscriber count at year-end 2022 was only 3.5
million, down from 4.2 million and 4.4 million at year-end 2021 and
2020, respectively. Almost all of the decline stemmed from a loss
in digital subscribers, while studio subscribers remained mostly
steady year-over-year. Digital subscriber revenue constituted over
63% of total sales in 2022.
The company does not face a major term debt maturity until 2028,
when the term loan is due, affording WW ample time to implement its
strategies aimed at returning to subscriber and revenue growth.
However, given the large amount of debt and the low (compared to
current market) interest rates on both the term loan and notes,
Moody's notes that WW might not be able to refinance its debt on
current market terms if it needed to do so.
WW's good liquidity profile, as reflected in the SGL-2 rating,
continues to support the credit. The company has reported cash
balances for the last several quarters that have averaged more than
$150 million. Cash stood at $138 million at the end of 2022, pro
forma for cash payments due in 2023 to the sellers of Sequence.
Moody's expects at least $30 million of free cash flow in 2023,
representing about 2% of debt. The company may use cash to prepay
debt in an effort to attain its long-term net leverage (as defined
by the company) target of 3.5 times. Moody's expects that the
company would not be in compliance with the Consolidated First Lien
Leverage Ratio governing availability under its $175 million
revolver (as defined in the facility agreement) if it were measured
over the next 12 to 15 months. The covenant is measured if there
are revolving loans outstanding of more than $61.25 million, or 35%
of the facility amount, outstanding on any fiscal quarter end date.
Therefore, Moody's anticipates revolver availability will be
limited to $61.25 million.
The downgrade of the senior secured instrument ratings to B3 from
B1 reflects the downgrade of the PDR to B3-PD from B1-PD. Since all
of WW's debt is pari passu, first-lien and senior secured, the
instrument ratings for the revolver, term loan, and notes are the
same as the company's B3 CFR. The rated debts are secured by a
first lien on: i) 100% of the capital stock of all direct and
indirect domestic subsidiaries; ii) 65% of the capital stock of
direct material foreign subsidiaries; and iii) all material
property and assets of WW and each direct and indirect U.S.
subsidiary. Additionally, the facilities are guaranteed by all
(current and future wholly-owned material) direct and indirect
domestic subsidiaries of the company.
The stable outlook reflects Moody's anticipation of a return to
modest subscriber, revenue and profit growth over the next two
years, with debt to EBITDA anticipated to remain above 8.0 times
until 2024, while the company sustains good liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
There could be a ratings upgrade if Moody's anticipates: 1) some
subscriber, revenue and profit growth; 2) debt to EBITDA will
remain below 7.0 times, 3) free cash flow around 2% of debt; and 4)
the company will maintain a good iquidity.
A downgrade may result if Moody's expects 1) sustained subscriber
or revenue declines; 2) debt to EBITDA will remain above 8.0 times;
3) negative cash flow; 4) more aggressive financial strategies,
including debt-funded acquisitions or shareholder returns; or 5) if
liquidity deteriorates substantially.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Moody's took the following actions and made the following outlook
statement:
Issuer: WW International, Inc.
Corporate Family Rating, Downgraded to B3 from B1
Probability of Default Rating, Downgraded to B3-PD from B1-PD
Speculative Grade Liquidity Rating, Downgraded to SGL-2 from
SGL-1
Senior Secured 1st Lien Bank Credit Facility, Downgraded to B3
(LGD3) from B1 (LGD3)
Senior Secured 1st Lien Regular Bond/Debenture, Downgraded to B3
(LGD3) from B1 (LGD3)
Outlook, Changed To Stable From Negative
WW International, Inc. (NASDAQ:WW), headquartered in New York City,
is a provider of weight management services. Moody's expects 2023
revenue of approaching $1 billion.
[*] 11 Digitally Native Retailers at Risk of Bankruptcy
-------------------------------------------------------
Caroline Jansen of RetailDive reports 11 digitally native retailers
at risk of bankruptcy. These companies were meant to be disruptors
to the industry. But as macroeconomic pressures intensify and
capital gets harder to find, they may be put to their biggest
test.
The e-commerce darlings that were meant to save retail may soon
find themselves in bankruptcy court.
Internet and direct marketing retailers had the highest median
market signal one-year probability of default of any sector at
8.1%, according to S&P Global Market Intelligence data and analysis
from February. Other sectors included home furnishings retail;
apparel, accessories and luxury goods; department stores; and
consumer electronics.
Already this year Forma Brands — the parent company to beauty
brands Morphe, Bad Habit, Jaclyn Cosmetics and Playa Beauty —
filed for Chapter 11. Aside from bankruptcy, digitally native
retailers have needed to close stores and lay off staff as a way to
cut costs amid economic pressure.
"These business models were supposed to be the major
disruptors. And were the major disruptors for a long time. But if
you add the inflationary challenges — which means their costs are
going up and upwards in their supply chain, costs are going up —
and you add to that that they are not bricks and mortar so
everything is done by shipping, and you throw in multi-year supply
chain disruptions, that’s a real tough combination," said James
Gellert, CEO of financial analysis firm RapidRatings.
And while retailers are facing challenges like massive supply chain
disruption, and consumers are pulling back more on discretionary
purchases amid inflation and other economic pressure, the problems
many e-commerce companies are experiencing predate the pandemic.
Take Wayfair for example. The retailer, by design, sells a broad
range of offerings in an effort to attract a wide consumer base.
The problem is, so does Overstock. And Amazon. And Target. And
Walmart. And a large swath of other major retailers.
Retailers that sell a lot of brands and don't provide a
differentiated product offering are primarily competing on price by
providing customers with the biggest deals. Those companies,
especially those operating primarily online, face challenges when
it comes to both acquiring and retaining customers.
"Those retail models are powerful in that they have diversified
offerings, and they are not overweighted to consumer preference for
one individual brand. But the flip side of that is that there is no
brand loyalty to them specifically," Gellert said.
When seeking to attract consumers on the endless void of the
internet where competition is brimming, customer acquisition costs
quickly add up, sometimes coming at the expense of reaching
profitability. Pure-play e-commerce retailers are twice as likely
as retailers who have stores to report being unprofitable,
according to a 2022 survey conducted by Ipsos for Publicis Sapient
and Salesforce. Pure-play e-commerce retailers are also nearly
twice as likely to report they are struggling to make necessary
investments to improve profitability.
"Identifying, capturing at a reasonable cost, and sustaining a
customer base is a challenge," Gellert said. "A lot of the online
retail companies have to spend so much to capture consumers and it
is very hard to hold on to those consumers unless they have a truly
unique product."
This is why several digitally native companies have since taken
their products offline and opened stores. Physical retail can serve
as an additional marketing channel to help acquire customers and
can diversify brands as competition grows. Allbirds, Warby Parker,
Casper and even Wayfair and The RealReal have turned to brick and
mortar.
But stores can also help brands improve the speed of fulfillment.
Companies like Amazon and Target have normalized fulfilling online
orders quickly, whether through fast delivery or store pick-up
options. For smaller retailers that don't have access to the same
resources as those companies, there's growing pressure from
consumers to meet those expectations around fast and free
fulfillment.
"I think all consumer brands are struggling with this and
particularly those that don't have the balance sheets to stockpile
inventory and have the brick-and-mortar places for people to go in
and buy that inventory," Gellert said.
As digitally native retailers work to address existing problems and
face newer challenges -- like higher production costs, a pullback
in consumer spending and increased competition -- having cash
available will set apart those who survive and those who fall.
"It's going to come down to: Who's got the ability to raise money
and has the liquidity to survive this difficult time? The companies
that have access to capital are going to survive. The companies
that have less access to capital, or no access to capital, and/or
are going to be paying a lot more for their capital as rates have
risen — those are the companies that we're going to see either
fail, or need to be purchased, or have some major event that goes
on that will change the nature of your business," Gellert said.
Companies that have a 9.99%-50% chance of bankruptcy
Online retailers that carry a FRISK score of 1, the highest risk,
as of March 6, 2023.
Companies that have a 4%-9.99% chance of bankruptcy
Online retailers that carry a FRISK score of 2 as of March 6,
2023.
According to data from CreditRiskMonitor, 11 online retailers have
an elevated risk of filing for bankruptcy in the next 12 months. Of
those retailers, six have a FRISK score of 1, the highest risk,
with a 10% to 50% chance of filing for bankruptcy. The other five
retailers carry a FRISK score of 2, representing a 4% to 10% chance
of filing for bankruptcy in the next 12 months.
Many of those retailers outlined above also carry a high or very
high probability of default over the next 12 months, according to
RapidRatings data, which rates companies based on their near-term
and medium-term financial health. The firm tracks two key
indicators: the Financial Health Rating, which is the primary risk
measurement indicating the risk of default in 12 months, and the
Core Health Score, which measures the core financial health of a
company and reflects long-term sustainability and operational
efficiency. The metrics are based on a scale of 100, with 100 being
the best and 0 being the worst.
These companies represent a high or very high risk of default in
the next 12 months
The Financial Health Ratings and Core Health Scores, on a scale of
0 to 100, of online retailers.
Here's a closer look at some of the digitally native retailers at
risk:
* Wayfair. Wayfair has grown in popularity as shopping online
for home goods has become more widespread. Wayfair stood to
benefit in the early days of the pandemic as consumers both avoided
unnecessary trips to stores and sought out goods to make their
homes more comfortable. And it did. 2020 marked the first year the
online retailer was able to turn a profit since going public in
2014. But that success was short lived, and Wayfair reverted back
to its pattern of losses as consumers shifted spending away from
the home to other areas, like entertainment and dining out as the
economy opened up more broadly. In 2022, the retailer's net loss
topped $1.3 billion as its customer base shrunk to 22.1 million,
down 19% from the year prior. This came as full-year net revenue
declined 11% year over year to $12.2 billion.
* Grove Collaborative: Sustainable personal care company Grove
Collaborative started out by selling other brands on its website,
but now sees most of its growth stemming from its own private
labels, CEO Stuart Landesberg said in late 2021. Grove
Collaborative entered the public markets through a de-SPAC
transaction with Richard Branson's special purpose acquisition
company amid a wave of IPOs from other digitally native companies.
But like other digitally native companies, the retailer has
struggled with profitability. At the end of fiscal 2021, Grove's
net revenue inched up 5.3% to $383.7 million, but its operating
loss grew by nearly 94% and its net loss increased by 88%. Late
last 2022, the company received a delisting notice from the New
York Stock Exchange that it was no longer in compliance with its
continued listing criteria, which requires companies to have an
average closing share price of at least $1.00 over a 30-day trading
period. Following tough financial performance in the public
markets, Grove in December refinanced its debt with a $72 million
four-year term loan. The loan, which matures in 2026, was used to
help bolster the company's profitability, the company said at the
time.
* Boxed: Online retailer Boxed, which focuses on selling
bulk-sized pantry items, was founded to simplify the bulk-buying
experience "without membership fees," a dig seemingly directed at
club retail giants like Costco, BJ's and Walmart-owned Sam's Club.
The retailer went public via special purpose acquisition company in
2021, but has faced financial turmoil over the past year.
In October 2022, Boxed received a delisting warning from the New
York Stock Exchange for not being in compliance with the
exchange’s listing criteria because its stock price had been less
than $1.00 over a 30-day trading period. A month later, the
retailer received another delisting warning from NYSE for failing
to comply with the exchange’s listing requirements of having a
market cap above $50 million over a 30-day trading period. Early
this 2023, Boxed announced it was exploring "strategic
alternatives," which could include a sale of the company. The
company has been facing declining liquidity, reporting cash and
cash equivalents of $32.1 million as of September 30, 2023, down
from $105 million in the year-ago period.
* Redbubble: Redbubble, which calls itself the "world's largest
marketplace for independent artists," became popular for selling
things like stickers and phone cases. But the company's financial
health has taken a turn for the worse over the past year, 2022.
The company's financial health rating has moved from a "very low
risk" in 2021 to a "high risk" in 2022, according to RapidRatings.
Redbubble’s core health score -- a measure of medium-term
sustainability -- went from a 74 in 2021 to a 22 in 2022.
RapidRatings said that while the brand has some strength in
leverage, it demonstrates weakness in liquidity and earnings
performance. "Significant improvement in one or more of these areas
is imperative," the firm said. In fiscal 2022, Redbubble reported
marketplace revenue fell 13% from the prior year to $483 million
and its net profit after taxes swung to a loss of $25 million from
a profit of $31 million in 2021. The company had $74.9 million in
cash as of September 30, 2022 compared to $89.1 million in June
2022.
* The RealReal: Luxury reseller The RealReal has landed on past
iterations of Retail Dive bankruptcy watchlists before. The
company, like many digitally native retailers that have filed for
IPOs in recent years, made its public trading debut despite
operating unprofitably. In its most recent quarter, the retailer
reported revenue grew 10% year over year to $160 million as gross
merchandise value rose 13% to $493 million. And while the company
narrowed its loss slightly, it’s still operating in the red,
reporting a net loss of $39 million and an operating loss of $38
million. At the end of its fiscal year, the company had $294
million in cash and cash equivalents compared to $418 million at
the end of 2021. The RealReal brought on Neiman Marcus veteran
John Koryl as its new CEO in January 2023, replacing founder Julie
Wainwright, who resigned from the position in June 2022. The
company has also joined a growing list of retailers making job
cuts, announcing in February 2023 it laid off about 230 employees,
or 7% of its workforce. This reverses a move The RealReal made in
2022 to add staff after labor shortages hurt the business.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
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