/raid1/www/Hosts/bankrupt/TCR_Public/230320.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, March 20, 2023, Vol. 27, No. 78
Headlines
1255 LLC: U.S. Trustee Unable to Appoint Committee
1280 MIDDLESEX: Unsecured Creditors Unimpaired in Sale Plan
152 WEST PICO: Case Summary & Three Unsecured Creditors
839 E MINORKA: April 12 Disclosure Statement Hearing Set
960 FRANKLIN: Unsecureds to be Paid in Full with Interest in Plan
ACASTI PHARMA: Delists Voluntarily From TSX Venture Exchange
ALL SAINTS EPISCOPAL: Seeks to Extend Plan Exclusivity to June 20
ANJU SOFTWARE: Barings Private Marks $1.4M Loan at 18% Off
ANYWHERE REAL: Moody's Affirms B1 CFR & Alters Outlook to Negative
APPLE VALLEY, MN: S&P Affirms 'BB-(sf)' Rating on 2016A Rev. Bonds
ASTRALABS INC: Case Summary & 20 Largest Unsecured Creditors
BED BATH: Announces Meeting to Approve Reverse Stock Split
BETTER NUTRITIONALS: Seeks to Hire 'Ordinary Course' Professionals
BIG VILLAGE: CPX Interactive Steps Down as Committee Member
BLACK DIAMOND: Exclusivity Period Extended to April 22
BLINK CHARGING: Incurs $91.6 Million Net Loss in 2022
BRP GROUP: S&P Downgrades ICR to 'B-' On Elevated Leverage
CARIBBEAN BANANA: Unsecureds Will Get 100% of Claims in 60 Months
CAVALIER PHARMACY: Bid for TRO and Preliminary Injunction Denied
CINEWORLD GROUP: Seeks to Extend Plan Exclusivity to June 5
CLASSICAL CHARTER: Moody's Lowers Rating on Revenue Bonds to Ba2
CORE SCIENTIFIC: April 14 Claims Filing Deadline Set
CORIZON HEALTH: Judge Stayed Proceedings in Hunter's Lawsuit
CORIZON HEALTH: Move to Withdraw as Defendant's Counsel Denied
CORNERSTONE ONSITE: Case Summary & 20 Largest Unsecured Creditors
COUNTER CORTE: Unsecureds Will Get 7.55%-8.16% in Subchapter V Plan
CSI COMPRESSCO: Incurs $22.1 Million Net Loss in 2022
DIAMOND SPORTS: Moody's Lowers CFR to 'C' Amid Bankruptcy Filing
DYNAMIC TECHNOLOGIES: Obtains CCAA Stay Order; FTI as Monitor
EVERNEST HOLDINGS: Amends Several Secured Claims Pay Details
FAMOUS ANTHONY'S: Reaches Settlement with Cincinnati Insurance
FAMOUS ANTHONY'S: Resolves Personal Injury Unsecured Claims Issues
FIRST REPUBLIC BANK: Receives $30 Billion Lifeline from 11 Banks
FLOSS BAR: Creditors to Get Proceeds From Liquidation
FRANCO'S PAVING: Voluntary Chapter 11 Case Summary
FREEDOM DRAIN: Unsecured Creditors to Recover 1% to 30% in Plan
FTX TRADING: Files Schedules, Statements of Financial Affairs
GAINWELL ACQUISITION: Fitch Alters Outlook on B LongTerm IDR to Neg
GEOSTELLAR INC: Dismissal of Adversary Case Affirmed on Appeal
GOLDEN SEAHORSE: Judge Bentley Approves Agreement With HHC
GREAT LAKES: Moody's Lowers CFR to B2 & Alters Outlook to Negative
GWG HOLDINGS: Bid to Strike Affirmative Defenses Granted in Part
HANESBRANDS INC: Moody's Retains Ba3 CFR, Outlook Negative
HARRIS ENERGY: Case Summary & 20 Largest Unsecured Creditors
HOLLISTER CONSTRUCTION: FM May File Counterclaims for Recoupment
IEH AUTOPARTS: Gets Court's Okay to Sell All Assets
INNOVATIVE CHEMICAL: S&P Downgrades ICR to 'CCC+' on Divestiture
JADEX INC: Moody's Lowers CFR to B3 & Alters Outlook to Stable
JAX SERVICE: Unsecureds Will Get 5% of Claims in 60 Months
KBK ENTERPRISES: Reaches Settlement with Cincinnati Insurance
M & S TRUCKING: Case Summary & 18 Unsecured Creditors
MERCY HOSPITAL: Moody's Lowers Rating on Revenue Bonds to Caa1
MIRAGE INTERNATIONAL: Taps Blackwood Law Firm as Co-Counsel
MIRAGE INTERNATIONAL: Taps Hammond Law Firm as Bankruptcy Counsel
MISS BRENDA: Voluntary Chapter 11 Case Summary
MOUNTAIN EXPRESS: Case Summary & 40 Largest Unsecured Creditors
NATURE COAST: Unsecureds to be Paid in Full in 12 Months
NIELSEN & BAINBRIDGE: Affiliates Tap Quinn Emanuel as Legal Counsel
NORTHERN MARIANAS CNMI: Fitch Affirms BB on 1998A & 2005A Bonds
PAPA JOHN'S: Moody's Affirms Ba3 CFR & Alters Outlook to Negative
PURE GOLD: Announces Management Departures, CCAA Stay Extended
R1 HOLDINGS: Barings Capital Marks $236,000 Loan at 15% Off
RANDYS HOLDINGS: Barings Capital Marks $220,000 Loan at 19% Off
REALMARK MARINA: Unsecureds to Get Share of Income for 3 Years
SAFETY PRODUCTS: Barings Capital Marks $143,000 Loan at 24% Off
SAMARITAN MEDICAL CENTER: S&P Affirms 'BB' Rating on Revenue Bonds
SEA WEST: Case Summary & One Unsecured Creditor
SORRENTO THERAPEUTICS: $125M NantPharma Arbitration Award Confirmed
SOURCEWATER INC: Case Summary & 20 Largest Unsecured Creditors
SOUTHEASTHEALTH, MO: S&P Lowers Revenue Bonds LT Rating to 'BB-'
SUMMIT PUBLIC SCHOOLS: Moody's Cuts 2017 Rev. Bonds Rating to Ba3
SVB FINANCIAL: Files Voluntary Chapter 11 Bankruptcy Petition
SVB FINANCIAL: Voluntary Chapter 11 Case Summary
VANTAGE DRILLING: S&P Upgrades ICR to 'CCC+' on Improved Liquidity
VBI VACCINES: Incurs $113.3 Million Net Loss in 2022
VIAD CORP: Moody's Ups CFR & Senior Secured First Lien Debt to B2
VILLAS OF COCOA: Seeks to Extend Plan Exclusivity to June 30
VISIONARY LABELS: Case Summary & 20 Largest Unsecured Creditors
VOYAGER DIGITAL: Judge Wiles Confirms Plan of Reorganization
WOODLAND FOOD: Barings Capital Marks $80,000 Loan at 25% Off
[*] April 11 Auction Scheduled for Englewood Commercial Property
*********
1255 LLC: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of 1255, LLC, according to court dockets.
About 1255 LLC
1255, LLC sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. S.D. Fla. Case No. 23-11116) on Feb. 13, 2023, with as much
as $1 million in both assets and liabilities. Judge Robert A. Mark
oversees the case.
Joel M. Aresty P.A. is the Debtor's legal counsel.
1280 MIDDLESEX: Unsecured Creditors Unimpaired in Sale Plan
-----------------------------------------------------------
1280 Middlesex Street LLC, submitted a Second Amended Disclosure
Statement describing its Amended Plan of Reorganization dated March
14, 2023.
The Debtor intended to utilize this Chapter 11 case to provide it
with time to reorganize and to repay the Debtor's obligations,
including tax arrears. The Debtor sold the Property at a private
sale to fund its Plan. The proceeds of said sale were more than
sufficient to cover all creditor liability (some at closing and one
through the Plan). It is Debtor's intention that the Plan to be
proposed, cure all arrearages and pay the secured and priority
unsecured creditors a 100% of their claims.
The Plan proposes to pay creditors of the Debtor from the proceeds
of the sale of the Property. This Plan provides for 2 classes of
secured claims, 1 class of priority claims, and 1 class of general
unsecured claims.
The Plan essentially pays all secured and unsecured creditors 100%
of their allowed claims. Administrative claims will be paid from
the balance in the DIP account after payment has been made to
Classes III and IV. The sale of the Property has generated
sufficient revenue to pay the secured and unsecured creditors 100%
of their claims, in addition to Administrative claims.
Administrative claims for professional services (i.e. attorney or
accountant's services) require Bankruptcy Court approval. These
claims will be paid in full only after the entry of orders allowing
those claims after notice and hearing. The estimated final requests
are as follows: Mestone & Associates, LLC ($16,000.00); and Pamela
K. Katsiris ($1,500.00).
Counsel to the Debtor will ensure that Classes III and IV claims,
in addition to the administrative claim for the Tax Return
preparer, are paid prior to Debtor's Counsel's fees being paid and
counsel will ensure that his fees do not impair payment to Classes
III and IV and the Administrative Claim of the Tax Return
Preparer.
Class IV consists of the holders of all general unsecured claims
against the Debtor. Included in this Class are all claims that are
not included in Class I through III. The Debtor estimates that the
Class IV unsecured claims to be paid under this Plan are
approximately $30.00. The Class IV creditors will be paid 100%
distribution on the Effective Date of the Plan. This Class is not
impaired and, therefore, not entitled to vote.
The Debtor no longer has any equity ownership in any estate
property as the Property was sold in accordance with the sale Order
issued by the Bankruptcy Court prior to the filing of this Amended
Chapter 11 Plan.
The Debtor has concluded that the sale of the Property was in the
best interest of the secured and unsecured creditors because, based
on the sales price, most creditors were paid immediately upon sale
with only one remaining to be paid through the Plan. By selling the
Property, the Debtor generated sufficient revenue to pay not only
the secured and unsecured creditors100%, but also pay
administrative claims as well.
A full-text copy of the Second Amended Disclosure Statement dated
March 14, 2023 is available at https://bit.ly/3yJo7tL from
PacerMonitor.com at no charge.
The Debtor's attorney:
Richard A. Mestone, Esq.
MESTONE & ASSOCIATES LLC
435 Newbury Street, Suite 217
Danvers, MA 01923
Tel: (617) 381-6700
E-mail: richard.mestone@mestoneassociatesllc.com
About 1280 Middlesex Street
1280 Middlesex Street LLC is a Massachusetts Limited Liability
Company organized on July 24, 2021. The LLC has a 100% interest in
the real estate located at 1280 Middlesex Street and 6 Livingston
Ave, Lowell, MA 01851. The members and managers of the LLC are
Marc Karibian and John Faneros.
1280 Middlesex Street LLC filed a Chapter 11 petition (Bankr. D.
Mass. Case No. 22 40303) on April 25, 2022. The Debtor is
represented by Richard A. Mestone, Esq. of MESTONE & ASSOCIATES
LLC.
152 WEST PICO: Case Summary & Three Unsecured Creditors
-------------------------------------------------------
Debtor: 152 West Pico, LLC
152 West Pico Blvd
Los Angeles, CA 90015
Business Description: The Debtor owns a property located at
152 West Pico Blvd Los Angeles, CA,
valued at $8.52 million (based on comparable
sales valuation).
Chapter 11 Petition Date: March 16, 2023
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-11537
Judge: Hon. Sandra R. Klein
Debtor's Counsel: Onyinye N. Anyama, Esq.
ANYAMA LAW FIRM, A PROFESSIONAL CORPORATION
18000 Studebaker Road
Suite 325
Cerritos, CA 90703
Tel: 562-645-4500
Fax: 562-645-4494
Email: info@anyamalaw.com
Total Assets: $8,519,000
Total Liabilities: $6,475,215
The petition was signed by Payam Ebrahimian as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's three unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/5KRCGPA/152_WEST_PICO_LLC__cacbke-23-11537__0001.0.pdf?mcid=tGE4TAMA
839 E MINORKA: April 12 Disclosure Statement Hearing Set
--------------------------------------------------------
Judge Scott H. Gan of the U.S. Bankruptcy Court for the District of
Arizona has entered an order within which April 12, 2023 at 2:00
p.m. is the hearing to consider the approval of the Disclosure
Statement of 839 E Minorka Partners, LLC.
Judge Gan further ordered that April 5, 2023 is the deadline to
file and serve a written objection to the Disclosure Statement.
A copy of the order dated March 13, 2023 is available at
https://bit.ly/3ySnzBy from PacerMonitor.com at no charge.
Attorney for the Debtor:
Bryan W. Goodman, Esq.
GOODMAN & GOODMAN, PLC
7473 E. Tanque Verde Rd
Tucson, AZ 85715
Telephone: 520-886-5631
E-mail: bwg@goodmanadvisor.com
About 839 E Minorka Partners
839 E Minorka Partners, LLC, is a single asset real estate company
whose sole member is Community Partners in Housing, an Arizona
Non-Profit. The company's sole asset is the building and land
located at 839 E. Minorka Road, Tucson, Arizona 85706.
The Property is subject to a deed of trust in favor of Bank of
America, which secures payment under a promissory note dated
December 30, 2005 in the original principal amount of $93,571. The
Note was in default for failure to pay the outstanding balance due
on maturity, and a trustee's sale was set for May 24, 2022.
To stop the trustee's sale, 839 E Minorka Partners filed a Chapter
11 bankruptcy petition (Bankr. D. Ariz. Case No. 22-bk-03299) on
May 24, 2022. The Debtor is represented by GOODMAN & GOODMAN, PLC.
960 FRANKLIN: Unsecureds to be Paid in Full with Interest in Plan
-----------------------------------------------------------------
960 Franklin Owner, LLC, filed with the U.S. Bankruptcy Court for
the Eastern District of New York a Disclosure Statement for Joint
Plan of Reorganization dated March 14, 2023.
The Debtor is a limited liability company formed to acquire a 51%
membership interest in 960 Franklin LLC, with an obligation to
purchase the remaining interests.
The Property at issue is collectively the real properties and
improvements and all other assets on the premises designated at
Block 1192, Lots 41 and 46 in Kings County, New York, and premises
designated as Block 1192, Lot 40, in Kings County, New York.
Agreements were entered by the Debtor and the Hagler Parties
memorializing the arrangement, and closing dates were fixed. The
Debtor, pursuant to the series of documents, had arranged for
financing, but as contended, the financing fell through, and the
Debtor was unable to close. Simultaneously with this transaction,
960 Franklin LLC was to purchase the Property and did in fact
acquire the Property. The Debtor later filed this case to obtain
additional time to close on the membership transaction.
The implementation of the Plan is based on the appointment of a
Plan Administrator who will be empowered to (i) execute a 99-year
ground lease of the Property with Franklin Plaza II LLC post
confirmation, (ii) encumber or authorize Franklin Plaza II LLC to
encumber the ground lease with the Leasehold Mortgage, (iii)
encumber of the Property with the Property Mortgage, and (iv) the
subsequent transfer of the Property subject to the ground lease.
Upon confirmation of the Joint Plan, the Debtor's beneficial 51%
membership interest in 960 Franklin shall be irrevocably assigned
to the Plan Administrator and held by the Plan Administrator in
escrow for the purposes of either (i) selling the Property at
Hagler's direction, or (ii) assigning the Debtor's beneficial 51%
ownership interest in 960 Franklin to Hagler or his designee.
The Plan Administrator shall release the beneficial 51% membership
interest to either (x) the purchaser of the Property with the sale
proceeds to be paid to Hagler (or his designee) upon the closing of
the sale of the Property or (y) Hagler (or his designee) if the
Property is not sold within one year of the confirmation of the
Joint Plan. The Hagler Parties shall fund to the Plan Administrator
on the Effective Date the sums necessary to pay the claims of the
general unsecured creditors in accordance with the terms of the
Plan.
Class 3 consists of General Unsecured Claims against the Debtor.
Unless a holder of an Allowed General Unsecured Claim has agreed to
less favorable treatment of such Claim, each such holder shall
receive payment in full with interest at the federal judgment rate
on the Effective Date. The Hagler Parties shall provide the Plan
Administrator with up to $124,000 plus applicable interest at the
Federal Rate five business days before the Confirmation Hearing to
pay the Allowed Class 3 General Unsecured Claims. Class 3 is
Unimpaired.
Class 4 consists of Existing Equity Interests in the Debtor.
Existing Equity Interests in Class 4 have consented to the terms of
the Plan and will receive a payment of $100,000 constituting a
partial return of its equity and receive no other distribution
under the Plan. Class 4 is Unimpaired and is conclusively presumed
to have accepted the Plan pursuant to the Restructuring Support
Agreement.
The Debtor, the Hagler Parties along with Franklin Plaza II LLC and
16972 Holdings LLC, the purported beneficial owner of the Debtor,
entered into a Restructuring Support Agreement, which was a global
resolution of the outstanding dispute.
The Restructuring Transactions are based on the appointment of a
Plan Administrator who shall be empowered, under the Debtor's
Confirmed Plan, to (i) execute a 99-year ground lease of the
Premises with FP which will take place under and made pursuant to
the Debtor's Confirmed Plan, (ii) encumber or authorize FP to
encumber the ground lease with a leasehold mortgage under and in
accordance with the Debtor's Confirmed Plan ("Leasehold Mortgage"),
(iii) the encumbering of the Premises by a mortgage under and in
accordance with the Plan ("Premises Mortgage") and (iv) the
subsequent sale of the Premises subject to the ground lease
pursuant to the Debtor's Confirmed Plan.
Absent the settlement detailed in the Restructuring Support
Agreement and notwithstanding the Court grant of stay relief, the
Debtor has indicated its intention to contest its right to control
the 51% percent interest in 960 Franklin in state court. In order
to avoid potential protracted costly litigation, the parties
determine that it was in their best interests to use the pendency
of the bankruptcy case as a mechanism to resolve their disputes
with finality and provide for the payment of the Debtor's
creditors. They, therefore, negotiated the RSA and the Plan to
implement the terms of the settlement and have it approved under
Bankruptcy rule 9019 as part of the plan process.
A full-text copy of the Disclosure Statement dated March 14, 2023
is available at https://bit.ly/3Fxk5Zh from PacerMonitor.com at no
charge.
Attorneys for the Debtor:
Mark A. Frankel, Esq.
Backenroth Frankel & Krinsky, LLP
800 Third Avenue
New York, NY 10022
Telephone: (212) 593-1100
Facsimile: (212) 644-0544
Email: mfrankel@bfklaw.com
About 960 Franklin Owner
960 Franklin Owner, LLC, is engaged in activities related to real
estate. The company is based in Brooklyn, N.Y.
960 Franklin Owner filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
22-42760) on Nov. 2, 2022, with up to $50,000 in assets and $10
million to $50 million in liabilities. David Goldwasser, manager,
signed the petition.
Judge Jil Mazer-Marino presides over the case.
Mark Frankel, Esq., at Backenroth Frankel & Krinsky, LLP, is the
Debtor's legal counsel.
ACASTI PHARMA: Delists Voluntarily From TSX Venture Exchange
------------------------------------------------------------
Acasti Pharma Inc. announced it has applied and received approval
for a voluntary delisting of its common shares from the TSX Venture
Exchange. The delisting from the TSXV will not affect the
Company's listing on the NASDAQ Capital Market. The common shares
will continue to trade on the NASDAQ under the symbol "ACST".
The Company believes that the trading volume of its shares on the
TSXV no longer justifies the expenses and administrative efforts
required to maintain a dual listing. The Company also believes
that delisting from the TSXV will create a central marketplace for
its common shares on the NASDAQ, and ultimately benefit the
long-term liquidity and shareholder value of the Company.
It is anticipated that, effective as at the close of trading on
March 27, 2023, Acasti's common shares will no longer be listed and
posted for trading on the TSXV.
Following delisting from the TSXV, Acasti's shareholders can trade
their common shares through their brokers on NASDAQ. As most
brokers in Canada including many discount and online brokers, have
the ability to buy and sell securities listed on NASDAQ, Acasti's
NASDAQ listing will continue to provide shareholders with the same
accessibility to trade the Company's common shares. Shareholders
holding shares in Canadian brokerage accounts should contact their
brokers to confirm how to trade Acasti's shares on the NASDAQ.
The Company also confirms that neither Acasti, nor any of its
subsidiaries have any exposure to Silicon Valley Bank or Silvergate
Bank. The Company has no deposits with those institutions, and has
been financed through equity issuances in the past and not from any
form of debt or other interest bearing securities.
About Acasti Pharma
Acasti Pharma Inc. -- http://www.acastipharma.com-- is a
late-stage specialty pharma company with drug delivery capability
and technologies addressing rare and orphan diseases. Acasti's
novel drug delivery technologies have the potential to improve the
performance of currently marketed drugs by achieving faster onset
of action, enhanced efficacy, reduced side effects, and more
convenient drug delivery -- all which could help to increase
treatment compliance and improve patient outcomes.
Acasti Pharma reported a net loss and comprehensive loss of $9.82
million for the year ended March 31, 2022, a net loss and
comprehensive loss of $19.68 million for the year ended March 31,
2021, and a net loss and comprehensive loss of $25.51 million for
the year ended March 31, 2020. As of Dec. 31, 2022, the Company
had $116.80 million in total assets, $20.08 million in total
liabilities, and $96.72 million in total shareholders' equity.
ALL SAINTS EPISCOPAL: Seeks to Extend Plan Exclusivity to June 20
-----------------------------------------------------------------
All Saints Episcopal Church asks the U.S. Bankruptcy Court for
the Northern District of Texas to extend its exclusive period to
solicit acceptances and confirm a plan of reorganization until
June 20, 2023.
The Debtor explained that an extension of its exclusive period to
confirm the Plan will conserve estate and judicial resources and
allow for the efficient resolution of disputed issues of property
ownership before the Court considers confirmation of the Debtor's
Plan.
This is the Debtor's third motion for an extension. It's current
exclusive period ends on April 12, 2023.
All Saints Episcopal Church is represented by:
Patrick J. Neligan, Jr., Esq.
Douglas J. Buncher, Esq.
John D. Gaither, Esq.
NELIGAN LLP
325 North St. Paul, Suite 3600
Dallas, TX 75201
Tel: (214) 840-5300
Email: pneligan@neliganlaw.com
dbuncher@neliganlaw.com
jgaither@neliganlaw.com
About All Saints Episcopal Church
All Saints Episcopal Church, a parish in The Episcopal Church in
North Texas, filed its voluntary petition for Chapter 11
protection (Bankr. N.D. Texas Case No. 21-42461) on Oct. 20,
2021, listing as much as $10 million in both assets and
liabilities. Christopher N. Jambor, rector, chairman and
president, signed the petition.
Judge Edward L. Morris oversees the case.
Patrick J. Neligan, Jr., Esq., at Neligan LLP represents the
Debtor as legal counsel.
The Debtor filed its Chapter 11 plan of reorganization and
disclosure statement on Feb. 17, 2022. The plan provides for the
Debtor's reorganization and the liquidation of some of its
properties to pay claims of its creditors.
ANJU SOFTWARE: Barings Private Marks $1.4M Loan at 18% Off
----------------------------------------------------------
Barings Private Credit Corporation has marked its $1,417,000 loan
extended to Anju Software, Inc to market at $1,165,000 or 82% of
the outstanding amount, as of December 31, 2022, according to a
disclosure contained in Barings Private's Form 10-K for the fiscal
year ended December 31, 2022, filed with the Securities and
Exchange Commission on February 23, 2023.
Barings Private Credit is a participant in a First Lien Senior
Secured Term Loan to Anju Software, Inc. The loan accrues interest
at a rate of 11.6%% (LIBOR+7.25%) per annum. The loan matures In
February 2025.
Barings Private Credit was formed on April 2, 2021, as a Maryland
Limited Liability Company named Barings Private Credit LLC and
commenced operations on May 10, 2021. Barings Private converted to
a Maryland corporation, effective on May 13, 2021. The Company is
an externally managed, non-diversified closed-end management
investment company that has elected to be regulated as a business
development company under the Investment Company Act of 1940, as
amended. In addition, Barings Private has elected to be treated
and intends to qualify annually as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as
amended.
Anju Software, Inc. designs and develops life sciences software
platform. The Company provides an integrated platform that assists
users to manage mission-critical pharma processes and turn data
into actionable insights. Anju Software serves customers in the
United States and Belgium.
ANYWHERE REAL: Moody's Affirms B1 CFR & Alters Outlook to Negative
------------------------------------------------------------------
Moody's Investors Service revised Anywhere Real Estate Group LLC's
outlook to negative from positive. Moody's also affirmed Anywhere's
corporate family rating at B1, probability of default rating at
B1-PD, senior secured bank credit facilities at Ba1 and senior
unsecured notes at B2. The speculative grade liquidity rating is
SGL-1.
"The rapid decline in Anywhere's revenue and profit in late 2022,
the near certainty of a very weak existing home sale season this
spring and summer and the dominance of downside risks over upside
potential for the company's performance over the next 12 to 18
months leads to the pivot of the outlook to negative from
positive," said Edmond DeForest, Moody's Senior Vice President.
RATINGS RATIONALE
The B1 CFR reflects Moody's expectations for debt to EBITDA above
6.0 times in 2023, which is high compared to many services issuers
also rated in the B1 category. In 2022, Anywhere's combined closed
transaction volume decreased 14% year-over-year, resulting in a
revenue decrease of 14% and lower EBITDA margin of 8.5% from 12.4%
in 2021. Debt to EBITDA was up to 6.3 times as of December 31, 2022
compared to 3.5 times as of 2021, driven by the sudden decline in
home sale activity once interest rates began to rise about a year
ago. Moody's expects the US housing market to continue softening
during 2023, although the rates of decline will be more moderate in
2023 and profit rates should stabilize, reflecting cost management
initiatives implemented in 2022 and before.
All financial metrics cited reflect Moody's standard adjustments.
Anywhere's revenue and profits are highly correlated to changes in
the average price and number of existing home sale transactions.
The number of transactions declined in a mid 20s-percent-rate range
in the second half of 2022. Moody's expects similarly-high-rate
year-on-year declines in the first half of 2023, driving lower
revenue in 2023 versus 2022. Average home sale prices in 2022
declined at a low-single-digit rate but remain near their
post-pandemic highs, providing support to brokerage fees per
transaction. Although interest rates are high and Moody's expect
them to rise further, unsold home inventories in many markets are
still low, while consumer interest and investment in their home
remains high.
Anywhere's leading competitive position and investments in its
brands and technology will support its ability to attract and
retain sales professionals in the market downturn. Moody's
anticipates Anywhere's revenue and profits will recover once the
existing home sale market improves. A long debt maturity profile
featuring low, fixed interest rates, provides Anywhere with balance
sheet stability until existing home sale market conditions improve.
Moody's expects solid-for-B1 key credit metrics, including EBITA to
interest anticipated around 2.0 times and free cash flow to debt
expected around 5%. Expectations for financial and operating
strategies featuring an emphasis on cash generation and cost
management provide additional support.
The secured and unsecured debt instrument ratings reflect the B1-PD
PDR and an overall loss given default ("LGD") assumption of 50%.
Anywhere, which is the issuer of the rated debts, is an indirect
subsidiary of publicly-traded Anywhere Real Estate Inc. Anywhere
Real Estate Inc. does not conduct any operations other than with
respect to its indirect ownership of Anywhere. As a result, the
consolidated financial positions, results of operations and cash
flows of Anywhere and Anywhere Real Estate Inc. are considered the
same.
The Ba1 rating assigned to the senior secured bank credit
facilities reflects the B1-PD PDR and a LGD assessment of LGD2,
reflecting its priority position in the capital structure. The debt
is secured by a pledge of substantially all of the company's
domestic assets (other than excluded entities and excluding
accounts receivable pledged for the securitization of the facility)
and 65% of the stock of foreign subsidiaries. The Ba1 rating, three
notches above the CFR, benefits from loss absorption provided by
the substantial amount of junior ranking debt and non-debt
obligations.
The B2 rating assigned to the senior unsecured notes reflects the
B1-PD PDR and a LGD assessment of LGD5. The LGD assessment reflects
effective subordination to all the secured debt. The senior notes
are guaranteed by substantially all of the company's domestic
assets (other than excluded entities and excluding accounts
receivable pledged for the securitization facility) and 65% of the
stock of foreign subsidiaries). The unrated 0.25% exchangeable
notes due June 2026 are ranked pari passu with Anywhere's rated
unsecured notes in Moody's hierarchy of claims at default.
The SGL-1 speculative grade liquidity rating reflects Anywhere's
very good liquidity profile. As of December 31, 2022, Anywhere had
a cash balance of over $200 million. Moody's anticipates more than
$100 million of free cash flow in 2023. As of December 31, 2022,
there was $700 million available under the company's $1.1 billion
revolving credit facilities. The outstanding $221 million term loan
A matures in February 2025 with amortization of around $16 million
expected in 2023. The next large debt maturity is the $221 million
term loan maturing in February 2025. Anywhere's cash flow is
seasonal, with negative cash flow typically in the 1st fiscal
quarter. Given the preponderance of unsecured debt in Anywhere's
debt capital structure, Moody's expects Anywhere will maintain a
comfortable margin below the maximum senior secured net debt to
EBITDA (as defined in the facility agreement) financial maintenance
covenant applicable to the secured 1st lien debt despite the
anticipated decline in profits over the next 12 to 15 months.
The negative outlook reflects Moody's concern that revenue and
profit rate declines anticipated in 2023 could be worse or may
endure longer than expected, leading to a prolonged period of
elevated financial leverage or deterioration of Anywhere's leading
existing home sale brokerage market position or liquidity profile.
The outlook could be revised to stable from negative if Moody's
anticipates profit and free cash flow growth and debt to EBITDA to
fall and remain below 6.0 times and good liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the negative outlook, an upgrade is not anticipated over the
next 12-18 months. Over the longer term, the ratings could be
upgraded if Moody's expects Anywhere will sustain through market
cycles: (1) debt to EBITDA below 4.5 times, (2) free cash flow to
debt of at least 8%, (3) very good liquidity and (4) balanced
financial strategies, including an emphasis upon repaying debt and
extending its debt maturity profile.
The ratings could be downgraded if Moody's anticipates: (1) debt to
EBITDA to remain above 5.5 times, (2) diminished liquidity, or (3)
aggressive financial strategies featuring large, debt-financed
acquisitions or shareholder returns.
The principal methodology used in these ratings was Business and
Consumer Services published in November.
Affirmations:
Issuer: Anywhere Real Estate Group LLC
Corporate Family Rating, Affirmed B1
Probability of Default Rating, Affirmed B1-PD
Senior Secured Bank Credit Facility, Affirmed Ba1 (LGD2)
Senior Unsecured Regular Bond/Debenture, Affirmed B2 (LGD5) from
(LGD4)
Outlook Actions:
Issuer: Anywhere Real Estate Group LLC
Outlook, Changed To Negative From Positive
Based in Madison, NJ, Anywhere Real Estate Inc (NYSE: HOUS)
provides franchise and brokerage operations as well as national
title, settlement, and relocation companies and nationally scaled
mortgage origination and underwriting joint ventures. Anywhere's
brand portfolio includes Better Homes and Gardens(R) Real Estate,
CENTURY 21(R), Coldwell Banker(R), Coldwell Banker Commercial(R),
Corcoran(R), ERA(R), and Sotheby's International Realty(R). Moody's
expects 2023 revenue of over $6 billion.
APPLE VALLEY, MN: S&P Affirms 'BB-(sf)' Rating on 2016A Rev. Bonds
------------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from negative and
affirmed its 'BB-(sf)', 'B(sf)' and 'B-(sf)' long-term ratings on
the City of Apple Valley, Minn.'s senior-tier 2016A, second-tier
2016B, and third-tier 2016C, respectively, senior living revenue
bonds (Minnesota Senior Living LLC project).
"The outlook revision reflects our view of Transforming Age Inc.,
the ownership entity, support for the transaction, both
operationally and financially, during the one-year outlook period
as evidenced by appropriated and board-approved equity
contributions that will help ensure full and timely debt service
payment on the existing bonds in fiscal 2023," said S&P Global
Ratings credit analyst Joan Monaghan. In addition, improvements in
debt service coverage (DSC) ratios for all tiers of debt reflect
prudent expense management and support the outlook revision as well
as its view that other key credit factors will remain consistent
with the current ratings during the outlook period.
The series 2016A, 2016B, 2016C and unrated fourth-tier 2016D bonds
(together the 2016 bonds) were issued in late 2016 by Apple Valley
for the borrower, Minnesota Senior Living LLC. Proceeds of the
bonds, with a total par amount of $147.97 million, were used by the
borrower to acquire eight senior living facilities in the
Minneapolis-St. Paul metropolitan area, consisting of 1,007 rental
independent living, assisted living, and memory care beds. Proceeds
of the bonds were also used to fund debt service reserve funds for
the subordinate series and to pay certain capital and issuance
costs.
The series 2016 bonds are limited obligations of the issuer,
payable by the issuer solely from and secured exclusively by
payments made by the borrower under the loan agreement and other
funds held by the trustee under the trust indenture. Minnesota
Senior Living LLC agreed to pay all project revenues, meaning all
cash operating and non-operating revenues of the properties, with
certain exclusions, to the trustee for deposit in the revenue fund
and application in accordance with the trust indenture.
The ratings reflect S&P Global Ratings' calculated DSC (S&P DSC)
that has been consistently low primarily due to consistent and
year-over-year below-budget occupancy numbers. Somewhat offsetting
the very low coverage is an ownership group that has demonstrated
financial and operational commitment to the project, enabling it to
continue operations and make full and timely debt service payments
without draws on the transaction debt service reserve funds. While
our assessment of management and governance is a credit strength,
the poor financial performance and negative factors related to
coverage and liquidity are primary drivers of the non-investment
grade ratings on the rated bonds.
The project's sole affiliate, Transforming Age (TA), committed
financial support to compensate for revenue shortfalls and coverage
levels below 1x; failure to continue this support in the future
would likely result in an inability to meet full and timely debt
service obligations without draws on reserves or other cash
infusions. Because TA has committed to financially support the
project through the debt service payment dates in fiscal 2023 and
expense management has had positive impact on DSC ratios, S&P's
outlook on the ratings is stable.
The stable outlook reflects S&P's view that improved coverage
ratios due to prudent expense management coupled with TA's
financial and operational commitment to the project will support
performance consistent with the current ratings on the bonds during
the one-year outlook period.
ASTRALABS INC: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Astralabs Inc.
979 Springdale Road Suite #123
Austin, TX 78723
Business Description: Astralabs operates an accelerator program
delivered by online curriculum.
Chapter 11 Petition Date: March 17, 2023
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 23-10164
Judge: Hon. Shad Robinson
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: $1,763,754
Total Debts: $4,389,867
The petition was signed by Jack Cartwright as VP of Finance.
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/DOAOVWQ/ASTRALABS_Inc__txwbke-23-10164__0001.0.pdf?mcid=tGE4TAMA
BED BATH: Announces Meeting to Approve Reverse Stock Split
----------------------------------------------------------
Bed Bath & Beyond Inc. (Nasdaq: BBBY) on March 17, 2023, disclosed
that it plans to hold a special meeting of shareholders to seek
approval to amend the Company's Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") to effect, at
the discretion of the Board of Directors (the "Board"), a reverse
stock split of the Company's common stock, par value $0.01 per
share (the "Common Stock"), at a ratio in the range of 1-for-5 to
1-for-10, with such ratio to be determined at the discretion of the
Board. Holders of record of the Common Stock as of the close of
business on March 27, 2023 will be entitled to notice of and to
vote at the special meeting. The time, location, and other details
regarding the special meeting, will be communicated to shareholders
at a later date via proxy materials that have been filed with, and
are subject to review by, the Securities and Exchange Commission
(the "SEC").
Sue Gove, President & CEO of Bed Bath & Beyond Inc. said, "Our
proposal for a reverse stock split will enable us to continue
rebuilding liquidity to execute our turnaround plans and better
position the Company financially. We look forward to engaging with
shareholders and continuing to provide meaningful updates as we
progress with our strategy."
The reverse stock split would not have any effect on the actual or
intrinsic value of our business or a shareholder's proportional
ownership in the Company (subject to the treatment of fractional
shares) and would have no impact on the Company's business
operations or any of its outstanding indebtedness. The Board may
revoke the proposal and cancel the special meeting at any time if
it determines that the reverse stock split is no longer in the best
interests of the Company and its shareholders. Even if the meeting
occurs and the amendment to the Certificate of Incorporation is
approved, the Board may delay or abandon the reverse stock split at
any time prior to the effective time of the reverse stock split if
the Board determines that the reverse stock split is no longer in
the best interests of the Company or its shareholders.
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.
BETTER NUTRITIONALS: Seeks to Hire 'Ordinary Course' Professionals
------------------------------------------------------------------
Better Nutritionals, LLC seeks approval from the U.S. Bankruptcy
Court for Central District of California to hire certain
professionals used in the ordinary course of business.
The "ordinary course" professionals include:
Duane Kumagai, Esq.
Macias Kumagai PC
1901 Avenue of the Stars, Suite 200
Los Angeles, CA 90067
Tel: 310-710-2925
Email: dkumagai@mkpc.law
Efthalia Rofos, Esq.
Lewis Brisbois Bisgaard & Smith LLP
650 Town Center Dr., Suite 1400
Costa Mesa, CA 92626
Tel: 714-668-5580
Email: thalia.rofos@lewisbrisbois.com
Margarette M. Mow, Esq.
Mow Law Firm
1107 Fair Oaks Ave., #248
S. Pasadena, CA 91030
Tel: 213-989-2006
Email: mow@mowlawfirm.com
Tristan Mullis, Esq.
Pettit Kohn Ingrassia Lutz & Dolin
5901 W. Century Blvd., #1100
Los Angeles, CA 90045
Tel: 310-649-5772
Email: tmullis@pettitkohn.com
Ty S. Vanderford, Esq.
Vanderford & Ruiz LLP
1510 Oxley St., Suite C
South Pasadena, CA 91030
Tel: 626-405-8800
Email: tvanderford@vrlawyers.com
Wendy May Thomas, Esq.
Tadjedin Thomas & Engbloom Law Group
6101 W. Centinela Ave., Suite 270
Culver City, CA 90230
Tel: 310-362-4970
Email: wendyt@ttelawgroup.com
The Debtor proposed to pay 100 percent of the fees and
reimbursements of each of the OCPs. While the Chapter 11 case is
pending, the fees of each OCP, excluding costs and disbursements,
may not exceed $10,000 per month on average over a rolling
three-month period.
As disclosed in court filings, the Debtor does not believe that any
of the OCPs has an interest materially adverse to the Debtor,
creditors or other parties in interest that should preclude such
OCP from continuing to represent the Debtor.
About Better Nutritionals
Better Nutritionals, LLC is a contract manufacturer and R&D leader
in nutritional supplements. The company is based in Norco, Calif.
Better Nutritionals sought protection from Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-14723) on Dec. 20,
2022, with $50 million to $100 million in assets and $100 million
to $500 million in liabilities. Sharon Hoffman, manager, signed the
petition.
Judge Mark D. Houle oversees the case.
John N. Tedford, IV, Esq., at Danning Gill Israel & Krasnoff, LLP
and Force 10 Partners, LLC serve as the Debtor's legal counsel and
financial advisor, respectively.
The U.S. Trustee for Region 16 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee is represented by Keith Owens, Esq.
BIG VILLAGE: CPX Interactive Steps Down as Committee Member
-----------------------------------------------------------
The U.S. Trustee for Region 3 disclosed in a court filing that CPX
Interactive, LLC resigned from the official committee of unsecured
creditors in the Chapter 11 case of Big Village Holding, LLC.
The remaining members of the committee are:
1. Columbia Property Trust, Inc.
aka Columbia REIT
Attn: Maria Blake
315 Park Avenue South
New York, NY 10010
Phone: 212-659-8467
Email: maria.blake@columbia.reit
2. Samsung Electronics America, Inc.
Attn: Scott Jenkins
123 West 18th Street
New York, NY 10011
Phone: 945-227-6348
Email: s1.jenkins@samsung.com
3. Consumable, Inc.
Attn: Mark Levin
680 S. Cache Street, Suite 100
Box 12679
Jackson, WY 83001
Phone: 240-876-5388
Fax: 443-431-2508
Email: mark@consumable.com
4. Philo, Inc.
Attn: Tanya Bayeva
225 Green Street
San Francisco, CA 94111
Phone: 646-408-5164
Email: tanya@philo.com
5. Content IQ, LLC
Attn: James Van Strander
One World Trade Center, Suite 71J
New York, NY 10007
Phone: 984-298-9318
Email: jamesv@perion.com
6. Roku, Inc.
Attn: Joe Hollinger
1155 Coleman Avenue
San Jose, CA 95510
Phone: 415-572-3121
Fax: 408-364-1260
Email: jhollinger@roku.com
About Big Village Holding
Big Village Holding LLC and its affiliates are a global
advertising, technology, and data company with operations in the
United States, European Union, and Australia. They deliver their
advertising and digital content across multiple media channels and
online platforms, and facilitate the implementation of targeted,
data-driven advertising strategies which encompass all of the
technology and intelligence necessary to execute global advertising
campaigns.
Big Village Holding LLC and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10174) on February 8, 2023. In the petition signed by Kasha
Cacy, global chief executive officer, the Debtors disclosed up to
$50 million in assets and up to $100 million in liabilities.
Judge Craig T. Goldblatt oversees the case.
The Debtors tapped Young Conaway Stargatt and Taylor, LLP as legal
counsel; Portage Point Partners, LLC as restructuring advisor; and
Stephens, Inc. as investment banker. Kroll Restructuring
Administration, LLC is the claims and noticing agent and
administrative advisor.
BNP Paribas, as administrative agent under the Debtors' prepetition
credit agreement, is represented by Mayer Brown LLP's attorneys,
Brian Trust and Scott Zemser; and Potter Anderson & Corroon LLP's
attorney, L. Katherine Good.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represneted by Steven Golden, Esq.
BLACK DIAMOND: Exclusivity Period Extended to April 22
------------------------------------------------------
Judge Gregory L. Taddonio of the U.S. Bankrutpcy Court for the
Western District of Pennsylvania extended Black Diamond Energy
of Delaware, Inc.'s exclusive period to file a Chapter 11 Plan
and solicit acceptance and confirmation thereof to April 22 and
June 21, 2023, respectively.
The judge also extended the deadline for the Debtor to file a
plan and disclosure statement to April 22, 2023.
About Black Diamond Energy of Delaware
Black Diamond Energy of Delaware, Inc. --
https://www.blackdiamondenergy.com/ -- is a company based in
Greensburg, Pa., which provides natural gas drilling programs for
investor partners. It specializes in coalbed methane play in the
Powder River Basin.
Black Diamond sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Pa. Case No. 22-21448) on July 26,
2022, with up to $50,000 in assets and $10 million to $50 million
in liabilities. Eric Koval, president of Black Diamond, signed the
petition.
Donald R. Calaiaro, Esq., at Calaiaro Valencik and Eric Rossi
CPA, LLC serve as the Debtor's legal counsel and accountant,
respectively.
BLINK CHARGING: Incurs $91.6 Million Net Loss in 2022
-----------------------------------------------------
Blink Charging Co. has filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$91.56 million on $61.14 million of total revenues for the year
ended Dec. 31, 2022, compared to a net loss of $55.12 million on
$20.94 million of total revenues for the year ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $362.54 million in total
assets, $101.58 million in total liabilities, and $260.96 million
in total stockholders' equity.
Blink Charging stated, "We have not yet achieved profitability and
expect to continue to incur cash outflows from operations. It is
expected that our operating expenses will continue to increase and,
as a result, we will eventually need to generate significant
product revenues to achieve profitability. Historically, we have
been able to raise funds to support our business operations,
although there can be no assurance that we will be successful in
raising significant additional funds in the future. We expect that
our cash on hand will fund our operations for at least 12 months
after the issuance date of the financial statements included in
this Annual Report."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1429764/000149315223007639/form10-k.htm
About Blink Charging
Based in Miami Beach, Florida, Blink Charging Co. (OTC: CCGID)
f/k/a Car Charging Group Inc. -- http://www.CarCharging.com-- is
an owner and operator of electric vehicle (EV) charging equipment
and has sold or deployed over 66,000 chargers, many of which are
networked EV charging stations, enabling EV drivers to easily
charge at any of Blink's charging locations worldwide. Blink's
principal line of products and services is its nationwide Blink EV
charging networks and Blink EV charging equipment, also known as
electric vehicle supply equipment ("EVSE"), and other EV related
services, and the products and services of recent acquisitions,
including SemaConnect, EB Charging, Blue Corner and BlueLA.
Blink Charging reported a net loss of $17.85 million for the year
ended Dec. 31, 2020, a net loss of $9.65 million for the year ended
Dec. 31, 2019, and a net loss of $3.42 million for the year ended
Dec. 31, 2018.
BRP GROUP: S&P Downgrades ICR to 'B-' On Elevated Leverage
----------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on insurance
broker BRP Group Inc. to 'B-' from 'B'.
S&P said, "The stable outlook reflects our view that leverage will
improve in the second half of 2023, via organic growth and
incremental margin expansion, though remain elevated above 7.0x
through 2023.
"At the same time we also lowered our ratings on BRP's first-lien
credit facilities due 2027 to 'B-' from 'B' and maintained our '3'
recovery ratings, which indicate our expectation for meaningful
(50%-70%; rounded estimate 50%) recovery in the event of default."
BRP's rapid expansion has come at a cost with a strain to leverage
above expectations.
BRP has achieved robust topline growth since its IPO in 2019, due
to its active acquisition pace in conjunction with its
industry-leading organic revenue growth. S&Ps aid, "With BRP
materially drawing against its revolver in 2022 to fund its largest
strategic acquisition to date (Westwood Insurance Agency), combined
with higher integration costs and investments, we had forecast
leverage to remain elevated at around 9.0x at year-end. However,
higher-than-anticipated expenses related to the integration of
partnerships, remediation costs, and other investments (costs we do
not give EBITDA add-back credit for) resulted in pro forma adjusted
leverage increasing above expectations." The company ended 2022
with S&P pro forma adjusted leverage of 9.9x, up from an already
heightened level of 7.9x at year-end 2021.
On the same token, cash flows have declined despite the material
top line growth given the elevated integration costs and
investments towards organic growth, with S&P adjusted free
operating cash flow of approximately $41 million in 2022, from $50
million in 2021. Similarly, cash flows relative to debt levels have
worsened and remain weak, with S&P adjusted free operating cash
flow to debt of around 2%, from 4% in 2021.
BRP is committed to deleverage to meet its targets through organic
growth and cutting M&A.
S&P said, "While there is a wide divergence between our leverage
calculations and those of BRP given our add-back exclusions, cash
haircut, and contingent considerations treatment as debt, BRP is
currently above its own articulated leverage tolerances as well
(BRP calculated leverage of 5.4x at year-end 2022, relative to
3.5x-4.5x target). The company plans to deleverage through organic
growth and conduct no meaningful acquisition activity in 2023. BRP
is a public company and does have access to equity markets though
given market volatility and the company's commitment to deleverage
organically we do not forecast BRP tapping equity markets in the
next 12 months. We believe BRP is committed to make headway toward
internal leverage targets, but per our calculations, leverage
improving to a level commensurate with 'B' rated peers will stretch
out beyond the rating horizon.
"Although we anticipate metric improvement in the back half of the
year as BRP focuses on organic expansion, efficiencies materialize,
and integration costs subside, we now forecast S&P pro forma
adjusted leverage to remain well above 7.0x at year-end 2023.
"We view BRP's track record of organic expansion as a strength to
the rating and a component in the company's path to deleveraging.
As part of its growth philosophy, BRP opts to invest in the organic
top line of the business to create more value and cash flow over
the long term rather than the near term. The strategy supported BRP
posting double-digit organic growth across all segments in 2022;
however, investments weighed on profitability. S&P Global Ratings
adjusted EBITDA margins contracted in 2022 to 15.8% as BRP deployed
additional capital of approximately $50 million focused on
headcount and technology, and costs we do not give EBITDA add-back
credit for were higher than anticipated. For 2023 we do not
forecast similar levels of investments, and costs related to
integration should lessen though remain sizable. Efficiencies
expected, however, will take time to work through. We now forecast
slower margin expansion per our calculations and for leverage to
worsen further before turning a corner in the back-half of 2023.
"The stable outlook reflects our expectation that leverage will
improve but remain above 7.0x in 2023 as costs to integrate prior
partnerships persist and margins expand to a lower level than
previously anticipated. We believe BRP will continue to report
robust organic growth with little to no M&A over the next twelve
months as it focuses on organic growth pursuits and leverage
reduction. S&P adjusted free operating cash flow to debt should
improve modestly to the 3%-5% range with lower investments and
improving cash flows. Meanwhile, S&P adjusted EBITDA interest
coverage will moderate modestly to around 2x or slightly below due
to increased debt servicing costs with rising variable rates offset
modestly by the company's interest rate cap.
"We could consider raising our ratings in the next 12 months if BRP
exceeds organic or margin expectations, or manages cash and
revolver capacity resulting in more conservative levels of
financial leverage below 7.0x on a sustained basis and EBITDA
interest coverage near or above 2.0x.
"Although unlikely in the next 12 months, we could lower our
ratings if credit metrics further deteriorate, leading to an
unsustainable capital structure with liquidity falling below the
adequate level, debt to EBITDA rising above 10.0x, or EBITDA
interest coverage nearing 1.0x on a sustained basis. This could
occur if organic growth and EBITDA fall below our expectations or
if cash flow generation worsens, constraining the company's ability
to execute. This could also occur if macroeconomic conditions and
interest rates worsen beyond base-case expectations or affect BRP
more than envisioned."
BRP is a publicly traded insurance broker headquartered in Tampa,
Fla. Founded in 2011, the company provides risk management,
insurance, and employee benefits solutions to over 1.2 million
clients across the U.S. with offices in 23 states. It operates
through three segments:
-- Insurance Advisory Solutions (formerly Middle Market) (55% of
reported revenues $981 million as of year-end 2022) provides
private risk management, commercial risk management, and employee
benefits solutions for mid- to large-size businesses, and high
net-worth individuals and families.
-- Underwriting Capacity and Technology Solutions (formerly
Specialty) (30%) operates as a wholesale co-brokerage platform that
delivers programs requiring underwriting and placement services
including MGA of the Future.
-- MainStreet Insurance Solutions (combined operations of former
-- MainStreet and Medicare segments) (15%) offers personal
insurance, commercial insurance, and life and health solutions to
individuals and businesses in their communities and provides
consultation for government assistance programs and solutions to
seniors and individuals through a network of agents.
S&P's base case assumes the following in 2023:
-- Organic growth in the mid-teens with little to no acquisitions
S&P Global Ratings adjusted EBITDA margins expanding to
approximately 17.5%-18.5% from 15.8% in 2022 as the company
realizes efficiency improvements and integration costs subside
-- No equity issuance nor incremental debt issuance outside of
modest shifts in revolver borrowings
Based on the above assumptions, S&P arrives at the following
adjusted credit metrics for 2023:
-- Pro forma debt to EBITDA of 7.5x-8.0x at year-end 2023
-- Funds from operation to debt of 5%-10%
-- Free operating cash flow to debt of 3%-5%
-- EBITDA interest coverage of 1.7x-2.1x
S&P assesses BRP's liquidity as adequate based on its expectation
that sources will exceed uses of cash by at least 1.2x over the
next 12 months and that BRP will sustain this even with a 15%
decline in EBITDA. This assessment is also based on qualitative
factors that include sound relationships with banks and prudent
risk management.
Principal liquidity sources
-- Cash balance of $118 million as of Dec. 31, 2022
-- Revolver capacity of $95 million ($505 million drawn as of Dec.
31, 2022)
-- $40 million to $100 million cash funds from operations
Principal liquidity uses
-- Required paydown of debt through scheduled amortization ($8.5
million annually)
-- Annual capital expenditure representing approximately 1%-2% of
revenue
-- Expected contracted earnout payments of $25 to $75 million over
the next year
Environmental, Social, And Governance
ESG credit indicators: E-2, S-2, G-2
Governance is no longer a moderately negative consideration in
S&P's credit rating analysis of BRP as the company remediated all
material weaknesses in its internal controls at year-end 2022.
ESG factors have no material influence on our credit rating
analysis of BRP.
-- S&P's recovery ratings on BRP's $600 million revolver and $850
million first-lien term loan due 2027 are '3', indicating its
expectation for meaningful (50%) recovery.
-- S&P has valued the company on a going-concern basis using a
5.5x multiple over its projected emergence EBITDA.
-- S&P is applying a 20% operational adjustment because the
company only has first-lien debt and is displaying lower weighted
average recovery relative to its peers'.
-- S&P's simulated default scenario contemplates default in 2025
stemming from intense competition in the brokerage market, leading
to significantly lower commissions and margins.
-- S&P believes lenders would achieve the greatest recovery value
through reorganization rather than liquidation of the business.
-- Year of default: 2025
-- Emergence EBITDA after recovery adjustment: $133.8 million
-- Implied enterprise value (EV) multiple: 5.5x
-- Net recovery value (after 5% administrative costs): $698.9
million
-- Valuation split (% obligors/non-obligors): 100%/0%
-- Collateral value available to secured creditors: $698.9
million
-- Total first-lien debt: $1.375 billion
--Recovery expectations: 50%-70% (rounded estimate (50%)
All debt amounts include six months of prepetition interest.
CARIBBEAN BANANA: Unsecureds Will Get 100% of Claims in 60 Months
-----------------------------------------------------------------
Caribbean Banana, Inc., filed with the U.S. Bankruptcy for the
District of Puerto Rico a Disclosure Statement describing Small
Business Plan of Reorganization dated March 13, 2023.
The Debtor is a privately owned corporation incorporated under the
Laws of the Commonwealth of Puerto Rico on August 1, 2012. It is
located at Finca Isadora Los Poleos, Km 97.1 Carr. 1, Salinas,
Puerto Rico, and is part of the Agriculture Industry.
Debtor's line of business includes the planting, harvesting and
sale of bananas and other small fruits. Debtor has approximately 30
employees and operates in a farm of over 150 acres. Debtor's fruits
take 8 months to be ready for sale. Debtor's shareholders are Mr.
Elvin Soto Santiago (50%) and Mr. Eliot Jirau Pineiro (50%). The
Company serves many local supermarkets and other businesses with
its products, with at least 20 supermarkets in the Island.
The ongoing economic downturn and recession faced by Puerto Rico
during the last years, primarily due to the earthquakes and the
effects of the COVID-19 Pandemic, adversely impacted numerous
sectors and entities of Puerto Rico's economy, including Debtors'
industry. As a result, in an effort to protect its businesses,
obtain a breathing spell and the benefits of 11 U.S.C. 362 (a),
which stays all collection actions and judicial proceedings, on May
6, 2022, Debtor filed its Chapter 11 petition.
After the filing of this case, the farm where Debtor operates was
considerably damaged as a result of the passage of the Hurricane
Fiona in September, 2022. The expenses of the harvest rebuild were
covered with the insurance funds and governmental assistance funds.
Within a span of two months, the Debtor successfully harvested and
cultivated 37.3 acres, resulting in the growth of 26,110 plants
that are expected to yield sales worth $652,740.00.
The new production is anticipated to generate revenue from August
to November 2023. The Debtor will carry on with the re-harvesting
procedure and estimates that it can replant a minimum of 40 acres
each month until it reaches 150 acres by June 2023. With the
completion of this process, the sales figures are predicted in
$1,600,000.00 which is equivalent to the sales achieved in 2020.
Also, with the purpose of increasing additional revenues, the
Debtor is transitioning its business model to a hybrid model which
includes buying and importation of exterior fruits. With this
model, the Debtor will be selling imported fruits while the fruits
of the harvest are obtained. The hybrid model will increase
Debtor's income and allow it to sustain a steady flow of income
during the life of the proposed Plan.
Class 6 consists of Holders of Allowed General Unsecured Claims.
Holders of Allowed General Unsecured Claim, excluding those of
Debtor's Insiders, shall be paid in full satisfaction of their
claims 100% thereof, through 60 equal consecutive monthly
installments commencing on the Effective Date and continuing on the
30th day of the subsequent 59 months. The insiders' claims due to
Debtor's shareholders will be subordinated, until the full payment
of all other claims on the Plan. The allowed unsecured claims total
$178,727.05. This Class is impaired.
Class 7 consists of Interests in Debtor. The Holders of the Equity
Interest in Debtor will not receive any distribution under the Plan
but will retain their shares in Debtor unaltered.
Except as otherwise provided in the Plan, Debtor will effect
payment of Administrative Expense Claims, Priority Tax Claims,
Allowed Secured and General Unsecured Claims in accordance with the
payment plans from the cash flows generated from its operations,
the collection of its accounts receivables, and the cash
accumulated during the pendency of the case.
A full-text copy of the Disclosure Statement dated March 13, 2023
is available at https://bit.ly/3JrMpNO from PacerMonitor.com at no
charge.
Debtor's attorneys:
Enrique M. Almeida, Esq.
Zelma B. Davila, Esq.
Almeida & Davila, P.S.C.
268 Ponce de Leon Avenue Suite 900
San Juan, PR 00918
P.O. Box 191757
San Juan, PR 00919-1757
Tel. (787) 722-2500
Fax No. (787) 777-1376
Email: enrique.almeida@almeidadavila.com
zelma.davila@almeidadavila.com
About Caribbean Banana
Caribbean Banana, Inc., is a privately owned corporation
incorporated under the Laws of the Commonwealth of Puerto Rico in
August 2012. Its line of business includes the planting,
harvesting and sale of bananas and other small fruits.
Caribbean Banana sought protection for relief under Chapter 11 of
the Bankruptcy Code (Bankr. D.P.R. Case No. 22-01302) on May 6,
2022, listing as much as $500,000 in both assets and liabilities.
The Honorable Bankruptcy Judge Maria De Los Angeles Gonzalez
oversees the case.
Enrique Almeida Bernal, Esq., and Zelma B. Davila, Esq., at Almeida
& Davila, P.S.C., are the Debtor's bankruptcy attorneys.
CAVALIER PHARMACY: Bid for TRO and Preliminary Injunction Denied
----------------------------------------------------------------
Bankruptcy Judge Paul M. Black for the Western District of Virginia
denies the motion for temporary restraining order and preliminary
injunction filed by the Debtor/Plaintiff, Cavalier Pharmacy, Inc.
In the Motion, Cavalier seeks entry of an order requiring Health
Mart Atlas, LLC to turn over funds the Debtor contends belong to
it. HM Atlas filed an Objection thereto. The Debtor asserts that as
of the "Petition Date, the Debtor was due monies from accounts
receivable, or monies due to Debtor from insurance companies for
prescriptions filled for customers of the Debtor, in the amount of
$280,000. . . HMA has refused to turn over the monies due to the
Debtor. . . and HMA continues to withhold all funds due to the
Debtor, which the Debtor estimates now to be approximately
$300,000.00. . ." The Debtor further asserts that HM Atlas "does
not have claim for setoff or recoupment because CVS Caremark, an
insurance company of some of the Debtor's customers, alleges that
the Debtor owes CVS Caremark money as a result of an audit
performed by CVS Caremark. CVS Caremark claims it is owed
approximately $1 million from the Debtor."
HM Atlas asserts that it possesses valid recoupment and setoff
rights with respect to the funds at issue; therefore, the Debtor's
underlying turnover claim will not succeed, and the Debtor is not
entitled to preliminary injunctive relief.
The Debtor and HM Atlas are parties to a Pharmacy Participation
Agreement "pursuant to which HMA markets networks of independent
pharmacies (such as the Debtor) to 'Payors' (e.g., prescription
drug plans and the like), enters into agreements with Payors
governing the submission of covered pharmaceutical reimbursement
claims and payments, and processes pharmacy reimbursement payments
on behalf of the Debtor in exchange for a monthly fee."
Practically, HM Atlas acts as a clearinghouse, where payments come
into HM Atlas on the Debtor's behalf from multiple sources under
Payor Agreements. Pursuant to the PPA, the Debtor agreed that if
there is a negative charge, recoupment, or true up, which the
Debtor has to a Payor (like CVS Caremark), then HM Atlas can do one
of three things: (i) withhold funds received under the Consolidated
Reimbursement Program from future payments to the Debtor until such
time as the Debtor's balance for all Payors is zero or above, (ii)
debit the Debtor's bank account for the negative amount, or (iii)
invoice the Debtor for the negative amount, which is due in full
within five business days. These are defined as the "Recoupment
Rights" in the PPA.
Here, HM Atlas has chosen to exercise the first option and is
withholding every dollar received on the Debtor's behalf, from
whatever Payor, until the balance with Payor CVS Caremark is
reduced to zero, including the alleged 20% audit fee. Netting out
these payments is expressly permitted under the terms of the
contract between the Debtor and HM Atlas -- the automatic stay does
not apply. True, the end debt is ultimately with CVS Caremark, but
the Debtor agreed to appoint HM Atlas its attorney in fact to enter
into the Payor contract with CVS Caremark on its behalf, and to
allow payments received from CVS Caremark and other Payors under
the PPA to be applied against the CVS Caremark balance until it is
reduced to zero.
Normally, the Court would rule quickly on a request for a temporary
injunction, but the Court has agonized over this result. The Debtor
has the burden of proof here, and as much as the Court would like,
it cannot manufacture a remedy out of whole cloth. It must apply
the law to the facts as submitted. The Debtor must prove it has a
likelihood of success on the merits, and the test is "will it be
successful in this litigation where it seeks turnover of its
receivables, an injunction, and a finding that the automatic stay
is violated." The Court finds that the Debtor has not carried this
burden.
In the adversary proceeding is In re: Cavalier Pharmacy, Inc.
Chapter 11 Debtor. Cavalier Pharmacy, Inc. Plaintiff, v. Health
Mart Atlas, LLC Defendant, Case No. 23-70004, Adversary Proc. No.
23-07002, (Bankr. W.D. Va.).
A full-text copy of the Memorandum Opinion dated March 8, 2023 is
available at https://tinyurl.com/3y8jj8ns from Leagle.com.
About Cavalier Pharmacy, Inc.
Cavalier Pharmacy, Inc. operates a pharmacy in Wise, Virginia.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Va. Case No. 23-70004) on January 4,
2023. In the petition signed by Rick Mullins, president, the Debtor
disclosed up to $50,000 in assets and up to $10 million in
liabilities.
Judge Paul M. Black oversees the case.
Scot Farthing, Esq., at Farthing Legal, PC, is the Debtor's legal
counsel.
CINEWORLD GROUP: Seeks to Extend Plan Exclusivity to June 5
-----------------------------------------------------------
Cineworld Group PLC and its co-debtors ask the U.S. Bankruptcy
Court for the Southern District of Texas to extend the periods
during which the debtors have the exclusive right to file a
Chapter 11 plan and solicit acceptances thereof to June 5 and
August 4, 2023, respectively.
The debtors explained that their Chapter 11 cases are large and
complex and that while they have made significant progress in
negotiating in good faith with their creditors and administering
these Chapter 11 cases, they seek the extension of the
exclusivity periods to continue discussions with their
stakeholders around a consensual restructuring and proceed toward
emergence in an efficient, organized manner.
Cineworld Group PLC is represented by:
Matthew D. Cavenaugh, Esq.
Rebecca Blake Chaikin, Esq.
Veronica A. Polnick, Esq.
Vienna Anaya, Esq.
JACKSON WALKER LLP
1401 McKinney Street, Suite 1900
Houston, TX 77010
Tel: (713) 752-4200
Email: mcavenaugh@jw.com
rchaikin@jw.com
vpolnick@jw.com
vanaya@jw.com
- and -
Joshua A. Sussberg, Esq.
Christopher Marcus, Esq.
Christine Okike, Esq.
Ciara Foster, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, NY 10022
Tel: (212) 446-4800
Email: mcavenaugh@jw.com
rchaikin@jw.com
vpolnick@jw.com
vanaya@jw.com christine.okike@kirkland.com
About Cineworld Group
London-based Cineworld Group PLC was founded in 1995 and is the
world's second-largest cinema chain. Cineworld operates 751 sites
with 9,000 screens in 10 countries, including the Cineworld and
Picturehouse screens in the UK and Ireland, Yes Planet in Israel,
and Regal Cinemas in the United States.
According to The Guardian, the Griedinger family, including
Mooky's brother and deputy chief executive, Israel, have
struggled to maintain control of the ailing business but have
been forced to reduce their stake from 28% in recent years.
Cineworld's top five investors include the Chinese Jangho Group
at 13.8%, Polaris Capital Management (7.82%), Aberdeen Standard
Investments (4.98%) and Aviva Investors (4.88%).
The London-listed Cineworld, which has run up debt of more than
$4.8 billion after losses soared during the pandemic, is pinning
its hopes on a meatier slate of movies in 2022 to bounce back
from a two-year lull.
Cineworld Group plc and 104 affiliates sought Chapter 11
protection (Bankr. S.D. Texas Lead Case No. 22-90168) on Sept. 7,
2022, estimating more than $1 billion in assets and debt. Judge
Marvin Isgur oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP and Jackson Walker, LLP
as bankruptcy counsels; PJT Partners, LP as investment banker;
AlixPartners, LLP as restructuring advisor; and Ernst & Young,
LLP as tax services provider. Kroll Restructuring Administration,
LLC is the claims agent.
The U.S. Trustee for Region 7 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on Sept. 23,
2022. The committee tapped Weil, Gotshal & Manges, LLP and
Pachulski Stang Ziehl & Jones, LLP as legal counsels; FTI
Consulting, Inc., as financial advisor; and Perella Weinberg
Partners, LP as investment banker.
CLASSICAL CHARTER: Moody's Lowers Rating on Revenue Bonds to Ba2
----------------------------------------------------------------
Moody's Investors Service has downgraded the rating on Classical
Charter Schools of America, Inc., NC's (CCSA), formerly Charter Day
School Inc., outstanding revenue bonds to Ba2 from Ba1. The outlook
is stable.
RATINGS RATIONALE
The downgrade to Ba2 reflects significantly reduced liquidity due
to additional capital and operational spending in 2022 and
continuing into 2023. This spending has been driven by an effort
to grow enrollment and improve academic performance due to pandemic
related learning loss. The action also reflects a decline in
academic performance and demand as evidenced by declining test
scores, waitlists, and retention all which limits operational
flexibility. Positively, operating revenues have continued to grow
with enrollment, state and local per student funding continues to
increase and the school has an established charter renewal history.
Debt service coverage will remain sufficient and above covenanted
levels.
RATING OUTLOOK
The stable outlook reflects cash flow margins sufficient to
maintain debt service coverage levels. With the completion of the
capital program by fall 2023, liquidity should stabilize if not
improve over time. The outlook also incorporates favorable
prospects to maintain enrollment and meet revenue growth
projections.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Significantly improved liquidity providing greater
cushion for potential volatility
-- Sustained strengthening of operating performance
and debt service coverage
-- Evidence of improvement in student demand and success,
evidenced by ability to meet enrollment targets with
a growing waitlist and improved retention
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Further weakening of liquidity and debt service
coverage levels
-- Inability to meet enrollment targets or other evidence
of deterioration of the school's competitive profile
-- Additional debt issuance without strengthened reserves
or operating cash flow
LEGAL SECURITY
Bonds are secured by lease payments to be made by CCSA Inc, the
sole member of the obligated group schools, formerly named Charter
Day School, Inc. CCSA Inc is the lessee and the credit quality of
its revenue bonds is supported by long-term non-contingent leases
with Leland LLC, Southport LLC, and Columbus LLC's for repayment of
debt service. CCSA has entered into a Loan Agreement with the
Public Finance Authority (the issuer), which has assigned its
interest in the lease with CCSA to the trustee.
The requirement of the obligated group to make payments that secure
debt service during the lease term are absolute and unconditional,
payable from all legally available sources. Additional security is
derived by the group's right, title and interest in and to the
mortgaged estate, including all related additions, replacements,
substitutions and proceeds. Base lease payments are due monthly.
Pursuant to the loan agreement, CCSA Inc. maintains $250,000 repair
and replacement fund which moneys may be used to pay the cost of
extraordinary maintenance and replacement to keep the Series 2020
facilities in sound condition. The repair and replacement fund is
funded annually in an amount equal to one-half of one percent (.5%)
of operating expenses of the CDS Inc. A debt service reserve fund
is established funded at maximum annual debt service.
The CCSA also covenants to maintain a coverage ratio at or above
1.10 to 1.00 maximum annual debt service for any fiscal year. If
coverage is below 1.10 to 1.00 but above 1.00 to 1.00, then the
CCSA Inc. retain, at its expense, a management consultant. CCSA Inc
also covenants that it will maintain days cash on hand equal to at
least 45 days as of each June 30 thereafter. If coverage or days
cash on hand ever fall below the covenant requirements, CDS Inc.
shall retain a consultant. An event of default arising from failure
to achieve the debt service coverage ratio shall only occur if the
ratio is below 1.0x. Additional covenants include an additional
bonds test which requires a historical coverage ratio for the prior
12 months of at least 1.1x debt Service plus lease payments and a
projected coverage ratio that requires 1.25x future Maximum Annual
debt Service including all parity debt as well as the additional
debt and lease payments for 3 years. The debt service reserve fund
is at least 10% of principal amount of bonds, 125% of annual debt
service, or 100% of MADS.
PROFILE
CCSA is the sole member of Leland LLC, Southport LLC, and Columbus
LLC the borrowers and lessors of the financed properties and
facilities where the schools are located. CCSA Inc is the lessee
and the operating company of the obligated group schools which
include Classical Charter School of Leland, Classical Charter
School of Southport, and Classical Charter School of Whiteville.
Management of the schools is provided by Robert Bacon Academy Inc,
a for profit Education Management Company and founding organization
of the schools.
Classical Charter Schools of America, Inc. (CCSA) network changed
its name in the spring of 2021 from Charter Day School, Inc. The
new name is intended to reflect its classical curriculum and
anticipates further enrollment growth and expansion beyond its
current footprint. The schools are located in the southeast corner
of North Carolina. Currently, CCSA operates 4 campuses each under a
separate charter serving grades K-8. The obligated group includes 3
of the four campuses/charters which include Classical Charter
School of Leland, of Southport, and of Whiteville. The obligated
group charters expire in 2025, 2027, and 2029. The Classical
Charter School of Wilmington campus is not in the obligated group
and is leased by the CCSA Inc network. As of December 2022 the
obligated group served 2,487 students in grades K-8.
METHODOLOGY
The principal methodology used in these ratings was US Charter
Schools published in September 2016.
CORE SCIENTIFIC: April 14 Claims Filing Deadline Set
----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas set
April 14, 2023, at 5:00 p.m. (prevailing Central Time) as the last
date and time for general creditors to file proofs of claim against
Core Scientific Inc. and its debtor-affiliates.
The Court also set June 19, 2023, a 5:00 p.m. (prevailing Central
Time) as the deadline for governmental units to file their claims
against the Debtors.
Each proof of claims must be filed electronically through (i)
Stretto Inc. at https://cases.stretto.com/CoreScientific; (ii)
filing through Public Access to Court Electronic Records (PACE), at
https://ecf.txsb.uscourts.gov; or (iii) by delivering the original
proofs of claim to Stretto by mail or hand delivery at:
Stretto Inc.
Core Scientific Inc. et al. Claims Processing
c/o Stretto
410 Exchange, Suite 1999
Irvine, CA 92602
Proof of claim forms and a copy of the bar date order may be
obtained by visiting https://cases.Stretto.com/CoreScientific,
maintained by the Debtors' claims and noticing agent, Stretto.
Questions concerning the contents of the notice and requests for
copies of filed proofs of claim should be directed to Stretto
through email at TeamCoreScientific@stretto.com or phone by calling
Stretto at 949-404-4152 (Toll-Number Within the U.S./Canada) and
888-765-7875 (International).
About Core Scientific
Core Scientific, Inc. (OTCMKTS: CORZQ) is the largest U.S.
publicly-traded Bitcoin mining company in computing power. Core
Scientific, which was formed following a business combination in
July 2021 with blank check company XPDI, is a large-scale operator
of dedicated, purpose-built facilities for digital asset mining
colocation services and a provider of blockchain infrastructure,
software solutions and services. Core mines Bitcoin, Ethereum and
other digital assets for third-party hosting customers and for its
own account at its six fully operational data centers in North
Carolina (2), Georgia (2), North Dakota (1) and Kentucky (1). Core
was formed following a business combination in July 2021 with XPDI,
a blank check company.
In July 2022, one of the Company's largest customers, Celsius
Mining LLC, filed for Chapter 11 bankruptcy in New York. With low
Bitcoin prices depressing mining revenue to a record low, Core
Scientific first warned in October 2022 that it may have to file
for bankruptcy if the company can't find more funding to repay its
debt that amounts to over $1 billion. Core Scientific did not make
payments that came due in late October and early November 2022 with
respect to several of its equipment and other financings, including
its two bridge promissory notes.
Core Scientific and its affiliates filed petitions for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No.
22-90341) on Dec. 21, 2022. As of Sept. 30, 2022, Core Scientific
had total assets of US$1.4 billion and total liabilities of US$1.3
billion.
Judge David R. Jones oversees the cases.
The Debtors hired Weil, Gotshal & Manges, LLP as legal counsel; PJT
Partners, LP as investment banker; and AlixPartners, LLP as
financial advisor. Stretto is the claims agent.
A group of Core Scientific convertible bondholders is working with
restructuring lawyers at Paul Hastings.
B. Riley Commercial Capital, LLC, as administrative agent under the
Replacement DIP facility, is represented by Choate, Hall & Stewart,
LLP.
On Jan. 9, 2023, the U.S. Trustee for Region 7 appointed an
official committee to represent unsecured creditors in the Debtors'
Chapter 11 cases. The committee tapped Willkie Farr & Gallagher,
LLP as legal counsel, and Ducera Partners, LLC, as investment
banker.
CORIZON HEALTH: Judge Stayed Proceedings in Hunter's Lawsuit
------------------------------------------------------------
On Monday, March 13, 2023, Magistrate Judge Curtis Ivy, Jr. for the
Eastern District of Michigan has issued an order administratively
staying proceedings in the case titled Theron Hunter, Plaintiff, v.
Kathleen Holmes, et al., Defendants, Case No. 20-10534, (E.D.
Mich.), but only as to Defendant Corizon Health Inc. due to
bankruptcy filing.
A full-text copy of the Order dated March 13, 2023 is available at
https://tinyurl.com/mtvbvfpp 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: Move to Withdraw as Defendant's Counsel Denied
--------------------------------------------------------------
Magistrate Judge Kevin R. Sweazea for the District of New Mexico
denies the Motion to Withdraw as Counsel for Defendant Corizon
Health, Inc. filed in the case entitled ADAM BAKER, as Personal
Representative to the Estate of ZACHARY BARELA, Plaintiff, v.
CORIZON HEALTH, INC., Defendant, Case No. 2:22-cv-152 KWR/KRS,
(D.N.M.).
Corizon's counsel filed the instant motion to withdraw, stating
that "there is an irreconcilable conflict between Counsel for this
Defendant and the named Defendant regarding obligations owed by the
Defendant to Counsel under the attorney-client agreement."
Corizon has not filed objections to the Motion to Withdraw, which
constitutes consent to grant the motion. Nevertheless, as a
business entity, Corizon "can appear only with an attorney," and
"absent entry of appearance by a new attorney, any filings made by
the corporation, partnership or business entity other than a
natural person may be stricken and default judgment or other
sanctions imposed."
Therefore, considering the automatic stay as to Corizon pursuant to
the bankruptcy proceeding, the Court denies the Motion to Withdraw
without prejudice and with leave to re-file if Corizon obtains new
counsel.
A full-text copy of the Order dated March 10, 2023 is available at
https://tinyurl.com/487bsdfb 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.
CORNERSTONE ONSITE: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Cornerstone Onsite, LLC
d/b/a Dent-Well; d/b/a Campus Smiles;
d/b/a Mobile Dentistry Solutions;
d/b/a MDS;
d/b/a WellSmiles
7575 San Felipe Street
Suite 101
Houston, TX 77063-1776
Chapter 11 Petition Date: March 17, 2023
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 23-30949
Debtor's Counsel: John Akard Jr., Esq.
COPLEN & BANKS, PC
11111 McCracken, Suite A
Cypress TX 77429
Tel: (832) 237-8600
Email: johnakard@attorney-cpa.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by John D. White as chair.
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/JMVMHTI/Cornerstone_Onsite_LLC__txsbke-23-30949__0001.0.pdf?mcid=tGE4TAMA
COUNTER CORTE: Unsecureds Will Get 7.55%-8.16% in Subchapter V Plan
-------------------------------------------------------------------
The Counter Corte Madera LP filed with the U.S. Bankruptcy Court
for the Northern District of California a Plan of Reorganization
for Small Business under Subchapter V dated March 14, 2023.
Prior to August, 2022, the Debtor operated The Counter, a
restaurant located at 201 Corte Madera Town Center, Corte Madera,
California (the "Premises").
The COVID-19 pandemic resulted in 3 consecutive years of operating
losses for the Debtor. The Debtor determined that, with the
imminent expiration of its lease, the time had come to close and
liquidate its business.
The Counter ceased serving meals and closed as of August 1, 2022.
The lease of the Premises terminated, so the landlord has only a
small claim in this case. The Debtor moved its remaining assets to
a storage facility in Belmont, California. The U.S. Small Business
Administration ("SBA") has a lien on the personal property assets
stored in Belmont. At the commencement of the case, SBA also held
an unperfected lien on the cash on hand of $50,128.10.
The Debtor commenced this bankruptcy case on December 14, 2022, to
facilitate the orderly liquidation and distribution of its assets
and permit avoidance of SBA's lien on cash under the Bankruptcy
Code.
The Debtor is concurrently filing for bankruptcy court approval of
a sale of its liquor license for $124,000 or such higher bidder as
may be approved by the court at the hearing. The Debtor believes
that an overbid of $165,000 may be possible, leading to the range
of projections for recovery.
Payments due under the Plan total $171,128.10 - $215,128.10. They
are as follows:
* $14,000.00 for projected administrative claims of
professionals over retainer, $12,000 for the Subchapter V Trustee,
and $800.00 for the Franchise Tax Board
* Priority claims of $9,183.75 to the Marin County Tax
Collector, $4,527.54 for EDD and, unless it is paid by ADP prior to
the Effective Date, $25,477.81 to the Internal Revenue Service.
* The remaining $146,944.95 -$165,467.14 will be paid the
holders of allowed general unsecured claims on a pro rata basis in
two payments, the first on the Effective Date and second when the
proceeds from sale of the liquor license are available.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $130,617.50 - $149,139.60
in total over the three-year plan period, net of annual expenses
(projected at $0), amounting to a projected $130,617.50 -
$149,139.60. The final Plan payment is expected to be paid not
later than July 1, 2023.
This Plan of Reorganization proposes to pay creditors of the
Debtors from personal earnings, the proceeds of repayment of a
business loan, and then cash and proceeds from Debtors' investment
account.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 7.55-8.16% cents on the dollar. This Plan also
provides for the payment of administrative and priority claims.
Class 3 consists of General unsecured claims. General unsecured
claims shall receive their pro rata share of the remainder of the
estate, estimated to be $130,617.50 to $149,139.60 in two payments,
the first on the Effective Date and second when the proceeds from
sale of the liquor license are available. This Class is impaired.
Class 4 consists of the interests of the individual Debtors in
property of the estate. The Debtor's members shall retain their
interests in the Debtor.
The Debtor will retain possession of the property of the estate,
complete the sale of its liquor license and distribute all proceeds
as soon as practicable after the Effective Date. In the event that
SBA elects to take possession of its collateral, the Debtor shall
assemble it and make it available to SBA where it is stored in
Belmont, California.
A full-text copy of the Plan of Reorganization dated March 14, 2023
is available at https://bit.ly/3FB4lo2 from PacerMonitor.com at no
charge.
Attorney for the Plan Proponent:
Heinz Binder, Esq.
Robert G. Harris, Esq.
Binder & Malter, LLP
2775 Park Avenue
Santa Clara, CA 95050
Tel: (408) 295-1700
Fax: (408) 295-1531
Email: Heinz@bindermalter.com
Rob@bindermalter.com
About The Counter Corte Madera
The Counter Corte Madera LP operated The Counter, a restaurant
located at 201 Corte Madera Town Center, Corte Madera, California
(the "Premises"). The Debtor filed its voluntary petition for
Chapter 11 protection (Bankr. N.D. Calif. Case No. 22-30686) on
Dec. 14, 2022, with $272,574 in assets and $1,467,285 in
liabilities. Peter Katz, manager of CI Management LLC, signed the
petition.
Judge Dennis Montali oversees the case.
Binder & Malter, LLP, serves as the Debtor's legal counsel.
CSI COMPRESSCO: Incurs $22.1 Million Net Loss in 2022
-----------------------------------------------------
CSI Compressco LP has filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$22.09 million on $353.40 million of total revenues for the year
ended Dec. 31, 2022, compared to a net loss of $50.27 million on
$304.17 million of total revenues for the year ended Dec. 31,
2021.
As of Dec. 31, 2022, the Company had $722.40 million in total
assets, $84.25 million in total current liabilities, $663.42
million in total other liabilities, and a total partners' deficit
of $25.27 million.
The Company said, "Our primary cash requirements are for
distributions, working capital requirements, debt service, normal
operating expenses, and capital expenditures. Our potential sources
of funds are our existing cash balances, cash generated from our
operations, asset sales, and long-term and short-term borrowings,
which we believe will be sufficient to meet our working capital and
growth capital requirements during 2023. We have secured orders
from key customers for high-horsepower and electric compressors
which will drive our investment in growth capital and consume
liquidity in 2023."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1449488/000144948823000007/cclp-20221231.htm
About Compressco
CSI Compressco is a provider of compression services and equipment
for natural gas and oil production, gathering, artificial lift,
transmission, processing, and storage. CSI Compressco's
compression and related services business includes a fleet of
approximately 4,800 compressor packages providing approximately 1.2
million in aggregate horsepower, utilizing a full spectrum of low-,
medium-and high-horsepower engines. CSI Compressco also provides
well monitoring and automated sand separation services in
conjunction with compression and related services in Mexico. CSI
Compressco's aftermarket business provides compressor package
reconfiguration and maintenance services. CSI Compressco's
customers comprise a broad base of natural gas and oil exploration
and production, midstream, transmission, and storage companies
operating throughout many of the onshore producing regions of the
United States, as well as in a number of foreign countries,
including Mexico, Canada and Argentina. CSI Compressco is managed
by Spartan Energy Partners.
* * *
This concludes the Troubled Company Reporter's coverage of CSI
Compressco until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
DIAMOND SPORTS: Moody's Lowers CFR to 'C' Amid Bankruptcy Filing
----------------------------------------------------------------
Moody's Investors Service downgraded Diamond Sports Group, LLC's
probability of default rating to D-PD from Caa2-PD, and corporate
family rating to C from Caa2. Concurrently, Moody's downgraded the
ratings on the company's senior secured first lien term loan to
Caa2 from B2, the ratings on the company's second lien senior
secured debt to C from Caa2, the ratings on third lien senior
secured debt to C from Caa3 and the rating on the unsecured notes
to C from Ca. The speculative grade liquidity (SGL) rating was
downgraded to SGL-4. The ratings outlook is stable.
The rating actions reflect the company's announcement [1] that it
had filed for protection under Chapter 11 of the U.S. Bankruptcy
Code.
The filing follows a period in which the company has been
contending with unsustainably high leverage and low free cash flow
at a time when its strategy to expand its direct to consumer
business, to counter cord-cutting trends, requires investment.
These negative operating trends are expected to continue through
2023 necessitating a rationalization of the company's capital
structure. The downgrades reflect the default in connection with
the Chapter 11 filing and lower than anticipated recovery at
default as a result of the uncertainty over the business profile of
the company once it emerges from bankruptcy.
Downgrades:
Issuer: Diamond Sports Group, LLC
Corporate Family Rating, Downgraded to C from Caa2
Probability of Default Rating, Downgraded to D-PD from Caa2-PD
Speculative Grade Liquidity Rating, Downgraded to SGL-4 from
SGL-3
Backed Senior Secured 1st Lien Term Loan, Downgraded to Caa2
(LGD2) from B2 (LGD2)
Backed Senior Secured 2nd Lien Term Loan, Downgraded to C (LGD5)
from Caa2 (LGD3)
Backed Senior Secured 2nd Lien Revolving Credit Facility,
Downgraded to C (LGD5) from Caa2 (LGD3)
Backed Senior Secured 3rd Lien Term Loan B, Downgraded to C (LGD
6) from Caa3 (LGD5)
Backed Senior Secured 2nd Lien Global Notes, Downgraded to C
(LGD5) from Caa2 (LGD3)
Senior Secured 3rd Lien Global Notes, Downgraded to C (LGD6) from
Caa3 (LGD5)
Senior Unsecured Global Notes, Downgraded to C (LGD6) from Ca
(LGD6)
Outlook Actions:
Issuer: Diamond Sports Group, LLC
Outlook, Remains Stable
RATINGS RATIONALE
On March 14, 2023, Diamond commenced voluntary Chapter 11
proceedings in the U.S. Bankruptcy Court for the Southern District
of Texas. The company is negotiating a Restructuring Support
Agreement (RSA) with its lenders. As announced, the RSA being
discussed provides that first lien lenders will be unimpaired, with
the large remainder of the debt being equitized and that Diamond
will separate from Sinclair Broadcast Group, Inc. and operate as a
fully separate company.
Subsequent to the actions, Moody's will withdraw all of its ratings
for Diamond given the company's bankruptcy filing.
The principal methodology used in these ratings was Media published
in June 2021.
DYNAMIC TECHNOLOGIES: Obtains CCAA Stay Order; FTI as Monitor
-------------------------------------------------------------
Dynamic Technologies Inc., Dynamic Attractions Ltd., Dynamic
Entertainment Group Ltd., Dynamic Attractions Inc. and Dynamic
Structures Ltd. sought and obtained an initial order ("Initial
Order") from the Court of King's Bench of Alberta ("Court") under
the Companies' Creditors Arrangement Act, as amended ("CCAA").
FTI Consulting Canada Inc. was appointed as monitor ("Monitor") of
the Companies.
The Initial Order provides, among other things, a stay of
proceedings until Mach 19, 2023 ("Stay Period"). A comeback
hearing was scheduled with the Court on March 16, 2023 for
arguments with respect to the relief granted in the Initial Order,
an extension of the Stay Period, and any additional relief that may
be sought by the Companies at the Comeback Hearing.
According to court documents, the Companies are insolvent and have
over $5,000,000 in liabilities and the companies qualify as
affiliates pursuant to the CCAA. The Dynamic Group has satisfied
the statutory conditions under the CCAA to obtain an Initial Order.
The application is supported by the Companies' primary secured
creditors. The companies anticipate that they will shortly be in a
position to conduct a sales and investment solicitation process
("SISP").
A copy of the Initial Order and copies of the materials publicly
filed in the CCAA proceedings may be obtained at
http://cfcanada.fticonsulting.com/dynamicgroupor on request from
the Monitor by calling 1-833-768-1171 or e-mailing
DynamicGroup@FTIConsulting.com. The Applicant is continuing
operations pursuant to the terms of the Initial Order.
To date, no claims procedure has been approved by the Court and
creditors therefore are not required to file a proof of claim at
this time.
If you have any questions regarding the foregoing or require
further information, please consult the Monitor's website at
http://cfcanada.fticonsulting.com/dynamicgroupor contact the
Monitor at 1-833-768-1171 or via e-mail
DynamicGroup@FTIConsulting.com.
Counsel to Dynamic Technologies:
MLT Aikins LLP
2100 Livingstone Place 222 - 3rd Avenue SW
Calgary, Alberta T2P 0B4
Tel: 403-693-5420/4347
Fax: 403-508-4349
Ryan Zahara
Email: rzahara@mltaikins.com
Catrina Webster
Email: cwebster@mltaikins.com
FTI Consulting Canada:
FTI Consulting Canada Inc.
Receiver
1610, 520 - 5 Avenue SW
Calgary, Alberta T2P 3R7
Deryck Helkaa
Email: deryck.helkaa@fticonsulting.com
Brett Wilson
Email: brett.wilson@fticonsulting.com
Olver, Dustin
Email: Dustin.Olver@fticonsulting.com
Robert Kleebaum
Email: Robert.Kleebaum@fticonsulting.com
Counsel to FTI Consulting Canada:
Burnett, Duckworth & Palmer LLP
2400, 525 - 8th Avenue SW
Calgary, Alberta T2P 1G1
David Legeyt
Email: dlegeyt@bdplaw.com
Ryan Algar
Email: ralgar@bdplaw.com
Dynamic Technologies Inc. -- https://dynamictechgroup.com/ --
provides innovative ride systems, attractions and dynamic
structures.
EVERNEST HOLDINGS: Amends Several Secured Claims Pay Details
------------------------------------------------------------
Evernest Holdings LLC, submitted an Amended Plan of Reorganization
under Subchapter V dated March 14, 2023.
On Nov. 16, 2022, the Debtor acquired the Properties located at 117
NW 42 Avenue, Miami, Florida, (hereinafter "117 NW Property"),
15661 SW 29 Terrace Miami, Florida, (hereinafter "15661 Property")
and 10240 SW 124 Street, Miami, Florida, (hereinater 10240
Property), hereinafter referred to as "The Evernest Properties").
The primary business of the debtor is the ownership and rental of
the properties to residential tenants.
This Plan is an operating plan. It provides for continuing
operation of the Debtor's business to fund an orderly repayment of
claims within the constraints of the cash flow generated by the
Debtor's business.
The 15661 Property is encumbered by a first position mortgage in
favor of the Class 2 Claimant, HSBC, in the approximate amount of
$1,402,800.57. (POC # 1) The Debtor believes the value of the 15661
Property is approximately $544,370.00.
The 10240 Property is encumbered by a first position mortgage in
favor of the Class 3 Claimant, PMIT REI 2021-A LLC, (hereinafter
PMIT) in the approximate amount of $1,066,238.55 (POC # 3) The
Debtor believes the value of the 10240 Property is approximately
$835,000.00 net of required repairs.
This Plan of Reorganization proposes to pay creditors of Evernest
Holdings LLC., from future rental income, as well as sales and or
refinance proceeds resultant from the owning and managing of the
Evernest Properties.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 41 cents on the dollar. This Plan also provides
for the payment in full of administrative claims during Year 1 of
the Plan.
Class 1 First position mortgage of Shellpoint in the total amount
of approximately $390,000, of which $245,000 is secured. On the
Effective Date of the Plan Eddrian Burciaga shall through a new
value contribution, make a principal reduction payment of $5,000 to
the Class 1 Creditor. The Class 1 claim holder shall retain the
first mortgage lien it held as same existed immediately prior to
the Petition Date, with an adjusted balance of $245,000. Commencing
on the 15th of the month following the Effective Date, the Class 1
allowed Secured Claim shall be paid in monthly installments
calculated at an interest rate of 6% fixed interest amortized over
30 years with a balloon payment due at the end of the 60th month in
an amount equal to the unpaid principal balance of the loan.
The unsecured balance of the Class 1 Claimants Claim in the amount
of approximately $140,000 ($390,000 - $245,000 - $5,000.00 new
value contribution) shall be treated as an unsecured claim pursuant
to Class 6. Upon entry of the Confirmation Order, Shellpoint shall
attach copies of the confirmed Plan and the Confirmation Order to
the Shellpoint First position mortgage Note as an Allonge.
The Class 2 First position mortgage of HSBC in the total amount of
approximately $1,402,857, of which $544,370.56 is secured. On the
Effective Date of the Plan Eddrian Burciaga shall through a new
value contribution, make a principal reduction payment of $5,000 to
the Class 2 Creditor. The Class 2 claim holder shall retain the
first mortgage lien it held as same existed immediately prior to
the Petition Date with an adjusted balance of $544,370.56.
Commencing on the 15th of the month following the Effective Date,
the Class 2 allowed Secured Claim shall be paid in monthly
installments calculated at 6% fixed interest amortized over 30
years with a balloon payment due at the end of the 60th month in an
amount equal to the unpaid principal balance of the loan.
The unsecured balance of the Class 2 Claimants Claim in the amount
of approximately $878,459.00 ($1,402,857 - $519,398 - $5,000 new
value Contribution = $878,459) shall be treated as an unsecured
claim pursuant to Class 6. In the event the Reorganized Debtor
defaults in its obligation to pay each payment due and payable
under the Plan, the holder of the HSBC First position mortgage may
send notice of the default to the Debtor at the Debtor's place of
business or such other location as may be agreed. In that event,
the Debtor shall have 21 days from the date the notice is sent to
cure the default. In the event the Debtor does not cure the
default, the holder of the HSBC First position mortgage may
exercise its rights to foreclose pursuant to Florida law.
The Class 3 First position mortgage of PMIT in the total amount of
approximately $1,066,238.55. The Class 2 Claimant is fully secured
under the Plan. On the Effective Date of the Plan Eddrian Burciaga
shall through a new value contribution, make a principal reduction
payment of $5,000 to the Class 3 Creditor. The Class 3 claim holder
shall retain the first mortgage lien it held as same existed
immediately prior to the Petition Date. The interest bearing
principal balance shall be the February 2023 principal balance of
$490,000. The non-interest bearing principal balance shall be
$571,239.00 ($1,066,238.55 - $490,000 - $5,000.00 New Value
contribution = $571,239).
The Distributions under the Plan will be made from revenues
resultant from the rental of the Evernest Properties.
The Plan will be funded by the Debtor's post-petition disposable
income over a 5 year period after the Effective Date. Only
creditors holding Allowed Claims will receive distributions and a
reserve will be set up for filed or scheduled claims that are
disputed and will be subject to the claims objection.
A full-text copy of the Amended Plan dated March 14, 2023 is
available at https://bit.ly/3Ttirxt from PacerMonitor.com at no
charge.
Attorney for the Debtor:
Richard Siegmeister
Richard Siegmeister, PA
3850 Bird Rd, Floor 10
Miami, FL 33146-1501
Tel: (305) 859-7376
Email: rspa111@att.net
About Evernest Holdings
Evernest Holdings, LLC owns real properties located in Miami-Dade
County, Fla.
Evernest Holdings sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-18951) on Nov. 21,
2022. In the petition signed by its manager, Eddrian Burciaga, the
Debtor disclosed up to $50,000 in assets and up to $1 million in
liabilities.
Judge Robert A. Mark oversees the case.
Richard Siegmeister, Esq., at Richard Siegmeister, PA is the
Debtor's legal counsel.
FAMOUS ANTHONY'S: Reaches Settlement with Cincinnati Insurance
--------------------------------------------------------------
Famous Anthony's Brookside, Inc., submitted an Amended Plan of
Reorganization dated March 13, 2023.
The Debtor provided in its original Plan of Reorganization dated
April 11, 2022 that allowed personal injury claims arising from the
hepatitis outbreak would be paid with the proceeds from its
insurance policy with The Cincinnati Insurance Company
("Cincinnati").
At the time of filing the initial Plan of Reorganization, the
amounts of the claims of the personal injury claimants
("Claimants") had not been liquidated. Further, at the time of the
filing of the original Plan of Reorganization the amounts available
from Cincinnati had not been determined.
On May 5, 2022, the Debtor, along with its affiliated Debtors, KBK
Enterprises of Roanoke, Inc. ("KBK") and Famous Anthony's, Inc.,
along with the Claimants, filed an adversary proceeding in this
Court against Cincinnati. The adversary proceeding was styled
Complaint for Declaratory Judgment Against Defendant, Cincinnati
Insurance Company. Cincinnati removed the Adversary Proceeding to
the United States District Court for the Western District of
Virginia.
Ultimately, after requesting and being allowed to file an amended
complaint, the same parties to the bankruptcy court adversary
proceeding filed a 2nd Amended Complaint for Declaratory Judgment
against Cincinnati. In January, 2023, the parties reached a
tentative settlement with Cincinnati regarding the amount of
insurance proceeds available, subject to an allocation by the
Bankruptcy Court of the amount of insurance proceeds agreed to by
the Settlement ("$14,000,000.00") among the claimants of the Debtor
and those of its affiliate, KBK.
After the liquidation of the personal injury claims and the
settlement with Cincinnati as to the available insurance proceeds,
a dispute arose amongst the Claimants of this Debtor and those of
KBK as to the appropriate allocation of the insurance proceeds. On
January 31, 2023 the Debtor, jointly with its affiliates, KBK and
Famous Anthony's Inc. filed a Motion to Determine and Allocate
Assets of the Estates Pursuant to 11 U.S.C. §541 ("Motion to
Allocate"). With the Motion, the Debtor and its affiliates were
asking the Bankruptcy Court to determine the appropriate allocation
of the insurance proceeds between the bankruptcy estates of
Brookside and KBK.
On March 2, 2023, with the help of a retained mediator, this Debtor
and KBK, and the Claimants of this Debtor and KBK engaged in a
lengthy mediation, resulting in an agreement among all of the
parties as to the allocation of the insurance proceeds. As a
result, $6,225,000.00 of insurance proceeds will be available pro
rata, to Claimants of the Debtor. Those funds will be paid pursuant
to this Plan, pro-rata, to the Debtor's personal injury Claimants.
The pro-rata payment to each of the Debtor's Claimants will be paid
as settlement in full of their claims against the Debtor.
Class 2 consists of Non-Personal Injury Unsecured Claims. The Class
2 claims will be paid in full, by the Debtor, within 30 days of the
Effective Date, from cash on hand, operating profit and vendor
rebates. The Class 2 claims will not be paid from the insurance
proceeds from Cincinnati.
Class 3 consists of Personal Injury Unsecured Claims. Debtor will
pay its claims for allowed personal injury claims arising from the
referenced hepatitis outbreak with the proceeds from its insurance
policy with Cincinnati (totaling $6,225,000.00). The proceeds shall
be paid, pro-rata to the Williamson Road designated claimants. The
pro rata payment will be in full satisfaction of the personal
injury claims and each Claimant shall release the Debtor, its
affiliate co-debtors, and all of their owners, shareholders, and
employees.
Further, the Claimants shall release Cincinnati. Prior to payment,
each Claimant shall be required to sign releases. The distribution
from the insurance proceeds shall be the only distribution to be
received by Claimants in this class under the Plan. The amount that
the Debtor expects to pay pursuant to this Plan, from the insurance
proceeds, to each Claimant.
The Debtor hereby provides the following means for execution of
this Plan:
* The Debtor will determine in the near future whether to
reopen the Williamson Road restaurant and continue its operations
as a full service restaurant in the ordinary course of business.
Tony Triplette and Bonnie Viar will continue in their roles as
officers and managers.
* Within 30 days of the Effective Date, the Debtor from cash
on hand or from affiliates, will pay the Class 2 claims in full.
* The Debtor, upon payment by Cincinnati of the insurance
proceeds, and the signing of the required releases as described in
the treatment of the Class 3 claims, through its counsel and in
conjunction with plaintiffs' counsel, will make pro-rata
distributions to the personal injury claimants and obtain the
requisite releases.
* Any objections to claims are to be filed within 45 days of
the Effective Date. The Debtor will not object to personal injury
claims to the extent they are consistent with Exhibit 1.
* Final professional fee applications are to be filed within
45 days of the Effective Date.
* The Debtor shall pursue voidable preference and/or
fraudulent conveyance claims in its discretion.
A full-text copy of the Amended Plan dated March 13, 2023 is
available at https://bit.ly/3YUM5N6 from PacerMonitor.com at no
charge.
Counsel for the Debtor:
Andrew S. Goldstein, Esq.
Magee Goldstein Lasky & Sayers, P.C.
PO Box 404
Roanoke, VA 24003-0404
Telephone: (540) 343-9800
Facsimile: (540) 343-9898
E-mail: agoldstein@mglspc.com
About Famous Anthony's Brookside
Famous Anthony's Brookside, Inc., was formed in 1998 and has
operated the Famous Anthony's restaurant at 6499 Williamson Road,
Roanoke, VA 24019.
The Debtor filed a Chapter 11 petition (Bankr. W.D. Va. Case No.
22-70009) on Jan. 10, 2022. The Debtor is represented by Andrew S.
Goldstein, Esq. of MAGEE GOLDSTEIN LASKY & SAYERS, P.C.
FAMOUS ANTHONY'S: Resolves Personal Injury Unsecured Claims Issues
------------------------------------------------------------------
Famous Anthony's, Inc., submitted an Amended Plan of Reorganization
dated March 13, 2023.
Since the bankruptcy filing, the Debtor has continued to operate
its non-restaurant business. It has timely paid its post-petition
bills. It has collected some postpetition vendor rebates. It does
not have any liability to the personal injury claimants that have
asserted claims in its case.
Class 3 consists of Non-Personal Injury Unsecured Claims. The Class
3 claims will be paid in full, by the Debtor, within 30 days of the
Effective Date, from cash on hand, operating profit and vendor
rebates.
Class 4 consists of Personal Injury Unsecured Claims (Disputed).
Forty personal injury claims were filed against the Debtor in this
case. Because the Debtor does not own or operate any restaurant,
and did not own or operate any restaurant during the time of the
alleged hepatitis outbreak, the Debtor disputes having any
liability to any/all of the personal injury claimants. Further,
because the Debtor did not own or operate any restaurant, it does
not have available insurance proceeds to pay the personal injury
claimants. The Debtor also had no employees during the time of the
alleged hepatitis outbreak, so it clearly did not employ the
individual alleged to have worked while infected with hepatitis.
Pursuant to the Stipulation and Consent Order Resolving Claims of
Injured Claimants entered by the Court on March 13, 2023 all of the
personal injury claims filed in this case have been disallowed.
Accordingly, there will be no payment needed or to be made to this
class.
Class 5 consists of Executory Contracts and Unexpired Leases. Known
executory contracts and unexpired leases of the Debtor are as
follows: FA Properties, LLC – commercial lease for Debtor's
premises; and Waste Management of Virginia – trash pickup for all
Famous Anthony's entities. The Debtor assumes, pursuant to 11
U.S.C. § 365, as of the petition date, the executory contracts and
unexpired leases.
The Debtor will continue to operate in a management capacity as
described in this Plan, for the 6 Famous Anthony's entities. Tony
Triplette and Bonnie Viar will continue in their roles as officers
and managers.
The Debtor hereby provides the following means for execution of
this Plan:
* The Debtor will continue to operate in a management capacity
as described in this Plan, for the 6 Famous Anthony’s entities.
Tony Triplette and Bonnie Viar will continue in their roles as
officers and managers.
* Any objections to claims are to be filed within 45 days of
the Effective Date.
* Final professional fee applications are to be filed within
45 days of the Effective Date.
A full-text copy of the Amended Plan dated March 13, 2023 is
available at https://bit.ly/3Tq8T6w from PacerMonitor.com at no
charge.
Counsel for the Debtor:
Andrew S. Goldstein, Esq.
Magee Goldstein Lasky & Sayers, P.C.
PO Box 404
Roanoke, VA 24003-0404
Telephone: (540) 343-9800
Facsimile: (540) 343-9898
agoldstein@mglspc.com
About Famous Anthony's Inc.
Famous Anthony's Inc. was formed in 1991 and has operated as
company that facilitates operations among the Famous Anthony's
restaurants.
Famous Anthony's filed a Chapter 11 petition (Bankr. W.D. Va. Case
No. 22-70010) on Jan. 10, 2022. The Debtor is represented by
Andrew S. Goldstein, Esq. of MAGEE GOLDSTEIN LASKY & SAYERS, P.C.
FIRST REPUBLIC BANK: Receives $30 Billion Lifeline from 11 Banks
----------------------------------------------------------------
A consortium of 11 of the largest U.S. banks last week agreed to
make uninsured deposits totaling $30 billion to First Republic
Bank:
-- Bank of America, Citigroup, JPMorgan Chase and Wells are
each making a $5 billion uninsured deposit into First Republic
Bank.
-- Goldman Sachs and Morgan Stanley are each making an
uninsured deposit of $2.5 billion.
-- BNY Mellon, PNC Bank, State Street, Truist and U.S. Bank
are each making an uninsured deposit of $1 billion.
The move came as First Republic was facing a crisis of confidence
from investors and customers, according to a CNN report.
“This show of support by a group of large banks is most welcome,
and demonstrates the resilience of the banking system,” the
Treasury Department said in a statement Thursday, CNN reported.
The banks said in a joint statement: “This action by America's
largest banks reflects their confidence in First Republic and in
banks of all sizes, and it demonstrates their overall commitment to
helping banks serve their customers and communities. Regional,
midsize and small banks are critical to the health and functioning
of our financial system.
Following the receiverships of Silicon Valley Bank and Signature
Bank, there were outflows of uninsured deposits at a small number
of banks. "America's financial system is among the best in the
world, and America's banks -- large, midsize and community banks --
do an extraordinary job serving the banking needs of their unique
customers and communities. The banking system has strong credit,
plenty of liquidity, strong capital and strong profitability.
Recent events did nothing to change this," the banks said.
"The actions of America's largest banks reflect their confidence in
the country's banking system. Together, we are deploying our
financial strength and liquidity into the larger system, where it
is needed the most. Smaller- and medium-sized banks support their
local customers and businesses, create millions of jobs and help
uplift communities. America's larger banks stand united with all
banks to support our economy and all of those around us.”
As reported by the Troubled Company Reporter on March 17, 2023, S&P
Global Ratings lowered its long-term issuer credit rating on First
Republic Bank to 'BB+' from 'A-'. S&P also lowered its senior
unsecured issue rating to 'BB+' and the subordinated and preferred
stock issue ratings to 'BB-', and 'B', respectively. S&P placed all
of its ratings on First Republic on CreditWatch with negative
implications.
S&P said, "We believe the risk of deposit outflows is elevated at
First Republic -- despite actions by federal regulators. In the
wake of recent bank failures due to liquidity issues and the
ensuing market stress, the Federal Reserve Board announced on March
12, certain emergency liquidity measures, including the creation of
the Bank Term Funding Program (BTFP) and an easing of terms offered
through the discount window. The BTFP offers loans of up to one
year in length to banks pledging eligible securities. Still, if
deposit outflows continue, we expect First Republic would need to
rely on its more costly wholesale borrowings. This would encumber
its balance sheet and hurt its modest profitability.”
"We believe that First Republic's deposit base is more concentrated
than most large U.S. regional banks, which presents heightened
funding risks in the current environment. As of Dec. 31, 2022,
First Republic had approximately $176.4 billion in total deposits,
of which 63% were commercial. We believe the portion above the
Federal Deposit Insurance Corp. insurance limit of $250,000 --
about 68% of the total, or $119.5 billion -- is most susceptible to
withdrawal, despite the bank's historically excellent depositor
loyalty."
Similarly, Fitch Ratings downgraded First Republic Bank's Long-Term
Issuer Default Rating (IDR) to 'BB' from 'A-' and Short-Term IDR to
'B' from 'F1'. In addition, the ratings were placed on Rating Watch
Negative. The Long-Term IDR is driven by the bank's Viability
Ratings (VR), which was downgraded to 'bb' from 'a-'. The action
reflects Fitch's revised view of the bank's funding and liquidity
profile in the current environment. Fitch believes the bank's
funding and liquidity profile has changed and represents a "weakest
link" relative to other rating factors.
Fitch noted that the bank's investment portfolio is relatively
concentrated in long-dated municipal securities that affords it
less flexibility, another rating constraint. As of Dec. 31, 2022,
roughly 61% of the book value of the bank's investment portfolio
was comprised of municipal securities. This proportion is high
compared to industry standards. While the credit quality of the
bank's municipal portfolio is viewed as good, these securities are
relatively illiquid compared to U.S. treasury and agency securities
that feature more prominently at most other U.S. banks.
FLOSS BAR: Creditors to Get Proceeds From Liquidation
-----------------------------------------------------
Floss Bar, Inc. and Med Bar, LLC, filed with the U.S. Bankruptcy
Court for the Southern District of New York a Plan of Liquidation
under Subchapter V dated March 13, 2023.
Floss Bar was established in 2017 as a mobile logistics business
enabling dentists and hygienists to provide dental care at the
workplaces of Floss Bar's corporate clients as part of onsite
wellness initiatives for their employees.
Unfortunately, the Covid-19 pandemic negatively impacted Floss
Bar's operations. The Debtors were forced to scale back operations
and take various cost cutting measures. For instance, prior to
bankruptcy, the Debtors reduced their salaried staff by over 85%
and have sold certain dental equipment and vehicles. The Debtors
entered into that certain Purchase and Sale of Future Receivables
on or about June 16, 2022 with Fora Financial Advance, LLC in order
to refinance its existing debt (the "Fora Agreement"). As of
December 9, 2022, Fora is owed $431,909.84.
Ultimately, the Debtors have determined that it requires the
breathing spell afforded by the automatic stay provisions of the
Bankruptcy Code so that they may wind down its business in an
orderly fashion. The Debtors intend to collect their receivables
and service their remaining contracts. On the Petition Date, Med
Bar had a long-term agreement with the Massachusetts Department of
Corrections to provide Covid testing. Finally, Med Bar has
approximately $500,000 in accounts receivable for clinical
laboratory services it rendered, which includes reimbursement
claims against certain insurance companies totaling about $350,000.
This forecast is after significant write-downs of insurance claims
analyzed to be uncollectable.
The Debtors believe that certain assets could be attractive to
buyers. They have dental equipment (estimated, and un-appraised,
value of about $137,000 owned by Floss Bar); a vehicle (worth about
$80,000), trade secrets, software developed in-house, good will,
and a large $4.7 million net operating loss. They have a combined
debt of about $1.9 million, including the outstanding amount owed
to Fora as well as large disputed claims of Talis Biomedical (about
$260,000), Greenpoint Rx (about $286,000), and Dr. Chrono (about
$129,000).
The Plan calls for the wind-down of the Debtors' business and
liquidation of their assets. The Debtors intend to sell their
assets, collect their receivables, service their remaining and any
profitable new contracts, and make distributions to creditors. The
Debtors believe that through this orderly liquidation, the Debtors'
creditors will receive the most value.
The Debtors intend to wind down their business and liquidate their
assets over the course of 18 months. The Plan provides for classes
of claims for secured creditors, non-tax priority creditors, and
unsecured creditors. The Plan also provide for separate
classification among Floss Bar's creditors and Med Bar's
creditors.
The Plan provides for the full payment of administrative and
priority claims in accordance with the Bankruptcy Code. The Debtors
including secured creditors (1(a), 1(b), 1(c), and 1(d)) and
priority creditors (class 2(a), 2(b)) will be paid in full. The
Debtors' unsecured creditors will share in the recovery after the
senior creditors are paid in full.
Class 3(a) consists of allowed general unsecured claims against
Floss Bar. Class 3(a) consists of the Allowed General Unsecured
Claims against Floss Bar (including deficiency claims of Class 1(b)
creditors). Upon the Effective Date of the Plan, in full
satisfaction of its Allowed General Unsecured Claim, on the 18
months anniversary of the Effective Date of this plan, the Debtors
will distribute their assets pro rata to Class 3(a) creditors after
senior creditors (Class 1(a), (b), (c), (d) and Class 2(a) and (b))
are paid in full. Class 3(a) Claims are impaired. The allowed
unsecured claims total $94,227.24 plus deficiency claims of Class
1(b) creditor.
Class 3(b) consists of allowed general unsecured claims against Med
Bar. Class 3(b) consists of the Allowed General Unsecured Claims
against Med Bar (including deficiency claims of Class 1(b)
creditors). Upon the eighteenth month after the Effective Date of
the Plan, in full satisfaction of its Allowed General Unsecured
Claim, the Debtors will distribute their assets pro rata to Class
3(b) creditors after senior creditors (Class 1(a), (b), (c), (d)
and Class 2(a) and (b)) are paid in full. Class 3(b) Claims are
impaired. The allowed unsecured claims total $1,301,158.00 (based
on Med Bar's schedules. Subject to Debtors' right to object to
claims).
Class 4(a) consists of Allowed equity interests of Floss Bar. Upon
the Effective Date of the Plan, the holder of the Interests of
Floss Bar shall retain such Interests. Class 4(a) Interests are
unimpaired, and therefore holders of Class 4(a) are deemed to have
voted to accept the Plan.
Class 4(b) consists of Allowed membership interests of Med Bar.
Upon the Effective Date of the Plan, the holder of the Interests of
Med Bar shall retain such Interests. Class 4(b) Interests are
unimpaired, and therefore holders of Class 4(b) are deemed to have
voted to accept the Plan.
Floss Bar does not anticipate engaging in any ongoing business
operations after the Effective Date. Med Bar will perform under its
existing contracts, provide inbound sales services from time to
time, and will wind down its business. The Debtors' business
operations are anticipated to be limited to liquidating their
assets, collecting Debtor's assets, making distributions, and
otherwise winding up Debtors' financial and business affairs. For
the purposes of windup and liquidation, the Reorganized Debtors are
authorized to continue normal business operations and enter into
such transactions as they deem advisable, free of any restriction
or limitation imposed under any provision of the Bankruptcy Code,
except to the extent otherwise provided in the Plan.
The Reorganized Debtors shall conduct an orderly liquidation of
their property and assets. The Reorganized Debtors are not required
to conduct a liquidation sale of property and assets but may market
and sell them after the Effective Date, without court order, as
they deem reasonable and likely to maximize their value.
A full-text copy of the Liquidating Plan dated March 13, 2023 is
available at https://bit.ly/3ZYD07j from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Vincent J. Roldan, Esq.
Mandelbaum Barrett, P.C.
3 Becker Farm Road
Roseland, NJ 07068
Tel: (973) 974-9815
Email: vroldan@mblawfirm.com
About Floss Bar
Floss Bar, Inc. -- https://www.flossbar.com/ -- offers dental care
specializing in preventative, restorative and orthodontic
dentistry. It is based in New York.
Floss Bar and affiliate Med Bar, LLC each filed a petition for
relief under Subchapter V of Chapter 11 of the Bankruptcy Code
(Bankr. S.D.N.Y. Lead Case No. 22-11671) on Dec. 15, 2022. In the
petitions filed by their chief executive officer, Ewa Sadej, the
Debtors reported $1 million to $10 million in both assets and
liabilities.
Judge Michael E. Wiles oversees the cases.
The Debtors are represented by Vincent J. Roldan, Esq., at
Mandelbaum Salsburg P.C.
FRANCO'S PAVING: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Franco's Paving LLC
3813 Castle Valley Dr.
Corpus Christi, TX 78410
Business Description: The Debtor provides paving services.
Chapter 11 Petition Date: March 17, 2023
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 23-20069
Debtor's Counsel: Susan Tran Adams, Esq.
TRAN SINGH, LLP
2502 La Branch St.
Houston, TX 77004
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Isaias Franco as president.
The Debtor filed an empty list of its 20 largest unsecured
creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/LPVRRCY/Francos_Paving_LLC__txsbke-23-20069__0001.0.pdf?mcid=tGE4TAMA
FREEDOM DRAIN: Unsecured Creditors to Recover 1% to 30% in Plan
---------------------------------------------------------------
Freedom Drain Cleaning and Pipe Services LLC filed with the U.S.
Bankruptcy Court for the District of Delaware a Small Business Plan
of Reorganization dated March 13, 2023.
The Debtor is a professional commercial (95%) and residential (5%)
plumbing service company. The Debtor operates in the Plumbing
Contractors business/industry within the Construction-Special Trade
Contractors sector.
The Debtor commenced this case to restructure its balance sheet
that had become overleveraged with very costly borrowings from 5
different Merchant Lenders. As a newly formed company, the Debtor
lacked a sufficient history of profitability or unencumbered assets
to attract a traditional small business lender, but still needed
capital to sustain and grow its business. Reluctantly, the Debtor
resorted to sub-prime Merchant Lenders that extended credit or
purchased future receivables of the business.
However, such financing carries with it actual or implied annual
percentage rates that are exorbitant and create a burdensome cycle
of debt with payment schedules varying from daily to weekly and
sharply abbreviated repayment periods. The Debtor also was the
target of litigation that resulted in a monetary settlement. The
Debtor's obligations pursuant to the settlement further impaired
its ability to pay ongoing business expenses, including payroll to
its employees.
Under the Plan, the Debtor will devote all of its projected
Disposable Income toward the payment of Creditors. The Plan will be
funded with the funds that are not for the payment of expenditures
necessary for the continuation, preservation, or operation of the
business of the Debtor. The Plan provides for payment of
Administrative Expenses, Priority Tax Claims, and Allowed Secured
Claims in accordance with the Bankruptcy Code, and projects payment
to Allowed General Unsecured Claims. Finally, Holders of Equity
Interests will retain their Equity Interests as they existed on the
Commencement Date.
Class 1 consists of Secured Claims. Payment in full by equal
monthly installments, the amount of Disposable shall be split
proportionally among Allowed Secured Claims for that particular
month.
Class 2 consists of Priority Non-Tax Claims. Pro rata payment from
any Disposable Income of the Debtor and after the Debtor makes
distributions to Administrative Claims, Priority Tax Claims and
Class 1. This Class is unimpaired. This Class will receive a
distribution of 100% of their allowed claims.
Class 3 consists of General unsecured Claims. Pro rata payment from
any disposable income of the Debtor and after the Debtor makes
distributions to Claims of Classes 1 and 2. This Class will receive
a distribution of 1%-30% of their allowed claims. This Class is
impaired.
Class 4 consists of Equity Interests. The Members of the Debtor
shall retain their ownership interests in the Debtor.
The Plan will be funded by the proceeds realized from the
operations of the Debtor.
On Confirmation of the Plan, all property of the Debtor, tangible
and intangible, including, without limitation, licenses, furniture,
fixtures and equipment, will revert, free and clear of all Claims
and Equitable Interests except as provided in the Plan, to the
Debtor. The Debtor expects to have sufficient cash on hand to make
the payments required on the Effective Date.
A full-text copy of the Small Business Plan dated March 13, 2023 is
available at https://bit.ly/3LqTEYU from PacerMonitor.com at no
charge.
Counsel for the Debtor:
THE ROSNER LAW GROUP LLC
Frederick B. Rosner, Esq.
Jason A. Gibson, Esq.
Zhao (Ruby) Liu, Esq.
824 N. Market Street, Suite 810
Wilmington DE 19801
Tel.: (302) 777-1111
Email: rosner@teamrosner.com
gibson@teamrosner.com
liu@teamrosner.com
About Freedom Drain Cleaning
Freedom Drain Cleaning and Pipe Services LLC is a professional
commercial (95%) and residential (5%) plumbing service company.
Freedom Drain Cleaning and Pipe Services sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No.
22-11013) on Oct. 28, 2022. In the petition signed by Israel J.
Martinez, Jr., managing member, the Debtor disclosed up to $500,000
in both assets and liabilities.
Judge Brendan L. Shannon oversees the case.
Frederick B. Rosner, Esq., at The Rosner Law Group, LLC, is the
Debtor's counsel.
FTX TRADING: Files Schedules, Statements of Financial Affairs
-------------------------------------------------------------
FTX Trading Ltd. (d.b.a. FTX.com), and its affiliated debtors
(together, the "FTX Debtors") on March 15, 2023, filed Schedules of
Assets and Liabilities and Statements of Financial Affairs (the
"Schedules and SOFAs") for all Debtor entities involved in their
Chapter 11 proceedings. The Schedules and SOFAs include disclosure
of certain assets and liabilities of the FTX Debtors as of the
Petition Date, based on current information.
The Schedules and SOFAs filed describe $3.2 billion in payments and
loans to founders, chiefly from Alameda Research, including:
* ~$2.2 billion to Sam Bankman-Fried
* ~$587 million to Nishad Singh
* ~$246 million to Zixiao "Gary" Wang
* ~$87 million to Ryan Salame
* ~$25 million to John Samuel Trabucco
* ~$6 million to Caroline Ellison
These amounts exclude over $240 million spent to purchase luxury
property in the Bahamas, political and charitable donations made
directly by the FTX Debtors, and substantial transfers to
non-Debtor subsidiaries in the Bahamas and other jurisdictions.
Although some of the property purchased with the proceeds of these
transfers is already in the control of the FTX Debtors or
governmental authorities with whom the FTX Debtors are cooperating,
the amount and timing of eventual monetary recoveries cannot be
predicted at this time. The FTX Debtors are investigating causes of
action against the recipients of these transfers and their
subsequent transferees.
The Schedules and SOFAs are prepared pursuant to Chapter 11 rules
and do not conform to generally accepted accounting principles or
present a complete picture of the assets and liabilities of the FTX
Debtors. Ongoing efforts by the FTX Debtors are expected to result
in the further identification of assets, liabilities and transfers,
including a description of intercompany claims among the FTX
Debtors and their subsidiaries. No stakeholder should use the
Schedules and SOFAs for purposes of estimating recoveries on
claims.
Advisors
The FTX Debtors are represented by Sullivan & Cromwell LLP as legal
counsel and are assisted by Alvarez & Marsal North America, LLC as
financial advisor, Perella Weinberg Partners LP as investment
banker, Quinn Emanuel Urquhart & Sullivan, LLP as special counsel
and Landis Rath & Cobb LLP as Delaware counsel. The UCC is
represented by Paul Hastings LLP as legal counsel, FTI Consulting
as financial advisor, Jefferies LLC as investment banker and Young
Conaway Stargatt & Taylor LLP as Delaware counsel.
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.
GAINWELL ACQUISITION: Fitch Alters Outlook on B LongTerm IDR to Neg
-------------------------------------------------------------------
Fitch Ratings has affirmed Gainwell Acquisition Corp's Long-Term
Issuer Default Rating (IDR) at 'B'. The Rating Outlook has been
revised to Negative from Stable. Fitch has also affirmed the senior
secured first-lien term loan rating at 'BB-' and has maintained the
recovery rating at 'RR2'. Fitch's actions affect approximately $4.2
billion of outstanding debt.
The Negative Outlook reflects the recent operational
underperformance against expectations in the current year as
Gainwell increased investments in product management and
engineering capabilities, along with higher than expected
nonrecurring costs related to integration and separation costs.
This has resulted in weakened credit protection metrics for the
company. Fitch believes that despite short-term pressure on
Gainwell's profitability, the investments would strengthen
competitive positioning in the Medicaid industry, and margins would
become stronger once synergies are achieved.
KEY RATING DRIVERS
Recent Performance: Pro forma revenue growth for the LTM ended
Sept. 30, 2022 was 9%, with the September quarter representing 6%
pro forma adjusted revenue growth. Growth rates have been
moderately below Fitch's expectations for mid-to-high single digits
at the time of Fitch's last-year estimates. The company has
benefited from Medicaid enrollment growth, new program
implementations and new logos. This is partially limited by a few
client signature delays on awarded contracts and decreased COVID-19
related volumes.
From a profitability perspective, management continues to pursue
its margin expansion strategy and has executed on $166 million of
cost reductions and synergies out of the total target of $222
million. However, Gainwell is undergoing an investment phase to
deploy a new cloud-based modular Medicaid platform. The results are
also affected by continued high nonrecurring transaction and
integration costs, resulting in short-term depressed profitability.
As a result, Gainwell generated Fitch calculated pro forma EBITDA
margins in 1H23 of 26%. Fitch continues to forecast margin
expansion in the low 30% range as cost saving synergies are
achieved and the modular platform contributes to long-term
competitiveness.
Evolving Marketplace: Gainwell faces risks in the evolving MMIS
marketplace. Fitch believes CMS's efforts stimulate increased
competition by reducing switching costs and providing opportunities
for new entrants seeking to develop niche solutions, which may lead
to share erosion over time. However, despite the potential for
increased competition, Fitch believes the risk of lost wallet share
is moderated by Gainwell's large installed base and undertaken
investments, which position it as an entrenched provider of the
core underlying platform.
Market Position: Gainwell is the primary MMIS vendor in 32
states/territories, serving 51 in total when including adjacent or
modular offerings. The company covers approximately 60 million
beneficiaries across its portfolio of offerings, out of the 91
million under Medicaid and Human Health Services. The company is
gaining market share, having added eight new logos in the past
year.
Increased competition from CMS's drive toward modularity and
interoperability has increased competitive intensity and moderated
Gainwell's growth rate. However, Fitch expects the company's
leadership position, long-term contracts and high retention rates
to provide support during re-determination of contracts.
Cyclicality: Fitch expects Gainwell, which has generated
accelerated growth though the pandemic, to continue to exhibit low
cyclicality for the foreseeable future. Fitch believes the company
will exhibit a correlation with Medicaid spending and enrollment,
supported by the non-discretionary nature of health expenditures.
In addition, Medicaid enrollment exhibits countercyclicality, which
experiences elevated growth during economic downturns as job losses
increase the pool of eligible beneficiaries, resulting in increased
demand for the company's offerings.
However, with the upcoming end of the PHE in May 2023, enrollment
is forecast to decline by 0.4%, according to the Kaiser Family
Foundation. Moreover, declining COVID-19-related volumes represents
additional growth headwinds for 2023. As such, Fitch expects
Gainwell's fiscal 2024 pro forma growth to be slower from recent
high-single digit levels. Over the longer term, as the
COVID-19-related distortions are lapped, Fitch expects the company
will return to its characteristic low cyclicality and to
demonstrate a stable credit profile with little sensitivity to
macroeconomic cycles.
High Leverage: Gainwell's acquisition of the HMS carve-out in a
deal valued at $2.4 billion was financed with incremental term
loans that increased leverage to a Fitch-forecast pro forma fiscal
2022 level of 9.1x. Due to the margin pressures noted above, Fitch
is currently forecasting fiscal 2023 leverage of 9.4x. Fitch
believes liquidity remains sufficient and leverage is supported by
the company's dependable growth prospects over the longer term,
strong market position, low capital intensity and low cyclicality,
with leverage moderating toward 6.5x over the end of the rating
horizon.
Beneficial Tailwinds: Fitch expects Gainwell to benefit from strong
secular trends propelling growth in Medicaid expenditures. The
Centers for Medicare and Medicaid Services (CMS) forecasts Medicaid
expenditure growth of 5.6% per annum, approaching $1 trillion with
82 million beneficiaries by 2026, due to long-standing trends in
medical procedure/drug cost inflation and utilization, program
expansions among states, and increased share of the aged and
disabled beneficiaries served.
In addition, CMS estimates $80.6 billion of improper payments by
Medicaid and $4.3 billion under CHIP in 2022 due eligibility and
claims processing complexity, lack of sufficient documentation,
shifting regulatory requirements, fraud and waste. States suffering
from constrained budgets are strongly incentivized to adopt
Gainwell's software and data offerings in order to contain such
costs. Fitch believes the secular tailwinds provide for a
dependable growth trajectory, benefiting the credit profile.
DERIVATION SUMMARY
Fitch evaluates Gainwell following its 2021 acquisition of the HMS
carve-out that consists of the products that address administration
of state Medicaid programs in a transaction backed by private
equity sponsor, Veritas Capital.
Fitch believes the company benefits from favorable tailwinds as the
underlying growth of Medicaid, constrained state budgets,
constructive regulatory environment and long-standing trends in
U.S. healthcare including, an aging demographic, medical
procedure/drug cost inflation and utilization growth are supportive
of adoption of the company's software and services.
The combination with HMS bolstered the company's modular offerings
to generate significant cross-selling opportunities in the existing
client base. Fitch believes growth is further ensured by the
company's leading share, strong client retention rates, high
switching costs and continued Medicaid program expansions among
states.
Finally, as the country laps the distortions caused by the pandemic
and related government policies, Fitch expects Gainwell to
demonstrate minimal cyclicality and durable resistance to economic
cycles due to the counter cyclical aspects of Medicaid enrollment.
While Fitch views the high visibility into long-term revenue growth
positively, the company faces risks from an evolving marketplace
and the potential for future regulatory changes that may increase
competition or reduce growth in Medicaid expenditures and
enrollment over time.
The company's profitability metrics, though strong, scores below
peers, with Fitch forecasting EBITDA margins in low 30% range over
the rating horizon, compared with the 46% average for Fitch-rated
healthcare IT peers. However, Gainwell's margins are still above
average of Fitch-rated software peers in the B-category. Fitch also
expects consistent FCF margins to be constrained in the near term
due to increasing interest rates, similar to PE-sponsored peers.
Fitch believes FCF will improve gradually as growth and margin
expansion returns, and will be sustainable due the low cyclicality
and a supportive regulatory environment in the medium term.
Despite these favorable characteristics, Fitch forecast fiscal 2023
leverage of 9.4x is near the upper 6.0x-11.5x range for Fitch-rated
health care IT issuers in the 'B' rating category. However, Fitch
expects gradual reduction in leverage to 6.5x by fiscal 2026 due to
achievement of already actioned cost reduction programs in Gainwell
and synergy opportunities from the acquisition of HMS.
While the company clearly benefits from beneficial secular
tailwinds, a leading, defensible market position, and low
cyclicality, Fitch views sustained elevated leverage as the primary
determinant of the 'B' rating. No Country Ceiling,
parent/subsidiary or operating environment aspects had an impact on
the rating.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer:
- Organic revenue growth in the mid-to-high single digits in fiscal
2023 and mid-single digits thereafter, due to decreased Medicaid
enrolments and reduced COVID-related volumes, consistent with
Medicaid enrolment forecasts;
- EBITDA margins depressed in fiscal 2023, then expand to early 30%
over the rating horizon, reflecting actioned margin improvement
initiatives at Gainwell and achievement of synergies at HMS;
- Capital intensity of 3%, due to cloud migration efforts,
decreasing to 2.5% by fiscal 2025 and thereafter;
- Bolt-on acquisitions of total $150 million fiscal years 2025 and
2026.
KEY RECOVERY RATING ASSUMPTIONS
- The recovery analysis assumes that Gainwell would be reorganized
as a going-concern in bankruptcy rather than liquidated;
- A 10% administrative claim.
Going-Concern (GC) Approach
The GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which Fitch bases the
enterprise valuation (EV). Fitch contemplates a scenario in which
the increasing modularization of MMIS offerings results in elevated
competition and loss of share for Gainwell, leading to decreased
revenue growth and higher investment into sales and R&D to address
the challenges.
As a result, Fitch expects Gainwell would likely be reorganized
with a similar product strategy and higher than planned levels of
operating expenses as the company reinvests to develop competing
products, ensure customer retention and defend against
competition.
Under this scenario, Fitch believes EBITDA margins would decline
such that the resulting GC EBITDA is approximately 4% below fiscal
2022 EBITDA. Fitch believes GC EBITDA will be above future results
as much of the company's recent margin pressures are viewed as
transitory.
An EV multiple of 7.0x EBITDA is applied to the GC EBITDA to
calculate a post-reorganization enterprise value.
The choice of this multiple considered the following factors:
Comparable Reorganizations: The historical bankruptcy case study
exit multiples for technology companies ranged from 2.6x to 10.8x.
Of these companies, only three were in the software sector: Allen
Systems Group, Inc; Avaya, Inc.; and Aspect Software Parent, Inc.,
which received recovery multiples of 8.4x, 8.1x, and 5.5x,
respectively. Long-term contracts ranging from 6-10 years, average
client relationship of 20 years, with low customer concentration,
and mission critical nature of Gainwell's solutions support the
high-end of the range.
M&A Multiples: A study of 273 precedent transactions in the
healthcare IT industry during 2015-2020 established median
EV/EBITDA transaction multiples ranging 9x to 18x, depending on the
specific product area. In addition, HMS was acquired at a 15.5x
multiple, excluding synergies.
Fitch evaluated a number of qualitative and quantitative factors
that are likely to influence the GC valuation:
- Secular trends and regulatory environment are highly supportive
with Medicaid enrollment and expenditure growth resulting from
program expansions, looser eligibility standards leading to a
higher share of the aged and disabled beneficiaries served, and
increased claims processing complexity. In addition, constrained
state budgets encourage adoption of the company's products that
reduce improper Medicaid spend;
- Barriers to entry are high relative to software issuers, as deep
domain and regulatory expertise are required to develop necessary
solutions;
- Gainwell is the leading commercial provider of MMIS services;
- Revenue and cash flow outlooks are favorable as long-standing
secular trends are supportive of revenue growth, while moderate
margin expansion and low capital intensity promote FCF margins in
the low teens;
- Revenue certainty is high as a result of the 92% recurring
revenue profile, typical contract duration of 6 to 10 years, 100%
client retention and the countercyclicality of Medicaid;
- Operating leverage is durable given a highly variable cost
structure typical of software developers.
Fitch believes these factors reflect a particularly attractive
business model that is likely to generate significant interest,
resulting in a recovery multiple at the high-end of Fitch's range.
The recovery model implies a 'BB-' and 'RR2' Recovery Rating for
the company's first-lien senior secured facilities, reflecting
Fitch's belief that lenders should expect to recover 82% or greater
in a restructuring scenario.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- (Cash flow from operations-capex)/total debt sustaining above
6.5%;
- EBITDA leverage sustaining below 5.5x;
- Organic growth sustaining above high-single digits.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- EBITDA Interest Coverage sustained below 1.5x;
- EBITDA leverage sustaining above 7.5x;
- (Cash flow from operations-capex)/total debt sustaining below
3%;
- Erosion of the company's competitive advantage or market
position.
LIQUIDITY AND DEBT STRUCTURE
Declining Liquidity: As of 2Q23, total cash has declined to $61
million from nearly $190 million one year prior. EBITDA margin
compression, integration and carve-out costs, and rising interest
rates have pressured FCF and credit protection metrics with
coverage ratios now below 1.5x. However, the $400 million RCF
remains undrawn. Fitch forecasts steady growth in liquidity to over
$700 million by fiscal 2024 due to accumulation of FCF after the
transaction and carve-out costs are absorbed and the expectation
for the RCF to remain undrawn. While liquidity has come under some
pressure, Fitch believes it remains more than sufficient to fund
operating costs.
ISSUER PROFILE
Gainwell is a software and solutions provider that supports the
administration and operation of government Medicaid programs and
other Health & Human Services initiatives through a Medicaid
Management Information System.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
Environmental, Social and Corporate Governance (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
----------- ------ -------- -----
Gainwell
Acquisition Corp. LT IDR B Affirmed B
senior secured LT BB- Affirmed RR2 BB-
GEOSTELLAR INC: Dismissal of Adversary Case Affirmed on Appeal
--------------------------------------------------------------
In the appealed case entitled Thomas H. Fluharty, Trustee of the
Bankruptcy Estate of David Levine and Monica Levine, and Martin P.
Sheehan, Trustee of the Bankruptcy Estate of Geostellar, Inc.,
Appellants, v. Philadelphia Indemnity Company, and David A. Levine,
Debtor, Appellees, Civil Action No. 3:22-CV-50 (GROH), (N.D.W.
Va.), District Judge Gina M. Groh affirms the Bankruptcy Court's
order dismissing the Adversary Proceeding 3:21-ap-00019 and the
order denying Plaintiffs' Motion for Preliminary Injunction.
The Appellants Geostellar Trustee and Levine Trustee appeal from
the Bankruptcy Court's March 21, 2022 Order granting the Motion to
Dismiss Adversary Proceeding in 3:21-ap-00019. The Appellants also
appeal the bankruptcy court's Nov. 2, 2021 Order denying the
Plaintiffs' Motion for Preliminary Injunction.
Prior to initiating its bankruptcy proceeding, Geostellar had
purchased a director's and officer's liability policy from
Philadelphia Indemnity Company, which covered Mr. Levine in his
roles as president, CEO, and founder of Geostellar. After his
appointment, the Geostellar Trustee purchased, on behalf of the
Geostellar Estate, an extension of that existing policy.
The Levine Trustee wishes to exercise the consent to settlement
right provided by Philadelphia's policy. However, the settlement,
or lack thereof, of claims against Mr. Levine in the Geostellar
proceeding will not have any effect whatsoever on the Levine
bankruptcy proceeding. Geostellar's lawsuit against Mr. Levine is
an adversary proceeding in the Geostellar bankruptcy, not the
Levine bankruptcy; yet the Appellants try to conflate and combine
the underlying proceedings in this matter in an attempt to assert
standing.
The Court finds that the Levine Trustee lacked standing to initiate
the adversary proceeding below and lacked standing to request
injunctive relief. For the same reasons that the Levine Trustee
failed to establish an injury in fact in the adversary proceeding,
the Court finds that the Levine Trustee similarly failed to
establish a risk of an imminent irreparable injury to justify
injunctive relief.
The Appellants' argument in support of standing for the Geostellar
Trustee suffers a similar fatal flaw as to that of the Levine
Trustee in that the Appellants conflate and combine the underlying
proceedings in this matter in an attempt to assert standing.
Indeed, the only basis for standing provided by the Geostellar
Trustee in the underlying proceeding centers on the Geostellar
Trustee's adversary proceeding against Mr. Levine in the Geostellar
bankruptcy. However, this does not establish standing in the
underlying Levine bankruptcy proceeding.
Accordingly, the Court finds that the Geostellar Trustee lacked
standing to initiate the underlying adversary proceeding attached
to the Levine bankruptcy. For the same reasons that he failed to
establish an interest or injury in fact in the adversary
proceeding, the Court finds that the Geostellar Trustee similarly
failed to establish a risk of an imminent irreparable injury to
justify injunctive relief. Thus, having found that neither
Appellant had standing to initiate the adversary proceeding below,
or to request injunctive relief, the Court finds that the
bankruptcy court properly denied the motion for injunctive relief
and granted the motion to dismiss for lack of standing.
A full-text copy of the Memorandum Opinion and Order dated March
10, 2023 is available at https://tinyurl.com/3fj4j4wb from
Leagle.com.
About Geostellar Inc.
Geostellar, Inc., provides big-data geomatics solutions to make
solar energy accessible. The company was founded in 2010 and is
headquartered in Martinsburg, West Virginia.
Geostellar sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. W.Va. Case No. 18-00045) on Jan. 29, 2018. In
the petition signed by Howard Teich, president, the Debtor
estimated assets of less than $500,000 and liabilities of $1
million to $10 million. Bernstein-Burkley, P.C., is the Debtor's
legal counsel.
GOLDEN SEAHORSE: Judge Bentley Approves Agreement With HHC
----------------------------------------------------------
Bankruptcy Judge Philip Bentley for the Southern District of New
York grants Golden Seahorse LLC' motion for approval of agreement
with New York City Health & Hospitals Corporation.
Golden Seahorse LLC owns and operates a Hotel known as the Holiday
Inn Manhattan Financial District. Following the onset of the
COVID-19 pandemic, the Hotel's performance suffered, and eventually
the Debtor's inability to continue to pay interest on $137 million
of senior secured debt resulted in its November 2022 bankruptcy
filing.
In January 2023, the Debtor entered into an agreement with the New
York City Health & Hospitals Corporation, under which, for a term
of up to 15 months, HHC will use the Hotel to house approximately
1,000 asylum seekers, out of the more than 28,000 such migrants
currently in the City's care. Although the agreement is expected to
boost the Debtor's net revenues by more than $10 million, the
Debtor's senior secured lenders have strenuously objected to the
Court's approval of the agreement. They contend that the
agreement's benefits are outweighed by a host of downsides,
including potential physical damage to the premises, difficulties
the Hotel may have resuming normal operations after the contract
ends, and possible impairment of the Debtor's ability to sell or
refinance the Hotel. As a result, they claim, the agreement will
gravely harm the value of the Hotel -- their collateral -- thereby
depriving them of the adequate protection to which they are
entitled under Bankruptcy Code Section 363.
The Court grants the motion, finding that "the lenders had failed
to prove that the possible harms they identified were likely to
occur, much less to result in damages in an amount approaching the
agreement's undisputed financial benefits. . . the evidence
presented by the Debtor -- in particular, the testimony of a top
HHC official concerning that agency's experience housing about
7,000 asylum seekers at other New York City hotels over the prior
four months -- suggested that any physical harm to the Hotel was
likely to be modest."
A full-text copy of the Modified Post-Trial Bench Ruling dated
March 10, 2023 is available at https://tinyurl.com/32yk5xdd from
Leagle.com.
About Golden Seahorse
Golden Seahorse LLC, doing business as Holiday Inn Manhattan
Financial District, operates the Holiday Inn hotel, which is a
full-service hotel located at 99 Washington St., New York. It also
owns an adjacent neighboring property at 103 Washington St., New
York, whereby it leases space to Amazon Restaurant and Bar (doing
business as St. George Tavern). The Debtor believes the value of
the hotel is at least $165 million, an amount greater than the
$137.2 million in principal, together with accrued interest, due
pre-bankruptcy lenders.
Golden Seahorse sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-11582) on Nov. 29,
2022. In the petition signed by Jubao Xie, managing member of
Hysendal USA, LLC, the Debtor disclosed up to $500 million in both
assets and liabilities.
Judge Philip Bentley oversees the case.
Scott S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, is the
Debtor's counsel.
GREAT LAKES: Moody's Lowers CFR to B2 & Alters Outlook to Negative
------------------------------------------------------------------
Moody's Investors Service has downgraded Great Lakes Dredge & Dock
Corporation's Corporate Family Rating to B2 from B1, its
Probability of Default Rating to B2-PD from B1-PD, and the rating
on the $325 million senior unsecured notes to B3 from B2. Great
Lakes Speculative Grade Liquidity (SGL) is downgraded to SGL-3 from
SGL-2. The outlook is changed to negative from stable.
The downgrade of Great Lakes reflects the decline in its liquidity
reserve after weak performance and negative free cash flow in 2022.
The expected drawdown of its revolving credit facility to fund the
large spending on new vessels will strain its liquidity further in
2023. The lack of high-margin capital projects in the backlog at
yearend 2022 will keep its earnings and cash flow weak in the first
two to three quarters of 2023. Great Lakes' credit metrics are no
longer consistent with the previous B1 rating. The company expects
an improvement in the bid market with several port deepening and
widening projects bidding in the first half of 2023, a better
utilization of its fleet and a cheap loan from Title XI financing
in the second half, which would prevent its credit quality from
further deterioration.
Governance is a key driver for the rating action, given the weaker
than expected financial risk management and deviation from past
sound track record.
Downgrades:
Issuer: Great Lakes Dredge & Dock Corporation
Corporate Family Rating, Downgraded to B2 from B1
Probability of Default Rating, Downgraded to B2-PD from B1-PD
Senior Unsecured Regular Bond/Debenture, Downgraded to
B3 (LGD5) from B2 (LGD4)
Speculative Grade Liquidity Rating, Downgraded to SGL-3 from
SGL-2
Outlook Actions:
Issuer: Great Lakes Dredge & Dock Corporation
Outlook, Changed to Negative from Stable
RATINGS RATIONALE
Moody's expects Great Lakes 2023 operating performance will
continue to stay below historical levels due to the lack of the
large capital and port deepening projects in its order backlog and
a high percentage of lower-margin maintenance work. Credit metrics
will slightly improve from the 2022 lows given the expected
resumption of delayed projects, the delivery of a new vessel,
Galveston Island, other cost reduction and operational improvement
initiatives. However, operating cash flow will remain subdued in
2023, when capital expenditure will increase to a record level of
$175 million from $145 million in 2022. Moody's consider its
capital expenditure as largely committed, as vessel maintenance and
investments are crucial to bidding new capital projects and
generating future income.
Great Lakes' liquidity reserve has weakened, as reflected in the
downgrade to SGL-3 from SGL-2. Cash on hand dropped to $7 million
at the end of 2022 from $145 million a year ago. As of December 31,
2022, the company's primary liquidity source was $246 million
availability on its $300 million ABL revolver. The available
revolver will cover the entire $175 million planned capital
expenditure in 2023 when operating cash flow remains weak. However,
the company is not expected to allow its revolver availability to
fall below 12.5% of the borrowing base or $37.5 million, which
would trigger a testing of the revolver's minimum fixed charge
coverage covenant of 1.1x that can't be met based on recent
earnings. Alternative liquidity could come from Title XI financing
loan that Great Lakes has applied with the Maritime Administration
(MARAD) for the vessels which are currently under construction and
designed for offshore wind construction. However, issuance of
incremental secured debt could result in an additional downgrade on
the $325 million unsecured notes, as there will be less
unencumbered assets.
Great Lakes' 2022 earnings deteriorated significantly from prior
years, as a result of the unexpected drop in dredging projects,
especially those large high-margin port deepening projects.
Unfavorable weather events, site conditions, cost inflation and
supply chain issues delaying drydocking completions also
contributed to the weak operating performance in 2022. The reported
EBITDA fell to $17 million in 2022, from $127 million in 2021.
Great Lakes Dredge & Dock Corporation's B2 corporate family rating
is supported by its strong market position as the largest dredging
provider in the US and Moody's expectation that its operating
performance and margins will recover following continued
investments in new and existing vessels. Its credit profile also
incorporates the high barriers to entry created by the Jones Act
and the sizeable amount of capital required to enter the dredging
business, visibility into future revenues via its backlog and
funding from Federal government agencies and the Harbor Maintenance
Trust Fund. In particular, the Biden administration's support for
infrastructure such as harbor and waterways maintenance, beach
renourishment and coast protection projects as well as possible
permits for new LNG projects will improve bid market and dredging
work volumes for the company.
Its credit profile is constrained by its participation in a highly
cyclical industry that can lead to volatile earnings and muted cash
flows when the bid market or project win rates decline, as well as
its high fixed-costs and long term capital investment requirements
to maintain its existing fleet of vessels and to invest in new
vessels to replace aging vessels or to support growth. It also
reflects its significant customer concentration and the
susceptibility to external factors beyond management control
including weather conditions, project delays, COVID-19 outbreaks,
changes in the shipping industry and government funding priorities.
Great Lakes is reliant on the domestic dredging sector and US
Federal government agencies which account for about 95% and 80%,
respectively of its annual revenues.
Great Lakes' ESG Credit Impact Score (CIS-4) reflects the negative
credit impact from ESG considerations, primarily driven by
governance factors including financial policy, risk management and
track record. It also reflects environmental and social risk
factors, such as the heavy use of diesel fuel, disposal of dredged
material and protection of wetlands. The company benefits from
natural erosion, storm hardening and recovery work.
The negative outlook reflects Moody's expectation that operating
performance will remain subdued, debt level will increase with the
drawdown of its revolver, and its large capital expenditure will
negatively affect liquidity profile in 2023.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Rating upgrade is unlikely given the negative outlook, but could be
considered if it improves business visibility, strengthens its
asset base by vessel investments and improve its earnings so that
adjusted leverage ratio (Debt/EBITDA) is sustained below 3.0x and
interest coverage (EBITA/Interest) above 3.0x. Upgrade also
requires consistent free cash flow generation and a good liquidity
profile.
Great Lakes' ratings could be downgraded should the company fail to
win new projects and improve its earnings or liquidity continues to
deteriorate. Financial metrics, such as its adjusted leverage ratio
is sustained above 4.5x and interest coverage below 1.5x could also
result in negative ratings action.
The principal methodology used in these ratings was Construction
published in September 2021.
Great Lakes Dredge & Dock Corporation, headquartered in Houston,
TX, is the largest provider of dredging services in the United
States, with a small portion of its revenues generated overseas. US
Federal government agencies are its main customer and account for
about 80% of its annual revenues. The company generated $649
million in revenues in 2022.
GWG HOLDINGS: Bid to Strike Affirmative Defenses Granted in Part
----------------------------------------------------------------
District Judge Otis D. Wright, II, for the Central District of
California has issued an order granting in part and denying in part
the motion to strike affirmative defenses filed by the United
States Securities and Exchange Commission in the case captioned as
United States Securities and Exchange Commission, Plaintiff, v.
Western International Securities, Inc. et al., Defendants, Case No.
2:22-cv-04119-ODW (AFMx). (C.D. Cal.).
The United States Securities and Exchange Commission brings suit
against the Defendants Western International Securities, Inc. and
five of its registered representatives for violating SEC Regulation
Best Interest in connection with recommending and brokering the
purchase of high-risk, illiquid L Bonds for Western's retail
investor clients.
Under Regulation Best Interest, broker-dealers must "act in the
best interest of the retail customer at the time the recommendation
is made," without placing the interest of the broker-dealer ahead
of the interest of the retail customer. With this action, the SEC
alleges that the Defendants violated Regulation Best Interest when
they recommended their retail investor clients invest in L Bonds. L
Bonds were high-risk, illiquid corporate bonds2 that paid fixed
interest rates of between 5.5% and 8.5% and were available with
two-, three-, five-, or seven-year maturity periods.
L Bonds were offered by GWG Holdings, Inc. Since GWG began offering
L Bonds in 2012, it has offered L Bonds in a total of four separate
offerings. The L Bonds relevant to this action are from GWG's
fourth offering, which was an offering of up to $2 billion in L
Bonds that began in June 2020. GWG's largest tangible asset is its
portfolio of life insurance policies, which as of Dec. 31, 2019,
had a face value of approximately $2 billion and a fair value of
$796 million. However, L Bonds are not directly secured by GWG's
life insurance portfolio. Instead, they are primarily secured by
GWG's equity ownership interests in certain GWG subsidiaries. In
January 2022, GWG became unable to meet its obligations and
suspended further sales of L Bonds. As a result, those who invested
in L Bonds stand to lose a significant amount of their principal.
The value of GWG's life insurance portfolio was not sufficient to
repay all of GWG's outstanding debt.
The SEC now moves to strike several of the Defendants' affirmative
defenses.
First, the SEC moves to strike Western's first affirmative defense
(lack of fair notice) and the Registered Representative Defendants'
third affirmative defense (due process). The Court finds that the
Defendants' fair notice/due process defenses are colorable, such
that it would be premature and improper at this stage to deny the
Defendants the ability to pursue and prove these defenses to the
factfinder.
Second, the SEC moves to strike Western's second affirmative
defense and the Registered Representative Defendants' fourth
affirmative defense, both of which seek to challenge Regulation
Best Interest on the grounds that it is void for vagueness. The
Court declines to strike the Defendants' void for vagueness
defenses. The Court cannot make such a determination without the
benefit of the full Regulation, the Adopting Release, and
potentially other documents. If anything, the specificity of this
defense provides the SEC with additional notice regarding the
nature of the defense. The Court sees no basis for striking this
defense at this stage of litigation.
Next, the SEC moves to strike Western's fourth affirmative defense
of selective enforcement. Based on the facts and theory alleged,
the Court finds that Western has no colorable basis for arguing
that it was "intentionally treated differently from others
similarly situated and that there is no rational basis for the
difference in treatment." The Court agrees with the SEC that these
internal matters have nothing to do with the merits of the properly
pleaded claims and defenses in this case, and the SEC would suffer
significant prejudice were it "required to conduct expensive and
potentially unnecessary and irrelevant discovery" on a "legally
unsustainable affirmative defense." As such, the Court grants the
SEC's motion with respect to Western's fourth affirmative defense
(selective enforcement).
Finally, the SEC moves to strike Western's seventh affirmative
defense and the Registered Representative Defendants' first
affirmative defense (failure to state a claim), along with
Western's eighth affirmative defense and the Registered
Representative Defendants' eighth affirmative defense (reservation
of rights). Here, the Court denies the SEC's Motion with respect to
Western's Seventh Affirmative Defense and the Registered
Representative Defendants' First Affirmative Defense (failure to
state a claim) and Western's Eighth Affirmative Defense and the
Registered Representative Defendants' Eighth Affirmative Defense
(reservation of rights).
Given that the parties in their papers extensively addressed the
effect of the outcome of the Motion on discovery, the Court makes a
final clarification: "The parties should understand that the denial
of the Motion with respect to the fair notice, due process, and
void for vagueness defenses is without any prejudice to any
determination by this Court or the assigned Magistrate Judge that
certain discovery is or is not allowable or appropriate. Discovery
always remains subject to the relevance and proportionality
requirements of Rule 26(b)(1) of the Federal Rules of Civil
Procedure, no matter what affirmative defenses are pleaded. By the
same token, the granting of the Motion with respect to the
selective enforcement defense does not mean that the Defendants are
completely barred from any discovery that might relate to other
broker-dealers. Certain discovery may remain relevant after the
disposition of this Motion, and other discovery may not."
A full-text copy of the Order dated March 13, 2023 is available at
https://tinyurl.com/msswd44p from Leagle.com.
About GWG Holdings
Headquartered in Dallas Texas, GWG Holdings, Inc. (NASDAQ: GWGH)
conducts its life insurance secondary market business through a
wholly-owned subsidiary, GWG Life, LLC, and GWG Life's wholly-owned
subsidiaries.
GWG Holdings Inc. and affiliates sought Chapter 11 bankruptcy
protection (Bankr. S.D. Texas Lead Case No. 22-90032) on April 20,
2022. In the petition filed by Murray Holland, president and chief
executive officer, GWG Holdings disclosed between $1 billion and
$10 billion in both assets and liabilities.
Judge Marvin Isgur oversees the cases.
The Debtors tapped Mayer Brown, LLP, and Jackson Walker, LLP, as
bankruptcy counsels; Tran Singh, LLP as special conflicts counsel;
FTI Consulting, Inc., as financial advisor; and PJT Partners, LP as
investment banker. Donlin Recano & Company is the Debtors' notice
and claims agent.
National Founders LP, a debtor-in-possession (DIP) lender, is
represented by Michael Fishel, Esq., Matthew A. Clemente, Esq., and
William E. Curtin, Esq., at Sidley Austin, LLP.
The U.S. Trustee for Region 7 appointed an official committee to
represent bondholders in the Debtors' cases. The committee tapped
Akin Gump Strauss Hauer & Feld, LLP and Porter Hedges, LLP as legal
counsel; Piper Sandler & Co. as investment banker; and
AlixPartners, LLP, as financial advisor.
HANESBRANDS INC: Moody's Retains Ba3 CFR, Outlook Negative
----------------------------------------------------------
Moody's Investors Service upgraded Hanesbrands Inc. speculative
grade liquidity rating (SGL) to SGL-2 from SGL-3. All other ratings
are unchanged including the company's Ba3 corporate family rating,
Ba3-PD Probability of Default, Ba2 senior secured bank credit
facilities and B1 senior unsecured notes rating. The outlook is
negative.
The SGL change to SGL-2 (good) from SGL-3 (adequate) reflects
Hanesbrands improvement in liquidity as it has addressed all of its
2024 debt maturities. Hanesbrands recently refinanced its $1.4
billion of 2Q'24 bond maturities with a $900 million term loan due
2030 and $600 million in notes due 2031. The refinancing also
eliminated the springing 1Q'24 maturities on the company's existing
$1.0 billion revolver and approximately $980 million Term Loan A
which both now come due in November 2026. The SGL upgrade also
reflects the expected improvement in cash flow generation in
calendar 2023 and increased revolver availability.
Upgrades:
Issuer: Hanesbrands Inc.
Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3
RATINGS RATIONALE
Hanesbrands' Ba3 CFR reflects the company's significant scale in
the global apparel industry, its well-known brands, leading share
in the innerwear product category and typically low-cost supply
chain. Moody's expect that the company will remain focused on
reducing leverage (stated long-term net leverage target is
2.0x-3.0x on reported EBITDA) while executing its multiyear growth
strategy (Full Potential Plan). The Ba3 CFR also reflects the
company's good liquidity and sufficient covenant cushion following
a recent amendment. Additionally, management has taken
creditor-friendly steps such as halting dividends and reducing
capital expenditures which will bolster free cash flow and
liquidity. However, the company is currently dealing with weak
customer demand, a material customer concentration and elevated
costs. These factors have led adjusted debt/EBITDA to increase to
5.4x for the year-ended Dec 31, 2022 from 3.3x a year earlier while
EBITA/interest has also reduced to 3.3x from 5.0x over the same
time. Moody's anticipates that the current weak operating
environment will run through mid-2023 with earnings expected to
improve in 2H'23 as the company benefits from lower cost inventory
and a normalization in demand. This should lead to Moody's adjusted
leverage to be slightly above 5.0x and EBITA/Interest to be just
below 2.0x by year-end 2023. Also, Moody's expect that Hanesbrands
will remain focused on reducing leverage while executing its
multiyear growth strategy (Full Potential Plan).
The negative outlook reflects Moody's view that conditions will
remain challenging for Hanesbrands through 1H'23. The negative
outlook also reflects the risks associated with a highly uncertain
consumer spending environment that may temper or delay the very
significant earnings recovery that is required starting in 2H'23
through 2024 for leverage and coverage metrics to improve to levels
that are appropriate for the Ba3 corporate family rating.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Ratings could be upgraded following a sustained improvement in
operating performance and credit metrics and the maintenance of
good liquidity with adequate covenant cushion. Quantitatively,
ratings could be upgraded if Moody's-adjusted debt/EBITDA is
maintained below 4.5x and EBITA/Interest is maintained above
2.75x.
Ratings could be downgraded should the company fail to reverse its
current negative cash flow or should liquidity deteriorate.
Ratings could also be downgraded should operating performance
remain pressured resulting in Moody's-adjusted debt/EBITDA
sustained above 5.5x and EBITA/Interest sustained below 2.0x.
Headquartered in Winston-Salem, NC, Hanesbrands Inc. is a
manufacturer and distributor of basic apparel products under brands
that include Hanes, Champion, Maidenform, Bali, Bonds and Playtex.
Revenue is about $6.2 billion for the twelve months ending Dec 31,
2022.
The principal methodology used in this rating was Apparel published
in June 2021.
HARRIS ENERGY: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: Harris Energy Group, Inc.
100 State Street
Neshkoro, WI 54960
Business Description: The Debtors are a group of affiliated
businesses which own, lease, and operate
hydroelectric power plants and dams in
Wisconsin, Illinois, Iowa, and Michigan.
Chapter 11 Petition Date: March 16, 2023
Court: United States Bankruptcy Court
Eastern District of Wisconsin
Nine affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Harris Energy Group, Inc. (Lead Case) 23-21117
Renewable World Energies, LLC 23-21118
RWE Operations, LLC 23-21120
Flambeau Hydro, LLC 23-21121
Iowa Hydro, LLC 23-21123
Grande Pointe Power Corporation 23-21124
Eau Galle Hydro, LLC 23-21127
UP Hydro, LLC 23-21128
LCO Hydro, LLC 23-21129
Judge: Hon. Katherine M. Perhach
Debtors' Counsel: Paul G. Swanson, Esq.
Peter T. Nowak, Esq.
STEINHILBER SWANSON LLP
107 Church Avenue
Oshkosh, WI 54901
Tel: 920-235-6690
Fax: 920-426-5530
Email: pswanson@steinhilberswanson.com
pnowak@steinhilberswanson.com
Debtors'
Financial
Advisor: COWIE MANAGEMENT GROUP
Harris Energy's
Estimated Assets: $0 to $50,000
Harris Energy's
Estimated Liabilities: $500,000 to $1 million
Renewable World's
Estimated Assets: $0 to $50,000
Renewable World's
Estimated Liabilities: $10 million to $50 million
RWE Operations'
Estimated Assets: $0 to $50,000
RWE Operations'
Estimated Liabilities: $500,000 to $1 million
Flambeau Hydro's
Estimated Assets: $1 million to $10 million
Flambeau Hydro's
Estimated Liabilities: $10 million to $50 million
Iowa Hydro's
Estimated Assets: $0 to $50,000
Iowa Hydro's
Estimated Liabilities: $10 million to $50 million
Grande Pointe's
Estimated Assets: $100,000 to $500,000
Grande Pointe's
Estimated Liabilities: $10 million to $50 million
Eau Galle Hydro's
Estimated Assets: $0 to $50,000
Eau Galle Hydro's
Estimated Liabilities: $10 million to $50 million
UP Hydro's
Estimated Assets: $500,000 to $1 million
UP Hydro's
Estimated Liabilities: $1 million to $10 million
LCO Hydro's
Estimated Assets: $0 to $50,000
LCO Hydro's
Estimated Liabilities: $500,000 to $1 million
The petitions were signed by William D. Harris as chairman.
Full-text copies of the petitions containing, among other items,
lists of the Debtors' 20 largest unsecured creditors are available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/DM4JT6I/Harris_Energy_Group_Inc__wiebke-23-21117__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/74TL3DY/Renewable_World_Energies_LLC__wiebke-23-21118__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/J7QPSIA/RWE_Operations_LLC__wiebke-23-21120__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/6JOMHCA/Flambeau_Hydro_LLC__wiebke-23-21121__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/AQI7QRY/Iowa_Hydro_LLC__wiebke-23-21123__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/GGKMQGY/Grande_Pointe_Power_Corporation__wiebke-23-21124__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/KEGVFCQ/Eau_Galle_Hydro_LLC__wiebke-23-21127__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/LK5AHJA/UP_Hydro_LLC__wiebke-23-21128__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/5CVFFKY/LCO_Hydro_LLC__wiebke-23-21129__0001.0.pdf?mcid=tGE4TAMA
HOLLISTER CONSTRUCTION: FM May File Counterclaims for Recoupment
----------------------------------------------------------------
Chief Bankruptcy Judge Michael B. Kaplan for the District of New
Jersey denies in part the motion filed by FM Construction Group,
LLC seeking leave to file a third-party complaint and
counterclaims, and denies the Trustee's Cross-Motion.
Specifically, the Court denies FM's request to assert a Third-Party
Complaint with prejudice, denies FM's request to assert Count VI of
the Proposed Counterclaims without prejudice, and grants FM's
request to assert Counts I through V of the Proposed Counterclaims
for the limited purpose of pursuing FM's right to recoupment as a
means to extinguish or reduce the Trustee's recovery herein.
Bernard Katz, in his capacity as Liquidating Trustee for the
Bankruptcy Estate of Hollister Construction Services, LLC filed an
opposition to the Motion and a Cross-Motion seeking to enforce the
terms of a settlement order. The Trustee's Cross-Motion seeks to
enforce the terms of the Settlement Agreement, Confirmation Order,
and the Plan and is based on the Trustee's mistaken belief that FM
seeks to vacate those orders pursuant to Federal Rule of Bankruptcy
Procedure 9024. As such, the Court denies this request.
FM Construction Group, LLC is a subcontractor who entered a
contract with Hollister that governs all projects on which FM
worked for Hollister. In September 2017, Hollister entered into a
construction management agreement with the Ownerof residential
buildings in Harrison, New Jersey. Hollister then entered into a
project-specific subcontracting agreement with FM in which FM
agreed to provide certain services to Hollister in connection with
the Project. While the Project was ongoing, Hollister filed for
bankruptcy under Chapter 11.
During oral argument, the Court questioned whether it had
jurisdiction to decide a post-confirmation dispute between
non-debtors. The parties indicated – vaguely -- that any amounts
FM may recover from the Owner would affect amounts that the Trustee
is expecting to collect from the Owner. FM's counsel indicated that
its litigation against the Owner would allow this Court to
understand how much will come into the Trust and what will "trickle
down the waterfall" into the Plan. Counsel for the Trustee likewise
indicated that the Trust will be negatively impacted if FM were to
recover against the Owner. However, neither party adequately
explained the impact of post-confirmation non-debtor litigation on
the Trust or its relationship to the Plan or the existing adversary
proceeding.
The Court finds that "it would not have subject matter jurisdiction
over FM's claims against the Owner. . . neither the Trust nor the
Trustee is associated with the Proposed Third-Party Complaint --
except that the Trustee opposes the Motion. . . the Proposed
Third-Party Complaint does not have a close nexus to the Plan or
the pending adversary proceeding. . . the claims FM seeks to assert
against the Owners do not help to interpret, implement, consummate,
execute, or administer Debtors' plan of liquidation." Because the
claims in the Proposed Third-Party Complaint lack the requisite
close nexus, the Court concludes that it does not have
jurisdiction. Accordingly, amendment to assert the Proposed
Third-Party Complaint would be futile and FM's Motion is denied in
that regard, with prejudice.
As to the Proposed Counterclaims (Counts I through V), the Court
finds that they accrued prior to the effective date of the Plan and
are, thus, barred, enjoined, or otherwise precluded by operation of
the Confirmation Order and Plan from being asserted as affirmative
claims.
However, the Court acknowledges that FM clarified both on the
record during oral argument and in its Reply, that it is not
seeking to "assert claims against Hollister that are unrelated to
the current adversary proceeding that go beyond its preserved
setoff and recoupment rights." As such, the Court grants the Motion
with respect to Counts I through V with the qualification that
those counterclaims are limited to recovery available under FM's
right to recoupment, and only as a means to reduce or extinguish
the Trustee's recovery on his claims.
The Adversary Proceeding is In re: Hollister Construction Services,
LLC, Chapter 11, Debtor. Bernard Katz, in his capacity as
Liquidating Trustee for the Bankruptcy Estate of Hollister
Construction Services, LLC, Plaintiff, v. FM Construction Group,
LLC, Defendants, Case No. 19-27439 (MBK), Adv. Pro. No. 22-01037
(MBK), (Bankr. D.N.J.).
A full-text copy of the Memorandum Decision dated March 10, 2023 is
available at https://tinyurl.com/ycyk7pm3 from Leagle.com.
About Hollister Construction
Hollister Construction Services, LLC -- http://www.hollistercs.com/
-- is a full-service commercial construction company with a team of
150+ construction professionals. The Company's specialties include
interior and exterior renovations, building additions, and ground
up construction. Hollister's areas of expertise include the
construction of corporate, education, healthcare, industrial,
retail, and residential projects.
Hollister Construction sought Chapter 11 protection (Bankr. D.N.J.
Lead Case No. 19-27439) on Sept. 9, 2019, in Trenton, New Jersey.
In the petition signed by Brendan Murray, president, the Debtor
disclosed $100 million to $500 million in both assets and
liabilities.
The Hon. Michael B. Kaplan oversees the case.
The Debtor tapped Lowenstein Sandler as counsel; SM Law PC, as
special counsel; 10X CEO Coaching, LLC, as restructuring advisor;
and The Parkland Group, Inc., as business consultant. Prime Clerk
is the claims agent.
IEH AUTOPARTS: Gets Court's Okay to Sell All Assets
---------------------------------------------------
The United States Bankruptcy Court For The Southern District Of
Texas entered an order approving, among other things, the bid
procedures, which establish key dates and deadlines related to the
auction for and the sale of substantially the assets of IEH
Autoparts Holding LLC and its debtor-affiliates.
The Bid Procedures include a number of dates and deadlines that
must be strictly complied with, only a few of which are highlighted
here:
a) Bid Deadline: The deadline to submit a qualified Bid is May 3,
2023, at 5:00 p.m. (prevailing Central Time).
b) Auction: The Auction (if any) will commence on May 10, 2023, at
10:00 a.m. (prevailing Central Time), via video conference and
in-person at the offices of Jackson Walker LLP, 1401 McKinney
Street, Suite 1900, Houston, Texas 77010.
c) Notice of Winning Bid: As soon as reasonably practicable after
conclusion of the Auction, but in no event later than 48 hours
after the Auction concludes, the Debtors shall file with the Court
a notice of the results of the Auction.
d) Deadline to Object to the Sale: Objections to the Sale (or the
assumption and assignment of Designated Contract) must be filed
with the Court by May 17, 2023, at 5:00 p.m. (prevailing Central
Time) and otherwise meet the requirements set forth in the Bid
Procedures Order.
e) Deadline to Object to Assumption and Assignment of Designated
Contract: Objections to the assumption and assignment of a
Designated Contract or the adequate assurance of future performance
must be filed with the Court by May 18, 2023, at 5:00 p.m.
(prevailing Central Time).
f) Sale Hearing: A hearing to consider approval of the proposed
Sale will be held before the Court on May 19, 2023, at 10:00 a.m.
(prevailing Central Time) at 515 Rusk Street Courtroom 401,
Houston, Texas 77002.
Copies of the Bid Procedures, Bid Procedures Motion, the Bid
Procedures Order, and all other documents filed with the Court, are
available free of charge on the Debtors' case information website,
located at https://kccllc.net/autoplus.
About IEH Auto Parts Holding
IEH Auto Parts Holding LLC -- https://autoplusap.com/ --
distributes automotive products. It offers equipment, tools,
accessories, paint, and related products in the automotive
aftermarket. Auto Plus serves customers in the United States.
IEH Auto Parts Holding and its affiliates filed a petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas
Lead Case No. 23-90054) on Feb. 1, 2023. In the petition filed by
John Michael Neyrey, as chief executive officer, the Debtors
reported assets and liabilities between $100 million and $500
million.
Judge Christopher M. Lopez oversees the cases.
The Debtors are represented by Veronica Ann Polnick, Esq., at
Jackson Walker, LLP.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of IEH Auto
Parts Holding, LLC and its affiliates.
INNOVATIVE CHEMICAL: S&P Downgrades ICR to 'CCC+' on Divestiture
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Innovative
Chemical Products Group (ICP) to 'CCC+' from 'B-'.
The negative outlook reflects the potential for lower ratings if
tepid construction activity keeps credit measures weak and starts
to pressure the company's liquidity.
The downgrade reflects ICP's still very high debt leverage
post-divestiture.
ICP had more than $1.4 billion of S&P Global Ratings-adjusted debt
as of Sept. 30, 2022, and an adjusted debt to EBITDA ratio of
almost 15x. Our adjusted EBITDA figure differs from the company's
bank-calculated leverage figure, as ours does not add back
restructuring, transaction, and other costs, nor does it add back
pro forma cost savings. These add-backs are quite substantial. Pro
forma for ICP's receipt of divestiture proceeds, its application of
them toward first-lien debt repayment, and the absence of
nonrecurring costs, we see our leverage ratio easing to less than
10x, which is still quite highly leveraged in our view.
Debt reduction will be less than the $205 million gross proceed
amount.
The net proceeds ICP is receiving from the $205 million sale price
are more likely to be closer to $190 million at the immediate
outset as $15 million is set aside for adjustment and indemnity
escrows. After deducting $18.6 million for seller expenses and an
estimated tax payment and keeping $25 million on the balance sheet
as surplus cash (S&P does not net cash from its credit ratios for
financial sponsor-owned ICP), this leaves $146 million for
immediate first-lien debt paydown. Later, as the $15 million is
released from escrow, debt could be reduced some more.
S&P sees ICP's liquidity is adequate during the next year.
The disposition adds $25 million of cash to ICP's balance sheet,
which supports liquidity. S&P said, "We also believe the company
will be closer to breakeven on working capital in 2023 compared to
the roughly $35 million annual burden it was in 2021 and 2022.
However, we note that rising interest rates have increased the
company's interest expense. We see ICP's adjusted interest expense
rising to over $90 million in 2022 and potentially to over $100
million in 2023 compared to $77 million in 2021. This is partially
mitigated by roughly half of ICP's debt being hedged. Following the
divestiture, we believe ICP may refinance its $125 million
revolving credit facility due Dec. 29, 2025. It may resize the
revolver to more accurately reflect the company's smaller
operational scale while allowing for appropriate levels of
financial covenant headroom as it works to de-lever the balance
sheet. The leverage covenant under the current credit facility does
not spring unless 35% of the revolving line is drawn, and we would
not be surprised to see a similar condition to be present in the
refinanced revolver."
ICP's business becomes further concentrated into the building
products market.
The ISG segment was a significant, but not major part of ICP's
business, as it represented 16% of ICP's trailing-12 month sales
and 13% of its adjusted EBITDA. Its profitability was lower than
that of the building solutions segment (BSG), and the company
anticipates that the separation will have an accretive effect to
ICP's adjusted EBITDA margins by about 50 basis points. However,
ISG did provide end-market diversity, as it served some
less-cyclical and recession-resistant markets like food and
pharmaceutical. Following the divestiture, ICP is more concentrated
within building products and is more exposed to the cyclical demand
trends inherent in the industry. Although ICP's products serve
demand for commercial construction and renovation/maintenance as
opposed to being solely reliant on new build, this only partly
mitigates the risks.
S&P said, "The negative outlook on ICP reflects the potential we
will lower our rating in the next 12 months if ICP's adjusted
EBITDA to interest coverage ratio dips below 1.0x and it appears
apparent the company will be unlikely to meet its fixed charges.
This situation could be brought about if the U.S. experiences a
deeper recession than we anticipate that reduces the demand for its
products serving mainly the building materials end market while
interest rates and other costs remain high. A recession could erode
the demand for its sealants and adhesives for housing applications
and the tightness in the supply chain--which has eased as of
late--could return to late 2021 levels or worse. Sufficiently weak
demand and high interest rates could lead to liquidity pressures
and make the capital structure unsustainable, in spite of some debt
reduction from the ISG unit's divestiture and better operational
execution.
"In our base-case scenario, we expect revenue to contract by 6% in
2023, reflecting the divestiture of ISG, partially offset by light
organic growth in the remaining business. We assume that much of
the company's backlog was converted into revenue in the back half
of 2022. We ICP's profitability to improve as the supply chain
normalizes and there is an end to inventory destocking, and improve
more meaningfully from the middle part of 2023 onward. Despite
this, we also believe the company's debt leverage will likely
remain high over the near-term, with an S&P Global Ratings-adjusted
debt to EBITDA ratio that could be in the 8.5x-10.0x area. We
expect ICP to sustain adequate liquidity at this rating. Our
base-case scenario does not incorporate any additional
transformational acquisitions or dividends.
"We could lower our ratings on ICP within the next 12 months or
sooner if we believe macroeconomic conditions and its execution are
weak enough to render its capital structure unsustainable. We
believe this could occur due to a combination of margin erosion,
continued negative free cash flow during a high interest rate
environment, and financial covenant headroom remaining very tight
(less than 10%) with no prospects for improvement. We could also
lower the rating if the company undergoes what we would view as a
distressed exchange, in which it coerces its lenders to accept
compensation that is less than adequate or less than the originally
promised value for their debt securities.
"We could revise our outlook on ICP to stable or positive within
the next 12 months if it is more resilient to the macroeconomic
headwinds than we expect. This could occur if it demonstrates good
operational execution and improves its EBITDA margins such that its
adjusted debt to EBITDA improves toward 8.5x and the EBITDA to
interest coverage ratio improves to 1.3x. For a higher rating, we
would expect the company to be able to sustain even stronger credit
measures (i.e., debt leverage in the 7.5x-8.5x area), improve the
headroom under its financial covenant to the 15% area, and employ
financial policies that we believe would support less-aggressive
debt leverage levels."
ESG credit indicators: E-2, S-2, G-3
JADEX INC: Moody's Lowers CFR to B3 & Alters Outlook to Stable
--------------------------------------------------------------
Moody's Investors Service downgraded Jadex Inc.'s Corporate Family
Rating to B3 from B2, Probability of Default Rating to B3-PD from
B2-PD, and senior secured credit facility rating to B3 from B2. The
outlook was changed to stable from negative.
The downgrade reflects the company's weak credit metrics, including
leverage that is expected to maintain above 6x through 2024 and
interest coverage that will deteriorate over the next 12-18 months
due to the current rising rate environment. Further, Jadex is
exposed to consumer and industrial end markets, where Moody's
expects challenging demand conditions in the near-term.
The stable outlook reflects the longer-term fundamental demand for
Jadex's products and the company's solid position as sole supplier
on a significant percentage of contracts.
Downgrades:
Issuer: Jadex Inc.
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Backed Senior Secured Bank Credit Facility, Downgraded to
B3 (LGD3) from B2 (LGD3)
Outlook Actions:
Issuer: Jadex Inc.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
Jadex's B3 Corporate Family Rating reflects the company's moderate
scale, high leverage, and aggressive financial policy. It also
incorporates the company's low EBITDA margin and minimal free cash
flow generation due to growth capital expenditure projects. The
rating is constrained by Jadex's track record as a stand-alone
company, which has seen operational challenges and lagging price
realization in an inflationary environment.
The rating also reflects Jadex's extensive material science
capabilities and diversified business mix primarily serving
relatively stable end markets including consumer products, food,
and healthcare. Only a minor portion of the company's business
(-17%) is exposed to the automotive, infrastructure, and industrial
sectors, which have more cyclical characteristics. In addition,
Jadex manufactures zinc and steel-based coinage for governments
that further diversifies its portfolio. The company's material
science capabilities enable Jadex to provide exclusive customer
solutions across its portfolio, including sustainability advantages
in the packaging space and innovative solutions in the medical
segment, which create stickiness with customers and barriers to
entry.
Moody's expects Jadex to maintain adequate liquidity over the next
12-15 months supported by cash on the balance sheet and external
liquidity to fund growth capex. The company has $25 million of cash
as of December 31, 2022 and generated $3 million of free cash flow
in 2022. Moody's forecasts modestly negative free cash flow as the
company invests in growth, including a water bottle cap project
that will be funded using a new $30 million unsecured line of
credit. External liquidity also includes the company's $60 million
revolving credit facility expiring February 2026. The only
financial covenant is a springing first lien net leverage ratio of
6.5x on the revolver, which is triggered at 35% utilization.
Moody's does not expect utilization to reach 35% Certain assets are
not secured by the credit agreement leaving some alternate
liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if there is a sustainable improvement
in credit metrics and cash flow while maintaining less aggressive
financial policies. Specifically, debt/EBITDA below 5.5x,
EBITDA/interest above 3.0x, and free cash flow/debt maintained
above 3.0%.
The rating could be downgraded if there is a deterioration in
credit metrics or liquidity. Specifically, if debt-to-adjusted
EBITDA is sustained above 6.5x, adjusted EBITDA-to-interest
maintained below 2.0x, free cash flow turns negative, or liquidity
deteriorates.
Jadex Inc., headquartered in Greenville, SC, is a manufacturer of
rigid and flexible plastic packaging and zinc and steel-based
products. Jadex is a portfolio company of One Rock Capital Partners
LLC.
The principal methodology used in these ratings was Packaging
Manufacturers: Metal, Glass and Plastic Containers published in
December 2021.
JAX SERVICE: Unsecureds Will Get 5% of Claims in 60 Months
----------------------------------------------------------
Jax Service Center, LLC, filed with the U.S. Bankruptcy Court for
the Northern District of New York a Small Business Plan of
Reorganization dated March 13, 2023.
The Debtor is a sole member LLC organized under the laws of the
State of New York with operations located at 3845 Rte 281,
Cortland, NY 13045. The Debtor operates an automobile service
center in Cortland, New York.
Debtor lost its floor plan financing from Creditor Westlake
Flooring Company, LLC in the summer of 2022 due to a nonpayment
issue. Debtor did make a floor plan arrangement with NextGear, and
remained current with required payments to NextGear. However, after
about three months, NextGear told Debtor that it was their policy
to terminate all floor plan arrangements whenever a dealer was in
default with other floor plan companies. NextGear then pulled their
vehicles off Debtor's lot, leaving Debtor with no vehicles to sell.
Within about a month, Debtor made arrangements with a third party
to sell vehicles on consignment.
On October 13, 2022, one creditor, Smart Merchant (UCC filed by
DMKA) froze Debtor's credit card merchant payments, preventing
Debtor from receiving any money that their customers put on credit
or debit cards. Shortly prior to filing this case, Debtor had
received communication that Fundation had filed a lawsuit against
Debtor in West Virginia. As a result, Debtor could not continue to
operate its business without a reorganization.
This Plan of Reorganization under Chapter 11 of the Code proposes
to pay creditors of the Debtor from Debtor's cash flow from
operations and future income.
Class #1 includes Citizens Bank claim #6, receiving the full value
of their claim as secured at 6% interest paid over 60 months.
Class #2 includes U.S. Small Business Administration (no proof of
claim filed), receiving the full value of the value of their
collateral after payment to the prior lien holder of the value of
their collateral. This portion of their claim will be paid at 6%
interest paid over 60 months. The balance of their split claim will
be paid as an unsecured creditor in Class #4.
Class #3 includes all other secured creditors that are being
treated as fully unsecured as a result of the value of all of
Debtor's assets being paid to the two prior lien holders. This
Class includes First National Bank of Dryden (POC #9, Fundation
(POC#2, West Lake Services, LLC (POC #5 only against Debtor's
principal), Next Gear Capital (POC #7), Can Capital, Inc. (POC #8),
Copperwood (NO POC filed), and Swift Financial, LLC (POC #4). These
Class #5 creditors' claims will be paid as unsecured.
Class 5 consists of General Unsecured Claims. This Class is
impaired. All Class 5 Claims shall be paid as wholly unsecured
claims. Debtor will pay an amount equal to approximately 5% of all
allowed Class 5 claims. Payment of Class 5 claims will begin 30
Days after the Effective Date and continue thereafter for 60 months
or until paid 5% of their Claims.
Unsecured creditors, except those with total Plan payouts of $275
or less will receive a pro rata portion of the monthly unsecured
payment which will be $450.00. Allowed unsecured claims where Plan
payout of 5% equals $275 or less will be paid in full within 30
days after the Effective Date. There will be a total payout of
approximately $27,000.00 to unsecured creditors.
Class 6 consists of Sean Smith as Equity Security Holder of Debtor.
Equity Interest holders shall receive 100% of the shareholder
interests in the reorganized Debtor.
The Plan will be implemented by the Debtor remitting payment to
from the Debtor's cash flow derived from income from plumbing,
heating and air conditioning clients.
A full-text copy of the Plan of Reorganization dated March 13, 2023
is available at https://bit.ly/3JrqCFI from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Peter A. Orville, Esq.
Orville & McDonald Law, PC
30 Riverside Dr.
Binghamton, NY 13905
Telephone: (607) 770-1007
About Jax Service Center
Jax Service Center, LLC, operates an automobile service center,
dealership and transport company. Jax Service was formed as a
limited liability company on February 25, 2014.
Jax Service Center sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D.N.Y. Case No. 22-30821) on Dec. 13,
2022. In the petition signed by Sean Smith, owner, the Debtor
disclosed up to $500,000 in assets and up to $1 million in
liabilities.
Judge Wendy A. Kinsella oversees the case.
Peter A. Orville, Esq., at Orville & McDonald Law, P.C., is the
Debtor's legal counsel.
KBK ENTERPRISES: Reaches Settlement with Cincinnati Insurance
-------------------------------------------------------------
KBK Enterprises of Roanoke, Inc., submitted an Amended Plan of
Reorganization dated March 13, 2023.
The Debtor provided in its original Plan of Reorganization dated
April 11, 2022 that allowed personal injury claims arising from the
hepatitis outbreak would be paid with the proceeds from its
insurance policy with The Cincinnati Insurance Company
("Cincinnati").
At the time of filing the initial Plan of Reorganization, the
amounts of the claims of the personal injury claimants
("Claimants") had not been liquidated. Further, at the time of the
filing of the original Plan of Reorganization the amounts available
from Cincinnati had not been determined.
On May 5, 2022, the Debtor, along with its affiliated Debtors,
Famous Anthony's Brookside, Inc. and Famous Anthony's, Inc., along
with the Claimants, filed an adversary proceeding in this Court
against Cincinnati. The adversary proceeding was styled Complaint
for Declaratory Judgment Against Defendant, Cincinnati Insurance
Company. Cincinnati removed the Adversary Proceeding to the United
States District Court for the Western District of Virginia.
Ultimately, after requesting and being allowed to file an amended
complaint, the same parties to the bankruptcy court adversary
proceeding filed a 2nd Amended Complaint for Declaratory Judgment
against Cincinnati. In January, 2023, the parties reached a
tentative settlement with Cincinnati regarding the amount of
insurance proceeds available, subject to an allocation by the
Bankruptcy Court of the amount of insurance proceeds agreed to by
the Settlement ("$14,000,000.00") among the claimants of the Debtor
and those of its affiliate, Famous Anthony's Brookside, Inc.
("Brookside").
On March 2, 2023, with the help of a retained mediator, this Debtor
and Brookside, and the Claimants of the Debtor and Brookside
engaged in a lengthy mediation, resulting in an agreement among all
of the parties as to the allocation of the insurance proceeds. As a
result, $7,775,000.00 of insurance proceeds will be available
pro-rata, to Claimants of the Debtor. In addition, $25,000.00 will
be paid by the Debtor's principal, Tony Triplette. Those funds will
be paid pursuant to this Plan, pro-rata, to the Debtor's personal
injury claimants. The pro-rata payment to each of the Debtor's
Claimants will be paid as settlement in full of their claims
against the Debtor.
Class 2 consists of Non-Personal Injury Unsecured Claims. The Class
2 claims will be paid in full, by the Debtor, within 30 days of the
Effective Date, from cash on hand, operating profit and vendor
rebates. The Class 2 claims will not be paid from the insurance
proceeds from Cincinnati.
Class 3 consists of Personal Injury Unsecured Claims. Debtor will
pay its claims for allowed personal injury claims arising from the
referenced hepatitis outbreak with the proceeds from its insurance
policy with Cincinnati (totaling $7,775,000.00) and the
contribution by the Debtor's principal (totaling $25,000.00). The
$8,000,000.00 of total proceeds shall be paid, pro-rata to the
Grandin Road designated claimants. The pro rata payment will be in
full satisfaction of the personal injury claims and each claimant
shall release the Debtor, its affiliate co-debtors, and all of
their owners, shareholders, and employees.
Further, the personal injury claimants shall release Cincinnati.
Prior to payment, each claimant shall be required to sign a
release. The distribution from the insurance proceeds shall be the
only distribution to be received by claimants in this class under
the Plan. The amount that the Debtor expects to pay pursuant to
this Plan, from the insurance proceeds, to each personal injury
claimant.
The Debtor hereby provides the following means for execution of
this Plan:
* The Debtor will continue its operations as a full service
restaurant in the ordinary course of business. Tony Triplette and
Bonnie Viar will continue in their roles as officers and managers.
* Within 30 days of the Effective Date, the Debtor from cash
on hand or from affiliates, will pay the Class 2 claims in full.
* The Debtor, upon payment by Cincinnati of the insurance
proceeds, and payment by Tony Triplette of his contribution and the
signing of the required releases as described in the treatment of
the Class 3 claims, through its counsel and in conjunction with
plaintiffs' counsel, will make pro-rata distributions to the
personal injury claimants and obtain the requisite releases.
* Any objections to claims are to be filed within 45 days of
the Effective Date.
* Final professional fee applications are to be filed within
45 days of the Effective Date.
* The Debtor shall pursue voidable preference and/or
fraudulent conveyance claims in its discretion.
A full-text copy of the Amended Plan dated March 13, 2023 is
available at https://bit.ly/3Fx6vVx from PacerMonitor.com at no
charge.
Counsel for the Debtor:
Andrew S. Goldstein, Esq.
Magee Goldstein Lasky & Sayers, PC
P.O. Box 404
Roanoke, VA 24003-0404
Telephone: (540) 343-9800
Facsimile: (540) 343-9898
Email: agoldstein@mglspc.com
About KBK Enterprises of Roanoke
KBK Enterprises of Roanoke, Inc. was formed in 1993 and has
operated the Famous Anthony’s restaurant at 4913 Grandin Rd SW,
Roanoke, VA 24018 since that time. The Debtor filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
W.D. Va. Case No. 22-70008) on Jan. 10, 2022, listing up to $50,000
in both assets and liabilities. Tony Triplette, president, signed
the petition.
Andrew S. Goldstein, Esq., at Magee Goldstein Lasky & Sayers, PC
serves as the Debtor's legal counsel.
M & S TRUCKING: Case Summary & 18 Unsecured Creditors
-----------------------------------------------------
Debtor: M & S Trucking of Lockesburg LLC
164 Melrose Rd
Lockesburg, AR 71846
Chapter 11 Petition Date: March 16, 2023
Court: United States Bankruptcy Court
Western District of Arkansas
Case No.: 23-70348
Judge: Hon. Richard D. Taylor
Debtor's Counsel: Stanley V. Bond, Esq.
BOND LAW OFFICE
525 S. School Ave.
Suite 100
Fayetteville, AR 72701
Tel: 479-444-0255
Fax: 479-235-2827
Email: attybond@me.com
Total Assets: $1,196,698
Total Liabilities: $1,722,521
The petition was signed by Marlowe Allen King as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 18 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/HIL4QOQ/M__S_Trucking_of_Lockesburg_LLC__arwbke-23-70348__0001.0.pdf?mcid=tGE4TAMA
MERCY HOSPITAL: Moody's Lowers Rating on Revenue Bonds to Caa1
--------------------------------------------------------------
Moody's Investors Service has downgraded Mercy Hospital's (IA)
revenue bonds to Caa1 from B1. The outlook has been revised to
stable from negative at the lower rating level. Mercy had $74.4
million of debt outstanding at FYE 2022.
RATINGS RATIONALE
The downgrade to Caa1 follows severe cash flow deterioration, from
historically weak levels, which has resulted in material and rapid
cash burn and is likely to necessitate the funding of a debt
service reserve at FYE 2023. Cash flow losses are largely
reflective of elevated labor and supply costs and a slowed revenue
cycle after implementation of a new billing system. While labor and
inflation pressures are sector-wide challenges, the impact to Mercy
has been disproportionate and has been exacerbated by the
implementation of the new billing system which caused receivables
to balloon during the last quarter of FY 2022. Additionally,
sluggish recovery of inpatient volumes and ongoing shifts in care
to outpatient settings has impaired demand, with inpatient volumes
continuing to lag pre-COVID levels. While the Caa1 incorporates
management's implementation of a performance improvement plan in an
effort to stabilize operating results, governance is a key driver
to the rating action. Mercy has continued to face challenges in
securing a long-term strategic partner, high management turnover,
and inability to achieve lasting performance improvement. The
continuation of all of Mercy's revenue and expenses pressures are
expected to be prolonged such that Moody's don't expect operating
performance to reach break-even levels for the foreseeable future.
Moody's Caa1 reflects Moody's view of Mercy's continued weak cash
metrics and leverage ratios as well as its small size and limited
clinical array relative to a stronger and much larger local
competitor. Competition will remain a factor with a large academic
medical center in the primary service area. That said, favorably
lowering near term default risk is a debt service reserve fund
providing assurance that bond payments will be made for the coming
year. Though the MADS coverage covenant was breached at FYE 2022,
which is an event of default requiring a consultant call in, there
is no acceleration risk.
RATING OUTLOOK
The stable outlook at the Caa1 reflects expectations that Mercy
will continue to face operating challenges and weak liquidity for
the next 12-18 months with the potential for meaningful short-term
swings in performance.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
-- Material and sustained improvements in operating performance
which results in positive cash flow
-- Substantial rebuild of unrestricted cash and investments
that is durable
-- Widening and stabilization of headroom to financial covenants
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
-- Further decline of cash flow or liquidity, beyond current
expectations
-- Inability to execute upon performance improvement initiatives
-- Discontinuation of relationship with MercyOne before a
new partner or affiliation is established
LEGAL SECURITY
The bonds are secured by a mortgage pledge on the Hospital, Medical
Official building and parking garages. Financial covenants include
a 1.15 debt service coverage and 60 days cash on hand. As part of
the Series 2018 transaction the system must maintain at least a B2
rating on the Series 2011 bonds. Failure to meet these covenants
are events of default but do not result in acceleration.
PROFILE
The Mercy Iowa City and Subsidiaries System includes a 234-bed
Mercy Hospital, Mercy Services Iowa City and Mercy Hospital
Foundation. The hospital is located in Iowa City, Iowa. Operating
revenues were approximately $185 million in fiscal 2022. Mercy
currently has a management agreement with MercyOne, a part of
Trinity Health Credit Group.
METHODOLOGY
The principal methodology used in this rating was Not-For-Profit
Healthcare published in December 2018.
MIRAGE INTERNATIONAL: Taps Blackwood Law Firm as Co-Counsel
-----------------------------------------------------------
Mirage International, Inc. seeks approval from the U.S. Bankruptcy
Court for the Western District of Oklahoma to employ Blackwood Law
Firm, PLLC as co-counsel with Hammond Law Firm.
Blackwood Law Firm will bill $300 per hour for the services of its
attorneys and $70 per hour for legal assistants and law clerks.
As disclosed in court filings, Blackwood Law Firm is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Amanda R. Blackwood, OBA
Blackwood Law Firm, PLLC
512 NW 12th Street
Oklahoma City, OK 73103
Phone: 405-232-6357
Fax: 405-378-4466
Email: amanda@blackwoodlawfirm.com
About Mirage International
Mirage International, Inc. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. W.D. Okla. Case No. 23-10499) on
March 6, 2023, with up to $100,000 in assets and up to $1 million
in liabilities. Charles Michael Laws, president of Mirage
International, signed the petition.
Hammond Law Firm and Blackwood Law Firm, PLLC represent the Debtor
as bankruptcy counsel.
MIRAGE INTERNATIONAL: Taps Hammond Law Firm as Bankruptcy Counsel
-----------------------------------------------------------------
Mirage International, Inc. seeks approval from the U.S. Bankruptcy
Court for the Western District of Oklahoma to employ Hammond Law
Firm as counsel in their Chapter 11 bankruptcy proceedings.
The firm will charge these hourly fees:
Attorneys $400
Legal Assistants $80
Law Clerks $80
As disclosed in court filings, Hammond Law Firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Gary D. Hammond, Esq.
Hammond Law Firm
512 NW 12th Street
Oklahoma City, OK 73103
Phone: 405-216-0007
Fax: 405-232-6358
Emai: gary@okatty.com
About Mirage International
Mirage International, Inc. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. W.D. Okla. Case No. 23-10499) on
March 6, 2023, with up to $100,000 in assets and up to $1 million
in liabilities. Charles Michael Laws, president of Mirage
International, signed the petition.
Hammond Law Firm and Blackwood Law Firm, PLLC represent the Debtor
as bankruptcy counsel.
MISS BRENDA: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Miss Brenda LLC
Sand Point, AK 99661
Aleutians East
Business Description: The Debtor is part of the fishing
industry.
Chapter 11 Petition Date: March 16, 2023
Court: United States Bankruptcy Court
District of Alaska
Case No.: 23-00041
Debtor's Counsel: Christine M. Tobin-Presser, Esq.
BUSH KORNFELD LLP
601 Union St., Suite 5000
Seattle, WA 98101-2373
Tel: (206) 292-2110
Fax: (206) 292-2104
Email: ctobin@bskd.com
Total Assets: $1,530,826
Total Liabilities: $626,933
The petition was signed by Jack D. Berntsen 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/6H4RQCQ/Miss_Brenda_LLC__akbke-23-00041__0001.0.pdf?mcid=tGE4TAMA
MOUNTAIN EXPRESS: Case Summary & 40 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Mountain Express Oil Company
3650 Mansell Road, Suite 250
Alpharetta, GA 30022
Business Description: Founded in 2000 and based in Alpharetta,
Georgia, the Debtors operate in the fuel
distribution and retail convenience
industry. As one of the largest fuel
distributors in the American South, the
Debtors serve 828 fueling centers and 27
travel centers across 27 states.
Chapter 11 Petition Date: March 18, 2023
Court: United States Bankruptcy Court
Southern District of Texas
One hundred forty-five affiliates that concurrently filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Mountain Express Oil Company (Lead Case) 23-90147
Texas MEX Limited Company, LLC 23-90145
Star Mountain Express, LLC 23-90146
WHRG Retail Ops LLC 23-90148
WHRG TC-NW-KS LLC 23-90149
Brothers Expressway, Inc. 23-90150
WHRGOPS SW LLC 23-90151
WHRGOPS SW-AR LLC 23-90152
WHRG TC-NW-MO LLC 23-90153
Brothers I-10 Service Road, Inc. 23-90154
WHRG TC-SW LLC 23-90155
WHRG TC-NW-ND LLC 23-90156
WHRGOPS SW-AR-NWAR LLC 23-90157
Brothers Stonebridge, Inc. 23-90158
Brothers Terry Parkway, Inc. 23-90159
WHRG TC-NW-WY LLC 23-90160
WHRG-LA, LLC 23-90161
WHRG TC-SE LLC 23-90162
WHRGOPS SW-OK LLC 23-90163
Newton Brothers, Inc 23-90164
MEX RE Holdings LLC 23-90165
WHRGOPS SW-OK-OKC LLC 23-90166
300 Lee Drive LLC 23-90167
WebsterP L.L.C. 23-90168
798 Jean Lafitte, L.L.C. 23-90169
1200 Wego LLC 23-90170
WHRG TC-SE-AL LLC 23-90171
Webster P II L.L.C. 23-90172
1227 Veterans, LLC 23-90173
MEX RE-NE LLC 23-90174
WHRGOPS SW-TX LLC 23-90175
West Hill Ranch Group LLC 23-90176
WHRGOPS SW-TX-DALLAS LLC 23-90177
WHRGOPS SW-TX-STX LLC 23-90178
WHRG TC-SE-SC LLC 23-90179
WHRG TC LLC 23-90180
WHRG TC-SW-AR LLC 23-90181
WHRG TC-SW-LA LLC 23-90182
1308 Jefferson Davis LLC 23-90183
WHRG TC-NE LLC 23-90184
WHRGOPS NE LLC 23-90185
1600 Manhattan Blvd, LLC 23-90186
MEX RE-NE-IN LLC 23-90187
MEX RE-NE-NJ LLC 23-90188
MEX RE-NE-NY LLC 23-90189
WHRG TC-NE-PA LLC 23-90190
2601 Gen. Degaulle LLC 23-90191
WHRGOPS NE-NY LLC 23-90192
WHRG TC-NW LLC 23-90193
WHRGOPS NE-NY-LI LLC 23-90194
WHRG TC-NW-IA LLC 23-90195
MEX RE-NE-NY-LI LLC 23-90196
2698 Barataria Blvd LLC 23-90197
WHRGOPS NE-PA LLC 23-90198
2701 Canal Street LLC 23-90199
WHRG-LA2, LLC 23-90200
MEX RE-NE-OH LLC 23-90201
WHRGOPS NW LLC 23-90202
2850 Belle Chasse Hgwy LLC 23-90203
Spartan Tank Management LLC 23-90204
MEX RE-NE-PA LLC 23-90205
WHRGOPS NW-IA LLC 23-90206
Mountain Express Ethanol Company 23-90207
3049 Loyola Drive LLC 23-90208
4115 Airline Hgwy., LLC 23-90209
Mountain Express Oil Company Southeast, LLC 23-90210
Mississippi MEX Company, LLC 23-90211
4408 S. I-10 Service Road LLC 23-90212
MEX RE-NW LLC 23-90213
MEX North Alabama, LLC 23-90214
4520 Jefferson Highway LLC 23-90215
WHRGOPS NW-IA-WIA LLC 23-90216
MEX RE-NW-IA LLC 23-90217
Madison Auto Truck Plaza and Lucky Dollar Casino, 23-90218
4662 GDD LLC 23-90219
WHRGOPS NW-KS LLC 23-90220
Alabama Terminal Property, LLC 23-90221
4915 Westbank Expwy LLC 23-90222
MEX RE-NW-KS LLC 23-90223
WHRGOPS NW-MI LLC 23-90224
B&T Petroleum LLC 23-90225
4940 Groom Road, L.L.C. 23-90226
WHRGOPS NW-MO LLC 23-90227
Consolidated HR Services LLC 23-90228
WHRGOPS NW-MO-NMO LLC 23-90229
MEX RE-NW-MN LLC 23-90230
WHRGOPS NW-WI LLC 23-90231
5310 Flannery Road, LLC 23-90232
8692 River Road, LLC 23-90233
MEX Fuels LLC 23-90234
MEX Fuels NE LLC 23-90235
MEX RE-NW-MO LLC 23-90236
MEX Fuels NE-IL LLC 23-90237
9410 Greenwell Springs, LLC 23-90238
WHRGOPS NW-WI-NWI LLC 23-90239
MEX Fuels NE-IN LLC 23-90240
MEX RE-NW-ND LLC 23-90241
MEX Fuels NE-KY LLC 23-90242
WHRGOPS SE LLC 23-90243
13289 Old Hammond Highway LLC 23-90244
MEX Fuels NE-NJ LLC 23-90245
WHRGOPS SE-AL-NORTH LLC 23-90246
Avondale Brothers No 128 LLC 23-90247
MEX Fuels NE-NY LLC 23-90248
MEX Fuels NE-OH LLC 23-90249
MEX Fuels NW LLC 23-90250
Avondale Investments, L.L.C. 23-90251
WHRGOPS SE-MS LLC 23-90252
MEX RE-NW-WI LLC 23-90253
MEX Fuels NW-IA LLC 23-90254
WHRGOPS SE-MS-JACKSON LLC 23-90255
MEX Fuels NW-MO LLC 23-90256
Brothers Belle Chasse, L.L.C. 23-90257
MEX Fuels SE LLC 23-90258
MEX RE-SE LLC 23-90259
MEX RE-SE-AL LLC 23-90260
MEX RE-SE-FL LLC 23-90261
Brothers Carol Sue, LLC 23-90262
MEX RE-SE-GA LLC 23-90263
WHRGOPS SE-SC LLC 23-90264
MEX Fuels SE-GA LLC 23-90265
WHRGOPS SE-TN LLC 23-90266
Brothers Petroleum, L.L.C. 23-90267
MEX RE-SE-MS LLC 23-90268
MEX Fuels SE-MS LLC 23-90269
WHRGOPS SE-TN-WTN LLC 23-90270
MEX RE-SE-NC LLC 23-90271
MEX RE-SE-SC LLC 23-90272
MEX RE-SE-TN LLC 23-90273
Lapalco Brothers No. 125, LLC 23-90274
MEX RE-SW LLC 23-90275
MEX Fuels SE-TN LLC 23-90276
MEX RE-SW-AR LLC 23-90277
MEX RE-SW-LA LLC 23-90278
MEX RE-SW-OK LLC 23-90279
Crowder Brothers, LLC 23-90280
MEX RE-SW-TX LLC 23-90281
Exxon General Degaulle, LLC 23-90282
MEX Fuels SW LLC 23-90283
Gause Operation, L.L.C. 23-90284
Mountain Express Baking and Coffee Co. 23-90285
Jamie Boulevard, LLC 23-90286
South Claiborne Operation LLC 23-90287
MEX Fuels SW-LA LLC 23-90288
MEX Fuels SW-OK LLC 23-90289
Judge: Hon. Christopher M. Lopez
Debtors'
Bankruptcy
Counsel: Michael D. Warner, Esq.
Steven W. Golden, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
440 Louisiana Street, Suite 900
Houston, TX 77002
Tel: (714) 384-4740
Tel: (713) 691-9385
Fax: (713) 691-9407
Email: mwarner@pszjlaw.com
sgolden@pszjlaw.com
- and -
Jeffrey N. Pomerantz, Esq.
Jeffrey W. Dulberg, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
10100 Santa Monica Blvd., 13th Floor
Los Angeles, CA 90067
Tel: (310) 277-6910
Fax: (310) 201-0760
Email: jpomerantz@pszjlaw.com
jdulberg@pszjlaw.com
Debtors'
Financial
Advisor: FTI CONSULTING, INC.
Debtors'
Investment
Banker: RAYMOND JAMES FINANCIAL, INC.
Debtors'
Claims,
Noticing, and
Solicitation Agent
and Administrative
Advisor: KURTZMAN CARSON CONSULTANTS LLC
Estimated Assets: $100 million to $500 million
Estimated Liabilities: $100 million to $500 million
The petitions were signed by Michael Healy as chief restructuring
officer.
Full-text copies of three of the Debtors' petitions are available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/G4U43TY/4408_S_I-10_Service_Road_LLC__txsbke-23-90212__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/QN7L7YA/Mountain_Express_Oil_Company__txsbke-23-90147__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/XMOSECY/Brothers_I-10_Service_Road_Inc__txsbke-23-90154__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 40 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Sunoco Fuel Supply $1,678,800
3801 West Chester Pike
Newton Square, PA 19073
T. Garvin
Tel: 215‐977‐3000; 610‐355‐1840
Fax: 215‐977‐3409
Email: TTGARVIN@sunocoinc.com
2. Valero Fuel Supply $1,667,621
One Valero Way
San Antonio, TX 78249
Accounts Payable
Tel: 210‐345‐2000;
361‐289‐3236
Fax: 210‐370‐3236
Email: valeromedia@valero.com
3. Coca‐Cola Bottling Co Food & Beverage
$1,109,711
PO Box 105637
Atlanta, GA 30348‐5637
Pamela Hume
Tel: 318‐584‐907‐
Fax: 770‐558‐2530
Email: pamelahume@ccbcu.com
4. Marathon Fuel Supply $881,915
539 S. Main Street
Findlay, OH 45840
Accounts Payable
Tel: 419‐422‐2121
Fax: 419‐421‐2410
5. Cross Oil Refining & Marketing Fuel Supply $774,052
484 East 6th St
Smackover, AR 71762
Accounts Payable
Tel: (800) 343‐6361
Fax: (870) 864‐8656
6. KeyBank Real Estate Capital Real Estate/ $667,587
P. O. Box 145404 Equipment Lease
Cincinnati, OH 45250
Gina Sullivan
Email: Gina_Sullivan@keybank.com
7. Exxon Mobil Fuel Supply $572,839
P.O. Box 74007276
Chicago, IL 60674‐7276
Accounts Payable
Tel: 972‐940‐6000
8. VM Petro Inc Fuel Supply $559,807
2188 Kirby Lane
Syosset, NY 11791
Accounts Payable
Tel: 516‐921‐7190
9. Pepsi Beverages Food & Beverage $550,054
75 Remitance Drive Suite 1884
Chicago, IL 60675
Kenneth Billson
Tel: 870‐688‐2790
Fax: 913‐791‐3046
Email: kenneth.billson@pepsico.com
10. Flying J‐Saratoga‐Pilot Fuel Supply
$516,916
5508 Lonas Drive
Knoxville, TN 37909
Accounts Payable
Tel: 865‐588‐7488
Fax: 865‐450‐2801;
865‐297‐1812
Email: media.relations@pilotflyingj.com
11. Shell Fuel Supply $499,471
910 Louisana St.
Houston, TX 77002
Accounts Payable
Tel: 888‐467‐4355
Fax: 713‐241‐2124
Email: HOU‐OSP‐
Chemicals‐CRC‐
Americas@shell.com
consumerorders‐us@shell.com
12. Sinclair Distributor Services Fuel Supply $470,740
P.O. Box 30825
Salt Lake City, UT 84130
Accounts Payable
Tel: 801‐524‐2700
Fax: 801‐524‐2880
Email: SLC.CustomerService@HFSinclair.com
13. Federated Insurance Insurance $439,873
PO Box 486
Owatonna, MN 55060
Accounts Payable
Tel: 507‐455‐5200;
800‐533‐0472
Fax: 507‐455‐7808
14. JF Acquisition LLC Real Estate/ $398,889
PO Box 531829 Equipment Lease
Atlanta, GA 30353‐1829
Accounts Payable
Tel: (919) 838‐755
15. DAS Distributors TC Retail Supplier $343,818
724 Lawn Road
Palmyra, PA 17078
M. Newburn
Tel: 402‐320‐9299
309‐230‐4139
Fax: 800‐842‐1992
Email: Mnewburn@dasinc.com
16. Imperial Trading Company Retail Supplier $340,499
701 edwards ave.
Elmwood, LA 70123
B. Schenk
Tel: 504‐909‐4622
Email: bschenck@imperialtrading. com
17. ARG 1 CBHGNJ001, LLC et al Real Estate/ $314,488
PO Box 71532 Equipment Lease
Cincinnati, OH 45271‐5352
Accounts Payable
Tel: (212) 415‐6500
18. Entergy Utility $280,596
PO Box 8108
Baton Rouge, LA 70891
Accounts Payable
Tel: 800‐368‐3749
19. Anthem Blue Cross Blue Shield Insurance $265,833
P.O. Box 645438
Cincinatti, OH 45264‐5438
Ohio GA
Tel: (800) 770‐6226
Fax: 866‐587‐3316
Email: ohioga@anthem.com
20. Southern Eagle Sales & Food & Beverage $243,725
Service, LP
5300 Blair Drive
Metairie, LA 70003
Greg Naquin
Tel: 504‐235‐5991
Fax: 504‐734‐2550
Email: gregnaquin@southerneagle.com
21. Hunt Refining Company Fuel Supply $242,154
P O Box 930865
Atlanta, GA 31193
Accounts Payable
Tel: 205‐391‐3300
Fax: 205‐758‐8371
Email: info@huntrefining.com
22. Core‐Mark AR Retail Supplier
$231,655
3400 Commerce Drive
Forrest City, AR 72335
Tonia Tubbs
Tel: 870‐317‐4197
Fax: 570‐823‐3316
Email: tonia.tubbs@core‐mark.com
23. Chevron Fuel Supply $227,944
6001 Bollinger Canyon Rd
San Ramon, CA 94583
Accounts Payable
Tel: 925‐842‐1000
24. Southern Glazer's Wine and Food & Beverage $227,587
Spirits‐LA
939 W Pont Des Mouton Rd
Lafayette, LA 70507‐4007
Z. Bibbins
Tel: 504‐274‐4235
Fax: 337‐237‐8081
Email: zbibbins@sgws.com
25. Golden Gallons, LLC Fuel Transport $225,452
2439 Manhattan Blvd., Ste 401
Harvey, LA 70037
Accounts Payable
Tel: (504) 366‐2413
26. Total Image Solutions, LLC Marketing $209,763
196 Theater Rd
South Hill, VA 23970
Jason Dawson
Tel: 434‐447‐3347
Fax: 434‐447‐3266
Email: vasignguy@hotmail.com
27. TBHC Deliveries, LLC Food & Beverage $203,015
2967 Sidco Drive
Nashville, TN 37204
Chad Metcalf
Tel: 800‐235‐3798
Fax: 800‐809‐9241
Email: chad.metcalf@luminafoods.com
28. Frito‐Lay Food & Beverage
$185,942
75 Remittance Drive Ste 1217
Chicago, IL 60675‐1217
Arnel Dujkovic1
Tel: 228‐342‐0181
Email: arnel.dujkovic1@pepsico.co
29. CBE, Inc IT $185,830
PO Box 1944
Montgomery, AL 36102
Alyison Whatley
Tel: (334) 265‐8903
Email: alyison.whatley@cbe‐inc.com
30. Andrews Distributing Company Food & Beverage $180,567
2730 Irving Boulevard
Dallas, TX 75207
C. Mcpherson
Tel: 214‐525‐9400
Fax: 214‐905‐0811
Email: cmcpherson@andrewsdistributing.com
31. Crescent Crown Distributing Food & Beverage $163,585
5900 Almonaster Ave
New Orleans, LA 70126
Regina Terranova
Tel: 985‐960‐6737
Fax: 504‐240‐5539
Email: regina.terranova@crestcrown.com
32. Aaron Palmer Litigation Unknown
33. Azhar M. Chaudhary, Esq. Litigation Unknown
440 Louisiana
Suite 948
Houston, TX 77002
Azhar M. Chaudhary
Tel: (281) 265‐1010
Email: attorney@chaudharyjd.com
34. Law Offices of James Scott Litigation Unknown
Farrin
Douglas E. Berger
555 South Mangum St.
Ste 800
Durham, NC 27701
Douglas E. Berger
Tel: 800‐220‐7321
Fax: 800‐716‐7881
Email: dberger@farrin.com
35. Joseph V. Dirosa, Jr. Litigation Unknown
329 North Woodlawn Avenue
Metairie, LA 70001
Joseph V. Dirosa, Jr.
Tel: (504) 289‐2739
Fax: 504‐218‐7035
Email: jdirosa1@cox.net
36. AFN ABSPROP001 LLC Litigation Unknown
c/o BYBEE & TIBBALS, LLC
P.O. BOX 1542
735 Johnie Dodds Blvd
Suite 104 (29464)
Mount Pleasant, SC 29465
Jeff Tibbals
Tel: 843‐881‐1623
Fax: 800‐716‐7881
Email: jst@bybeetibbals.com
37. AFN ABSPROP001 LLC Litigation Unknown
c/o Daniel Coker Horton & Bell, P.A.
Post Office Box 1396
Oxford, MS 38655
Tel: 662‐232‐8979
38. AFN ABSPROP001 LLC Litigation Unknown
c/o GREENBERG TRAURIG, LLP
3333 Piedmont Road NE
Suite 2500
Atlanta, GA 30305
Theordore Blum, Ernest
LaMont Greer
Tel: 678‐553‐2100
Fax: 678‐553‐2212
Email: blumt@gtlaw.com;
greere@gtlaw.com
39. Freeway Stores OK LLC c/o Litigation Unknown
McAfee & Taft
211 N. Robinson
Eighth Floor
Two Leadership Square
Oklahoma, OK 73102
Kathy Neal
Tel: 918‐574‐3020
Fax: 405‐235‐0439
Email: kathy.neal@mcafeetaft.com
40. AFN ABSPROP001 LLC Litigation Unknown
c/o Mitchell, Williams, Selig,
Gates & Woodyard, P.L.L.C
425 W Capitol Ave #1800
Little Rock, AR 72201
Tel: 501‐688‐8800
Fax: 501‐688‐8807
NATURE COAST: Unsecureds to be Paid in Full in 12 Months
--------------------------------------------------------
Nature Coast Development Group, LLC, filed with the U.S. Bankruptcy
Court for the Northern District of Florida a Disclosure Statement
describing Plan of Reorganization dated March 14, 2023.
The Debtor was created to construct a 65,000 square foot, five
story, and approximately 93 room Best Western Premier Hotel in
Gilchrist County, Florida (the "Hotel Project" or "Hotel"). The
Hotel is located at 7900 State Road 26, Fannings Springs, Florida
32693.
The Debtor's issues with WB and the Surety triggered monetary and
non-monetary defaults with Seacoast and construction of the Hotel
Project completely halted. The Debtor is now involved in multiple
lawsuits with Seacoast National Bank, the Surety, WB,
subcontractors, and other associated entities. To make matters
worse, Debtor's issues with Seacoast National Bank, the Surety, WB,
and other associated entities coincided with the beginning of the
COVID-19 pandemic.
The Debtor filed the instant case to preserve the going concern
value of its business operations, to restructure its debt
obligations, and ultimately allow for a successful reorganization
for all stakeholders. The Debtor has engaged in conversations with
Seacoast Bank to generally discuss the Plan terms. Debtor has
engaged with different entities regarding DIP financing and exit
financing. Debtor has further engaged in conversations with
replacement contractors to finish construction of the Hotel. Debtor
expects to have commitments from a general contractor, a DIP
financer, and an exit financer before any Confirmation hearing.
The Plan generally contemplates paying Holders of Allowed Claims
from: (i) the turnover of certain funds being held by Seacoast
Bank, (ii) DIP financing, (iii) exit financing, (iv) proceeds
derived from the Debtor's pursuit of Causes of Action, and (v) the
Debtor's business operations once the Debtor's Hotel is completed
and a certificate of occupancy is issued by the State of Florida.
The Plan also provides that the Debtor's existing membership and
equity interests will retain their same interest as on the Petition
Date.
Class 4 consists of the Allowed Unsecured Claims of General
Unsecured Creditors. In full satisfaction of the Allowed Class 4
Claims, Class 4 Claimholders shall be repaid in full based on equal
monthly payments over 12 months. Payments shall commence on the
Effective Date. Class 4 is Impaired.
Class 5 consists of all equitable interests in the Debtor. Class 5
Interest holders shall retain their equitable interest in the
Debtor as of the Petition Date. Class 5 is Unimpaired.
The Plan contemplates the Debtor will begin operations
approximately 12 months after the Effective Date. The Debtor has
engaged Blankenship Consulting, LLC to complete construction of the
Hotel. Debtor's Agreement with Blankenship Consulting, LLC, along
with a cost estimate and construction schedule. Once the Hotel is
completed, Debtor will generate funds from its guest rooms,
restaurants, wedding venue, and other amenities.
Debtor plans to obtain both DIP financing to fund construction of
the Hotel and exit financing to payoff the DIP financer and Classes
1-4. It is anticipated that Debtor's operations will be sufficient
to make payments to the exit financing company and for general
hotel operations. Debtor will supplement this Disclosure Statement
with a projection of the Debtor's anticipated financial performance
during the term of the Plan.
The Debtor has engaged in discussions with multiple entities
regarding DIP financing. DIP financing will allow the Debtor to
fund construction of the Hotel and service the debts in Classes 1 4
until the Hotel is operational. Debtor has received terms from
Stonehill Strategic Capital, LLC. Stonehill can provide Debtor up
to $4,400,000.00 for construction of the Hotel Project. The DIP
financing, together with $3,515,524.71 being held by Seacoast Bank,
will allow the Debtor to complete the hotel within approximately 12
months of the Effective Date and receive a certificate of occupancy
from the State of Florida.
A full-text copy of the Disclosure Statement dated March 14, 2023
is available at https://bit.ly/3FxoA6a from PacerMonitor.com at no
charge.
Counsel for Debtor:
Justin M. Luna, Esq.
Latham Luna Eden & Beaudine, LLP
201 S. Orange Ave., Suite 1400
Orlando, FL 32801
Tel: (407) 481-5800
Fax: (407) 481-5801
Email: jluna@lathamluna.com
About Nature Coast Development Group
Nature Coast Development Group, LLC, a company in Fanning Springs,
Fla., filed a petition for relief under Subchapter V of Chapter 11
of the Bankruptcy Code (Bankr. N.D. Fla. Case No. 22-10200) on Dec.
14, 2022. In the petition filed by its managing member, Marites
Padot, the Debtor reported assets between $10 million and $50
million and liabilities between $1 million and $10 million. Jodi D.
Dubose has been appointed as Subchapter V trustee.
Judge: Karen K Specie oversees the case.
The Debtor is represented by Latham, Shuker, Eden, & Beaudine, LLP.
NIELSEN & BAINBRIDGE: Affiliates Tap Quinn Emanuel as Legal Counsel
-------------------------------------------------------------------
Nielsen & Bainbridge, LLC's affiliates, NBG Intermediate Holdings,
Inc. and KNB Holdings Corporation, seek approval from the U.S.
Bankruptcy Court for the Southern District of Texas to hire Quinn
Emanuel Urquhart & Sullivan, LLP.
The Debtors require legal counsel to render independent services at
the sole direction of their managers, Jonathan Foster and Jeffrey
Dane, for the purpose of reviewing, negotiating, evaluating, and
approving strategic transactions in which a conflict of interests
exists between them and any of their shareholders, affiliates, or
directors and officers.
Quinn received a retainer in the amount of $50,000 for its
services.
The firm's standard hourly rates are as follows:
Partners $1,505 to $2,250
Counsel $1,415 to $2,250
Associates $880 to $1,390
Law Clerks $515 to $715
The attorneys expected to provide the services and their hourly
fees are as follows:
James Tecce, Partner $1,865
Lindsay Weber, Associate $1,390
Seth Fortenbery, Associate $1,280
Cameron Kelly, Associate $1,095
James Tecce, Esq., a partner at Quinn, disclosed in a court filing
that his firm is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code.
Mr. Tecce also disclosed the following in response to the request
for additional information set forth in Paragraph D.1 of the U.S.
Trustee Fee Guidelines.
Question: Did the firm agree to any variations from, or
alternatives to, the firm's standard billing arrangements for this
engagement?
Answer: No. The firm and the disinterested managers have not
agreed to any variations from, or alternatives to, the firm's
standard billing arrangements for this engagement. The rate
structure provided by the firm is appropriate and is not
significantly different from the rates that the firm charges for
other non-bankruptcy representatives, or the rates of other
comparably skilled professionals.
Question: Do any of the firm professionals in this engagement
vary their rate based on the geographical location of the Debtors'
Chapter 11 cases?
Answer: No. The hourly rates used by the firm in representing
the disinterested managers are consistent with the rates that the
firm charges other comparable Chapter 11 clients regardless of the
location of the Chapter 11 case.
Question: If the firm has represented the disinterested
managers in the 12 months prepetition, disclose the firm's billing
rates and material financial terms for the prepetition engagement,
including any adjustments during the 12 months prepetition. If the
firm's billing rates and material financial terms have changed
post-petition, explain the difference and the reasons for the
difference.
Answer: The firm followed the fee arrangement as stated in an
engagement letter dated Jan. 27, 2023. There have been no
adjustments to the firm's billing rates.
Question: Have the Debtors approved the firm's budget and
staffing plan, and if so, for what budget period?
Answer: The firm is working with the disinterested managers to
prepare budgets and staff plans.
Quinn can be reached through:
James C. Tecce, ESq.
Quinn Emanuel Urquhart & Sullivan, LLP
51 Madison Avenue, 22nd Floor
New York, NY 10010-1601
Phone: (212) 849-7199
Email: jamestecce@quinnemanuel.com
About Nielsen & Bainbridge
Nielsen & Bainbridge, LLC, 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. Tex. Lead Case No. 23-90071) on
February 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 case.
The Debtors tapped Jackson Walker LLP as local bankruptcy counsel,
Kirkland and Ellis LP and Kirkland and Ellis International LLP as
general bankruptcy counsel, Alvarez and Marsal North America, LLC
as financial advisor, Guggenheim Securities, LLC as investment
banker, Hilco Real Estate, LLC as exclusive sales agent, and Omni
Agent Solutions as claims, noticing, solicitation agent and
administrative advisor.
KKR Loan Administration Services, LLC, serves as administrative
agent and collateral agent under the DIP Facility. Counsel 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. Counsel
tothe Prepetition ABL Agent are Julia Frost-Davies, Esq. and
Christopher L. Carter, Esq. at Morgan, Lewis & Bockius LLP.
NORTHERN MARIANAS CNMI: Fitch Affirms BB on 1998A & 2005A Bonds
---------------------------------------------------------------
Fitch Ratings has affirmed the 'BB' rating on approximately $14.2
million of outstanding Commonwealth Ports Authority (CPA),
Commonwealth of the Northern Mariana Islands (CNMI) senior series
1998A and 2005A seaport revenue bonds. The Rating Outlook is
Stable.
Entity/Debt Rating Prior
----------- ------ -----
Northern Mariana
Islands,
Commonwealth
of (MP)
[Port Facilities]
Northern Mariana
Islands,
Commonwealth of
(MP) /Port
Facilities
Revenues/1 LT LT BB Affirmed BB
RATING RATIONALE
The rating reflects the essentiality of the ports to a small,
island economy amidst high exposure to economic volatility from
tourism and a nearly 100% import-based cargo operation. The rating
also considers CPA's sustained revenue performance and history of
controlled expenses. Despite recent adverse impacts on operational
performance, CPA is expected to maintain financial metrics
supportive of the current rating level. Under Fitch's rating case
scenario, coverage levels average 1.5x through 2027. CPA further
benefits from robust liquidity levels that provide some mitigation
to a prolonged softening of cargo demand.
KEY RATING DRIVERS
Revenue Risk - Volume - Weaker
Concentrated but Vital Cargo Base
The seaports remain essential for the import of goods to an island
economy; however, there is potential for stagnant operational
trends, due to CNMI's exposure to macroeconomic factors and its
elevated dependence on a limited tourist base. Volume stability is
expected, given that food and fuel related cargos account for
approximately 50% of import-dependent revenue tonnage.
Revenue Risk - Price - Weaker
Limited Pricing Power
CNMI's narrow economy and exposure to economic volatility limit
management's economic flexibility to raise rates on seaport system
tenants and users. Following the last increase in 2009, the
authority's focus has instead been on effective containment of
operating expenses.
Infrastructure Dev. & Renewal - Midrange
Modest Capital Improvement Plan
The ports once handled nearly twice as much cargo and are in
satisfactory condition to deal with current and forecasted demand.
The authority's capital improvement plan (CIP) is manageable and
funded with grants and internally generated funds. No additional
debt is anticipated in the near to medium term.
Debt Structure - Senior - Stronger
Conservative Capital Structure
The authority maintains 100% fixed-rate, fully amortizing debt with
a level debt service profile and a 2031 final maturity. Structural
features and reserves are sufficient and consistent with other
Fitch-rated ports.
Financial Profile
CPA maintained favorable leverage and liquidity metrics offset by a
modest coverage ratio of 1.4x in fiscal 2022 (unaudited). Estimated
fiscal 2022 net debt-to-cash flow available for debt service
(CFADS) is negative, reflecting cash balances exceeding debt
outstanding. The CPA maintains strong balance sheet cash and
reserves available for operating expenses, with days cash on hand
(DCOH) currently exceeding 1,200. These liquidity and leverage
metrics provide the CPA with some degree of flexibility to meet
financial commitments in weak performing periods. Rating case
coverages are expected to average 1.5x through the projection
period.
PEER GROUP
Paita (Peru) (BBB-/Stable) serves as a global peer to CPA, with a
similar regionally focused importance but higher coverage metrics
and superior franchise strength. The Hawaii Department of
Transportation (AA-/Stable) is a U.S. port with a similar
operational profile, strong financial metrics and island economy
structure. However, Hawaii's operations are on a much larger scale,
the service area less economically volatile, and tariff increases
are increased annually by the greater of 3% or CPI. This results in
stronger volume assessment and a midrange price assessment. All of
these factors contribute to Hawaii's much higher rating.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A severely weakened underlying service area economy that results
in the seaports' inability to maintain cargo levels at or near
current levels for a sustained period;
- Depressed debt service coverage levels resulting from declining
operating revenues;
- A shift in the seaports' balance sheet liquidity and financial
flexibility resulting from changes in operating expense management
or pricing power.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Given the ports' limited operating profile and significant
exposure to local economic factors, positive rating migration is
not anticipated at present.
CREDIT UPDATE
Revenue trends have been volatile since 2018, attributed to the
pandemic and reductions in inbound revenue tonnage and damage from
storms such as Super Typhoon Yutu that have passed through the
CNMI. While the ports are located in an island economy with
exposure to tourism, CPA also has a mix of non-operating revenues
(grants and interest income) to help offset declines in operating
revenue.
The seaport system benefits from a natural monopoly position, with
90% of goods entering the Northern Mariana Islands passing through
the ports of Saipan, Tinian, and Rota. Total tonnage in fiscal 2022
improved slightly by 0.6% from the prior year, with nearly 455
thousand metric tons of cargo moving through the ports
(representing 80% of fiscal 2019 volumes).
Total operating revenues for the seaport system, which consist
primarily of harbor and non-harbor revenues, increased 18.5% to
$7.7 million in fiscal 2022 (unaudited). Estimated operating
expenses in fiscal 2022 (unaudited) increased 22.4% to $3.5 million
from $2.8 in fiscal 2021, primarily due to increases in employee
salaries and wages, operating and maintenance and insurance. CPA
also experienced cost increases for supplies and materials
attributed to supply chain challenges and inflation.
Debt service coverage in fiscal 2022 (unaudited) is estimated at
1.4x, and leverage remains negative, benefitting from strong
balance sheet cash and reserves. Though coverage is expected to
remain depressed over the next 1-2 years, the slower recovery of
seaport operations and revenue is offset by a low debt service
obligation of just over $3 million through 2028 before stepping
down to $540,000 through maturity in 2031.
FINANCIAL ANALYSIS
Given that cargo volumes have not yet recovered to historical
levels, Fitch's rating case is also considered the base case.
Fiscal 2022 revenue performance is based on preliminary actual
performance. The differences for each case focus on the level and
speed of cargo revenue recovery starting in 2022 and through the
next several years.
Fitch's rating case reflects the budget for fiscal 2023, followed
by conservative expectations of future performance thereafter.
Fitch assumes revenue recovery to 93% in fiscal 2024 and a full
recovery to 2019 levels by fiscal 2025, followed by low growth of
1.5% per year thereafter. Under the rating case, DSCR averages 1.5x
through 2027 and 4.0x through debt maturity in 2031 and the
leverage profile remains negative.
Fitch's downside case reflects a prolonged recovery back to 2019
levels. Revenues are expected to recover to 88% in fiscal 2024, 93%
in fiscal 2025, and 100% of 2019 levels by fiscal 2026. Similar to
the base case, Fitch assumes low annual growth of 1.5% thereafter
through maturity. Under these assumptions, DSCR averages 1.4x
through 2027 and 3.9x through maturity, with leverage remaining
negative.
SECURITY
The seaport bonds are secured solely by gross seaport revenues and
certain accounts established pursuant to the bond indenture.
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.
PAPA JOHN'S: Moody's Affirms Ba3 CFR & Alters Outlook to Negative
-----------------------------------------------------------------
Moody's Investors Service changed Papa John's International, Inc.
's outlook to negative from stable and downgraded its speculative
grade liquidity rating (SGL) to SGL-2 from SGL-1. In addition,
Moody's affirmed Papa John's ratings, including its Ba3 corporate
family rating, Ba3-PD probability of default rating, and B1 senior
unsecured guaranteed notes rating.
The outlook change to negative from stable reflects governance
considerations including a more aggressive financial strategy which
includes use of revolver debt to fund share repurchases during an
increasingly challenging operating environment with high inflation
and pressure on consumer spending. On March 2, 2022[1], Papa John's
announced that it will repurchase around 2.18 million shares of
common stock beneficially owned by Starboard Value LP ("Starboard")
for around $179.6 million, using balance sheet cash, of which it
had around $47.4 million as of December 25, 2022, and additional
borrowing under its $600 million secured revolving credit facility.
The transaction will result in material deterioration in credit
metrics, with Moody's debt-to-EBITDA rising to around 4.0x and
EBIT-to-interest falling near 3.3x on a pro forma annualized basis.
Papa John's had around $205 million already borrowed under the
revolver as of December 25, 2022, largely drawn to fund prior share
repurchases as well as free cash flow shortfalls in 2022.
The downgrade to SGL-2 from SGL-1 reflects the reduced liquidity as
a result of increased borrowing to fund the share repurchases, as
well as Moody's expectation that while free cash flow will turn
positive in 2023, it will remain modest and well below 2020 levels.
When considering the Starboard transaction and repurchases made
earlier in 2023, Moody's expects revolver borrowing outstanding
will rise to more than 50% of the total facility size. However, the
SGL-2 still reflects Moody's expectation that cash, free cash flow
and remaining revolver availability will be more than sufficient to
support cash flow needs over the next twelve months, including
working capital, capital expenditures, and dividends.
The affirmation of ratings reflects Moody's expectation that Papa
John's will improve its credit metrics through profitable growth
and debt reduction over the next 12 months despite ongoing
pressures presented by commodity and labor inflation and a
difficult operating environment. Moody's expects growth in North
America and international markets outside of the UK, as well as
benefits from recent price increases, operational improvement and
cost containment initiatives to support increased profitability.
Moody's also expects the company to focus on revolving debt
reduction in lieu of share repurchases for the rest of 2023, and
credit metric improvement.
Downgrades:
Issuer: Papa John's International, Inc.
Speculative Grade Liquidity Rating, Downgraded to SGL-2 from
SGL-1
Affirmations:
Issuer: Papa John's International, Inc.
Corporate Family Rating, Affirmed Ba3
Probability of Default Rating, Affirmed Ba3-PD
Senior Unsecured Global Notes, Affirmed B1 (LGD5)
Outlook Actions:
Issuer: Papa John's International, Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Papa John's Ba3 CFR reflects its solid brand awareness, scale in
terms of units, and good liquidity. Moody's projects adjusted debt
to EBITDA to improve from approximately 4.0x to 3.5x based on
business growth and revolver repayment using free cash flow.
Governance considerations, including its recent acceleration of
share repurchases, are a constraint to the rating. Constraining
factors also include its relatively smaller revenue scale, its
narrow brand and product offering focusing on Papa John's pizza,
which exposes the company to changes in consumer preferences. Also,
while Papa John's restaurant unit base is predominantly franchised,
providing a base level of earnings stability, reported revenue is
largely derived from company-owned restaurants and commissaries
(around 75%) which increases exposure to operating risks as well as
commodity and labor costs, which are currently at elevated levels
which have negatively impacted company margins and cash flow;
although the commissary arrangement with North American franchisees
passes through food, labor and fuel costs on a cost plus fixed
margin basis.
The negative outlook reflects Papa John's more aggressive financial
strategy and the risks to driving sustained revenue and earnings
growth and free cash flow generation to improve credit metrics in
an increasingly difficult operating environment.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A rating upgrade is unlikely over the near-to-intermediate term
given Papa John's limited revenue scale as well as brand and
product diversification relative to rated peers. Factors that could
result in an upgrade include a material and sustained improvement
in credit metrics driven by consistent positive revenue and
earnings growth, with positive same store sales driven by both
traffic and check, as well as increased scale, brand and product
diversification. Specific metrics include debt to EBITDA sustained
below 2.5x and EBIT to interest coverage of over 5.0x. An upgrade
would also require very good liquidity and a conservative and
clearly articulated financial strategy.
A downgrade could occur if revenue and earnings were to materially
decline or if liquidity were to weaken. Given its limited brand
and product diversification, any material increase in financial
leverage from either operating performance or more aggressive
financial strategies could result in a downgrade. Quantitatively, a
downgrade could occur should debt to EBITDA remain above 3.75x or
EBIT to interest coverage remains below 4.0x. In addition,
increasing amount of borrowings under the secured debt could
pressure the rating on the company's unsecured notes depending on
the overall mix of secured and unsecured debt in the capital
structure.
Papa John's, with headquarters in Louisville, KY., is the world's
third largest pizza delivery company with around 5,706 restaurants
(around 522 are company owned) in 48 countries and territories as
of December 2022. Revenue for the year ended December 2022 exceeded
$2.1 billion; although systemwide sales were around $4.84 billion.
The principal methodology used in these ratings was Restaurants
published in August 2021.
PURE GOLD: Announces Management Departures, CCAA Stay Extended
--------------------------------------------------------------
Pure Gold Mining Inc. on March 17, 2023, announced the departures
of
Mark O'Dea, President & CEO; Phil Smerchanski, VP Exploration &
Technical Services; Chris Lee, Chief Geoscientist; and Adrian
O'Brien, Director Marketing and Communications, effective
immediately. The Company also announces the departures of Chris
Haubrich, VP Business Development & CFO and Ashley Kates, VP
Finance & Corporate Secretary, effective March 31, 2023.
The above noted departures are taking place in consultation with
the Company's senior lender, a fund managed by Sprott Resource
Lending Corp. ("Sprott") and the court appointed Monitor in the
ongoing Companies' Creditors Arrangement Act ("CCAA") proceedings,
KSV Restructuring Inc. ("KSV"). The departures are being made in
connection with an application scheduled to be heard on March 30,
2023 in the ongoing CCAA proceedings in which the Company will be
seeking to appoint a Chief Administrative Officer ("CAO"). Mr.
Haubrich, Ms. Kates, and Mr. Smerchanski have agreed to continue to
provide support beyond their termination dates to the Company in a
consulting capacity, as needed. The members of the Board of
Directors have each indicated an intention to resign after the
court appointment of the CAO.
The Company's PureGold Mine near Red Lake, Ontario remains in a
state of care and maintenance and is expected to remain in such
state for the foreseeable future as part of the ongoing CCAA
proceedings. On March 7, 2023, the CCAA stay of proceedings was
extended to May 12, 2023 and an additional US$5 million in
authorized borrowings was approved. The Mine remains staffed with a
full-time workforce of approximately 40 employees who are focused
on care and maintenance activities and preserving the value of the
asset. PureGold continues to engage in discussions with Sprott and
interested third parties concerning a possible transaction.
About Pure Gold Mining Inc.
Pure Gold Mining Inc. (NEX:PGM.H) -- http://www.puregoldmining.ca/
-- is a Canadian gold mining company, located in Red Lake, Ontario,
Canada. The Company owns and operates the Company's Mine, which
began gold production in 2021 after the successful construction of
an 800 tpd underground mine and processing facility. The Company's
Mine is centered on a forty-seven square kilometre property with
significant discovery potential.
R1 HOLDINGS: Barings Capital Marks $236,000 Loan at 15% Off
-----------------------------------------------------------
Barings Capital Investment Corporation has marked its $236,000 loan
extended to R1 Holdings, LLC to market at $201,000 or 85% of the
outstanding amount, as of December 31, 2022, according to a
disclosure contained in Barings Capital's Form 10-K for the fiscal
year ended December 31, 2022, filed with the Securities and
Exchange Commission on February 23, 2023.
Barings Capital is a participant in a Revolver loan to R1 Holdings,
LLC. The loan accrues interest at a rate of 6.25% (SOFR+6.50%) per
annum. The loan matures in October 2028.
Barings Capital was formed on February 20, 2020 as a Maryland
limited liability company and converted to a Maryland corporation
on April 28, 2020. On July 13, 2020, Barings Capital commenced
operations and made its first portfolio company investment. The
Company is an externally managed, non-diversified closed-end
management investment company that has elected to be regulated as a
business development company under the Investment Company Act of
1940, as amended. In addition, the Company has elected to be
treated and intends to qualify annually as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as
amended.
R1 Holdings, LLC is in the transportation industry. Resource 1
acts as a broker between retailers and manufacturers for the sale,
sourcing, and development of packaged food/beverage and consumer
products.
RANDYS HOLDINGS: Barings Capital Marks $220,000 Loan at 19% Off
---------------------------------------------------------------
Barings Capital Investment Corporation has marked its $220,000 loan
extended to Randys Holdings, Inc. to market at $178,000 or 81% of
the outstanding amount, as of December 31, 2022, according to a
disclosure contained in Barings Capital's Form 10-K for the fiscal
year ended December 31, 2022, filed with the Securities and
Exchange Commission on February 23, 2023.
Barings Capital is a participant in a Revolver loan to Randys
Holdings, Inc. The loan accrues interest at a rate of 10.6%
(SOFR+6.50%) per annum. The loan matures in October 2028.
Barings Capital was formed on February 20, 2020 as a Maryland
limited liability company and converted to a Maryland corporation
on April 28, 2020. On July 13, 2020, Barings Capital commenced
operations and made its first portfolio company investment. The
Company is an externally managed, non-diversified closed-end
management investment company that has elected to be regulated as a
business development company under the Investment Company Act of
1940, as amended. In addition, the Company has elected to be
treated and intends to qualify annually as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as
amended.
Randys is a supplier of highly engineered drivetrain products to
the automotive aftermarket.
REALMARK MARINA: Unsecureds to Get Share of Income for 3 Years
--------------------------------------------------------------
Realmark Marina Grill, LLC, filed with the U.S. Bankruptcy Court
for the Middle District of Florida a Plan of Reorganization for
Small Business dated March 13, 2023.
Realmark Marina Grill, LLC ("Marina Grill") owns waterfront
property in the Cape Harbour Marina condominium community from
which it conducts a variety of business operations.
Marina Grill's principal business is the lease of a restaurant
facility, which was originally constructed in 2003, and leased to
Snappers Inc. ("Snappers") through 2021. Currently, the Marina
Grill restaurant facility is leased to Rumrunners, LLC
("Rumrunners"). Marina Grill collects rent under the lease on a
percentage basis.
The Debtor and Realmark Parking Services One, LLC ("Parking One")
and Realmark Parking Services Two, LLC ("Parking Two" and together
with the Debtor and Parking One, collectively, the "Companies") are
debtors in cases pending before this Court. The Companies have
overlapping ownership and operational synergies, are subject to the
same master condominium declaration, are codefendants in pending
litigation with an adjoining property owner, and are parties to a
reciprocal easement agreement.
In addition to providing the Companies access to debtor in
possession and exit financing, the Chapter 11 is intended to bring
to an end years of prolonged and expensive litigation involving
intricate issues of real estate law arising from, among other
documents, a 2003 reciprocal easement (the "2003 Easement") and 2
separate 2005 Shared Building Easements, Covenants, Conditions, and
Restrictions (the "2005 Shared Building Agreements") and the
placement and usage of underground fuel storage tanks. Although
intricate, the real estate disputes are ideally suited for
resolution in the Bankruptcy Court.
After evaluating alternatives, the Companies each determined that
Subchapter V, Chapter 11 filings would provide a venue in which to
effectively address their current legal issues and debts, and best
serve the interests of its creditors, customers, and employees, and
the Cape Harbour community as a whole.
The Debtor's financial projections show that the Debtor will be
able to make the distributions to the holders of allowed
administrative, priority tax, secured, and unsecured creditors.
Payments to Class 3 unsecured creditors shall be made on a
quarterly basis over a period of 3 years or 12 quarters, commencing
on the first day of the calendar quarter beginning after the
Effective Date.
This Plan of Reorganization proposes to pay creditors of the Debtor
from (i) existing cash on hand on the Effective Date; (ii)
projected disposable income remaining after the payment of
operating expenses; (iii) net proceeds, to the extent available,
from debtor in possession loans; and (iv) the net proceeds from the
sale of property under the Plan.
Specifically, the distributions to Class 3 unsecured creditors will
be fixed payments based upon projected disposable income as set
forth in Section 1191(b) of the Bankruptcy Code remaining after
payment of operating expenses and senior claims. The Debtor, as
reorganized pursuant to this Plan, are hereafter referred to as the
"Reorganized Debtor" in these Bankruptcy Cases.
Class 3 consists of all non-priority, non-insider unsecured claim
excluding SHM and insiders. The scheduled and filed Class 3 claims
total approximately $5,000,000. Every holder of an allowed non
priority, no-ninsider unsecured claim against the Debtor shall
receive its pro-rata share of projected disposable income,
remaining after payment of operating expenses and senior claims.
Payments shall be made on a quarterly basis over a period of 3
years or 12 quarters, commencing on the first day of the calendar
quarter following the Effective Date. Class 4 is impaired by the
Plan.
Class 4 consists of all non-priority, insider unsecured claims
allowed under § 502 of the Bankruptcy Code. The scheduled Class 4
claims total approximately $1,235,000. Every holder of an allowed
non-priority, insider unsecured claim against the Debtor shall be
subordinated to the allowed Class 3 claims such that the holders of
allowed Class 4 claims shall not receive any distribution unless
the allowed Class 3 claims are paid in full. Once the allowed Class
3 claims are paid in full, every holder of an allowed Class 4 claim
shall receive its pro-rata share of projected disposable income,
remaining after payment of operating expenses and senior claims.
Payments shall be made on a quarterly basis over a period of 3
years or 12 quarters, commencing on the first day of the calendar
quarter following the Effective Date. The Debtor does not
anticipate that it will have sufficient projected disposable income
remaining after payment of operating expenses and senior claims to
make distributions to the holders of allowed Class 4 claims. Class
4 is impaired by the Plan.
Class 5 consists of all equity security interests. Existing equity
security holders will retain their equity interests in the Debtor.
No distributions will be made to equity security holders until the
distributions to Class 3 have been made. Class 5 is unimpaired by
the Plan.
Payments required under the Plan will be funded from (i) existing
cash on hand on the Effective Date; (ii) projected disposable
income remaining after the payment of operating expenses; (iii) net
proceeds, to the extent available, from debtor in possession loans;
and (iv) the net proceeds from the sale of property under the
Plan.
A full-text copy of the Plan of Reorganization dated March 13, 2023
is available at https://bit.ly/3Ft94rB from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Amy Denton Mayer, Esq.
Stichter, Riedel, Blain & Postler, P.A.
110 East Madison Street, Suite 200
Tampa, FL 33602
Tel: (516) 496-7100
Email: amayer@srbp.com
About Realmark Marina Grill
Realmark Marina Grill, L.L.C. and two affiliates filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. M.D. Fla. Lead Case No. 22-01229) on Dec. 12, 2022. At the
time of filing, Realmark Marina Grill listed $1 million to $10
million in assets and up to $50,000 in liabilities.
Judge Caryl E. Delano presides over the case.
The Debtor tapped Stichter Riedel Blain & Postler, P.A. as
bankruptcy counsel; GrayRobinson, P.A. as special litigation
counsel; Hancock Askew & Co., LLP as accountant; and McHale, P.A.
as financial advisor.
SAFETY PRODUCTS: Barings Capital Marks $143,000 Loan at 24% Off
---------------------------------------------------------------
Barings Capital Investment Corporation has marked its $143,000 loan
extended to Safety Products Holdings, LLC to market at $143,000 or
76% of the outstanding amount, as of December 31, 2022, according
to a disclosure contained in Barings Capital's Form 10-K for the
fiscal year ended December 31, 2022, filed with the Securities and
Exchange Commission on February 23, 2023.
Barings Capital is a participant in a First Lien Senior Secured
Term Loan to Safety Products Holdings, LLC. The loan accrues
interest at a rate of 11.2% (LIBOR+6%) per annum. The loan matures
in September 2023.
Barings Capital was formed on February 20, 2020 as a Maryland
limited liability company and converted to a Maryland corporation
on April 28, 2020. On July 13, 2020, Barings Capital commenced
operations and made its first portfolio company investment. The
Company is an externally managed, non-diversified closed-end
management investment company that has elected to be regulated as a
business development company under the Investment Company Act of
1940, as amended. In addition, the Company has elected to be
treated and intends to qualify annually as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as
amended.
Safety Products Holdings, LLC provides engineered and consumable
safety cutting tools.
SAMARITAN MEDICAL CENTER: S&P Affirms 'BB' Rating on Revenue Bonds
------------------------------------------------------------------
S&P Global Ratings revised its outlook to negative from stable and
affirmed its 'BB' rating on Jefferson County Civic Facility
Development Corp., N.Y.'s series 2017A and 2017B hospital revenue
bonds, issued for Samaritan Medical Center (SMC).
"The negative outlook reflects our view of significantly diminished
unrestricted reserves and large losses due to elevated labor costs
and capacity constraints," said S&P Global Ratings credit analyst
Anne Cosgrove. The negative outlook also reflects S&P's view that
operating pressure will continue in fiscal 2023 although management
expects a significant increase in special funding, some of which
could come in over three years. There will be limited cushion under
the days' cash on hand covenant that requires maintenance of 40
days at the obligated group.
S&P said, "We could lower the rating if unrestricted reserves
decline further or if there is a covenant violation under the
master trust indenture. In addition, we could take a negative
rating action if there is no sustained meaningful improvement in
operating performance or a significant erosion in market position.
"We could revise the outlook to stable or raise the rating if SMC
is able to demonstrate meaningful improvement in key financial
metrics by achieving at least break-even operational performance
coupled with growth in unrestricted reserves to provide operating
flexibility for future operating initiatives. We would also expect
SMC to maintain current enterprise profile strengths."
SEA WEST: Case Summary & One Unsecured Creditor
-----------------------------------------------
Debtor: Sea West, Inc.
Sand Point, AK 99661
Aleutians East
Business Description: Sea West is part of the fishing industry.
Chapter 11 Petition Date: March 16, 2023
Court: United States Bankruptcy Court
District of Alaska
Case No.: 23-00042
Debtor's Counsel: Thomas A. Buford, Esq.
BUSH KORNFELD LLP
601 Union St., Suite 5000
Seattle, WA 98101-2373
Tel: (206) 292-2110
Fax: (206) 292-2104
Email: tbuford@bskd.com
Total Assets: $1,200,000
Total Liabilities: $921,679
The petition was signed by Jack D. Berntsen as president.
The Debtor listed Miss Brenda LLC as its only unsecured creditor
holding a claim of $39,522.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/5JDRS2Q/Sea_West_Inc__akbke-23-00042__0001.0.pdf?mcid=tGE4TAMA
SORRENTO THERAPEUTICS: $125M NantPharma Arbitration Award Confirmed
-------------------------------------------------------------------
Sorrento Therapeutics, Inc., a biopharmaceutical company dedicated
to the development of life-saving therapeutics to treat cancer,
announced that on March 16, 2023, the LA County Superior Court
confirmed an arbitration award of $125 million in damages, to be
paid by NantPharma, LLC ("NantPharma"). The award reflects the
values of lost milestones for the approval of the drug Cynviloq®
for the treatment of breast and lung cancers.
Dr. Henry Ji, Ph.D., Chairman and Chief Executive Officer of
Sorrento, commented: "We are pleased that the Court has affirmed
the result of the arbitration against NantPharma and has awarded
$125 million in damages to Sorrento. From here, we remain focused
on our important work of developing new and innovative therapies
for patients struggling with cancer, intractable pain, infectious
disease, and more."
The award stems from an arbitration between Sorrento and NantPharma
regarding the development of chemotherapy drug Cynviloq, the rights
to which NantPharma acquired from Sorrento in 2015. In 2019,
Sorrento filed an arbitration demand against NantPharma, alleging
that the company had failed to live up to its contractual
obligations to develop Cynviloq and bring it to market.
On December 19, 2022, following nearly two years of discovery and
an 18-day evidentiary hearing, the Honorable Faith Hochberg, whom
the parties selected to preside over the Cynviloq Arbitration,
awarded Sorrento $125 million in damages. On March 16, 2023, the LA
County Superior Court granted Sorrento's motion to confirm the
award, which Sorrento now intends to enforce against NantPharma.
About Sorrento Therapeutics
Sorrento Therapeutics, Inc. (OTC: SRNEQ --
http://www.sorrentotherapeutics.com/
-- is a clinical and commercial stage biopharmaceutical company
developing new therapies to treat cancer, pain (non-opioid
treatments), autoimmune disease and COVID-19. Sorrento's
multimodal, multipronged approach to fighting cancer is made
possible by its extensive immuno-oncology platforms, including key
assets such as next-generation tyrosine kinase inhibitors ("TKIs"),
fully human antibodies ("G-MAB(TM) library"), immuno-cellular
therapies ("DAR-T(TM)"), antibody-drug conjugates ("ADCs"), and
oncolytic virus ("Seprehvec(TM)"). Sorrento is also developing
potential antiviral therapies and vaccines against coronaviruses,
including STI-1558, COVISHIELD(TM) and COVIDROPS(TM), COVI-MSCTM;
and diagnostic test solutions, including COVIMARK(TM).
Sorrento Therapeutics, Inc., and Scintilla Pharmaceuticals, Inc.,
sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No.
23-90085) on Feb. 13, 2023. Sorrento disclosed assets in excess of
$1 billion and liabilities of about $235 million as of Feb. 10,
2023.
Judge David R. Jones oversees the cases.
Jackson Walker LLP and Latham & Watkins LLP are serving as legal
counsel to Sorrento. M3 Partners is serving as restructuring
advisor. Stretto Inc. is the claims agent.
On Feb. 28, 2023, the U.S. Trustee for Region 7 appointed an
official committee to represent unsecured creditors in the Debtors'
Chapter 11 cases. The committee is represented by the law firms of
Norton Rose Fulbright US, LLP and Milbank, LLP.
SOURCEWATER INC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Sourcewater, Inc.
d/b/a Sourcenergy
1801 Main Street, Suite 1300
Houston, TX 77002
Business Description: Sourcenergy gathers, analyzes and visualizes
surface and subsurface energy and water
activity.
Chapter 11 Petition Date: March 17, 2023
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 23-30960
Debtor's Counsel: Jarrod B. Martin, Esq.
CHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS, &
AUGHTRY, P.C.
1200 Smith Street
Suite 1400
Houston, TX 77002
Tel: (713) 658-1818
Fax: (713) 658-2553
Email: jarrod.martin@chamberlainlaw.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Joshua A. Adler 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/ASY7GFQ/Sourcewater_Inc__txsbke-23-30960__0001.0.pdf?mcid=tGE4TAMA
SOUTHEASTHEALTH, MO: S&P Lowers Revenue Bonds LT Rating to 'BB-'
----------------------------------------------------------------
S&P Global Ratings lowered its long-term rating to 'BB-' from
'BBB-' on the Cape Girardeau County Industrial Development
Authority, Mo.'s series 2016A, 2017A, and 2021 revenue bonds issued
for Southeast Hospital (doing business as SoutheastHEALTH or SEH).
In addition, S&P Global Ratings lowered its long-term rating to
'BB-' from 'BBB-' on the Stoddard County Industrial Development
Authority's series 2016B and 2017B revenue bonds, also issued for
SHE. Finally, S&P Global Ratings placed the ratings on CreditWatch
with negative implications.
"The three-notch downgrade reflects our view of the larger than
expected operating losses in fiscal 2022 that resulted in a debt
service coverage covenant violation and triggered an option by the
bondholders to accelerate the debt," said S&P Global Ratings credit
analyst Wendy Towber. "The CreditWatch placement reflects our view
that there is a one-in-two chance that we could lower the rating
pending progress toward the hospital's request for a forbearance
agreement," Ms. Towber added.
The bonds are issued under SEH's master trust indenture (MTI) and
are secured by unrestricted receivables and by a lien on the
mortgaged property.
The 'BB-' rating reflects S&P's view of SEH's:
-- Uneven operations (based on S&P Global calculations), including
fiscal 2022 (unaudited) operating performance that exhibited heavy
unbudgeted losses that led to a DSC covenant violation;
-- Fiscal 2023 budgeted operating losses, with additional DSC
covenant violations likely and an unclear path toward stabilized
operating performance;
-- Unrestricted reserves comprising less than 1.0x long-term debt
(as calculated by S&P Global Ratings), leaving SEH without
sufficient liquidity to cover its outstanding principal if its
bonds were accelerated; and
-- Uncertainty regarding the pending acquisition by Mercy Health.
In S&P's opinion, these factors are somewhat mitigated by SEH's:
-- Possible enterprise and financial benefits from the pending
acquisition by Mercy Health, though some details of this agreement
remain both confidential and undetermined;
-- Recent history of positive operating performance in fiscals
2020 and 2021, which, while partly supported by CARES Act funding,
is particularly notable given the industrywide financial pressure
associated with the pandemic; and
-- Sound market share and beneficial affiliations with Washington
University School of Medicine in St. Louis and UHS Behavioral
Health.
Environmental, social, and governance (ESG) credit factors for this
change in credit rating/outlook and/or CreditWatch status:
-- Human capital
SUMMIT PUBLIC SCHOOLS: Moody's Cuts 2017 Rev. Bonds Rating to Ba3
-----------------------------------------------------------------
Moody's Investors Service has downgraded Summit Public Schools
Obligated Group, CA's Charter School Revenue Bonds (Summit Public
Schools - Obligated Group) Series 2017 to Ba3 from Baa3. The rating
outlook was changed to negative from stable. The obligated group
has about $22.6 million in revenue bonds outstanding.
RATINGS RATIONALE
The downgrade to Ba3 reflects the material, unexpected operating
deficits at the Summit Public Schools Home Office and closure of
the Summit Denali middle and high schools. Liquidity could face
further weakening without significant adjustments to Home Office
operations. In March 2023, the Summit Public School Board voted to
close the Summit Denali middle and high school campuses at the end
of the current school year. These actions negatively impact Moody's
view of management credibility and track record, governance
considerations and a key driver of this rating action.
The financial position of the Home Office will deteriorate over the
next one to two years due to a significant operational imbalance
and a modest year over year systemwide enrollment decline.
Continued enrollment declines would result in reduced gross
management fee revenue (pledged toward bond repayment) thereby
exacerbating the Home Office imbalance. Management has not
provided any detailed plans beyond the closure of the Summit Denali
middle and high school campuses regarding its plan to remedy the
material existing structural imbalance. The cash position of the
obligated group, exclusive of the Denali campus that will close,
can fund about three years of deficits similar to fiscal 2023
projections. Management's ability to right size operations at the
Home Office while maintaining service levels, debt service
coverage, and operating liquidity will be key considerations moving
forward.
RATING OUTLOOK
The negative outlook reflects the significant uncertainty of the
obligated group's financial status given the material imbalance of
the Home Office, the potential disposition of the Denali High
School campus, and the board's decision to close the Summit Denali
middle and high school campuses.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
-- Significantly strengthened financial profile resulting
from improved operational balance of the obligated group
-- Disposition of the Summit Denali high school campus
that materially reduces the risk to bondholders
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
-- Further financial deterioration of the obligated group
-- Failure to resolve the status of the Denali High school
campus sufficient to offset bondholder risk introduced by
the closure of the school
LEGAL SECURITY
Lease payments from Obligated Group members to the Community High
School Foundation, a California nonprofit corporation, represent
the source of repayment under the Loan Agreement. The Obligated
Group consists of the Summit Public Schools (SPS) Home Office,
along with Summit Shasta and Summit Denali, both of which are high
schools serving grades 9-12. The Home Office revenue is derived
from the management fee SPS charges its member schools (obligated
and non-obligated schools), which equals a percentage of state
apportionment revenue. Serving as a credit strength, payment
obligations under separate leases with each member of the Obligated
Group are cross-collateralized, and the Trustee is authorized to
charge additional rents to Obligated Group members, if required.
Additionally, pledged gross management revenue of all obligated and
non-obligated schools and state aid apportionment of the obligated
schools is intercepted directly to the Trustee.
PROFILE
Summit Public Schools operates ten charter schools serving grades
6-12, seven in the San Francisco Bay Area (in the cities of El
Cerrito, Daly City, Redwood City, Richmond, San Jose, and
Sunnyvale) and three in Washington State (in the cities of Seattle
and Tacoma). Each of the schools pays a management fee to the
Summit Public Schools Home Office equal to a percentage of
projected state education apportionment revenues prior to the
beginning of each school year. Systemwide enrollment is
approximately 4,000 students for fiscal 2023.
The Summit Public Schools Obligated Group, for which the Series
2017 bonds were issued, consists of the Summit Public Schools Home
Office, along with Summit Shasta and Summit Denali, both of which
are high schools serving grades 9-12. Jefferson Union High School
District serves as Shasta's authorizer and the Santa Clara County
Office of Education is the authorizer for Denali. Obligated group
enrollment is approximately 800 students for fiscal 2023.
METHODOLOGY
The principal methodology used in this rating was US Charter
Schools published in September 2016.
SVB FINANCIAL: Files Voluntary Chapter 11 Bankruptcy Petition
-------------------------------------------------------------
SVB Financial Group (NASDAQ: SIVB) on March 17 disclosed that it
has filed a voluntary petition for a court-supervised
reorganization under Chapter 11 in the United States Bankruptcy
Court for the Southern District of New York to preserve value.
SVB Securities and SVB Capital's funds and general partner entities
are not included in the Chapter 11 filing and continue to operate
in the ordinary course as SVB Financial Group proceeds with its
previously announced exploration of strategic alternatives for
these valuable businesses.
SVB Capital, a venture capital and private credit fund platform
with deep roots in the innovation economy, continues to operate in
the ordinary course and serve its clients. The SVB Capital funds
and general partners are separate legal entities, distinct from SVB
Financial Group, and are not included in the Chapter 11 filing. SVB
Capital funds continue to have access to sources of funding,
including subscription credit facilities and investor and general
partner commitments. SVB Financial Group is committed to providing
SVB Capital with support throughout the reorganization process.
SVB Securities, a regulated broker-dealer with its own management,
employees and capital, is a separate legal entity from SVB
Financial Group and is not included in the Chapter 11 filing. It
continues to operate in the ordinary course. SVB Financial Group,
which owns the equity of SVB Securities, is committed to providing
SVB Securities with support throughout the reorganization process.
SVB Financial Group is no longer affiliated with Silicon Valley
Bank, N.A., or the bank's private banking and wealth management
business, SVB Private. The bank's successor, Silicon Valley Bridge
Bank, N.A., is operating under the jurisdiction of the Federal
Deposit Insurance Corporation ("FDIC") and is not included in the
Chapter 11 filing.
The Company believes it has approximately $2.2 billion of
liquidity. In addition to cash and its interests in SVB Capital and
SVB Securities, SVB Financial Group has other valuable investment
securities accounts and other assets for which it is also exploring
strategic alternatives.
SVB Financial Group's funded debt is approximately $3.3 billion in
aggregate principal amount of unsecured notes, which are only
recourse to SVB Financial Group and have no claim against SVB
Capital or SVB Securities. SVB Financial Group also has $3.7
billion of preferred equity outstanding.
SVB Financial Group intends to use the court-supervised process to
evaluate strategic alternatives for SVB Capital, SVB Securities and
the Company's other assets and investments. As previously
announced, this process is being led by a five-member restructuring
committee appointed by the SVB Financial Group Board of Directors.
Centerview Partners LLC is assisting the restructuring committee
with the strategic alternatives process, which is already underway
and has attracted significant interest. Any sale process will be
conducted through the Chapter 11 proceeding and be subject to court
approval.
"The Chapter 11 process will allow SVB Financial Group to preserve
value as it evaluates strategic alternatives for its prized
businesses and assets, especially SVB Capital and SVB Securities,"
said William Kosturos, Chief Restructuring Officer for SVB
Financial Group. "SVB Capital and SVB Securities continue to
operate and serve clients, led by their longstanding and
independent leadership teams."
"SVB Financial Group will continue to work cooperatively with
Silicon Valley Bridge Bank," Mr. Kosturos continued. "We are
committed to finding practical solutions to maximize the
recoverable value for stakeholders of both entities."
SVB Financial Group plans to file customary first day motions with
the Bankruptcy Court that, among other things, seek authorization
to continue the operations of SVB Financial Group in the ordinary
course of business as soon as a hearing can be scheduled.
Additional documents relating to the Bankruptcy Court proceeding
will be filed in the coming days.
Centerview Partners LLC is proposed financial advisor, Sullivan &
Cromwell LLP proposed legal counsel and Alvarez & Marsal proposed
restructuring advisor to SVB Financial Group as
debtor-in-possession.
About SVB Financial Group
SVB Financial Group (Nasdaq: SIVB) is the holding company for SVB
Capital and SVB Securities.
SVB FINANCIAL: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: SVB Financial Group
387 Park Avenue South
New York NY 10016
Business Description: SVB Financial Group is a financial services
company focusing on the innovation economy,
offering financial products and services to
clients across the United States and in key
international markets. Prior to March 10,
2023, SVB Financial Group owned and operated
Silicon Valley Bank, a state-chartered bank.
Chapter 11 Petition Date: March 17, 2023
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 23-10367
Judge: Hon. Martin Glenn
Debtor's Counsel: James L. Bromley, Esq.
SULLIVAN & CROMWELL LLP
125 Broad Street
New York NY 10003
Tel: (212) 558-4000
Email: bromleyj@sullcrom.com
Debtor's
Investment
Banker: CENTERVIEW PARTNERS LLC
Debtor's
Restructuring
Advisor: ALVAREZ & MARSAL NORTH AMERICA LLC
Debtor's
Notice,
Claims &
Balloting
Agent: KROLL RESTRUCTURING ADMINISTRATION LLC
Total Assets as of Dec. 31, 2022: $19,679,000,000
Total Debts as of Dec. 31, 2022: $3,675,000,000
The petition was signed by William Kosturos as chief restructuring
officer.
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/VEJB4JI/SVB_Financial_Group__nysbke-23-10367__0001.0.pdf?mcid=tGE4TAMA
VANTAGE DRILLING: S&P Upgrades ICR to 'CCC+' on Improved Liquidity
------------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on offshore
drilling rig operator, Vantage Drilling International, to 'CCC+'
from 'CCC' and removed it from CreditWatch, where S&P placed it
with positive implications on Feb. 16, 2023.
S&P said, "We affirmed our 'B-' issue-level rating on the company's
new $200 million first-lien notes due 2028. At the same time, we
withdrew our issue-level rating on the company's first-lien notes
due 2023 on the redemption.
"The outlook is stable, reflecting our expectation that Vantage
will navigate the improving operating backdrop at its current fleet
size, and maintain healthy utilization while realizing higher day
rates on new contracts. We project the company will generate
minimal free cash flow over the next year as below-market contracts
begin to roll off and are replaced by better current market
pricing."
The upgrade reflects the full redemption at par of Vantage's
remaining $180 million of first-lien notes due November 2023, using
proceeds from a $200 million private placement of first-lien notes
due 2028, with the remaining balance going to cash on hand. As a
result, Vantage has no debt maturities until 2028, improving
liquidity and supporting the company as it navigates improving
industry conditions.
Vantage's financial results remain dependent on favorable operating
conditions and the ability to recontract efficiently.
S&P said, "We expect Vantage's jackup fleet utilization to average
about 75% in 2023 at a dayrate of approximately $90,000 and its
drillship utilization to average about 88% with an average dayrate
of approximately $160,000. We expect 2023's minimal free cash flow
generation to improve in 2024 as well-below market rate contracts
roll off and reset higher to better align with the current market.
We expect funds from operations (FFO) to debt in the 5%-10% range
in 2023."
The company's small scale relative peers limits the rating.
With only four owned rigs, Vantage is much smaller relative to its
peers. The higher concentration risk could have outsized negative
effects on cash flows in the event of unexpected downtime.
Additionally, Vantage generates material EBITDA from its managed
services business by managing and operating three rigs owned by
Aquadrill LLC. However, Acquadrill's recently announced acquisition
by Seadrill, if completed, could negatively impact the EBITDA
contribution from the segment if Seadrill decides to take over
management of the rigs.
S&P said, "The stable outlook reflects our expectation that Vantage
will navigate the improving operating backdrop at its current fleet
size, and maintain healthy utilization while realizing higher day
rates on new contracts. We project the company will generate
minimal free cash flow over the next year as below-market contracts
begin to roll off and are replaced by better current market
pricing.
"We could lower the rating within the next 12 months if offshore
activity weakens, likely due to a sustained pull-back in crude oil
prices, and the company is unable to secure new contracts at
favorable rates, or if liquidity deteriorates materially.
"We could raise the rating if the company significantly improves
its scale, most likely through mergers and acquisitions, and keeps
FFO/debt above 12% and debt/EBITDA well below 5x, while generating
positive free cash flow for a sustained period."
ESG credit indicators: E-4; S-3; G-3
S&P said, "Environmental factors are a negative consideration in
our rating analysis of Vantage Drilling International due to our
expectation that the energy transition will result in lower demand
for services and equipment as the accelerating adoption of
renewable energy sources reduces the demand for fossil fuels.
Additionally, the industry faces an increasingly challenging
regulatory environment, both domestically and internationally, that
has included limits on drilling activity in certain jurisdictions,
as well as a slowdown in the pace of issuance of new and existing
well permits. Given its material exposure to the offshore market,
Vantage Drilling faces higher environmental risks than onshore
service providers due to its susceptibility to operational
interruptions and damage to its equipment from more challenging
operating conditions, including hurricanes. In addition, we
offshore operations as being more at risk of personnel injury or
fatality given the inherent added risks of operating complex
offshore drilling rigs, and this has a moderately negative impact
on our assessment of social factors. Vantage Drilling's governance
is a moderately negative consideration, as is the case for most
rated entities owned by private-equity sponsors. We believe the
company's highly leveraged financial risk profile points to
corporate decision-making that prioritizes the interests of the
controlling owners."
VBI VACCINES: Incurs $113.3 Million Net Loss in 2022
----------------------------------------------------
VBI Vaccines Inc. has filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$113.30 million on $1.08 million of net revenues for the year ended
Dec. 31, 2022, compared to a net loss of $69.75 million on $631,000
of net revenues for the year ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $155.08 million in total
assets, $36.94 million in total current liabilities, $53.98 million
in total non-current liabilities, and $64.16 million in total
stockholders' equity.
Iselin, New Jersey-based EisnerAmper LLP, the Company's auditor
since 2016, issued a "going concern" qualification in its report
dated March 13, 2023, citing that the Company faces several risks,
including but not limited to, uncertainties regarding the success
of the development and commercialization of its products, demand
and market acceptance of the Company's products, and reliance on
major customers. The Company anticipates that it will continue to
incur significant operating costs and losses in connection with the
development and commercialization of its products. The Company has
an accumulated deficit as of December 31, 2022 and cash outflows
from operating activities for the year-ended December 31, 2022 and,
as such, will require significant additional funds to conduct
clinical and non-clinical trials, commercially launch its products,
and achieve regulatory approvals that raise substantial doubt about
its ability to continue as a going concern.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/764195/000149315223007351/form10-k.htm
About VBI Vaccines
VBI Vaccines Inc. -- www.vbivaccines.com -- is a biopharmaceutical
company driven by immunology in the pursuit of powerful prevention
and treatment of disease. Through its innovative approach to
virus-like particles ("VLPs"), including a proprietary enveloped
VLP ("eVLP") platform technology, VBI develops vaccine candidates
that mimic the natural presentation of viruses, designed to elicit
the innate power of the human immune system. VBI is committed to
targeting and overcoming significant infectious diseases, including
hepatitis B, coronaviruses, and cytomegalovirus (CMV), as well as
aggressive cancers including glioblastoma (GBM). VBI is
headquartered in Cambridge, Massachusetts, with research operations
in Ottawa, Canada, and a research and manufacturing site in
Rehovot, Israel.
VIAD CORP: Moody's Ups CFR & Senior Secured First Lien Debt to B2
-----------------------------------------------------------------
Moody's Investors Service upgraded the corporate family rating of
Viad Corp, a global leader serving the attractions and hospitality
market and live event industry, to B2 from B3. Concurrently,
Moody's upgraded the probability of default rating to B2-PD from
B3-PD and the senior secured first lien credit facilities ratings
to B2 from B3. The Speculative Grade Liquidity remains SGL-3. The
rating outlook is stable.
Upgrades:
Issuer: Viad Corp
Corporate Family Rating, Upgraded to B2 from B3
Probability of Default Rating, Upgraded to B2-PD
from B3-PD
Senior Secured 1st Lien Bank Credit Facility,
Upgraded to B2 (LGD3) from B3 (LGD3)
Outlook Actions:
Issuer: Viad Corp
Outlook, Remains Stable
RATINGS RATIONALE
The ratings upgrade reflects the improved operating performance in
Viad's Pursuit and GES segments which were previously negatively
impacted by event and trade show cancellations and postponements
and travel restrictions driven by the coronavirus pandemic.
Financial leverage, as expressed by debt to EBITDA, and EBITA to
Interest Expense have considerably improved to 4.6x and 1.5x,
respectively, for 2022. Moody's expects Pursuit will benefit from
the lifting of all coronavirus restrictions at the Canadian border,
increased visitation at new experiences such as FlyOver Las Vegas
and the Golden Skybridge, and the gradual return of international
visitors from the APAC region and other destination markets in 2023
and beyond. Moody's projects Pursuit segment revenue will grow at
least in the high-single-digit percentages annually and segment
margins will increase supported by increased visitation and the
easing of previous cost pressures during the pandemic. Moody's also
expects GES segment revenue will decline in the mid-single-digit
percentage range for 2023 driven by the loss of revenue from the
sale of ON Services in December 2022 and lower show rotation from
the timing of major non-annual shows. Moody's anticipates this will
result in 2023 consolidated revenue being flat to slightly down
over the prior year but margin expansion in the Pursuit segment
support financial leverage to declining to around 4.4x. Similar to
2022, Moody's expects Viad to maintain at least adequate liquidity
despite negative free cash flow projected for 2023 driven by growth
capital spending in the Pursuit segment and rising interest rates.
Moody's estimates that Viad will generate around 5% free cash flow
to debt in 2024 driven by Moody's expectations of continued margin
expansion and revenue growth from both the Pursuit and GES
segments.
Viad's B2 CFR reflects its high financial leverage with
debt-to-EBITDA of 4.6x as of December 31, 2022 which Moody's
expects will slightly decrease to 4.4x by year-end 2023, modest
interest coverage and Moody's expectation of negative free cash
flow for 2023. Viad's Pursuit segment is highly seasonal with
approximately 55% of Pursuit's segment revenue generated in the
company's third quarter of 2022. The rating is supported by Viad's
exposure to leisure travel which is expected to see continued
recovery in 2023 supported by the return of international visitors
from the APAC region and the company's leading and defensible
market position in the global live events industry. Historically,
the GES segment has provided stable free cash flow generation with
3-5 year contracts and high renewal rates.
All financial metrics cited reflect Moody's standard adjustments.
The B2 rating of the senior secured first lien credit facility,
consisting of a $100 million revolving credit facility expiring
2026 and a $395 million term loan B due 2028, reflects a PDR of
B2-PD and a loss given default assessment of LGD3. The senior
secured first lien rating is in line with the B2 CFR and reflects
its position as the vast majority of debt in the capital structure.
The facilities are secured by a first priority lien on
substantially all assets (excluding real estate) of Viad and
(through secured guarantees) its subsidiaries.
The SGL-3 rating reflects Viad's adequate liquidity profile. The
company had approximately $60 million of cash as of December 31,
2022 and a $100 million revolver with $87 million of availability
due to $13 million outstanding letters of credit. Moody's expects
Viad will generate about negative $25 million of free cash flow for
2023 largely due to growth capital spending in the Pursuit segment
and rising interest rates. The company must pay $4 million of
annual term loan amortization and has no meaningful near-term
maturities. Viad is subject to the following financial covenants
under its revolver: 1) a minimum consolidated interest coverage
ratio of 2.5x,; and 2) a maximum total net leverage ratio of 4.75x
that steps down to 4.5x at March 31, 2023 and 4x at June 30, 2023
and thereafter. As of December 31, 2022, Viad's total net leverage
ratio was 3.15x and the interest coverage ratio was 3.67x. Moody's
expects Viad to be in and maintain compliance with its covenants.
There are no financial covenants under its term loan.
The stable outlook reflects Moody's expectations that international
business and leisure travel market conditions continue to improve
such that the Pursuit segment grows at least in high-single-digits
annually and that Viad will maintain at least an adequate liquidity
profile. The stable outlook also considers an uncertain
macroeconomic outlook and Moody's expectation for rising interest
rates.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Moody's expects Viad will sustain
financial leverage below 4x, EBITA to Interest Expense above 2.5x,
and free cash flow to debt approaching 8% while maintaining
balanced financial strategies.
The ratings could be downgraded if Moody's expects Viad will
sustain financial leverage above 6x or EBITA to Interest Expense
below 1.5x. Additionally, should liquidity weaken, including
continued negative free cash flow in 2024, or more aggressive
financial policies be employed, ratings could also come under
downward pressure.
Viad (NYSE: VVI) is a global leader serving the attractions and
hospitality market, as well as the live events industry. The
company has three distinct reportable segments: Pursuit, Spiro and
GES Exhibitions. Pursuit is a collection of travel experiences that
includes recreational attractions, unique hotels and lodges, food
and beverage, retail, sightseeing, and ground transportation
services. The Spiro and GES Exhibition segments are both live event
companies, and are collectively referred to as GES. Viad generated
$1.1 billion revenue for 2022.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
VILLAS OF COCOA: Seeks to Extend Plan Exclusivity to June 30
------------------------------------------------------------
The Villas of Cocoa Village LLC asks the U.S. Bankruptcy Court
for the Middle District of Florida to extend the period which the
Debtor has the exclusive right to solicit acceptances of its
amended Chapter 11 plan to June 30, 2023.
The current exclusivity period expires on March 13, 2023.
The Debtor explained that while it is optimistic that its heavily
negotiated First Amended Plan will be confirmed, the extended
deadline more than covers confirmation on March 23, 2023, and
also allows a sufficient buffer thereafter in the event the
Debtor is not able to confirm a plan on this first attempt.
About The Villas of Cocoa Village
The Villas of Cocoa Village, LLC filed a petition for relief
under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr.
M.D. Fla. Case No. 22-03286) on Sept. 12, 2022. In the petition
filed by Robert D. Harvey, authorized member, the Debtor
disclosed between $500,000 and $1 million in assets and between
$1 million and $10 million in liabilities. Robert Altman has been
appointed as Subchapter V trustee.
Judge Tiffany P. Geyer oversees the case.
Winderweedle, Haines, Ward & Woodman, PA serves as the Debtor's
counsel.
The U.S. Trustee for Region 21 appointed an official committee of
unsecured creditors in the Debtor's Chapter 11 case on Nov. 16,
2022. The committee is represented by Shutts & Bowen, LLP.
VISIONARY LABELS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Visionary Labels and Packaging, LLC
16641 Orange Way
Fontana, CA 92335
Chapter 11 Petition Date: March 17, 2023
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-11032
Judge: Hon. Magdalena Reyes Bordeaux
Debtor's Counsel: Giovanni Orantes, Esq.
THE ORANTES LAW FIRM, A.P.C.
3435 Wilshire Blvd., Suite 2920
Los Angeles, CA 90010
Tel: (818) 619-8222
Fax: (877) 789-5776
Email: go@gobklaw.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Frank Sanchez as CEO.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/NWEXWQQ/Visionary_Labels_and_Packaging__cacbke-23-11032__0001.0.pdf?mcid=tGE4TAMA
VOYAGER DIGITAL: Judge Wiles Confirms Plan of Reorganization
------------------------------------------------------------
Bankruptcy Judge Michael E. Wiles for the Southern District of New
York, on March 11, 2023, approves the Disclosure Statement and
confirm the plan of reorganization filed by Voyager Digital
Holdings, Inc. and its debtor-affiliates.
Judge Wiles notes that "The plan. . . provides for a sale of
customer accounts to BAM Trading Services Inc. (which does business
as Binance.US), though account holders can elect not to become
customers of Binance.US. The plan also includes a backup option in
the event that the proposed deal with Binance.US does not close."
Judge Wiles does not believe that the Disclosure Statement, which
was circulated in January 2023, needed to be any more specific than
it was, particularly with regard to issues that the SEC itself did
not identify until March 2023 and that the SEC itself has not been
able to explain during this hearing in anything other than
conclusory terms. As such, Judge Wiles rejects the contentions by
the SEC and others to the effect that the Debtors allegedly did not
offer sufficient disclosure about potential regulatory risks.
Judge Wiles finds that: "the Disclosure Statement included specific
disclosures about regulatory issues faced in so-called 'Unsupported
Jurisdictions' where Binance.US does not have certain regulatory
licenses. . . the Disclosure Statement revealed that
cryptocurrencies would be transferred to Binance.US only as and
when they were to be distributed to customers, and that until such
time as the distributions were completed Binance.US would receive
and hold the cryptocurrencies "solely in a custodial capacity in
trust and solely for the benefit of Account Holders who each open
an account on the Binance.US Platform. . . The Liquidation Analysis
that was attached to the Disclosure Statement included projections
as to what creditors' recoveries would be under the Binance.US
transaction, under the alternative "toggle" proposal, and under a
chapter 7 liquidation. It stated that for various reasons (which
were explained in footnotes) that the Binance.US proposal would
result in approximately $90 million more being available for
distribution, resulting in approximately 5% greater recoveries for
creditors when compared to the toggle option and about a 14%
increase when compared to a possible chapter 7 liquidation. . .
which calculations were sufficient to disclose what the Debtors
believed as to the value of the Binance.US transaction."
Consequently, Judge Wiles approves the Disclosure Statement and
confirm the Debtors' plan of reorganization.
Some other motions were addressed during the same hearing at which
the Court considered the confirmation of the plan. Several pro se
parties asked the Court to appoint a trustee, to disband the
Official Committee of Unsecured Creditors and to remove the
advisors to the Committee.
The Bankruptcy Code provides that the Court may appoint a Trustee
at any time before confirmation of a plan, and it gives the Court
considerable discretion in deciding whether "cause" exists to do
so. The motion for appointment of a trustee was argued just prior
to the confirmation of a plan. Judge Wiles explains that "there
would have been no way, even if I had felt that circumstances
called for the appointment of a trustee, that a trustee would have
been in place before confirmation took effect and rendered the
whole concept moot. I know that is frustrating for the account
holders who filed the motions, and I also note that the motions
make a lot of accusations that have not really been answered by the
Debtors. However, at this late stage in the cases, the issues that
were raised did not provide "cause" to interrupt the confirmation
process and to throw everything into disarray." Thus, Judge Wiles
denies the motions seeking appointment of a trustee.
Two pro se parties also asked that they be allowed to withdraw the
assets that were listed in their accounts, rather than receiving
merely pro rata distributions. Judge Wiles rules that: "I simply
cannot allow that. If one customer were to withdraw everything that
had been listed in that customer's account, it would just mean that
the next customer would get less. The whole point of the Bankruptcy
Code is to make sure that everybody gets equal distributions. Since
there is not enough to pay all claims in full, no customer can get
a complete recovery of what was listed in his or her account. That
is simply a basic matter of bankruptcy."
A full-text copy of the Decision dated March 11, 2023 is available
at https://tinyurl.com/y252sr46 from Leagle.com.
About Voyager Digital Holdings
Based in Toronto, Canada, Voyager Digital Holdings Inc. --
https://www.investvoyager.com/ -- runs a cryptocurrency platform.
Voyager claims to offer a secure way to trade over 100 different
crypto assets using its easy-to-use mobile application. Through
its subsidiary Coinify ApS, Voyager provides crypto payment
solutions for both consumers and merchants around the globe.
Voyager Digital Holdings Inc. and two affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead
Case No. 22-10943) on July 5, 2022. In the petition filed by
Stephen Ehrlich, chief executive officer, the Debtors estimated
assets and liabilities between $1 billion and $10 billion.
Judge Michael E. Wiles oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP as general bankruptcy
counsel; Berkeley Research Group, LLC as financial advisor; Moelis
& Company as investment banker; Consello Group as strategic
financial advisor; Deloitte Tax, LLP as tax services provider; and
Deloitte & Touche, LLP as accounting advisor. Stretto, Inc. is the
claims agent.
On July 19, 2022, the U.S. Trustee for Region 2 appointed an
official committee of unsecured creditors in these Chapter 11
cases. The committee tapped McDermott Will & Emery, LLP as
bankruptcy counsel; FTI Consulting, Inc. as financial advisor;
Cassels Brock & Blackwell, LLP as Canadian counsel; and Epiq
Corporate Restructuring, LLC as noticing and information agent.
The committee also tapped the services of Harney Westwood &
Riegels, LP in connection with Three Arrows Capital Ltd.'s
liquidation proceedings in British Virgin Islands.
On July 6, 2022, the Debtors filed a joint Chapter 11 plan of
reorganization.
* * *
Following an auction process, the Debtors in September 2022
selected the bid submitted by FTX US' West Realm Shires Inc. as the
winning bid for the assets. But after a series of events, FTX
collapsed in November 2022, before the sale could be completed.
After reopening bidding, Voyager Digital selected the offer from
U.S. exchange BAM Trading Services Inc. (doing business as
"Binance.US") as the highest and best bid for its assets. Binance's
bid is valued at $1.022 billion.
WOODLAND FOOD: Barings Capital Marks $80,000 Loan at 25% Off
------------------------------------------------------------
Barings Capital Investment Corporation has marked its $80,000 loan
extended to Woodland Foods, LLC to market at $60,000 or 75% of the
outstanding amount, as of December 31, 2022, according to a
disclosure contained in Barings Capital's Form 10-K for the fiscal
year ended December 31, 2022, filed with the Securities and
Exchange Commission on February 23, 2023.
Barings Capital is a participant in a Revolver loan to Woodland
Foods, LLC. The loan accrues interest at a rate of 6.5%
(LIBOR+5.5%) per annum. The loan matures in December 2027.
Barings Capital was formed on February 20, 2020 as a Maryland
limited liability company and converted to a Maryland corporation
on April 28, 2020. On July 13, 2020, Barings Capital commenced
operations and made its first portfolio company investment. The
Company is an externally managed, non-diversified closed-end
management investment company that has elected to be regulated as a
business development company under the Investment Company Act of
1940, as amended. In addition, the Company has elected to be
treated and intends to qualify annually as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as
amended.
Woodland Foods provides organic and specialty food ingredients.
[*] April 11 Auction Scheduled for Englewood Commercial Property
----------------------------------------------------------------
Tranzon disclosed that a 0.84-acre commercial property in
Englewood, CO, has been put up for auction.
Property Location
3340 S. Federal Blvd.
Englewood, CO 80110
Bidding Opens
April 4, 2023 at 11:00 a.m. MT
Bidding Closes
April 11, 2023 at 11:00 a.m. MT
Sale Date
April 11, 2023 at 11:00 a.m. MT
Features:
* 3340 and 3346 S. Federal Blvd.
* 0.86 Acre Commercial Property
* Prime SE Denver location on major business route
* Flat, street-to-street lot
* Surrounded by retail, commercial and multi-family properties
* Zoning COM-C Commercial, under the jurisdiction of Sheridan
* High traffic location with 28,000 cars per day
* Just north of US Hwy 285 and south of W. Floyd
* Utilities at street
* Arapahoe County APN 1971-32-4-05-005 and 1971-32-4-05-006
Summary of Terms: $5,000.00 deposit required in order to bid; 10%
Buyer’s Premium will be charged to high bidder; 10% total deposit
day of sale; close of escrow within 45 days; 2% OF HIGH BID paid to
properly registered cooperating broker; property sold as-is with no
contingencies; sale subject to court confirmation; please see
Property Information Package for complete terms of sale.
Terms & Conditions
The following summary of Terms & Conditions of Auction Sale is only
intended to provide you a brief outline. For a complete copy,
either download the Property Information Package, if available, or
contact Tiffeny Cook
Tiffeny Cook: Tranzon Asset Strategies
888-314-1314
tcook@tranzon.com
All bidders must agree to all of the Terms & Conditions of Auction
Sale prior to bidding at any Tranzon auction. Listings may be
withdrawn or modified without notice at anytime.
Terms and Conditions
Buyer's Premium: 10% Buyers Premium based on the high bid.
Closing: 45-Day closing, sold in As-Is condition, no
contingencies.
Deposit Amount: $5,000.00 Credit card authorization required in
order to bid.
Broker Co-op: 2% of the high bid will be paid to a properly
registered broker at settlement.
Agency Disclosure: The member company acting as auctioneer/agent is
an agent for the seller only.
Online Bidding Instructions:
$5,000.00 Credit card authorization required in order to bid. The
authorization is for verification purposes only, your card will not
be charged. In the event high bidder fails to sign purchase
contract or remit deposit in a timely fashion following the
auction, Auctioneer reserves the right to charge bidder's credit
card for a penalty of $5,000.00.
If you are the high bidder, all deposits must be made by cashier's
check or wire transfer within 24 hours. No deposits or payments
will be accepted by credit card.
*********
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