/raid1/www/Hosts/bankrupt/TCR_Public/230323.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, March 23, 2023, Vol. 27, No. 81
Headlines
1255 LLC: Gets OK to Hire Joel M. Aresty as Legal Counsel
34 SUMNER: Seeks Cash Collateral Access
9TH & 10TH STREET: Voluntary Chapter 11 Case Summary
ADVANCED TISSUE: CMS Entitled to Recoup Medicare Overpayments
AGILE THERAPEUTICS: Ajit Shetty Won't Seek Reelection as Director
AGILE THERAPEUTICS: Stockholders Approve Stock Split Proposal
AMERICAN AUTO: NC SLF Marks $10.6M Loan at 21% Off
APX GROUP: Moody's Raises Debt Ratings to 'Ba2' on NRG Deal
APX GROUP: S&P Upgrades ICR to 'BB-' on Acquisition by NRG Energy
ASTRALABS INC: Seeks Cash Collateral Access
AUBSP OWNERCO: Exclusivity Period Extended to April 3
BED BATH & BEYOND: Stock Under $1, Could Lose Add'l Funding
BERKTREE LLC: Bid to Use Cash Collateral Denied
BERNARD L. MADOFF: Banco General's Motion to Dismiss Denied
BERNARD L. MADOFF: Merrill Lynch's Move to Dismiss Denied
BIG DADDY GUNS 2: Case Summary & 10 Unsecured Creditors
BIG DADDY GUNS: Case Summary & 16 Unsecured Creditors
BORREGO COMMUNITY: No Patient Care Concern, 3rd PCO Report Says
C&L AUTOMOTIVE: Commences Subchapter V Bankruptcy Case
C&L AUTOMOTIVE: Court OKs Interim Cash Collateral Access
C&L AUTOMOTIVE: Seeks to Hire Mickler & Mickler as Legal Counsel
CASA SYSTEMS: S&P Downgrades ICR to 'CCC', Outlook Negative
CERIDIAN HCM: Moody's Hikes CFR to B2 & Senior Secured Debt to Ba3
CERIDIAN HCM: S&P Alters Outlook to Positive, Affirms 'B+' ICR
CHASE CUSTOM HOMES: Taps Getty Real Estate Services as Broker
CHASE CUSTOM: $1.5MM DIP Loan From Androscoggin and Machias OK'd
CLAREHOUSE LIVING: No Decline in Patient Care, 7th PCO Report Says
CONCRETE SERVICES: Gets OK to Hire Spain & Gillon as Legal Counsel
CORIZON HEALTH: Judge Halts Proceedings in Williams' Lawsuit
CYXTERA TECHNOLOGIES: Incurs $355.1 Million Net Loss in 2022
DIVE PLACE II: Files Emergency Bid to Use Cash Collateral
DIVERSIFIED MEDICAL: Case Summary & 20 Top Unsecured Creditors
DLVAM1302 NORTH: Court Confirms Reorganization Plan
DVD FACTORY: Taps Law Offices of Michael Jay Berger as Counsel
EL MONTE NATURE: Exclusivity Period Extended to April 21
ELETSON HOLDINGS: Creditors Try to Force Chapter 7 Bankruptcy
EMPEREON MARKETING: Court OKs Cash Collateral Access Thru April 17
EXCL LOGISTICS: Files Emergency Bid to Use Cash Collateral
FIRST REPUBLIC: Davis Polk Advises Banks for $30B Rescue
FIRSTOX LABORATORIES: Case Summary & 20 Top Unsecured Creditors
FONDUE 26: Seeks Cash Collateral Access
FULL HOUSE: S&P Affirms 'B-' ICR on Temporary Casino Opening
GPD COMPANIES: Moody's Affirms B2 CFR & Alters Outlook to Negative
GULF COAST TRANS: Court OKs Cash Collateral Access Thru May 4
HARRIS ENERGY: Seeks Cash Collateral Access
HYRECAR INC: Taps Zukin Partners as Investment Banker
INDIGO PALMS: No Resident Complaints, 5th PCO Report Says
INTEGRATED COOLING: Court OKs Interim Cash Collateral Access
INVACARE CORPORATION: Taps Baker & Hostetler as Special Counsel
INVACARE CORPORATION: Taps Huron Consulting as Financial Advisor
INVACARE CORPORATION: Taps Jackson Walker as Co-Counsel
INVACARE CORPORATION: Taps McDonald Hopkins as Co-Counsel
INVACARE CORPORATION: Taps Miller Buckfire as Investment Banker
JG FOOD: Taps Licenciado Carlos Alberto Ruiz as Legal Counsel
JOHN KNOX VILLAGE: Fitch Affirms BB+ Rating on $122M Revenue Bonds
JOHN'S FAMILY: Court Confirms First Amended Chapter 11 Plan
JTG VENTURES: Silverstein's Involuntary Chapter 7 Dismissed
KABBAGE INC: Plan Modified, Providing Temporary Injunction
LAURA'S ORIGINAL: Court OKs Cash Collateral Access Thru April 21
LIBERTY INTERACTIVE: Moody's Cuts CFR to B3 & Unsec. Notes to Caa2
LIGHT OF PEACE: Taps Law Offices of Oliver & Cheek as Counsel
LITHIA MOTORS: S&P Alters Outlook to Stable, Affirms 'BB+' ICR
LLM INTERNET: Taps Davidoff Hutcher & Citron as Legal Counsel
LUCIRA HEALTH: Gets OK to Hire Armanino LLP as Financial Advisor
LUCIRA HEALTH: Gets OK to Hire Donlin as Administrative Advisor
MAGNOLIA OIL: S&P Affirms 'B+' ICR on Recent Price Deck Revision
MARKET FORCE: Main Street's $26M Loan at Steep Discount
MEHLING ORTHOPEDICS: U.S. Trustee Appoints Joseph Tomaino as PCO
MILLION DOLLAR SMILE: Seeks Cash Collateral Access Thru Sept 2
MUSC HEALTH-ORANGEBURG: S&P Withdraws 'B' Issuer Credit Rating
NATIONAL CINEMEDIA: Moody's Cuts CFR to C, Alters Outlook to Stable
NCL CORP: S&P Alters Outlook to Stable, Affirms 'B' ICR
NICE VIEW 82: Seeks to Hire Joel M. Aresty P.A. as Legal Counsel
NOSRAT LLC: Seeks Cash Collateral Access
POLARIS PARENT: S&P Affirms 'B-' ICR, Outlook Stable
PREMIER CAJUN: Court OKs Interim Cash Collateral Access
PREMIER MEDICAL: Case Summary & 20 Largest Unsecured Creditors
PROJECT ALPHA: Moody's Affirms B3 CFR & Alters Outlook to Stable
PURDUE PHARMA: Bankruptcy Court Okays $9-Mil. Funding for HRT
QUORUM HEALTH: CHS Defendants' Motion to Dismiss Granted in Part
RAYMOND C. GREEN: Involuntary Chapter 11 Case Summary
RECONEXT: Moody's Lowers CFR & Senior Secured Debt to Caa2
REMARK HOLDINGS: Sells $2.5M Convertible Debentures to Ionic
RICE ENTERPRISES: Files Emergency Bid to Use Cash Collateral
ROCKLEY PHOTONICS: Unsecured Creditors Unimpaired in Plan
ROOF IT BETTER: May 16 Plan Confirmation Hearing Set
ROOSEVELT UNIVERSITY: Moody's Alters Outlook on B1 Rating to Neg.
S&Q DATA: Involuntary Chapter 11 Case Summary
SCHARN INDUSTRIES: Taps Law Office of Gary W Cruickshank as Counsel
SPG HOSPICE: PCO Submits Sixth Interim Report
STANADYNE LLC: Seeks to Hire Hughes Hubbard & Reed as Legal Counsel
STANADYNE LLC: Taps Kurtzman Carson as Administrative Advisor
STANADYNE LLC: Taps Teneo Capital as Financial Advisor
STANADYNE LLC: Taps Young Conaway Stargatt & Taylor as Co-Counsel
SVB FINANCIAL: Union Says FDIC Should Not Sell SVB to Apollo
TIOGA ISD: Moody's Lowers Issuer & GOULT Ratings to B1
TKEES INC: Files Emergency Bid to Use Cash Collateral
TRITON WATER: Moody's Cuts CFR to B3 & First Lien Term Loan to B2
VESSEL MEDICAL: Case Summary & 20 Largest Unsecured Creditors
VITAL PHARMACEUTICALS: Taps C Street Ahead of Bankruptcy Auction
VOYAGER DIGITAL: Govt. Renews Effort to Stop Sale to Binance
WEWORK COS: Davis Polk Advises Noteholders on Debt Recapitalization
WEWORK COS: S&P Downgrades ICR to 'CC' on Announced Exchange Offer
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
1255 LLC: Gets OK to Hire Joel M. Aresty as Legal Counsel
---------------------------------------------------------
1255, LLC received approval from the U.S. Bankruptcy Court for the
Southern District of Florida to employ Joel M. Aresty, P.A. as its
legal counsel.
The Debtor requires legal counsel to:
a. give advice with respect to the powers and duties of the
Debtor and the continued management of its business operations;
b. advise the Debtor with respect to its responsibilities in
complying with the Office of the U.S. Trustee's Operating
Guidelines and Reporting Requirements and with the rules of the
court;
c. prepare legal documents;
d. protect the interest of the Debtor in all matters pending
before the court; and
e. represent the Debtor in negotiation with its creditors in
the preparation of a Chapter 11 plan.
The firm will be paid an hourly fee of $440 and will be reimbursed
for out-of-pocket expenses incurred.
The retainer fee is $5,000.
Joel Aresty, Esq., a partner at Joel M. Aresty, P.A., disclosed in
a court filing that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Joel M. Aresty, Esq.
Joel M. Aresty, P.A.
309 1st Ave S
Tierra Verde, FL 75202
Telephone: (305) 904-1903
Facsimile: (800) 899-1870
Email: Aresty@Mac.com
About 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.
34 SUMNER: Seeks Cash Collateral Access
---------------------------------------
34 Sumber Realty LLC asks the U.S. Bankruptcy Court for the
District of Massachusetts, Western Division, for authority to use
cash collateral.
The Debtor is attempting to operate its businesses and manage its
affairs and properties, although its efforts are being thwarted by
the first mortgagee on its properties, Mooring NC IV, LLC.
The first mortgage on the Debtor's property located in 34 Sumner
Avenue, Springfield, Massachusetts -- save perhaps one condominium
and certain parking places -- was originally held by Security
Mutual Insurance Company of New York, and was transferred to
Mooring in May or June 2022.
Security Mutual took possession of the 34 Sumner Avenue Property
approximately three years ago, and Mooring has continued to possess
the property, receiving rents.
There is a second mortgage held by Belvidere Capital LLC.
The Debtor says it needs to use the cash collateral assets
generated by the rentals to continue paying condominium fees,
utilities, insurance, real estate taxes, maintenance, and related
items. The Debtor proposes to retain any balance in its
debtor-in-possession account.
These creditors assert security interests in the Debtors'
properties:
-- Mooring NC IV, LLC with a principal place of business at
100 Court street, P.O. Box 1625, Binghamton, New York, 13902.
Mooring claims a first mortgage on the real properties of the
Debtor, securing a loan of approximately $3,500,000; this loan was
a refinance of the original mortgage obligation incurred in the
purchase of the Debtor's real properties.
-- Belvidere Capital, LLC, 396 Andover Street, Lowell, MA
01852, claims a second mortgage on the real properties of the
Debtor, securing a loan of approximately $3,000,000. The Debtor did
not receive the benefits of this loan, but rather an affiliate of
the Debtor did.
As adequate protection, the Debtor proposes that the secured
creditors receive a continuing lien on all of their assets,
including cash collateral and post-petition accounts receivables,
to the same extent and amount, in the same priority, that they were
perfected and valid prepetition.
A copy of the motion is available at https://bit.ly/3lnHPs1 from
PacerMonitor.com.
About 34 Sumner Realty LLC
34 Sumner Realty LLC owns various condominium units, garage units,
retail unit, and storage unit, at 34 Sumner Avenue, Springfield,
MA, with an aggregate value of $4 million.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 23-30073) on March 2,
2023. In the petition signed by Louis Masaschi, as manager, the
Debtor disclosed $4,000,000 in assets and $7,000,000 in debts.
The Law Offices of Louis S. Robin serves as counsel to the Debtor.
9TH & 10TH STREET: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: 9th & 10th Street L.L.C.
605 East 9th Street
New York, NY 10009
Business Description: The Debtor is a Single Asset Real Estate
as defined in 11 U.S.C. Section 101(51B).
Chapter 11 Petition Date: March 21, 2023
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 23-10423
Debtor's Counsel: Erica Aisner, Esq.
KIRBY AISNER & CURLEY LLP
700 Post Road
Suite 237
Scarsdale, NY 10583
Email: eaisner@kacllp.com
Estimated Assets: $100 million to $500 million
Estimated Liabilities: $100 million to $500 million
The petition was signed by Gregg Singer, president of Sing Fina
Corp., Manager of Debtor.
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/W7GTK4I/9th__10th_Street_LLC__nysbke-23-10423__0001.0.pdf?mcid=tGE4TAMA
ADVANCED TISSUE: CMS Entitled to Recoup Medicare Overpayments
-------------------------------------------------------------
Bankruptcy Judge Phyllis M. Jones for the Eastern District of
Arkansas has issued a Memorandum Opinion and Order dated March 16,
2023, finding that the automatic stay does not apply to CMS'
exercise of its right of recoupment.
In the Motion filed by the United States of America, on behalf of
the Department of Health and Human Services, acting through its
designated component, the Centers for Medicare & Medicaid Services,
CMS asserts that the Debtor Advanced Tissue, LLC received over $23
million in Medicare overpayments, and that CMS is entitled to
recoup a portion of the overpayments against approximately $1.2
million in Medicare reimbursements that CMS is holding in a
"Strumpf freeze." Alternatively, CMS argues it is entitled to
exercise its right of setoff against these frozen funds.
The Debtor argues that neither recoupment nor setoff is
appropriate. As to recoupment, the Debtor argues the payments
involved do not constitute a single integrated transaction, and in
addition, that the equities of the case do not support recoupment.
As to setoff, it argues setoff is improper because CMS has not
filed a proof of claim in the bankruptcy case.
The structure of the Medicare payment system supports a finding of
a single integrated transaction. Under the applicable statutes and
regulations, suppliers are quickly reimbursed for claims, but the
payments are subject to subsequent review and audit, which may take
place years later depending on the reason for the review.
Recoupment of any overpayment is woven into the very fabric of the
Medicare payment system.
This Court agrees with the court in the case of "In re Fischbach,
2013 WL 1194850," where it held that "The relationship between
providers or suppliers and Medicare is built on a system of
constantly balancing payments made and readjustments for over and
underpayments such that it is rational to treat the interaction
between the parties as a single, integrated transaction." Given the
system of payments and subsequent adjustments, the Court believes
that it would be rational to treat the claims as arising from a
single integrated transaction.
Accordingly, the Court finds and concludes that CMS' overpayment
claim against the Debtor arises from the same transaction as the
Debtor's claim against CMS for the frozen reimbursements. The Court
further concludes that CMS is entitled to recoup overpayments
previously made to the Debtor against the $1.2 million in Medicare
reimbursements that CMS is holding in a "Strumpf freeze" and the
automatic stay does not prevent CMS from doing so.
A full-text copy of the Memorandum Opinion and Order dated March
16, 2023 is available at https://tinyurl.com/2hby2spp from
Leagle.com.
About Advanced Tissue
Advanced Tissue, LLC is a distributor of wound care products.
Advanced Tissue sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Ark. Case No. 21-12261) on August 23,
2021. In the petition signed by Robert Betchley, chief executive
officer, the Debtor disclosed up to $10 million in assets and up to
$50 million in liabilities.
Judge Phyllis M. Jones oversees the case.
Kevin P. Keech, Esq., at Keech Law Firm, PA is the Debtor's
counsel.
AGILE THERAPEUTICS: Ajit Shetty Won't Seek Reelection as Director
-----------------------------------------------------------------
Ajit Shetty, Ph.D. informed the Board of Directors of Agile
Therapeutics, Inc. that he would not stand for re-election as a
Class III director at the upcoming annual meeting of stockholders
of the Company for 2023. The Company does not intend to fill Dr.
Shetty's seat on the Board and, therefore, the size of the Board
will be reduced to six directors following the Annual Meeting.
The Company expressed gratitude to Dr. Shetty for his contributions
to the Board and the Company. Dr. Shetty's departure is not
related to any disagreement with the Company or the Board regarding
any matter related to the Company's operations, policies or
practices. The Board is evaluating how it intends to fill Dr.
Shetty's committee assignments.
About Agile Therapeutics Inc.
Agile Therapeutics, Inc. is a women's healthcare company dedicated
to fulfilling the unmet health needs of today's women. The
Company's product and product candidates are designed to provide
women with contraceptive options that offer freedom from taking a
daily pill, without committing to a longer-acting method. Its
initial product, Twirla, (levonorgestrel and ethinyl estradiol), a
transdermal system, is a non-daily prescription contraceptive.
Iselin, New Jersey-based Ernst & Young LLP, the Company's auditor
since 2010, issued a "going concern" qualification in its report
dated March 30, 2022, citing that the Company has generated losses
since inception, used substantial cash in operations, anticipates
it will continue to incur net losses for the foreseeable future,
requires additional capital to fund its operating needs and has
stated that substantial doubt exists about the Company's ability to
continue as a going concern.
AGILE THERAPEUTICS: Stockholders Approve Stock Split Proposal
-------------------------------------------------------------
At a special meeting of stockholders of Agile Therapeutics, Inc.,
the stockholders approved an amendment to the Company's Amended and
Restated Certificate of Incorporation to, at the discretion of the
Board, effect a reverse stock split with respect to the Company's
issued and outstanding Common Stock, at a ratio of 1-for-20 to
1-for-50, at any time prior to June 30, 2023 with the exact ratio
to be determined within that range at the discretion of the Board
and included in a public announcement.
Since there were sufficient votes at the time of the Special
Meeting to approve the amendment to the Company's certificate of
incorporation, the proposal to approve the adjournment of the
Special Meeting, if necessary, to solicit additional proxies was
not called for at the Special Meeting.
About Agile Therapeutics Inc.
Agile Therapeutics, Inc. is a women's healthcare company dedicated
to fulfilling the unmet health needs of today's women. The
Company's product and product candidates are designed to provide
women with contraceptive options that offer freedom from taking a
daily pill, without committing to a longer-acting method. Its
initial product, Twirla, (levonorgestrel and ethinyl estradiol), a
transdermal system, is a non-daily prescription contraceptive.
Iselin, New Jersey-based Ernst & Young LLP, the Company's auditor
since 2010, issued a "going concern" qualification in its report
dated March 30, 2022, citing that the Company has generated losses
since inception, used substantial cash in operations, anticipates
it will continue to incur net losses for the foreseeable future,
requires additional capital to fund its operating needs and has
stated that substantial doubt exists about the Company's ability to
continue as a going concern.
AMERICAN AUTO: NC SLF Marks $10.6M Loan at 21% Off
--------------------------------------------------
NC SLF Inc has marked its $10,627,000 loan extended to American
Auto Auction Group to market at $8,348,000 or 79% of the
outstanding amount, as of December 31, 2022, according to a
disclosure contained in NC SLF's Form NCS-R for the fiscal year
ended December 31, 2022, filed with the Securities and Exchange
Commission on February 23, 2023.
NC SLF Inc is a participant in a First Lien Term Loan to American
Auto Auction Group. The loan accrues interest at a rate of 9.59%
(S+5%) per annum. The loan matures on December 30, 2027.
NC SLF Inc. is a registered closed-end management investment
company. Its investment objective is to generate current income and
capital appreciation primarily by investing in or originating first
lien and unitranche leveraged loans made to private equity-owned
U.S. middle-market companies that require capital for growth,
acquisitions, recapitalizations, refinancings and leveraged
buyouts.
American Auto Auction Group LLC operates physical, mobile, and
digital auction venues in addition to various remarketing services
that are expected to remain stable channels in the foreseeable
future, despite the advent of alternate power trains and electric
vehicles.
APX GROUP: Moody's Raises Debt Ratings to 'Ba2' on NRG Deal
-----------------------------------------------------------
Moody's Investors Service upgraded the debt ratings of Vivint Smart
Home, Inc.'s primary debt issuing subsidiary APX Group, Inc.
following the financial closing of its acquisition by NRG Energy,
Inc. (NRG, CFR Ba1 stable). Moody's upgraded APX's Term Loan B and
senior secured notes to Ba2 from B1 and APX's senior unsecured
notes to Ba3 from Caa1. The rating outlook of APX is stable.
Vivint's B2 corporate family rating, B2-PD probability of default
rating, and SGL-2 Speculative Grade Liquidity (SGL) rating have
been withdrawn. This concludes the review of Vivint and APX's
rating initiated in December when NRG announced the Vivint
acquisition. See below for a complete list of rating actions.
Upgrades:
Issuer: APX Group, Inc.
Senior Secured Bank Credit Facility, Upgraded to
Ba2 (LGD4) from B1 (LGD3)
Senior Secured First Lien Regular Bond/Debenture,
Upgraded to Ba2 (LGD4) from B1 (LGD3)
Senior Unsecured Regular Bond/Debenture, Upgraded
to Ba3 (LGD6) from Caa1 (LGD5)
Withdrawals:
Issuer: Vivint Smart Home, Inc.
Corporate Family Rating, Withdrawn, previously rated B2
Probability of Default Rating, Withdrawn, previously rated B2-PD
Speculative Grade Liquidity Rating, Withdrawn, previously rated
SGL-2
Outlook Actions:
Issuer: APX Group, Inc.
Outlook, Changed To Stable From Rating Under Review
Issuer: Vivint Smart Home, Inc.
Outlook, Changed To Rating Withdrawn From Rating Under Review
RATINGS RATIONALE
"The upgrade of Vivint's subsidiary debt reflects the successful
acquisition by a larger and more diversified NRG organization,
which has the potential to improve Vivint's business through
cross-selling opportunities, better customer retention, and greater
operational efficiencies," said Toby Shea, Vice President-Senior
Credit Officer. Moody's notes that Vivint's business and cash flow
have been on an upward trajectory over the past few years while it
has also exhibited a declining attrition rate, which could continue
under NRG ownership.
Vivint's home security and monitoring business is characterized by
high cash flow visibility, though customer acquisition costs can be
substantial. Even if the business faces headwinds due to an
economic downturn or a rise in competitive pressures in the future,
Vivint's cash flow is unlikely to experience a sudden decline due
to the strength of its existing, contracted customer base and its
ability to cut back on growth spending if necessary. NRG could
provide additional resources and support to help it to succeed in
the highly competitive home security and monitoring busienss.
NRG's Ba1 CFR and overall credit quality reflect that of a large
integrated power company with a profitable residential business and
moderate leverage that will be temporarily elevated following the
Vivint acquisition. NRG funded the acquisition with $2.3 billion of
debt and preferred shares, $376 million of cash on hand, as well as
assuming $2.73 billion of debt at Vivint. NRG, however, does not
guarantee the Vivint subsidiary debt at Vivint.
Moody's views Vivint to be an integral part of NRG and important to
the overall organization's success in strengthening and
diversifying its energy retail business. The senior secured rating
of Ba2 at Vivint subsidiary APX is, however, two notches below
NRG's senior secured rating of Baa3. The lower rating reflects that
the debt at APX is only secured by its own assets rather than the
large and diverse asset base at the rest of NRG. The senior
unsecured rating of Ba3 at APX is one notch below NRG's existing
senior unsecured rating of Ba2 due to a similar weakness.
Moody's views the Vivint acquisition as manageable and neutral to
NRG's overall business risk profile, despite the organization's
entrance into a completely new business line. Even though the home
monitoring business is adjacent to and may be complementary to
NRG's existing energy retail business, Moody's believe that there
is still some integration and execution risk because the home
monitoring business has its own set of business and competitive
dynamics. On the other hand, the business should produce steady
cash flow, will increase NRG's size and scale by about 20%, and
create significant geographic and product diversification for the
organization.
Rating Outlook
The stable outlooks at NRG and APX reflect NRG's robust free cash
flow underpinned by its strong retail brands and the hedged cash
flows of its wholesale business, viewed on a consolidated basis.
Even though Moody's expects NRG's consolidated CFO pre-WC to debt
ratio to fall in 2023 following the Vivint acquisition, the company
has a debt reduction plan in place and will continue to generate
strong free cash flow for the foreseeable future. The stable
outlook also reflects the manageable scale and scope of the
acquisition, which has recently been on an upward trajectory.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that Could Lead to an Upgrade
The near-term prospect for an upgrade of NRG and APX is limited
because of the Vivint acquisition, which involves significant
integration risk and acquisition debt. However, assuming that NRG's
business risk does not increase materially and the Vivint
acquisition is successful, NRG will need to achieve a CFO pre-WC to
debt of 25% to be considered for an upgrade.
Factors that Could Lead to a Downgrade
Moody's could take negative rating action on NRG and/or APX should
business conditions in the retail or wholesale power markets
deteriorate, the Vivint acquisition becomes a material drag on cash
flow, or the planned debt reduction does not occur as anticipated.
To maintain its current ratings, Moody's expects NRG to achieve a
CFO pre-WC to debt metric of 16% by the end of 2023 and at least
18% starting in 2024.
Company Profile
NRG is among the top three unregulated power companies in the US
and is headquartered in Houston, Texas. The company owns 16 GW of
generation capacity and sells power to approximately 5.5 million
home customers as well as commercial, industrial, and wholesale
customers. Vivint will add 1.9 million home customers to NRG's
existing customer base.
The principal methodology used in these ratings was Unregulated
Utilities and Unregulated Power Companies published in May 2017.
APX GROUP: S&P Upgrades ICR to 'BB-' on Acquisition by NRG Energy
-----------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Provo,
Utah-based APX Group Holdings Inc. (also known as Vivint) by three
notches to 'BB-' from 'B-', its issue-level rating on its senior
secured debt to 'BB' from 'B', and its issue-level rating on its
senior unsecured debt to 'B' from 'CCC'.
The stable outlook reflects S&P's expectation for mid-single-digit
percent revenue growth and a stable attrition profile in the
low-teens percent area, resulting in modestly positive
discretionary cash flow (DCF) to debt.
Vivint, a smart home company providing alarm monitoring and
support, completed its previously announced transaction to be
acquired by NRG Energy Inc. (NYSE:NRG; BB/Stable/--) and is now a
wholly owned subsidiary of NRG.
The relationship between Vivint and its parent, NRG Energy,
enhances its credit quality. S&P said, "We expect NRG will be
involved in the day-to-day operations as the company pivots toward
offering home services in combination with its power service
capabilities. NRG will work with Vivint to combine sales channels
and cross-sell incremental products and services to lower
subscriber-acquisition costs--an issue that has plagued the
smart-home industry, preventing meaningful free cash flow
generation. We believe NRG would likely provide extraordinary
support in most foreseeable circumstances if Vivint encountered
financial distress. As a result, we view Vivint as strategically
important and incorporate a three-notch uplift to our rating on
Vivint."
Vivint's operating performance has been solid over the past several
quarters, including strong revenue and subscriber growth, with its
lowest attrition level in years. For the year ended Dec. 31, 2022,
Vivint expanded its total subscriber base by 3.7%, with an 11.1%
attrition rate, resulting in 14% revenue growth and 46.7% EBITDA
margins. The company has reduced leverage from 8x as of year-end
2019 to 3.5x as of year-end 2022. Nevertheless, the company still
generates minimal free cash flow because of higher interest expense
and high customer acquisition costs to achieve subscriber growth
and retention targets. S&P forecasts better free cash flow
generation in the low-single-digit percentage area in 2023 and
2024, but we believe NRG will use cash generated at Vivint to help
service NRG debt.
Vivint is well positioned to take advantage of the secular trend
for increased adoption of integrated home solutions. Over the next
three to five years, S&P expects changing consumer preferences for
integrated home security monitoring and smart home solutions will
increase the complexity of these solutions. This will require a
wider range of business capabilities, such as systems development
and integration, machine learning, and data analytics, along with
information technology and marketing platforms that enhance the
user experience and facilitate efficient new user acquisitions. The
strong free cash flow profile of NRG's legacy business may
accelerate and enhance these very initiatives. S&P believes Vivint
is well positioned to take advantage of this secular trend because
of its strong technological capabilities and continued investments
to innovate within its product suite and differentiate its service
offering from that of other peers.
The stable outlook reflects S&P's expectation for mid-single-digit
percent revenue growth and a stable attrition profile in the
low-teens percent area, resulting in modestly positive DCF to
debt.
S&P would consider lowering the rating if:
-- Operating performance deteriorated beyond S&P's expectations
due to higher attrition and subscriber acquisition costs resulting
in free cash flow deficits;
-- Liquidity constraints such that we viewed the company's
position to be less than adequate; or
-- S&P believed NRG would no longer provide extraordinary support
to Vivint.
While unlikely since S&P caps its rating at one notch below the
'bb' rating of its group credit profile, S&P would consider
upgrading Vivint if:
-- NRG Energy's group credit profile improved to 'bb+', with
Vivint maintaining the same strategic importance to the group; and
-- The company displayed steady gains in operating performance,
such as improving return on investment in its customer acquisition
investments and increases in the average revenue per user with DCF
to debt approaching the 2% area. This would also require S&P to
believe NRG would limit the amount of cash it pulls from Vivint.
ESG credit indicators: To E-2, S-2, G-2; From E-2, S-2, G-3
ASTRALABS INC: Seeks Cash Collateral Access
-------------------------------------------
Astralabs Inc. asks the U.S. Bankruptcy Court for the Western
District of Texas to use cash collateral on an interim basis.
The Debtor depends on the use of cash collateral for payroll,
insurance, and general operating expenses. Revenue is generated
through the Debtor's business that operates two virtual programs --
an incubator and an accelerator that provides early stage founders
and companies with the tools and skills to build, scale, and fund
their startup; upon completion of the program, Astralabs connects
its founder customer to investors.
A search in the Texas Secretary of State shows that allegedly
secured positions are held by (in priority order) by Iruka Capital
(UCC #22-0059803009 and Apex Funding Source LLC (UCC
#23-0004366711).
The Debtor entered into agreements with multiple Merchant Cash
Advance lenders:
Lender Amount Advanced Amount "Purchased"
------ --------------- ------------------
Iruka Capital $800,000 $1,088,000
Apex Funding $5,600,000 $816,000
Source LLC
Merchant cash advance transactions have been described as payday
loans for businesses. Merchant cash advance lenders engage in the
legal fiction that they are purchasing a specified amount of future
receivables from the Debtor. However, unlike a factor, no specific
receivables are purchased. It is the Debtor's contention that these
transactions are loans and not purchases of receivables, a
conclusion supported by some recent cases.
A copy of the motion is available at https://bit.ly/3LMoJ9o from
PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3Z5l2Po from
PacerMonitor.com.
About Astralabs Inc.
Astralabs Inc. operates an accelerator program delivered by online
curriculum. In the petition signed by Jack Cartwright, as VP of
Finance, the Debtor disclosed $1,763,754 in assets and $4,389,867
in debts.
Judge Shad Robinson oversees the case.
Robert C. Lane, Esq., at the Lane Law Firm, oversees the case.
AUBSP OWNERCO: Exclusivity Period Extended to April 3
-----------------------------------------------------
Judge Mindy A. Mora of the U.S. Bankruptcy Court for the District
of Florida extended AUBSP Ownerco 8, LLC and AUBSP Ownerco 9,
LLC’s exclusivity period to file a plan and solicit acceptances
thereof to April 3, 2023.
The judge also noted the debtors notice of no opposition.
AUBSP Ownerco 8, LLC and AUBSP Ownerco 9, LLC are represented by:
Thomas M. Messana, Esq.
UNDERWOOD MURRAY, P.A.
401 E. Las Olas Blvd., Suite 1400
Fort Lauderdale, FL 33301
Tel: (954) 712-7400
About AUBSP Ownerco
AUBSP Ownerco 8, LLC, formerly known as RA2 Boise-Fairview, LLC,
and AUBSP Ownerco 9, LLC, formerly known as RA2 Boise-Overland,
LLC, filed petitions for Chapter 11 protection (Bankr. S.D. Fla.
Lead Case No. 22-18613) on Nov. 4, 2022. In the petitions signed
by Richard Sabella, authorized agent, the Debtors disclosed up to
$10 million in both assets and liabilities.
The Debtors tapped Thomas M. Messana, Esq., at Underwood Murray,
P.A. as bankruptcy counsel; and Stoel Rives, LLP and Cross & Simon,
LLC as special counsels.
BED BATH & BEYOND: Stock Under $1, Could Lose Add'l Funding
-----------------------------------------------------------
Caroline Valetkevitch and Lance Tupper at Reuters report that
shares of Bed Bath & Beyond Inc (BBBY.O) edged higher in midday
trading Tuesday but the stock remained under $1, leaving the home
goods retailer at risk of losing additional funding from hedge fund
Hudson Bay Capital Management, a pivotal investor.
Bed Bath & Beyond's stock dropped 21% on Monday to end at 81 cents
after the company late Friday said it was seeking shareholder
approval for a reverse stock split. After midday Tuesday, it was up
1% at 82 cents.
The company also reported late Friday shares outstanding as of
March 15 of about 335 million, compared with 117 million reported
in late January.
The struggling retailer reached an amended agreement with Hudson
last week to temporarily lower the stock price threshold to $1
until April 3.
That level is down from an original threshold of at least $1.25,
with the amendment aimed at allowing for up to $100 million
additional funding in April 2023.
Bed Bath & Beyond last month said it was planning to raise some $1
billion through a complex offering of preferred stock and warrants
in an effort to avoid bankruptcy.
"They were extended a lifeline," but its corporate bond levels are
still showing signs of distress, said Jake Dollarhide, CEO of
Longbow Asset Management in Tulsa, Oklahoma.
"On January 31st, they were priced for immediate bankruptcy and now
they're trading at 29 cents on the dollar," he said. "But any time
bonds are trading below 50 cents on the dollar, there's always
uncertainty involved."
The stock is down about 67% for the year to date, and on Monday its
shares were officially removed from the S&P 600 index (.SPCY) of
small capitalization stocks.
About Bed Bath & Beyond
Bed Bath & Beyond Inc., together with its subsidiaries, is an
omnichannel retailer selling a wide assortment of merchandise in
the Home, Baby, Beauty & Wellness markets and operate under the
names Bed Bath & Beyond, buybuy BABY, and Harmon, Harmon Face
Values. The Company also operates Decorist, an online interior
design platform that provides personalized home design services.
The Company reported a net loss of $559.62 million for the fiscal
year ended Feb. 26, 2022, a net loss of $150.77 million for the
year ended Feb. 27, 2021, and a net loss of $613.82 million for the
year ended Feb. 29, 2020. As of Nov. 26, 2022, the Company had
$4.40 billion in total assets, $5.20 billion in total liabilities,
and a total shareholders' deficit of $798.64 million.
* * *
As reported by the TCR on Jan. 11, 2023, S&P Global Ratings raised
its issuer credit rating on Union, N.J.-based specialty home
retailer Bed Bath & Beyond Inc. (BBBY) to 'CC' from 'SD' (selective
default). S&P said, "The 'CC' rating and negative outlook on BBBY
reflects our view that while not actively in default, the company
is highly vulnerable and a distressed transaction or broader
restructuring is a virtual certainty based on its deteriorating
liquidity position, challenging operating conditions, and the
looming maturities of its outstanding 2024 notes."
As reported by the TCR on Nov. 28, 2022, Moody's Investors Service
retained Bed Bath's corporate family rating at Ca and the outlook
remains stable. According to Moody's, Bed Bath & Beyond's Ca
corporate family rating reflects the very high likelihood of
further defaults over the next twelve months.
BERKTREE LLC: Bid to Use Cash Collateral Denied
-----------------------------------------------
The U.S. Bankruptcy Court for the Middle District of North
Carolina, Durham Division, denied the motion to use cash collateral
filed by Berktree, LLC and K Medical Supplies LLC.
The Debtors' lawyer, James White, represented to the Court that,
following the initial hearing on the Motion, the Debtors determined
it was no longer feasible or in the best interest of all parties to
pursue Chapter 11 reorganization. To that end, the Debtors filed
motions to convert the cases to chapter 7 on March 13, 2023. White
further stated that, despite the entry of the Interim Order, the
Debtors never opened debtor-in-possession bank accounts, had not
used any cash collateral for any authorized expenses, and had
ceased business operations. Further, the Debtors do not request the
use of cash collateral for any trailing expenses or other budgetary
items listed in the Interim Order.
The Court said the prior interim order is immediately terminated.
A copy of the order is available at https://bit.ly/3mWqJSh from
PacerMonitor.com.
About Berktree, LLC
Berktree, LLC offers medical, health, rehab, dental, and laboratory
supplies. Berktree, LLC and K Medical Supplies LLC sought
protection under U.S. Bankruptcy Code (Bankr. M.D.N.C. Lead Case
No. 23-80037) on February 28, 2023. In the petition signed by
Stephen Kovacs as owner and managing member, Berktree disclosed
$100,000 in assets and up to $10 million in liabilities.
Judge Lena Mansori James oversees the case.
James C. White, Esq., at J.C. White Law Group, PLLC, represents the
Debtors as legal counsel.
BERNARD L. MADOFF: Banco General's Motion to Dismiss Denied
-----------------------------------------------------------
Bankruptcy Judge Cecelia G. Morris for the Southern District of New
York denies the motion to dismiss the Trustee's complaint filed by
Banco General S.A. and BG Valores, S.A., f/k/a Wall Street
Securities S.A.
Irving Picard, the trustee for the liquidation of Bernard L. Madoff
Investment Securities LLC ("BLMIS"), filed this adversary
proceeding on Feb. 9, 2012. Via the complaint, "the Trustee seeks
to recover approximately $9.42 million in subsequent transfers of
customer property made to the Banco General Defendants by Fairfield
Sentry Limited."
The Banco General Defendants seek dismissal, arguing that the safe
harbor provision of the Bankruptcy Code bars the Trustee's claims
and that the complaint fails to allege that they received BLMIS
customer property.
On the issue of the safe harbor, the Court adopts the district
court's reasoning in Picard v. Multi-Strategy Fund Ltd. (In re
BLMIS), No. 22-CV-06502 (JSR), 2022 WL 16647767 (S.D.N.Y. Nov. 3,
2022), where the Trustee has alleged "that Fairfield Sentry knew
the payments it received from BLMIS were neither settlement
payments nor payments in connection with a securities contract."
The district court held that "The safe harbor was intended, among
other things, to promote the reasonable expectations of legitimate
investors. If an investor knew that BLMIS was not actually trading
securities, he had no reasonable expectation that he was signing a
contract with BLMIS for the purpose of trading securities for his
account. In that event, the Trustee can avoid and recover
preferences and actual and constructive fraudulent transfers to the
full extent permitted under state and federal law." As such, the
Court concludes that the safe harbor provision does not bar the
avoidance of the Fairfield Initial Transfers.
The Banco General Defendants argue that the allegations are
"mathematically impossible" in that the Trustee seeks to recover
over $5 billion in BLMIS Customer property in aggregate from all
subsequent transferees of Fairfield Sentry, yet only $3 billion of
customer property are alleged to have been transferred from BLMIS
to Fairfield Sentry. They further argue that the complaint
demonstrates that "Fairfield Sentry was receiving funds from
several sources, including not just BLMIS, but also its own
investors."
In order to determine how Fairfield Sentry spent the billions of
dollars it received from BLMIS, the Court would need review
financial documents in order to trace the monies to all of
Fairfield Sentry's principals, insiders, creditors, and customers.
Undoubtedly, the Court will trace and calculate how Fairfield
Sentry spent its BLMIS (and any non-BLMIS) funds at a later stage
of litigation. At this stage, the Trustee need only assert
allegations that make it seem plausible that Defendants received
BLMIS monies.
Thus, the Court finds and concludes that the Complaint plausibly
pleads that the Banco General Defendants received customer property
because the Fairfield Funds did not have other property to give.
The Trustee plausibly alleges that Fairfield Sentry did not have
any assets that were not customer property. In this case, the
Trustee is not seeking to collect $5 billion from the Banco General
Defendants -- he is seeking $9.42 million, which easily could come
from the $3 billion Fairfield Sentry received from BLMIS.
Since the calculation of the Fairfield Funds' customer property and
what funds it used to make redemption payments are issues of fact
better resolved at a later stage of litigation, the Court denies
Banco General Defendants' motion to dismiss.
The Adversary Proceeding is SECURITIES INVESTOR PROTECTION
CORPORATION, Plaintiff-Applicant, v. BERNARD L. MADOFF INVESTMENT
SECURITIES LLC, Defendant. In re: BERNARD L. MADOFF, Debtor. IRVING
H. PICARD, Trustee for the Liquidation of Bernard L. Madoff
Investment Securities LLC, and Bernard L. Madoff, Plaintiff, v.
BANCO GENERAL, S.A., and BG VALORES, S.A., f/k/a WALL STREET
SECURITIES, S.A., Defendants, Case No. 08-01789 (CGM)
(Substantively Consolidated), Adv. Pro. No. 12-01048 (CGM), (Bankr.
S.D.N.Y.).
A full-text copy of the Memorandum Decision dated March 16, 2023 is
available at https://tinyurl.com/2p8byjwj from Leagle.com.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of New
York granted the application of the Securities Investor Protection
Corporation for a decree adjudicating that the customers of BLMIS
are in need of the protection afforded by the Securities Investor
Protection Act of 1970. The District Court's Protective Order (i)
appointed Irving H. Picard, Esq., as trustee for the liquidation of
BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and
(iii) removed the SIPA Liquidation proceeding to the Bankruptcy
Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr.
Picard has retained AlixPartners LLP as claims agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal &
Associates Florida General Partnership, Martin Rappaport Charitable
Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven
Morganstern -- assert US$64 million in claims against Mr. Madoff
based on the balances contained in the last statements they got
from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later
transferred to Manhattan. In June 2009, Judge Lifland approved the
consolidation of the Madoff SIPA proceedings and the bankruptcy
case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to 150
years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
From recoveries in lawsuits coupled with money advanced by SIPC,
Mr. Picard has commenced distributions to victims. As of Jan. 31,
2021, and since his appointment in December 2008, the SIPA Trustee
has amassed more than $14.413 billion as a result of recoveries and
settlement agreements. These recoveries exceed similar efforts
related to prior Ponzi scheme recoveries, in terms of dollar value
and percentage of stolen funds recovered. Eligible BLMIS customers
have now received almost 70% of their allowed claims, and the SIPA
Trustee is optimistic that this figure will rise as the Trustee
secure more recoveries and distributions in the future.
BERNARD L. MADOFF: Merrill Lynch's Move to Dismiss Denied
---------------------------------------------------------
In the Adversary Proceeding captioned as SECURITIES INVESTOR
PROTECTION CORPORATION, Plaintiff-Applicant, v. BERNARD L. MADOFF
INVESTMENT SECURITIES LLC, Defendant. In re: BERNARD L. MADOFF,
Debtor. IRVING H. PICARD, Trustee for the Liquidation of Bernard L.
Madoff Investment Securities LLC, and Bernard L. Madoff, Plaintiff,
v. MERRILL LYNCH INTERNATIONAL, Defendant, No. 08-01789 (CGM)
(Substantively Consolidated), Adv. Pro. No. 10-05346 (CGM), (Bankr.
S.D.N.Y.), Bankruptcy Judge Cecelia G. Morris denies the motion to
dismiss the Trustee's complaint filed by the Defendant Merrill
Lynch International.
This adversary proceeding was filed on Dec. 8, 2010. Via the
Amended Complaint, Irving Picard, the trustee for the liquidation
of Bernard L. Madoff Investment Securities LLC ("BLMIS"), "seeks to
recover $16.1 million in subsequent transfers of BLMIS customer
property" made to Merrill Lynch International by Fairfield Sentry
Limited and Fairfield Sigma Limited.
Merrill Lynch International seeks dismissal for lack of personal
jurisdiction, for failure to state a claim for relief due to
improper adoption by reference, for failure to state a claim due to
the safe harbor provision of the Bankruptcy Code, and for failure
to allege that it received BLMIS customer property. In addition,
Merrill Lynch International has raised the good faith defense.
To survive a motion to dismiss for lack of personal jurisdiction,
the Trustee must make a prima facie showing that jurisdiction
exists. In this case, the Court finds that the Trustee has alleged
legally sufficient allegations of jurisdiction simply by stating
that Merrill Lynch International "knowingly directed funds through
leveraged transactions to be invested with, and then redeemed from,
BLMIS through the Fairfield Funds. . . purposefully targeted the
New York securities market by investing in the Fairfield Funds,
knowing that their assets were managed and custodied by BLMIS in
New York. . . It is represented by U.S. counsel, held bank accounts
in New York, and submitted to the jurisdiction of New York courts'
when they signed subscription agreements with the Fairfield
Funds."
The Court agrees with the district court's findings in the case
entitled SIPC v. BLMIS (In re Consolidated Proceedings on 11 U.S.C.
§ 550(a)), 501 B.R. 26, 36 (S.D.N.Y. 2013), "that adoption by
reference of the entire Fairfield Complaint is proper." Through the
adoption of the Fairfield Complaint, the Trustee has adequately
pleaded, with particularity, the avoidability of the initial
transfers due to the Fairfield Funds' knowledge of BLMIS' fraud.
The Court settles that "dismissing this Amended Complaint and
permitting the Trustee to amend his Complaint to include all of the
allegations that are already contained in the Fairfield Complaint,
would prejudice all parties by delaying the already overly
prolonged proceedings."
On the issue of the safe harbor, the Court adopts the district
court's reasoning in: Picard v. Multi-Strategy Fund Ltd. (In re
BLMIS), No. 22-CV-06502 (JSR), 2022 WL 16647767 (S.D.N.Y. Nov. 3,
2022), "The safe harbor was intended, among other things, to
promote the reasonable expectations of legitimate investors. If an
investor knew that BLMIS was not actually trading securities, he
had no reasonable expectation that he was signing a contract with
BLMIS for the purpose of trading securities for his account. In
that event, the Trustee can avoid and recover preferences and
actual and constructive fraudulent transfers to the full extent
permitted under state and federal law."
The Court determines that "good faith" cannot be found on the face
of a complaint. Good faith is linked with whether one had knowledge
of the voidability of the transfer. As such, the Court concludes
that it is not appropriate for the Court to resolve these factual
issues at this stage of the litigation.
A full-text copy of the MEMORANDUM DECISION dated March 16, 2023 is
available at https://tinyurl.com/3hhx2vvt from Leagle.com.
About Bernard L. Madoff
Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff
orchestrated the largest Ponzi scheme in history, with losses
topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A.
Stanton of the U.S. District Court for the Southern District of New
York granted the application of the Securities Investor Protection
Corporation for a decree adjudicating that the customers of BLMIS
are in need of the protection afforded by the Securities Investor
Protection Act of 1970. The District Court's Protective Order (i)
appointed Irving H. Picard, Esq., as trustee for the liquidation of
BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and
(iii) removed the SIPA Liquidation proceeding to the Bankruptcy
Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr.
Picard has retained AlixPartners LLP as claims agent.
On April 13, 2009, former BLMIS clients filed an involuntary
Chapter 7 bankruptcy petition against Bernard Madoff (Bankr.
S.D.N.Y. 09-11893). The petitioning creditors -- Blumenthal &
Associates Florida General Partnership, Martin Rappaport Charitable
Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven
Morganstern -- assert US$64 million in claims against Mr. Madoff
based on the balances contained in the last statements they got
from BLMIS.
On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff
Securities International Limited in London under bankruptcy
protection pursuant to Chapter 15 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later
transferred to Manhattan. In June 2009, Judge Lifland approved the
consolidation of the Madoff SIPA proceedings and the bankruptcy
case.
Judge Denny Chin of the U.S. District Court for the Southern
District of New York on June 29, 2009, sentenced Mr. Madoff to 150
years of life imprisonment for defrauding investors in United
States v. Madoff, No. 09-CR-213 (S.D.N.Y.).
From recoveries in lawsuits coupled with money advanced by SIPC,
Mr. Picard has commenced distributions to victims. As of Jan. 31,
2021, and since his appointment in December 2008, the SIPA Trustee
has amassed more than $14.413 billion as a result of recoveries and
settlement agreements. These recoveries exceed similar efforts
related to prior Ponzi scheme recoveries, in terms of dollar value
and percentage of stolen funds recovered. Eligible BLMIS customers
have now received almost 70% of their allowed claims, and the SIPA
Trustee is optimistic that this figure will rise as the Trustee
secure more recoveries and distributions in the future.
BIG DADDY GUNS 2: Case Summary & 10 Unsecured Creditors
-------------------------------------------------------
Debtor: Big Daddy Guns 2 Inc.
3558 SW College Road
Suite 400
Ocala, FL 34474
Chapter 11 Petition Date: March 21, 2023
Court: United States Bankruptcy Court
Northern District of Florida
Case No.: 23-10053
Debtor's Counsel: Jose I Moreno, Esq.
JOSE I MORENO PA
240 NW 76th Drive
Suite D
Gainesville, FL 32607
Tel: 352-332-4422
Fax: 352-332-4462
Email: jimoreno@bellsouth.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Anthony W. McKnight as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 10 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/HJGNLVA/Big_daddy_Guns_Inc__flnbke-23-10053__0001.0.pdf?mcid=tGE4TAMA
BIG DADDY GUNS: Case Summary & 16 Unsecured Creditors
-----------------------------------------------------
Debtor: Big daddy Guns, Inc.
7600 NW 5th Place
Suite C
Gainesville, FL 32607
Chapter 11 Petition Date: March 21, 2023
Court: United States Bankruptcy Court
Northern District of Florida
Case No.: 23-10053
Debtor's Counsel: Jose I Moreno, Esq.
JOSE I MORENO PA
240 NW 76th Drive
Suite D
Gainesville, FL 32607
Tel: 352-332-4422
Fax: 352-332-4462
Email: jimoreno@bellsouth.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Anthony M. McKnight as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 16 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/HJGNLVA/Big_daddy_Guns_Inc__flnbke-23-10053__0001.0.pdf?mcid=tGE4TAMA
BORREGO COMMUNITY: No Patient Care Concern, 3rd PCO Report Says
---------------------------------------------------------------
Jacob Nathan Rubin, the court-appointed patient care ombudsman for
Borrego Community Health Foundation, filed with the U.S. Bankruptcy
Court for the Southern District of California his third report
regarding the quality of patient care provided at Borrego's health
care facilities.
The PCO continued with his inspections and investigations during
this third period. Based on Borrego's intentions to sell its assets
and operations to a third party, the PCO worked with Borrego to
understand the pool of interested buyers and the proposals made by
the various parties. Once the proposed winning bidder was
determined -- Desert AIDS Project, doing business as DAP Health
–- the PCO communicated with Borrego and DAP to understand the
scope of the transaction, the transition process and continuity of
care.
The PCO visited the facilities that DAP will use to absorb some of
the patient care responsibilities as a result of changing Borrego's
locations to "Intermittent Status" or secondary to lease rejection
(Borrego's El Cajon Urgent Care). Borrego's facilities were visited
on more than one occasion. In summary, Borrego continues to meet
the necessary standard of care.
As of the filing of the third report, it has been less than 2 weeks
since sale approval to DAP. However, DAP is working on maintaining
care for Borrego's patients at the Intermittent locations of
concern: Centro Medico Cathedral City and Desert Hot Springs. The
options are still being evaluated, but the plan is to maintain care
of all the patients.
The PCO noted that Borrego is meeting the necessary standard of
care. Borrego continues to monitor its quality measures and address
customer service issues. DAP is working on the concerns and the PCO
will monitor the progress to ensure that patients have continued
access to care.
A copy of the third ombudsman report is available for free at
https://bit.ly/3JPQY5Z from PacerMonitor.com.
Attorneys for Jacob Nathan Rubin:
David B. Golubchik, Esq.
Krikor J. Meshefejian, Esq.
Levene, Neale, Bender, Yoo & Golubchik L.L.P.
2818 La Cienega Avenue
Los Angeles, CA 90034
Tel: (310) 229-1234
Fax: (310) 229-1244
Email: dbg@lnbyg.com; kjm@lnbyg.com
About Borrego Community Health Foundation
Borrego Community Health Foundation offers, among other services,
comprehensive primary care, pediatric care, urgent care, behavioral
health services, dental services, specialty care, transgender
health, women's health, prenatal care, veteran's health, and
chiropractic services. Borrego Community is a non-profit public
charity, tax-exempt under section 501(c)(3) of the Internal Revenue
Code. The Foundation, as of Sept. 12, 2022, had 24 brick-and mortar
sites including administrative sites, two pharmacies and six mobile
units covering a service area consisting of a 250-mile corridor on
the eastern side of San Diego and Riverside Counties, Calif.
Borrego Community Health Foundation sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Calif. Case No.
22-02384) on Sept. 12, 2022, with between $50 million and $100
million in both assets and liabilities. Isaac Lee, chief
restructuring officer, signed the petition.
Judge Laura S. Taylor oversees the case.
The Debtor tapped Tania M. Moyron, Esq., at Dentons US, LLP as
bankruptcy counsel and Hooper Lundy & Bookman, P.C. as special
counsel. Kurtzman Carson Consultants, LLC is the Debtor's claims
and noticing agent.
Jacob Nathan Rubin, the patient care ombudsman appointed in the
Debtor's case, tapped Levene Neale Bender Yoo & Golubchik, LLP as
bankruptcy counsel and Dr. Tim Stacy DNP, ACNP-BC as consultant.
On Sept. 26, 2022, the U.S. Trustee appointed an official unsecured
creditors' committee in this Chapter 11 case. Pachulski Stang Ziehl
& Jones, LLP serves as the committee's counsel.
C&L AUTOMOTIVE: Commences Subchapter V Bankruptcy Case
------------------------------------------------------
C&L Automotive & Towing Inc. filed for chapter 11 protection in the
Middle District of Florida. The Debtor elected on its voluntary
petition to proceed under Subchapter V of chapter 11 of the
Bankruptcy Code.
The Debtor is the operator of an auto repair and truck rental
business which operates in Jacksonville, FL. The business was
started in 2004 by Lisa Hood and has continuously operated since
that time.
The Debtor's main commercial property is located in Jacksonville,
FL and leased by Debtor.
During the pandemic year of 2020, the Debtor experienced a decline
in income of over $100,000 per year as compared to the prior years.
In response the Debtor opened an MCA debt with On Deck financing
in 2019 and expanded that loan in 2020. The Debtor also attempted
to maintain its financial health with an SBA loan of $150,000 in
2020. Unfortunately, the attempt to maintain the debt servicing
failed and the Debtor was sued by On Deck in Virginia Court in
2021. The Debtor attempted arbitration and several other methods
to resolve the suit but was unsuccessful and a judgment was entered
against the company.
The Chapter 11 case was filed to restructure the secured debt of
the Debtor’s commercial lender and SBA blanket liens. The Debtor
was attempting to cure the arrears on the secured claims, but was
unable to improve the cash flow of the closely held business to the
point that it
could avoid filing the Chapter 11.
According to court filings, C&L Automotive & Towing estimates
between $1 million and $10 million in debt owed to 1 to 49
creditors. The petition states that funds will not be available to
unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
April 5, 2023 at 1:00 p.m. in Room Telephonically on telephone
conference line: 866-718-3566. (participant passcode: 2721444#).
About C&L Automotive & Towing
C&L Automotive & Towing Inc. -- https://candlautomotiveus.com/ --
provides full service auto repair in Jacksonville, Florida.
C&L Automotive & Towing sought protection under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No.
3:23-bk-00437) on March 1, 2023. In the petition signed by Lisa
Hood, president/secretary/director, the Debtor disclosed assets and
liabilities between $1 million and $10 million each.
The case is overseen by Honorable Bankruptcy Judge Jason A
Burgess.
Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler,
LLP, is the Debtor's legal counsel.
C&L AUTOMOTIVE: Court OKs Interim Cash Collateral Access
--------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Jacksonville Division, authorized C&L Automotive & Towing, Inc. to
use cash collateral on an interim basis in accordance with the
budget.
The Debtor requires the use of cash collateral to continue
operating the business and pay salaries.
The Debtor executed a Promissory Note and Chattel Mortgage and
Security Agreement to On Deck Capital, Inc. in the original
principal amount of $100,000 in which the rents, accounts
receivables, chattel paper, contracts, documents, cash, bank
accounts, etc. were pledged as collateral. As of the Petition
Date, the Debtor owed On Deck $85,000.
The receivables, rents and other property are property of the
Chapter 11 estate of the Debtor pursuant to 11 U.S.C. section
541(a)(1) and (6) and were collaterally pledged to the lender to
ensure payment of the pre-petition obligations.
As adequate protection, the Debtor will pay only expenses necessary
for the operation of the business and not any pre-petition
expenses, officer salaries, professional fees, or insiders without
further Court order.
As additional adequate protection of the lender's interest and the
estate's interest in cash collateral, the lender is granted a
replacement lien to the same nature, priority, and extent that the
lender may have had immediately prior to the date that this case
was commenced nunc pro tunc to the Petition Date. Further, the
lender is granted a replacement lien and security interest on
property of the bankruptcy estate to the same extent and priority
as that which existed pre-petition on all of the cash accounts,
accounts receivable and other assets and property acquired by the
Debtor's estate or by the Debtor on or after the Petition. The
replacement lien in the Post-Petition Collateral will be deemed
effective, valid and perfected as of the Petition Date.
The Debtor is ordered to pay Adequate Protection payments of $500
to On Deck commencing April 1, 2023, and on the first of the month
thereafter or further Court order.
The Debtor's authority to use cash collateral will terminate
immediately and upon the earlier of (a) a Court order; (b) the
conversion of the case to a Chapter 7 case or the appointment of a
Chapter 11 trustee without the consent of the lender; (c) the entry
of an Order that alters the validity or priority of the replacement
liens granted therein to the Bank; (d) the Debtor ceasing to
operate all or substantially all of its business; (e) the entry of
an order granting relief from the automatic stay that allows any
entity to proceed against any material assets of the Debtor that
constitute Cash Collateral; (f) the entry of an Order authorizing a
security interest under section 364(c) or 364(d) of the Bankruptcy
Code in the collateral to secure any credit obtained or debt
incurred that would be senior to or equal to the replacement lien;
or (g) the dismissal of the Chapter 11 case.
A further hearing on the matter is set for April 19, 2023 at 9:30
a.m.
A copy of the order is available at https://bit.ly/3FrYUHS from
PacerMonitor.com.
About C&L Automotive & Towing, Inc.
C&L Automotive & Towing, Inc. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 3:23-bk-00437)
on March 1, 2023. In the petition signed by Lisa Hood, its
president, secretary and director, the Debtor disclosed up to
$500,000 in both assets and liabilities.
Judge Jason A. Burgess oversees the case.
Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler,
LLP, represents the Debtor as legal counsel.
C&L AUTOMOTIVE: Seeks to Hire Mickler & Mickler as Legal Counsel
----------------------------------------------------------------
C&L Automotive & Towing, Inc. seeks approval from the U.S.
Bankruptcy Court for the Middle District of Florida to employ the
Law Offices of Mickler & Mickler, LLP as counsel.
The hourly rates charged by the firm for legal services range from
$250 to $350. In addition, the firm will seek reimbursement for
out-of-pocket expenses incurred.
Bryan Mickler, Esq., at the Law Offices of Mickler & Mickler,
disclosed in a court filing that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Bryan K. Mickler, Esq.
Law Offices of Mickler & Mickler, LLP
5452 Arlington Expy.
Jacksonville, FL 32211
Tel: (904) 725-0822
Fax: (904) 725-0855
Email: bkmickler@planlaw.com
About C&L Automotive & Towing
C&L Automotive & Towing, Inc. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00437) on
March 1, 2023, with up to $500,000 in both assets and liabilities.
Lisa Hood, president, secretary and director of C&L Automotive,
signed the petition.
Judge Jason A. Burgess oversees the case.
The Debtor tapped Bryan K. Mickler, Esq., at the Law Offices of
Mickler & Mickler, LLP as legal counsel and William G. Haeberle,
CPA, LLC as accountant.
CASA SYSTEMS: S&P Downgrades ICR to 'CCC', Outlook Negative
-----------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Casa Systems
Inc. to 'CCC' from 'CCC+'. At the same time, S&P lowered its
issue-level ratings on the company's first-lien senior secured debt
to 'CCC' from 'CCC+'. The '3' recovery rating is unchanged.
The negative outlook reflects the high likelihood of lowering S&P's
rating on Casa if it fails to execute a refinancing in the coming
months since this would suggest an even greater probability of a
distressed restructuring or payment default within the next six
months.
The rating action reflects Casa's approaching debt maturity and the
increasing likelihood of distressed exchange or payment default
occurring within nine months, following several adverse
developments it shared during its recent earnings release last
week.
Casa's first-lien term loan, which has around $226 million
outstanding, matures on Dec. 30, 2023, less than nine months away.
S&P said, "With cash balances of $126.3 million as of Dec. 31,
2022, insufficient to cover the maturity and limited free cash flow
generation, we believed Casa would likely encounter difficulties
executing such a transaction. We now believe these challenges are
likely to intensify, following the company's disclosure of a
variety of negative developments, including the loss of orders from
a top North American cable customer (who we believe was undertaking
a $5.5 billion network upgrade), the sudden retirement of its
founder and CEO Jerry Guo, and a material weakness in its internal
controls over financial reporting. While Casa has announced that it
is working with bankers to explore refinancing options, considering
these recent disclosures, its operating prospects, and the
difficult conditions in the capital markets, we believe executing
such a transaction is uncertain. In such a scenario where a default
by the company looks inevitable, we think it could become
increasingly motivated to pursue a distressed debt repurchase or
restructuring that would continue a default under our criteria."
S&P said, "The negative outlook reflects the high likelihood of
lowering our rating on Casa if it fails to execute a refinancing in
the coming months since this would suggest an even greater
probability of a distressed restructuring or payment default within
the next six months.
"We could consider lowering our ratings on Casa within the next six
months if we believed there was an even greater risk of distressed
debt restructuring or payment default occurring.
"We could consider raising our ratings on Casa if it can refinance
its 2023 term loan maturity, resolve its outstanding internal
control weakness, and start reestablishing a track record of
sustainably improving its operating performance." This would
require it to return to revenue growth, sustain higher EBITDA
margins, and generate sustainable positive free operating cash flow
(FOCF) while continuing to fund its working capital and capital
expenditure requirements.
Andover, Mass.-based Casa provides a suite of hardware and software
infrastructure technology solutions that allows cable service
providers to deliver voice, video, and data services over a single
platform. In addition, the company offers solutions for
next-generation distributed and virtualized architectures in cable
operator, fixed telecommunications, and wireless networks.
ESG credit indicators: To E-2, S-2, G-4; From E-2, S-2, G-2
Governance factors are now a negative consideration in S&P's credit
rating analysis of Casa compared to a neutral consideration. This
change stems from additional adverse governance-related
developments, including its failure to maintain effective internal
controls, recent management and board changes, and the
disproportionate effect supply chain disruptions had on its
performance. Casa's auditors identified pervasive material
weaknesses in the company's internal control processes, including
areas such as the control environment, risk assessment,
communication, and monitoring components of the COSO framework.
These findings by its auditors stem from an insufficiently staffed
finance organization with the requisite knowledge or skills and
ability to focus on internal control over financial reporting
matters.
CERIDIAN HCM: Moody's Hikes CFR to B2 & Senior Secured Debt to Ba3
------------------------------------------------------------------
Moody's Investors Service upgraded Ceridian HCM Holding Inc.'s
corporate family rating to B2 from B3 and its probability of
default rating to B2-PD from B3-PD. Concurrently, Moody's upgraded
the rating on Ceridian's senior secured credit facility to Ba3 from
B1 and upgraded the speculative grade liquidity rating ("SGL") to
SGL-1 from SGL-2. The outlook is stable.
Moody's upgraded the following ratings:
Upgrades:
Issuer: Ceridian HCM Holding Inc.
Corporate Family Rating, Upgraded to B2 from B3
Probability of Default Rating, Upgraded to B2-PD from B3-PD
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Senior Secured Bank Credit Facility, Upgraded to Ba3 (LGD2) from
B1 (LGD2)
Outlook Actions:
Issuer: Ceridian HCM Holding Inc.
Outlook, Remains Stable
The upgrade of the CFR to B2 from B3 was driven by Moody's
expectation of continued improvement in Ceridian's operating
performance over the coming 12 to 18 months fueled by ongoing
secular growth of outsourcing in the payroll processing and human
capital management (HCM) services market which should not be
materially impacted by a modest anticipated rise in unemployment
rates during this period. Concurrently, Ceridian's profitability
and cash flow metrics should benefit considerably from rising float
income given the increase in interest rates in recent quarters. The
potential for Ceridian to pursue debt financed acquisitions or
share repurchases continues to present releveraging risk, but
Moody's expects such initiatives to fuel limited increases in the
company's debt such that Ceridian's credit metrics, including
financial leverage, will remain consistent with comparable services
industry issuers also rated in the B2 CFR category.
RATINGS RATIONALE
Ceridian's B2 CFR is principally constrained by the company's high
leverage with LTM debt/EBITDA (Moodys' adjusted for leases and
pensions) of 10.4x (4.7x excluding stock compensation expense) as
of December 31, 2022 as well as Ceridian's somewhat concentrated
equity ownership and the potential for aggressive financial
strategies including stock repurchase programs to offset the
dilutive impact of rising stock compensation expense. Additionally,
intense competition in Ceridian's markets from considerably larger
rivals with greater financial resources and the possibility of a
material weakening in employment trends in the coming 12-18 months
present ongoing credit risk. Ceridian's credit profile is supported
by the healthy long term growth prospects of the company's target
markets as well as the company's strong relationships with its base
of largely enterprise and middle market clients. Additionally, the
company's credit quality is bolstered by healthy business
visibility as a majority of its revenues are driven by cloud-based
products and related services featuring long term contracts and
high retention rates.
The upgrade of Ceridian's bank debt instrument ratings to Ba3 from
B1 reflects both the issuer's B2-PD PDR and a loss given default
(LGD) assessment of LGD2. The bank debt ratings are two notches
above Ceridian's B2 CFR, reflecting the senior ranking and priority
in the collateral of the bank debt relative to the company's senior
unsecured convertible notes due March 15, 2026 (unrated) which
provide considerable first loss support to the bank debt.
Moody's has assessed that Ceridian's liquidity profile has
strengthened and will remain very good over the next year,
reflected in an increase in the company's SGL rating to SGL-1.
Liquidity is principally supported by the company's cash balance of
approximately $433 million as of December 31, 2022 as well as
Moody's expectation of annual free cash flow in excess of $100
million over the next 12-15 months. The cash sources provide strong
coverage of just under $7 million of required term loan
amortization in 2023. While Ceridian's term loan is not subject to
financial covenants, the revolving credit facility has a springing
covenant based on a maximum net first lien debt to EBITDA ratio of
7.25x which the company should be comfortably in compliance with
over the next 12-15 months.
The stable ratings outlook reflects Moody's expectation that
Ceridian's non-float revenues will increase by nearly 15%, on an
organic basis, in 2023 driven by ongoing demand growth in the
company's core markets. Concurrently, Ceridian's profitability and
cash flow metrics should benefit considerably from rising float
income during this period and Moody's expects adjusted EBITDA to
nearly double from 2022 levels. Moody's notes that an increasing
component of stock-based compensation raises the probability of
heightened stock repurchase activity in the future to offset
dilution, but the expected growth in Ceridian's EBITDA should drive
debt/EBITDA (including stock compensation expense) to 5.4x by the
end of 2023.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Ceridian expands revenues and
EBITDA such that debt/EBITDA metrics are sustained at less than
4.5x with annual free cash flow to debt exceeding 10% and the
company adheres to conservative financial policies.
The ratings could be downgraded if Ceridian's operating performance
weakens materially or the company adopts more aggressive financial
policies such that debt/EBITDA (including stock compensation
expense) is sustained above 7x or annual free cash flow to debt
falls consistently below 5%.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Ceridian is a publicly-traded human resources software and
transaction processing company providing workforce management
software, payroll and tax processing, and other human resources
services. Moody's expects Ceridian to generate pro forma revenues
of about $1.5 billion million in 2023.
CERIDIAN HCM: S&P Alters Outlook to Positive, Affirms 'B+' ICR
--------------------------------------------------------------
S&P Global Ratings revised the outlook on Minneapolis-based human
capital management (HCM) services provider Ceridian HCM Holding
Inc. to positive from stable and affirmed its 'B+' long-term issuer
credit rating on the company and its 'B+' issue-level rating, with
a '3' recovery rating, on the company's senior secured term debt. A
'3' recovery rating indicates meaningful (50%-70%; rounded estimate
65%) recovery in default.
The positive outlook on Ceridian reflects S&P Global Ratings'
expectation that the company's growth strategy of expanding market
share will lead to incremental EBITDA generation and
diversification of its operations. In S&P's view, the company's
strong growth from its cloud-based product (Dayforce) and robust
customer retention rates, should improve the leverage measures in
the 3.5x-4.0x range and also support positive free operating cash
flow (FOCF).
S&P said, "We expect Ceridian will increase its global reach and
addressable market with the addition of new modules to its Dayforce
platform and expansion in payroll capabilities. In fiscal 2022,
Ceridian's continued investment in the Dayforce platform resulted
in 39% of customers purchasing the Dayforce suite, and more than
25% of sales represented by add-ons to existing customer base. We
expect further expansion of Ceridian's total addressable market
with the addition of new modules to its platform and by expansion
of its global payroll capabilities. Currently, Ceridian offers its
comprehensive HCM suite in 57 countries. In 2022, the average
overall deal size increased by 22%, signaling the growth in
enterprise while maintaining the company's leadership in small- and
midsize companies. With triple-digit growth in its partner
ecosystem, which is used to sell Dayforce, in fiscal 2022, and more
than 170 partners globally that support more than 40% of bookings,
we expect Ceridian will further expand its enterprise (6,000 or
more employees) segment in fiscal 2023. We believe increased
innovations in the Dayforce platform and international expansion of
its ancillary products, such as Dayforce Wallet across Europe as
well as Asia-Pacific (APAC), to be a key catalyst for higher growth
over the long term.
"Higher recurring revenues should support the company's business
and growth strategies. Ceridian reported strong revenue growth of
about 22% for fiscal 2022 spurred by better performance in its
flagship Dayforce recurring solutions. These recurring revenues
account for about 65% of total revenues and have high attach rates
for new customers, which drive incremental growth in adjacent
markets. We expect the company will increase its high-margin cloud
recurring-revenue base, with its strong customer retention rates of
above 97% that provide stability and predictability of EBITDA in a
highly competitive and fragmented HCM market. With the ability to
sell Dayforce Wallet to 80% of its new customers, we believe
Ceridian would be able to achieve its target Dayforce recurring
revenue growth of the mid-20% area for fiscal 2023, supporting its
future topline growth. At the same time, we expect the company will
continue to benefit from currently high interest rates, resulting
in an increase in its higher-margin float revenue in fiscal 2023."
Exclusive focus on HCM limits Ceridian`s competitive position
compared with well-capitalized larger enterprise software players.
In our view, the HCM market is a niche segment within the larger
software services market. HCM product offerings are homogenous in
nature, with limited product differentiation, thus leading to lower
pricing power levels. Larger enterprise cloud software service
providers and niche HCM players are increasing their market
penetration, spurred by increasing shifts to the cloud-based
subscription model. Ceridian mainly focuses on midmarket customers
that demand a complete HCM solution, because these customers do not
have a strong in-house IT department to support larger projects. At
the same time, we believe that larger enterprise resource planning
players with deep financial pockets could penetrate the HCM market
with new product development and aggressive marketing efforts to
offer a broader suite of enterprise level software applications,
which could pressure Ceridian's growth prospects.
S&P said, "We expect Ceridian will fund the increased investments
in product innovation with internal cash. In our view, Ceridian`s
advancements toward intelligent automation, personalized content
and communication, and talent acquisition would aid customer
retention in the long term. At the same time, given the increased
demand for cloud-based HCM products, we anticipate Ceridian would
invest more in innovating new products, that lead the company to
use its cash on hand eventually to support the expansion of its
Dayforce and other products in and outside North America.
"We expect S&P Global Ratings-adjusted leverage measures will
remain in the 3.5x-4.0x range for fiscal 2023. Despite the economic
environment, demand and pipeline growth remain strong and retention
rates (97.1%) have not been pressured. Furthermore, there are
significant tailwinds driving modernization of HR systems and
processes, which we expect will continue even during a softer
macroeconomic environment. Moreover, Ceridian's cloud Dayforce
recurring revenues are less volatile because they are more focused
in the enterprise business customers that usually have multiyear
contracts and for larger base of employees. The company has stated
that it will focus on tuck-in acquisitions; as a result, we now
forecast the S&P Global Ratings-adjusted leverage ratio would be in
the 3.50x-4.00x range for fiscal 2023, lower than our previous
expectations of about 4.25x-4.50x.
"The positive outlook on Ceridian reflects S&P Global Ratings'
expectation that the company's growth strategy of expanding market
share and anticipated expansion will lead to incremental EBITDA
generation and diversification of its operations. In our view, the
company's strong growth from its cloud-based product (Dayforce) and
robust customer retention rates, should improve the leverage
measures in the 3.5x-4.0x range and also support positive FOCF.
"We could revise the outlook to stable if Ceridian's adjusted
debt-to-EBITDA ratio remains above 4x or adjusted FOCF to debt is
below 5%. In our opinion, this scenario could occur if the company
adopts an aggressive growth strategy for its cloud-based HCM
offerings, along with high debt-funded business investments, which
pressures near-term profitability and its deleveraging strategy.
"We could raise the ratings if the company's adjusted
debt-to-EBITDA ratio is sustained well below 4x along with an
adjusted FOCF-to-debt ratio of above 10%. In this scenario, we
would expect Ceridian to exhibit sustainable organic revenue growth
in the double-digit area from its cloud-based products and increase
scale by adding more customers and upselling new products. Although
the float revenue adds some volatility, we would also expect the
company to continue to demonstrate a commitment to a conservative
financial policy such that adjusted debt to EBITDA remains below 4x
including acquisitions."
ESG credit indicators: E-2, S-2, G-2
CHASE CUSTOM HOMES: Taps Getty Real Estate Services as Broker
-------------------------------------------------------------
Chase Custom Homes & Finance, Inc. seeks approval from the U.S.
Bankruptcy Court for the District of Maine to employ Getty Real
Estate Services as real estate broker.
The Debtor requires a real estate broker to:
(a) provide written broker price opinions and valuation of the
Debtor's real estate assets;
(b) commission sales and sales consulting on the Debtor's real
estate assets;
(c) assist the Debtor with new home pricing and recommend to
management for approval;
(d) assist the Debtor with new home construction scheduling,
subdivision approval, timelines, project management and budgets,
and recommend to management for approval;
(e) assist the Debtor with construction budgets for new home
construction, remodel, renovation construction and subdivision
development, and recommend to management for approval;
(f) assist the Debtor with opening new subdivisions from raw
land through the planning board process;
(g) assist the Debtor with client care and communications; and
(h) assist the Debtor with pricing spreadsheets, construction
timelines, scheduling, billing, subcontractor proposals, and draw
schedules, and recommend to management for approval.
Getty will get a minimum of 5 percent of the contract price for
residential listings; a minimum of 6 percent of the contract price
for land Listings; and a minimum of 2.5 percent of the contract
price for buyer representation.
For all non-commission sales, non-sales related activities, or if
any or all assets need to be liquidated or foreclosed upon all at
once, then an hourly fee of $125 will be charged.
William Noone, a partner at Getty, disclosed in a court filing that
his firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
William Noone
Getty Real Estate Services
146 Highland Ave.
South Portland, ME 04106
Tel: (207) 329-9440
About Chase Custom Homes & Finance
Chase Custom Homes & Finance, Inc. -- https://cchfi.com --
specializes in new home construction, home renovations and
remodeling in Portland, Maine.
Chase Custom Homes & Finance filed a petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Maine Case No.
23-20032) on Feb. 16, 2023. In the petition filed by Terina Chase
as authorized party, the Debtor reported between $10 million and
$50 million in both assets and liabilities.
The Debtor tapped Bernstein Shur Sawyer & Nelson as legal counsel;
Purdy, Powers & Company, P.A. as accountant; and Windsor
Associates, LLC as financial advisor.
The U.S. Trustee for Region 1 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee is represented by Marcus Clegg.
CHASE CUSTOM: $1.5MM DIP Loan From Androscoggin and Machias OK'd
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maine authorized
Chase Custom Homes & Finance, Inc. to use cash collateral and
obtain postpetition financing on a final basis, through December
31, 2023.
The Debtor is permitted to obtain postpetition financing from:
(1) Androscoggin Savings Bank, as lender, up to the aggregate
principal amount of $625,000; and
(2) Machias Savings Bank, as lender, up to a revolving maximum
principal amount of $950,000.
Each of the loans is subject to the terms and conditions in the
Interim Order and the timing of advances and repayments as set
forth in the Budget.
The ASB DIP Facility will mature on the earliest of: (a) September
30, 2023; (b) the effective date of a confirmed plan of
reorganization or liquidation; (c) conversion of the case to one
under Chapter 7 or dismissal of the case; or (d) at Androscoggin's
discretion, upon the occurrence of an Event of Default.
The MSB DIP Facility will mature on the earliest of: (a) September
30, 2023; (b) the date on which the MSB DIP Facility is fully
repaid pursuant to the Budget; (c) the effective date of a
confirmed plan of reorganization or liquidation; (d) conversion of
the case to one under Chapter 7 or dismissal of the case; or (e) at
Machias's discretion, upon the occurrence of an Event of Default.
In accordance with and subject to the Budget, up to $500,000 of the
ASB Advances will be available for use as general working capital
for the Debtor, and up to $125,000 of the ASB Advances will be
allocated to fund expenses exclusively associated with the
development of Sawyer Estates.
The Debtor requires the use of cash collateral and DIP Facility to
maintain and operate its business and assets, to sell or otherwise
liquidate its assets, to provide financial information, and to pay
other expenses necessary to maximize the value of the Debtor's
estate in Chapter 11.
These events constitute an "Event of Default" under the DIP
facility:
(a) The Final Order is reversed, vacated, stayed, amended,
supplemented or otherwise modified in a manner which will
materially and adversely affect the rights of the DIP Lenders;
(b) The Debtor materially fails to perform or materially
breaches any of the covenants set forth in the Interim Order,
including, but not limited to, using Cash Collateral in any manner
not authorized by the Budget, or any representation or warranty of
the Debtor set forth in the Interim Order will be false or
misleading in any material respect;
(c) Any intentional misrepresentation by the Debtor in the
weekly financial reporting to be provided by the Debtor under the
Interim Order;
(d) The chapter 11 case of the Debtor is either dismissed or
converted to a chapter 7 case pursuant to a final Court order, the
effect of which has not been stayed;
(e) A chapter 11 trustee, or an examiner with expanded powers
beyond those set forth in Bankruptcy Code sections 1106(a)(3) and
1106(a)(4), is appointed by a final order of the Court, the effect
of which has not been stayed, in the chapter 11 case; or
(f) A default occurs under the DIP Facility Documents.
As of February 14, 2023, the Debtor was indebted to Machias in the
aggregate amount of $6.815 million and the Debtor acknowledges and
ratifies the validity, perfection, and first priority of Machias'
(i) mortgages on the subdivisions owned by the Debtor located in
Gorham (Bramblewood), Raymond (Rolling Brook), and Lewiston
(Sanctuary Estates) and (ii) liens on all business assets of the
Debtor as of the Petition Date, including all rights to payment.
As of February 14, the Debtor was indebted to Androscoggin in the
aggregate amount of $5.965 million and the Debtor acknowledges and
ratifies the validity, perfection, and second priority of
Androscoggin's liens on all business assets of the Debtor as of the
Petition Date, including all rights to payment.
The Debtor's business has an immediate need to borrow under the DIP
Facilities and to use cash collateral to have adequate liquidity to
provide for, among other things, the orderly continuation of the
operation of its business, to maintain business relationships with
vendors, suppliers, and customers, to make payroll, and to satisfy
other working capital and operational, financial, and general
corporate needs.
The final hearing on the matter is set for December 14 at 1 p.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3YPEJdX from PacerMonitor.com.
The Debtor projects, total disbursements on a weekly basis as
follows:
$286,661 for the week ending March 17, 2023;
$35,163 for the week ending March 24, 2023; and
$33,368 for the week ending March 31, 2023.
About Chase Custom Homes & Finance, Inc.
Chase Custom Homes & Finance, Inc. is part of the residential
building construction industry. The Debtor sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Me. Case No.
23-20032) on February 15, 2023. In the petition signed by Terina
Chase, authorized party, the Debtor disclosed up to $50 million in
both assets and liabilities.
Judge Michael A. Fagone oversees the case.
The Debtor tapped Sam Anderson, Esq., at Bernstein Shur Sawyer &
Nelson, P.A. as legal counsel and Purdy, Powers & Co., P.A. as
accountant and financial advisor.
CLAREHOUSE LIVING: No Decline in Patient Care, 7th PCO Report Says
------------------------------------------------------------------
Melanie McNeil, Esq., the court-appointed patient care ombudsman,
filed with the U.S. Bankruptcy Court for the Northern District of
Georgia a seventh report regarding the quality of patient care
provided at Clarehouse Living, Inc.'s personal care homes in Powder
Springs, Ga.
The PCO on March 9 visited the two facilities operated by
Clarehouse Living and reported as follows:
* The PCO visited Clare House 1 with 10 residents, maintenance
staff, and direct care staff. No complaints were made. Residents
were satisfied with their care. It was reported that the staff is
stable. The facility had adequate food and supplies. No decline in
care was noted.
* The PCO visited Clare House II with three residents and
direct care staff. No complaints were made. The OR noted that staff
were cooperative on this visit. They had adequate food and
supplies. No decline in care was noted.
The PCO is not aware of any significant change in facility
conditions or decline in resident care for these personal care
homes since her appointment.
A copy of the seventh ombudsman report is available for free at
https://bit.ly/3YWcUR5 from PacerMonitor.com.
About Clarehouse Living
Clarehouse Living, Inc. is an operator of a licensed personal care
home for elderly or disabled residents in Georgia.
Clarehouse Living sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-50035) on Jan. 3,
2022, with up to $1 million in both assets and liabilities. Judge
Lisa Ritchey Craig oversees the case.
Ian M. Falcone, Esq., at Falcone Law Firm, PC is the Debtor's
counsel.
Melanie S. McNeil, Esq., is the patient care ombudsman appointed in
the Debtor's case.
CONCRETE SERVICES: Gets OK to Hire Spain & Gillon as Legal Counsel
------------------------------------------------------------------
Concrete Services, LLC received approval from the U.S. Bankruptcy
Court for the Northern District of Alabama to employ Spain &
Gillon, LLC to handle its Chapter 11 case.
The firm will be paid at these rates:
Frederick M. Garfield, Esq. $350 per hour
Attorneys $350 to $375 per hour
Paralegals $95 per hour
In addition, the firm will seek reimbursement for its out-of-pocket
expenses.
The firm received from the Debtor an advance payment of $15,062,
plus $1,738 filing fee.
Frederick Garfield, Esq., a partner at Spain & Gillon, disclosed in
a court filing that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Frederick M. Garfield, Esq.
Spain & Gillon, LLC
505 20th Street North, Suite 1200
Birmingham, AL 35203
Tel: (205) 328-4100
Email: fgarfield@spain-gillon.com
About Concrete Services
Concrete Services, LLC is a concrete construction contractor in the
State of Alabama and outlying slates with its principal place of
assets currently including Jefferson and Shelby Counties, Ala.
Concrete Services sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ala. Case No. 23-00520) on March 1,
2023, with up to $500,000 in assets and up to $1 million in
liabilities. James Ward, sole owner and president of Concrete
Services, signed the petition.
Judge Tamara O. Mitchell oversees the case.
Frederick M. Garfield, Esq., at Spain & Gillon, LLC serves as the
Debtor's counsel.
CORIZON HEALTH: Judge Halts Proceedings in Williams' Lawsuit
------------------------------------------------------------
Magistrate Judge Patricia T. Morris, on March 15, 2023, has issued
order administratively staying proceedings in the case styled JIM
WILLIAMS, Plaintiff, v. CORIZON, JANET NIXON, NP TERI MASSEY, and
KATHLEEN WOLOWIEC, Defendants, Case No. 2:21-cv-12534, (E.D. Mich.)
as to Defendant Corizon Health due to bankruptcy filing.
A full-text copy of the Order dated March 15, 2023 is available at
https://tinyurl.com/7pars399 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.
CYXTERA TECHNOLOGIES: Incurs $355.1 Million Net Loss in 2022
------------------------------------------------------------
Cyxtera Technologies, Inc. has filed with the Securities and
Exchange Commission its Annual Report on Form 10-K disclosing a net
loss of $355.1 million on $746 million of revenues for the year
ended Dec. 31, 2022, compared to a net loss of $257.9 million on
$703.7 million of revenues for the year ended Dec. 31, 2021.
"We achieved solid results in the fourth quarter and another year
of growth in 2022, demonstrating continued demand for our global
data center platform and our customers' confidence in our ability
to help them transform and scale their businesses," said Nelson
Fonseca, Cyxtera's chief executive officer. "We delivered 6.0%
revenue growth for the year, margin expansion, and positive net
bookings. Our results are further validation of the value we bring
to our customers with our global scale, innovative approach to
cloud-like colocation, and unwavering focus on providing high
quality services to our customers."
As of Dec. 31, 2022, the Company had $3.06 billion in total assets,
$2.67 billion in total liabilities, and $384.3 million in total
shareholders' equity.
Cyxtera Technologies said, "The Company is actively attempting to
extend the maturity on, or refinance or repay, its long-term debt
to ensure it will have positive cash flow for the long-term
foreseeable future. However, there can be no assurances that we
will be able to raise additional capital to refinance or repay our
existing debt or fund our future business activities and
requirements. The inability to raise capital would adversely
affect our ability to achieve our business objectives, including
pursuing additional expansion opportunities. Given the current
economic slowdown, some of our customers may have difficulty paying
us and we may experience increased churn in our customer base,
including reductions in their commitments to us, and we may be
unable to secure additional financing, or any such additional
financing may only be available to us on unfavorable terms, all of
which could have a material adverse effect on our liquidity. If
the Company cannot successfully extend, refinance or repay its
revolving credit facility and long-term debt with proceeds from
other sources, the Company will not be able to meet its financial
obligations when due in April 2024 and May 2024, respectively. As
a result, the Company could be forced to consider all strategic
alternatives including restructuring its debt, seeking additional
debt or equity capital, reducing or delaying its business
activities and strategic initiatives or selling assets, other
strategic transactions and/or other measures, including liquidation
or filing for bankruptcy, which could lead to material or even
total losses for its security holders as it relates to their
investments in the Company."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1794905/000179490523000010/cyxt-20221231.htm
About Cyxtera Technologies, Inc.
Headquartered in Coral Gables, FL, Cyxtera Technologies, Inc. --
https://www.cyxtera.com -- is a global data center company
providing retail colocation and interconnection services. The
Company provides an innovative suite of deeply connected and
intelligently automated infrastructure and interconnection
solutions to more than 2,300 leading enterprises, service providers
and government agencies around the world - enabling them to scale
faster, meet rising consumer expectations and gain a competitive
edge.
* * *
As reported by the TCR on Dec. 23, 2022, S&P Global Ratings lowered
its issuer credit rating on U.S.-based data center operator Cyxtera
Technologies Inc. by two notches to 'CCC' from 'B-'. The negative
outlook reflects Cyxtera's diminishing liquidity position and the
potential for a default or debt restructuring over the next 12
months.
DIVE PLACE II: Files Emergency Bid to Use Cash Collateral
---------------------------------------------------------
The Dive Place II LLC asks the U.S. Bankruptcy Court for the Middle
District of Florida, Orlando Division, for authority to use cash
collateral and provide adequate protection to Premier Capital
Funding, LLC.
On an emergency basis, the Debtor will require at least $3,480 to
satisfy its payroll.
Premier Capital may hold a security interest in the Debtor's cash
or cash equivalents.
The Debtor requires the use of cash collateral to pay employees and
other ordinary expenses, which expenses include office expenses,
and trade vendor invoices, which are necessary to its continued
operations.
Prior to the Petition Date, the Debtor obtained financing from
Premier Capital, which is purportedly secured by substantially all
of the accounts and receivables of TDP, including cash and cash
equivalents. Premier Capital Funding may assert a first priority
security interest in the Debtor's cash and cash equivalents by
virtue of a UCC-1 Financing Statement filed with the State of
Florida on April 1, 2020. The outstanding balance owed to Premier
Capital is approximately $13,429, which amount may be subject to
dispute.
Holders of inferior position security interests in the Debtor's
cash, accounts and cash equivalents -- Inferior Interests -- may
claim an inferior interest in the Debtor's cash and cash
equivalents by virtue of alleged liens on the Debtor's personal
property. The Debtor believes the Inferior Interests may be wholly
unsecured due to the outstanding amounts owed to the senior secured
lender with a superior interest in the Debtor's property, or due to
disputes over the basis for such creditors' respective alleged
security interests.
As adequate protection for the use of cash collateral, the Debtor
proposes to grant the Secured Creditors a replacement lien on its
post-petition cash collateral to the same extent, priority and
validity as their pre-petition liens, to the extent its use of cash
collateral results in a decrease in the value of the Secured
Creditors' interest in the cash collateral.
A copy of the Debtor's motion and budget is available at
https://bit.ly/3TtGhcj from PacerMonitor.com.
The Debtor projects total expenses, on a weekly basis, as follows:
$7,391 for March 19, 2023;
$5,600 for March 26, 2023;
$5,950 for April 2, 2023;
$5,950 for April 9, 2023;
$5,950 for April 16, 2023; and
$9,350 for April 23, 2023.
About The Dive Place II LLC
The Dive Place II LLC is a Scuba Diving International and Technical
Diving International certified dive center which offers open water,
advanced diver, and technical diver certifications, as well as
specialty certifications including drysuit diver, wreck diver,
search and recovery, and deep diver. In addition to its
certification classes, TDP coordinates and conducts special dive
events at a variety of dive sites around the State of Florida and
sells the full range of dive equipment at its retail store in
Winter Garden, Florida.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00907) on March 13,
2023. In the petition signed by Noel Hansen, managing member, the
Debtor disclosed up $500,000 in assets and up to $1 million in
liabilities.
Daniel A. Velasquez, Esq., at Latham Luna Eden and Beaudine LLP,
represents the Debtor as counsel.
DIVERSIFIED MEDICAL: Case Summary & 20 Top Unsecured Creditors
--------------------------------------------------------------
Debtor: Diversified Medical Healthcare, Inc.
6000A Pelham Road
Greenville, SC 29615
Chapter 11 Petition Date: March 21, 2023
Court: United States Bankruptcy Court
District of South Carolina
Case No.: 23-00813
Judge: Hon. Helen E. Burris
Debtor's Counsel: Robert H. Cooper, Esq.
THE COOPER LAW FIRM
150 Milestone Way, Ste B
Greenville, SC 29615
Tel: 864-271-9911
Fax: 864-232-5236
Email: thecooperlawfirm@thecooperlawfirm.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $10 million to $50 million
The petition was signed by Kevin Murdock as sole owner.
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/EVEDM2I/Diversified_Medical_Healthcare__scbke-23-00813__0001.0.pdf?mcid=tGE4TAMA
DLVAM1302 NORTH: Court Confirms Reorganization Plan
---------------------------------------------------
Judge Catherine Peek McEwen has entered an order approving the
Third Disclosure Statement and confirming the Third Plan of
Reorganization of DLVAM1302 North Shore, LLC.
A status conference will be held in, Courtroom 8B, Sam M. Gibbons
United States Courthouse, 801 N. Florida Ave., Tampa, FL 33602 on
July 20, 2023, at 1:30 p.m., before the Honorable Catherine Peek
McEwen, United States Bankruptcy Judge.
The Objection is denied as moot.
The Motion for "Cram-Down" is granted as to Class 2 and denied as
moot as to Class 1.
The Debtor filed a Ballot Tabulation which reflected the acceptance
of at least one impaired class.
Plan amendments made on the record in open court -- the treatment
of Class 1 shall be modified as follows:
HMC Assets, LLC solely in its capacity as Separate Trustee of
CAM XI Trust filed a clam [Claim No. 4] in the amount of
$1,293,300.811 secured by real property located at 302 North Shore
Drive, Ana Maria, Florida. Upon information and belief, the claim
amount was $1,469,700.15 on October 18, 2022. On or before March
28, 2023, claimant will provide the Debtor with a payoff of all
amounts due and owing as of March 27, 2023 (the "March 27 Payoff").
The March 27 Payoff is not a final payoff and Claimant is expressly
permitted to provide the Debtor subsequent payoffs which include
any amounts owed which may accrue subsequent to the March 27
Payoff.
This claim will be paid in full on or before September 25,
2023. The Debtor may extend this deadline by filing a motion prior
to the expiration of the deadline and demonstrating good cause
(i.e. the real property is under contract or the Debtor has
financing in place and is waiting for it to fund) for the
extension. In the event the Debtor is unable to timely pay off this
claim, the automatic stay will be terminated and the Debtor may
take no action to delay the foreclosure process other than what is
provided for in the Plan.
The Court retains jurisdiction to decide any dispute concerning
claimant's payoff(s). Claimant will retain its lien to the same
extent, validity, and priority as existed pre-petition.
Withdrawal of objections/changes of votes made orally on the record
in open court: based on the modification above to Class 1, HMC
voted to accept the Plan.
About DLVAM1302 North Shore
Anna Maria, Fla.-based DLVAM1302 North Shore, LLC filed a petition
for Chapter 11 protection (Bankr. M.D. Fla. Case No. 21-05371) on
Oct. 20, 2021, disclosing $1,988,681 in total assets and $1,585,279
in total liabilities. Floyd Calhoun, manager, signed the
petition.
Judge Catherine Peek McEwen oversees the case.
The Debtor tapped Buddy D. Ford, P.A., as legal counsel.
DVD FACTORY: Taps Law Offices of Michael Jay Berger as Counsel
--------------------------------------------------------------
DVD Factory, Inc. seeks approval from the U.S. Bankruptcy Court for
the Central District of California to employ the Law Offices of
Michael Jay Berger as its bankruptcy counsel.
The firm's services include:
a. communicating with creditors of the Debtor;
b. reviewing the Debtor's Chapter 11 bankruptcy petition and all
supporting schedules;
c. advising the Debtor of its legal rights and obligations in a
bankruptcy proceeding;
d. working to bring the Debtor into full compliance with
reporting requirements of the Office of the U.S. Trustee;
e. preparing status reports as required by the court; and
f. responding to any motions filed in the Debtor's bankruptcy
proceeding.
The hourly rates of the firm's attorneys and staff are as follows:
Michael Jay Berger, Esq. $595
Sofya Davtyan, Senior Associate Attorney $545
Carolyn M. Afari, Mid-level Associate Attorney $435
Robert Poteete, Mid-level Associate Attorney $435
Gary Baddin, Bankruptcy Analyst/Field Agent $275
Senior Paralegals and Law Clerks $250
Bankruptcy Paralegals $200
The firm will be paid a retainer in the amount of $20,000.
Michael Jay Berger, Esq., the sole owner of the Law Offices of
Michael Jay Berger, disclosed in a court filing that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Michael Jay Berger, Esq.
Law Offices of Michael Jay Berger
9454 Wilshire Blvd., 6th Floor
Beverly Hills, CA 90212-2929
Telephone: (310) 271-6223
Facsimile: (310) 271-9805
Email: michael.berger@bankruptcypower.com
About DVD Factory
DVD Factory, Inc., a company in Valencia, Calif., filed its
voluntary petition for Chapter 11 protection (Bankr. C.D. Calif.
Case No. 23-11085) on Feb. 27, 2023, with $1,463,452 in assets and
$2,051,540in liabilities. Daniel J. Quinn, president and chief
executive officer, signed the petition.
Judge Deborah J. Saltzman oversees the case.
The Law Offices of Michael Jay Berger serves as the Debtor's
bankruptcy counsel.
EL MONTE NATURE: Exclusivity Period Extended to April 21
--------------------------------------------------------
Judge Christopher B. Latham of the U.S. Bankruptcy Court for the
Southern District of California further extended El Monte Nature
Preserve, LLC's period during which it may solicit acceptances for
its Second Amende Chapter 11 Plan of Reorganization to April 21,
2023.
About El Monte Nature Preserve
El Monte Nature Preserve, LLC filed for Chapter 11 protection
(Bankr. S.D. Cal. Case No. 22-00971) on April 12, 2022, listing as
much as $50 million in both assets and liabilities. William B.
Adams, manager, signed the petition.
Judge Christopher B. Latham oversees the case.
Michael D. Breslauer, Esq., at Solomon Ward Seidenwurm & Smith, LLP
and Thorsnes Bartolotta McGuire, LLP serve as the Debtor's
bankruptcy counsel and special counsel, respectively.
ELETSON HOLDINGS: Creditors Try to Force Chapter 7 Bankruptcy
-------------------------------------------------------------
Jeremy Hill of Bloomberg News reports that some creditors to
Eletson Holdings Inc. are trying to force the shipping company into
bankruptcy more than a year after it failed to repay over $300
million of bonds, according to court papers.
Holders of more than $200 million of Eletson bonds filed an
involuntary Chapter 7 petition against the company and two
affiliates in New York last week. Eletson hasn't repaid the
principal on its 9.625% notes due last year and hasn't paid
interest on the debt since 2019, according to the creditors.
Lawyers for the company argue the petition is invalid.
"Following several Events of Default and multiple failed attempts
at out-of-court restructurings (that resulted in the Strict
Foreclosure and partial satisfaction of the Notes in 2019), the
Debtors have not made any interest payments on the Notes since due
in 2019 and have failed to pay the Notes on or after their maturity
date. Indeed, other than in connection with the Strict Foreclosure,
the Debtors have never made any cash payme nts on account of the
Notes since their issuance and have failed to provide basic
financial and other reporting information as required under the
Indenture -- such as balance sheets and statements of cash flow,
which should be readily available -- despite repeated requests.
Thus, the Petitioning Creditors have filed the Involuntary
Petitions to ensure a transparent restructuring process for the
Debtors and avoid transactions that diminish the Debtors' estates,
and to obtain the aid of this Court in assuring that all parties
will be dealt with fairly," the Petitioning Creditors said in court
filings.
"The Petitioning Creditors believe that, in light of market
improvements in the shipping industry, there is potentially
significant value at the Debtors that can be available to satisfy
creditors. That said, the shipping industry is very cyclical, and
this value may be quickly lost depending upon market forces. Given
the Debtors' failure to provide basic financial and other
information required under the Indenture, the Petitioning Creditors
have serious concerns that, in light of the Debtors' apparent
financial condition, they are conducting insider and other
affiliate transactions that transfer their assets out of the reach
of creditors and are “conducting [their] financial affairs in a
manner not consistent with one operating in good faith and in the
regular course of business."
About Eletson Holdings
Eletson Holdings Inc. is a family-owned international shipping
company, which touts itself as having a global presence with
headquarters in Piraeus, Greece as well as offices in Stamford,
Connecticut, and London.
At one time, Eletson claimed to ownand operate one of the world’s
largest fleets of medium and long-range product tankers and boasted
a fleet consisting of 17 double hull tankers with a combined
capacity of 1,366,497 dwt, 5 LPG/NH3 carriers with a combined
capacity of 174,730 cbm and 9 LEG carriers with capacity of 108,000
cbm.
Eletson Holdings, a Liberian company, is Eletson’s ultimate
parent company and is the direct parent and owner of 100% of the
equity interests in the two other debtors, Eletson Finance (US)
LLC, and Agathonissos Finance LLC.
Eletson Holdings Inc. and its two affiliates were subject to
involuntary Chapter 7 bankruptcy petitions (Bankr. S.D.N.Y. Case
No. 23-10322) filed on March 7, 2023. The petitions were signed by
alleged creditors Pach Shemen LLC, VR Global Partners, L.P., and
Alpine Partners (BVI), L.P.
The petitioning creditors are represented by:
Kyle J. Ortiz
Togut, Segal & Segal LLP
212-594-5000
kortiz@teamtogut.com
EMPEREON MARKETING: Court OKs Cash Collateral Access Thru April 17
------------------------------------------------------------------
Empereon Marketing LLC sought and obtained entry of an order from
the U.S. Bankruptcy Court for the District of Arizona authorizing
the use of cash collateral on an interim basis through April 17,
2023.
The cash collateral will be used to pay the Debtor's expenses in
the ordinary course of the Debtor's business and financial
affairs.
UMB Bank asserts an interest in the Debtor's cash collateral.
Empereon seeks to restructure under Subchapter V due to
unanticipated leasehold liabilities caused by the COVID-19 pandemic
along with concurrent revenue reduction related to same effects on
the economy. Under Subchapter V no Official Committee of Creditors
will be appointed pursuant to 11 U.S.C. section 1102.
The Debtor's budget contemplates a cash shortfall during the
Interim Period. The Debtor will make all best efforts to generate
sufficient cash to pay all approved expenses set forth in the
Budget. Those efforts include recoveries from the Debtor's
affiliated entities. To the extent the Debtor is unable to generate
sufficient cash, the Debtor may seek authorization for
post-petition financing on an emergency basis.
By no later than March 20, 2023, the Debtor was to report to UMB
its plan for supporting its ongoing post-petition expenses from
cash collateral without the need for additional financing from UMB
or otherwise.
Effective as of the Petition Date, the UMB bank card limit
available to the Debtor is reduced to $100,000.
All of the Debtor's cash collateral as of the Petition Date, and
all postpetition cash collateral received by the Debtor, will be
and remain encumbered by UMB's liens and security interests on a
senior priority basis.
A final hearing on the matter is set for April 18 at 2 pm.
A copy of the motion is available at https://bit.ly/40x7Wvx from
PacerMonitor.com.
A copy of the order is available at https://bit.ly/3YR9xuI from
PacerMonitor.com.
About Empereon Marketing, LLC
Empereon Marketing, LLC dba Empereon-Constar is a business process
outsourcing company providing end-to-end customer engagement and
customer management solutions through two distinct, but affiliated,
privately held entities.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ariz. Case No. 23-01592) on March 14,
2023. In the petition signed by Travis Bowley, chief executive
officer, the Debtor disclosed $6,385,218 in assets and $1,777,954
in liabilities.
Gerald Shelley, Esq., at Fennemore Craig PC, represents the Debtor
as legal counsel.
EXCL LOGISTICS: Files Emergency Bid to Use Cash Collateral
----------------------------------------------------------
Excl Logistics, LLC asks the U.S. Bankruptcy Court for the Western
District of Washington for authority to use cash collateral on an
emergency basis and provide adequate protection.
The Debtor requires the immediate use of cash proceeds from working
capital, collection of customer contracts and accounts receivable
to fund ordinary and necessary operating expenses.
During the first few years of operation, the Company grew rapidly
and expanded beyond its ability to effectively manage its
operation. To fund the rapid expansion, the Company incurred debt
which it was not able to service due to lack of experience in
managing its income and expenses effectively. Going into the
pandemic timeframe, the company's operation grew exponentially, and
the Debtor was able to secure several contracts with shippers and
receivers as well as 3PL companies. At its peak, the Debtor
operated over 200 tractors with a like number of drivers.
As the Debtor's operation grew, the Debtor signed various contracts
and leases for equipment, yard, and office space. During this time
the Debtor employed over 40 internal administrative employees.
Towards the end of 2020 and going into 2021, the Debtor began to
experience a decline in revenues due to performance issues which
the Debtor now believes was primarily due a lack of proper
organizational management structure. The reduction of revenue also
inhibited the Debtor's ability to remain current on debt and lease
payments.
To downsize during the period of revenue decline, it was determined
that the Debtor would purchase its tractors and equipment rather
than lease to save overall expenses and create asset value in the
company. Unfortunately, the Debtor was not in a position at that
time to purchase new equipment and much of the used equipment the
Debtor purchased required repairs to make it DOT-compliant which
resulted in unanticipated expenses.
To mitigate the repair expenses, the Debtor assembled a mechanical
team located close to the Debtor to work exclusively for the Debtor
to make the needed repairs. The Debtor continues to perform needed
repairs to its truck fleet with a goal toward placing all trucks in
services in a short a time as possible. Towards the end of 2022, to
further cut costs and provide more competitive support and service
to existing and future customers, founder, Anil Bhambi, traveled to
India to establish a back-end team to support the U.S. structure of
the Debtor, which substantially reduced operating costs and allowed
the Debtor the opportunity to compete in the changing marketplace.
Towards the end of the Debtor's trip in late February 2023, several
of the Debtor's trucks were repossessed. The repossessed trucks
constituted a substantial portion of the Debtor's operating fleet
without which the Debtor's ability to operated would have been
substantially impaired. In order to stop further repossession and
recover the repossessed trucks, the Debtor filed an emergency
Chapter 11 proceeding.
The creditors that assert an interest in the Debtor's cash
collateral are TBS Factoring Service, LLC, Kautilya Capital, LLC,
Commercial Credit Group, Inc., and BMO Harris Bank.
As adequate protection and for the Debtor's use of the cash
collateral, the secured creditors will be granted replacement liens
in the Debtor's post-petition cash, accounts receivables, and the
proceeds of each of the foregoing, to the same extent and priority
as any duly perfected and unavoidable liens in cash collateral held
by the Secured Creditors as of the Petition Date.
As additional adequate protection, the Debtor proposes to make
monthly interest payments to Secured Creditors, commencing April
15, 2023, and continuing monthly thereafter. The Adequate
Protection Payments total approximately $13,183 on April 14, 2023,
and $23,183 each month thereafter on the 15th day of each month.
A copy of the motion is available at https://bit.ly/3lmoneW from
PacerMonitor.com.
About Excl Logistics, LLC
Excl Logistics, LLC operates a trucking operation providing freight
carrying and logistic services to its customers from its
headquarters located in Snohomish, Washington.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-10364) on February
27, 2023. In the petition signed by Anil Bhambi, managing member,
the Debtor disclosed up to $1 million in assets and up to $10
million in liabilities.
Judge Christopher M. Alston oversees the case.
Thomas D. Neeleman, Esq., at Neeleman Law Group, P.C., represents
the Debtor as legal counsel.
FIRST REPUBLIC: Davis Polk Advises Banks for $30B Rescue
--------------------------------------------------------
Bloomberg reports that Davis Polk & Wardwell advised 11 banks who
deposited $30 billion in First Republic, an effort to rescue the
regional lender and help stabilize the financial system.
The Wall Street law firm advised Bank of America, Citigroup,
JPMorgan Chase and Wells Fargo, Davis Polk said Friday. The banks
each deposited $5 billion in the struggling First Republic, said to
be teetering after the collapse of Silicon Valley Bank and New
York's Signature Bank.
Davis Polk also guided Goldman Sachs and Morgan Stanley, which made
First Republic deposits of $2.5 billion apiece, and BNY Mellon, PNC
Bank, State Street, Truist and US Bank, which each deposited $1
billion.
The move is meant to stem the large outflow of uninsured deposits
at First Republic in the chaos following the SVB and Signature Bank
collapses, the banks said in a statement.
"This show of support by a group of large banks is most welcome,
and demonstrates the resilience of the banking system," the
Treasury Department, Federal Reserve, Federal Deposit Insurance
Corporation and Office of the Comptroller of the Currency said in a
joint statement.
The Davis Polk team was led by Randall D. Guynn, chair of the
firm’s financial institutions practice, and Donald Bernstein,
special counsel to the firm’s restructuring practice. Financial
institutions partners Margaret Tahyar, Luigi De Ghenghi and Eric
McLaughlin, and finance partner James Florack, also advised the
banks.
Financial Institutions counsel Ledina Gocaj and associates Andrew
Rohrkemper and Zachary Stone were also a part to the team based out
Davis Polk’s New York and Washington DC offices.
Sullivan & Cromwell Role
Bloomberg also reports that H. Rodgin "Rodge" Cohen, senior chair
at Sullivan & Cromwell and a key player for the firm during the
2008 financial crisis, is advising First Republic, the law firm
confirmed Friday. Lawyers Catherine Clarkin, Mitch Eitel and
Benjamin Weiner also worked on the deposits deal.
First Republic's most recent annual report listed Sullivan &
Cromwell and Arnold & Porter Kaye Scholer as its primary external
legal advisers.
Sullivan & Cromwell is also advising SVB in its bankruptcy. Court
filings by SVB show that James Bromley, a partner at the firm who
is already representing cryptocurrency exchange FTX in its
bankruptcy, has taken the lead for SVB in that matter.
Some of SVB Financial Group’s bondholders banded together and
were receiving advice from Davis Polk & Wardwell and PJT Partners,
Bloomberg News reported on Thursday.
The Safe Choice
For matters impacting a company's public perception and those at
the board level, clients increasingly gravitate to firms perceived
as a safe choice, said Kent Zimmermann, a law firm management
consultant for the Zeughauser Group.
"Kind of like going to the heart surgeon that's done the exact
procedure you need thousands of times with success," he said.
Cohen was heralded as the "Trauma Surgeon of Wall Street" by the
New York Times following the 2008 global financial crisis. He
worked on 17 financial deals related to the downturn, including JP
Morgan Chase's purchase of Bear Stearns and the bailout of
insurance giant AIG.
Davis Polk & Wardwell also played a central role in working to
rescue key financial players and institutions during the 2008
collapse. Guynn led the Davis Polk team that represented Citigroup
in negotiating its massive government bailout. The firm also
represented the Federal Reserve and the Treasury Department in
several other bailouts, including its rescue of AIG.
"It's like having a very good doctor who knows your medical
history, risk tolerance, and personality," said Dan Awrey, a
professor at Cornell University Law School. "Once you find them,
it’s not clear why you’d ever go anywhere else,” he said.
About First Republic
First Republic Bank is a commercial bank and provider of wealth
management services headquartered in San Francisco. It caters to
high-net-worth individuals. It operates 93 offices in 11 states
primarily in New York, California, Massachusetts, and Florida.
CBS News reports that the sudden collapse of Silicon Valley Bank
(SVB) on March 10, 2023, along with New York's Signature Bank two
days later, has shaken investor confidence in regional lenders like
$213 billion First Republic. In particular, concern has focused on
such lenders' uninsured deposits, or account funds exceeding the
Federal Deposit Insurance Corp.'s $250,000 cap.
First Republic Bank on March 16, 2023, received a $30 billion
rescue package from 11 of the biggest U.S. banks in an effort to
prevent its collapse. JPMorgan Chase, Bank of America, Citigroup
and Wells Fargo have agreed to each put $5 billion in uninsured
deposits into First Republic. Meanwhile Morgan Stanley and Goldman
Sachs would deposit $2.5 billion each into the bank. The remaining
$5 billion would consist of $1 billion contributions from BNY
Mellon, State Street, PNC Bank, Truist and US Bank.
The bank's credit rating on March 17, 2023, was downgraded by S&P
Global Ratings, which said the rescue package should ease near-term
liquidity pressures, but "may not solve the substantial business,
liquidity, funding and profitability challenges" that it believes
the San Francisco-based bank is now likely facing.
First Republic has tapped investment bank Lazard Ltd to help it
explore strategic options, the Wall Street Journal reported, citing
people familiar with the matter.
About SVB Financial Group
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. On the morning of
March 10, 2023, the California Department of Financial Protection
and Innovation seized SVB and placed it under the receivership of
the Federal Deposit Insurance Corporation (FDIC). SVB was the
nation's 16th largest bank and the biggest to fail since the 2008
financial meltdown.
On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 23-10367). The Hon. Martin
Glenn is the bankruptcy judge.
The Debtor had assets of $19,679,000,000 and liabilities of
$3,675,000,000 as of Dec. 31, 2022.
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. Kroll is the claims agent.
FIRSTOX LABORATORIES: Case Summary & 20 Top Unsecured Creditors
---------------------------------------------------------------
Debtor: Firstox Laboratories, LLC
6000A Pelham Road
Greenville, SC 29615
Chapter 11 Petition Date: March 21, 2023
Court: United States Bankruptcy Court
District of South Carolina
Case No.: 23-00821
Judge: Hon. Helen E. Burris
Debtor's Counsel: Robert H. Cooper, Esq.
THE COOPER LAW FIRM
150 Milestone Way, Ste B
Greenville, SC 29615
Tel: 864-271-9911
Fax: 864-232-5236
Email:
thecooperlawfirm@thecooperlawfirm.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Kevin Murdock as managing/sole member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/E2FQHNI/Firstox_Laboratories_LLC__scbke-23-00821__0001.0.pdf?mcid=tGE4TAMA
FONDUE 26: Seeks Cash Collateral Access
---------------------------------------
Fondue 26, LLC, dba the Ainsworth, asks the U.S. Bankruptcy Court
for the Southern District of New York for authority to use cash
collateral and pay pre-petition wages to employees in amounts not
to exceed $13,650, which is the statutory limitation for
classification as a priority claim pursuant to 11 U.S.C. section
507(4).
The Debtor has operated successfully for 15 years. The Debtor's
current financial predicament is the result of a decrease in
revenue suffered as a result of the COVID-19 pandemic and supply
chain difficulties. Although the Debtor's business improved with
the relaxing of COVID-19 restrictions and the improvement of supply
chain challenges, the Debtor suffered serious setbacks due to the
unscrupulous actions of a former member, who improperly and
vindictively surrendered the Debtor's liquor license to the State
Liquor Authority. This forced the Debtor to cease operating for
approximately five months. Although through litigation, the Debtor
was able to resume serving alcohol, the Debtor's inability to
collect revenue for an extended period created a severe strain on
its finances and caused it to fall further behind in payments to
its landlord and vendors.
The Debtor's goal is to continue operations and pay creditors from
revenue. The Debtor anticipates a robust March due primarily to
the "March Madness" basketball tournament. As set forth on the
budget, the Debtor estimates March revenue to be $375,000 and
expenses to be $218,250. The Debtor expects a profit of $57,750 in
March. In April, due to the Passover and Easter Holidays, the
Debtor anticipates there will be less revenue.
The U.S. Small Business Administration appears to be the only
secured creditor. According to the Debtor, the SBA is due $2
million on an EIDL loan. No payment amounts are due at this time.
Indeed, according to the Debtor, payments are not to commence until
August 2023.
As adequate protection for the Debtor's use of cash collateral, the
Debtor proposes to grant the SBA replacement liens in all of the
Debtor's pre-petition and post-petition assets and proceeds,
including receivables, rents and contract rights and the proceeds
of the foregoing, to the extent that it had a valid security
interest in said pre-petition assets and in the continuing order of
priority that existed as of the Debtor's bankruptcy filing.
The replacement liens will be subject and subordinate to (a)
professional fees of the Subchapter V Trustee and (b) duly retained
professionals in the Chapter 11 case.
A copy of the motion is available at https://bit.ly/3YVEOge from
PacerMonitor.com.
About Fondue 26, LLC
Fondue 26, LLC operates sports bar, restaurant, and private event
venues. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-10306) on March 2,
2023. In the petition signed by Matthew Shendell, managing member,
the Debtor disclosed up to $50,000 in assets and up to $10 million
in liabilities.
Judge Martin Glenn oversees the case.
Anne Penachio, Esq., at Penachio Malara, LLP, represents the Debtor
as legal counsel.
FULL HOUSE: S&P Affirms 'B-' ICR on Temporary Casino Opening
------------------------------------------------------------
S&P Global Ratings affirmed all ratings, including its 'B-' issuer
credit rating on regional gaming operator Full House Resorts Inc.
The stable outlook reflects S&P's expectation that Full House's
adjusted debt to EBITDA will improve to high-5x in 2023 from above
10x at the end of 2022 and that the company has sufficient
liquidity to complete the remaining development spending on
Chamonix, which it plans to open by the end of 2023.
The opening of The Temporary by American Place should result in
material deleveraging in 2023.The February 2023 opening of the
company's temporary casino in Waukegan represents a significant
milestone in the company's growth strategy. Full House indicated it
expects revenue from the temporary facility could be over $100
million per year based on initial results following its opening. If
the property ramps up to this level of revenue, it would represent
approximately double the company's gaming revenue and an
approximate 60% increase in total revenue.
S&P said, "Although newly opened casinos can often face operational
challenges in the initial months after opening, we believe the
challenges Full House experienced, including its inability to
initially open all its permitted gaming positions (1,000 slot
machines and 50 table games) because of staffing challenges and
limited hours, were largely driven by the uncertain opening date.
Now, as the company opens its gaming positions toward full
capacity, increases staffing, develops and markets more effectively
to a database, and increases its hours of operation, we expect
further revenue and EBITDA growth. Additionally, we expect revenue
growth from the temporary facility in addition to the relatively
high flow through from slot machines and limited lower-margin
amenities should result in a material increase in EBITDA in 2023.
We assume the temporary facility generates approximately $30
million in EBITDA in 2023. This would significantly reduce leverage
to below 6x by the end of 2023 from above 10x at the end of 2022
(largely due to the delay in opening the temporary casino).
"We believe Full House has sufficient liquidity to complete its
development projects, service its capital structure, and withstand
some operational volatility within its portfolio. Full House had
roughly $214 million of cash on its balance sheet as of Feb. 21,
2023, including about $110 million in restricted cash for the
completion of its Chamonix project. Aside from remaining
construction costs for Chamonix, which will be funded with
restricted cash, Full House's other material uses of cash this year
include $35 million-$50 million of license fee payments to the
Illinois Gaming Board, $37 million of interest related to its
senior secured notes, and modest maintenance capital expenditures
(capex). Full House's capital structure consists of a $40 million
revolving credit facility and fixed-rate senior secured notes.
Therefore, the company does not face significant interest rate risk
in the current rising rate environment."
In addition to current large cash balances, incremental cash flows
from the temporary casino at Waukegan and the opening of Chamonix
later this year will add more cash flow to its existing asset
portfolio. Full House faced cost overruns and construction delays
with its Chamonix project due to supply chain issues, inflation,
tariffs on raw materials, and the difficult construction
environment (including relatively low unemployment in Colorado). It
managed these cost overruns with existing liquidity and cash flow
generation, and estimates the remaining construction costs are
roughly equal to its restricted cash balance. Construction
disruption at Chamonix also impaired operations at its Bronco
Billy's casino, which currently functions without nearby parking
and with reduced gaming positions. The company now expects Chamonix
will open by the end of 2023 instead of our prior expectation of
mid-2023 (a delay from the originally planned fourth-quarter 2022
opening). Once open, Chamonix should further add to EBITDA and cash
flow generation.
The American Place development could improve the company's
competitive position, scale, and cash flow diversity, but inherent
risk, and development could increase leverage. Full House was
selected by the Illinois Gaming Board to build a casino resort in
Waukegan, midway between Milwaukee, Wis., and Chicago. The company
expects the entire development to cost approximately $500 million,
including the temporary casino, permanent casino, boutique hotel,
and various nongaming amenities. Given the construction delays with
the temporary facility, S&P does not expect the permanent facility
to open before 2025.
Full House could finance the permanent facility with incremental
debt, equity, and cash flow from the temporary casino. However, the
company has not outlined the financing package. S&P said,
"Therefore, we do not know how it will affect leverage and will
depend on the mix of debt and equity the company uses to fund the
development. We believe the company will first focus on ramping up
its temporary facility and will likely not pursue incremental debt
financing for the permanent facility in 2023. Therefore, we did not
reflect the permanent development in our 2023 forecast, but note
Full House could incur significant development spending beginning
in 2024. We assume that the temporary facility could generate about
$40 million in incremental EBITDA in 2024 after it ramps up."
Furthermore, S&P believes the temporary facility will allow Full
House to generate cash flow to support the permanent casino
development and gradually introduce its offerings and amenities to
the market, allowing Full House to test market dynamics in Waukegan
before opening the permanent downtown Chicago casino.
Although the new casino would enhance Full House's diversity and
scale, greenfield projects have high risks in ramping up operations
and generating cash, which can strain liquidity within the first
few quarters of operations. Attracting customers to a new property
is a significant risk, particularly in a highly competitive market
with existing operators that are parts of larger, diversified
gaming companies. Moreover, if the economy weakens during
construction, visitation, revenues, and cash flow could decrease
more than expected at both the temporary and permanent facilities,
as gaming relies on consumer discretionary spending and is highly
sensitive to economic conditions.
The company faces competitive pressure from larger,
better-capitalized rivals and is vulnerable to regional events.
Full House's properties are generally not market leaders in their
respective markets. The Chicagoland market has high gaming supply.
The American Place will target the northern suburbs of Chicago
competing with four existing casinos in an approximately 50-mile
radius in Illinois and Wisconsin, and larger regional gaming
operators own many of these properties, including the Grand
Victoria (within 30 miles), operated by Caesars Entertainment Inc.,
Hollywood Casino Aurora (within 50 miles), operated by Penn
National Gaming Inc., and Rivers Casino Des Plaines (within 25
miles), operated by Midwest Gaming. Compared with Full House, these
operators have greater resources to invest in marketing and
promotions. Additionally, these casino operators have sizeable
player databases and in the case of Caesars and Penn National boast
much larger player databases with coordinated player loyalty
programs designed to cross-promote their other properties.
Furthermore, the gaming expansion in the Chicagoland market--which
includes Full House's development in the north suburbs, a new
racino in Hawthorne (located about 45 miles south of Waukegan) and
Bally's Corp.'s construction of a casino resort in downtown
Chicago--could further hinder Full House from ramping up its
operations and establishing itself long term. Like Full House,
Bally's plans to open a temporary casino in downtown Chicago in
2023.
Additionally, many of Full House's competitors have better brand
recognition including Harrah's, Hard Rock, and Hollywood given that
these are well-established and recognizable brands. Given Full
House's small scale, it can't invest substantially in its
properties without incremental financing, resulting in
lower-quality assets with fewer amenities. Furthermore, the company
is particularly vulnerable to regional events, including natural
disasters, like hurricanes, and other adverse events, like changes
in the competitive landscape. This could hamper visitation and
spending at the Silver Slipper, given its revenue and EBITDA
concentration in Mississippi. Through the fourth-quarter 2022, Full
House generated about 50% of its revenue and 52% of its adjusted
segment EBITDA from Silver Slipper. However, once the temporary
casino in Waukegan ramps up and the Chamonix is complete, S&P
expects Full House's scale to improve materially and its reliance
on Mississippi will fall.
S&P said, "The stable outlook reflects our expectation that Full
House's S&P Global Ratings-adjusted debt to EBITDA will improve to
high-5x by the end of 2023 from above 10x in 2022 because of
incremental cash flow from its temporary Waukegan casino.
Additionally, it reflects our view that the company has sufficient
liquidity to complete the remaining development spending on
Chamonix, which it plans to open by the end of 2023."
S&P could lower its rating on Full House if:
-- Its projects face further construction delays or cost overruns
that strain its liquidity or require it to seek additional funding.
Specifically, leverage deviates materially from our base-case
forecast or the temporary casino or Chamonix project expand slower
than it expects;
-- S&P believes its capital structure is unsustainable; or
-- The company finances its permanent Waukegan facility with debt
that strains its liquidity or causes us to question the
sustainability of its capital structure.
S&P said, "It is unlikely that we will raise the rating before next
year until. Then, we can assess operations at its Chamonix and
temporary Waukegan casinos and evaluate its construction timeline
and planned financing for its permanent Waukegan casino. The size
of this casino project and expected incremental debt may limit our
rating until Full House opens the facility. To raise the rating, we
would also need to believe that Full House could sustain leverage
below 6.5x, interest coverage above 2x, and generate positive
FOCF."
ESG credit indicators: E-2, S-3, G-2
Social factors are a moderately negative consideration in S&P's
credit rating analysis of Full House. Despite impaired revenue and
cash flow in 2020 from casino closures and subsequent operating and
capacity restrictions, regional casino operators such as Full House
recovered strongly when casinos reopened. Nonetheless, while S&P
views the pandemic as a rare and extreme disruption unlikely to
recur at the same magnitude, safety and health scares are an
ongoing risk. Full House is also exposed to regulatory risks as the
company is subject to high regulation across the jurisdictions
where it operates.
GPD COMPANIES: Moody's Affirms B2 CFR & Alters Outlook to Negative
------------------------------------------------------------------
Moody's Investors Service affirmed GPD Companies, Inc.'s B2
corporate family rating, B2-PD probability of default rating and B3
senior secured rating. Moody's changed the rating outlook to
negative from stable due to weak operating performance and weak
credit metrics.
Affirmations:
Issuer: GPD Companies, Inc.
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Senior Secured Regular Bond/Debenture, Affirmed B3 (LGD4)
Outlook Actions:
Issuer: GPD Companies, Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
GPD's B2 corporate family rating reflects good market position and
geographic and customer diversification, offset by high balance
sheet leverage and low operating margins and supplier concentration
risk. The company has been negatively impacted by customer
destocking and declining resin prices, leaving it with higher
priced unsold inventory that negatively impacted margins. Moody's
adjusted EBITDA margins, which are typically low for distributors,
declined further to 2.9% in the twelve months ended December 2022
from a high of 6% during the post-COVID rebound in 2021 and 4.4% in
2020. As a result Moody's adjusted debt/EBITDA rose to 8.7x as of
December 2022. Moody's expects margin improvement as the company
has worked through higher cost inventory and releases working
capital, lowering leverage down to 6.7x in fiscal 2023, which is
still high for the rating. The company needs to demonstrate margin
improvement for a few consecutive quarters, generate free cash flow
and improve leverage metrics to maintain the rating. In addition,
while the company has extended its revolver to October 2025, it
needs to bring leverage down and generate consistent free cash flow
to reduce refinancing risk. The company's notes mature in 2026.
Risks to margin and EBITDA improvement include weaker than expected
growth and continued decline in volume. The company has implemented
improved inventory management process to better manage its
inventory levels and customer orders.
The company benefits from its asset-light model that requires
minimal capex and supports free cash flow generation. The rating
also reflects the company's leading market share positions in
plastics distribution North America and Europe, good end-market and
customer diversification, long-term relationships with customers
and broad product offering, engineered thermoplastics. The company
generates about half of sales from engineered thermoplastics, which
are specified into customer production and generate higher gross
unit margins than commodity polypropylene and polyethylene sales.
GPD's liquidity is good, supported by cash on hand, projected free
cash flow generation over the next 12 months and revolver
availability. The company had $37 million cash on hand as of
December 2022. The company also has a $270 million ABL revolver
with approximately $125.7 million outstanding as of December 31,
2022 and $68 million undrawn available. The facility matures in
October 2025. The revolver contains a springing fixed charge
coverage ratio test that does not become effective unless excess
availability plus suppressed availability falls below 17.5% of the
facility or $40.5 million. Moody's does not expect the covenants
will be tested in the near term. There are no near-term maturities,
but notes mature in 2026. The majority of assets are encumbered by
the revolver and secured notes, leaving little alternative
liquidity sources.
The negative rating outlook reflects sequential decline in
operating margin and weak credit metrics.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's would consider upgrading the rating, if the company targets
a more conservative balance sheet leverage target, exhibits
top-line growth, organically or inorganically, that drives EBITDA
growth and manages leverage to below 4.0x on a consistent basis.
Given Moody's negative outlook, the company needs to demonstrate
return to normalized profit margins over the next few quarters.
Moody's would likely consider a downgrade if leverage were
sustained above 5.0x or if EBITDA margins remain below 4.0% or if
free cash flow turns negative again and borrowings on the revolver
increase. Debt funded M&A activity amidst already stressed credit
metrics could also lead to a downgrade.
GPD Companies, Inc., based in The Woodlands, Texas, is a holding
company formed by One Rock Capital Partners LLC. Its operational
entities currently include Nexeo Plastics, a leading plastics
distributor in North America and Europe, as well as Distrupol, a
leading plastics distributor in the UK and Nordic regions. Annual
revenues for the LTM December 31, 2022 were roughly $2.5 billion.
The principal methodology used in these ratings was Chemicals
published in June 2022.
GULF COAST TRANS: Court OKs Cash Collateral Access Thru May 4
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, has authorized Gulf Coast Transportation, Inc. to
continue using cash collateral on an interim basis until May 4,
2023.
The Court will hold another hearing on the Debtor's continued
access that day.
The Court previously permitted the Debtor to use cash collateral up
to a maximum amount of $25,000 on an interim basis in accordance
with the budget, with a 10% variance, through March 20 hearing.
The Debtor's primary secured creditor is the U.S. Small Business
Administration in the amount of $500,000 for an Economic Injury
Disaster Loan. The Lender filed a UCC financing statement asserting
a security interest in, among other things, all accounts
receivable.
As adequate protection, the SBA is granted a replacement lien to
the same extent, validity, and priority as existed on the Petition
Date.
The Debtor is entitled to collect money from parties with
outstanding accounts receivable to the Debtor and no creditor or
party in interest will interfere with the Debtor's collection
actions.
The Debtor will maintain insurance coverage for the collateral in
accordance with the obligations under the loan and security
documents.
The Debtor projects total operating expenses of $14,712 for the
week ending March 24, 2023.
A copy of the Court's previous order and the Debtor's budget is
available at https://bit.ly/3YZMMEW from PacerMonitor.com.
About Gulf Coast Transportation, Inc.
Gulf Coast Transportation, Inc. sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00872) on
March 8, 2023. In the petition signed by Justin Morgaman, vice
president, the Debtor disclosed up to $1 million in both assets and
liabilities.
Judge Roberta A. Colton oversees the case.
Edward J. Peterson, Esq., at Johnson, Pope, Bokor Ruppel & Burns,
LLP, represents the Debtor as legal counsel.
HARRIS ENERGY: Seeks Cash Collateral Access
-------------------------------------------
Harris Energy Group, Inc. and affiliates ask the U.S. Bankruptcy
Court for the Eastern District of Wisconsin for authority to use
cash collateral and provide adequate protection.
The Debtors have an immediate need to use their cash to fund the
chapter 11 cases and operate their businesses. The Debtors intend
to use the funds to pay expenses relating to payroll, utilities,
professional services, insurance, and maintenance and repairs.
The Debtors collectively hold cash on hand of approximately
$130,000 and accounts receivable of approximately $85,000.
The entities that assert an interest in the Debtor's cash
collateral are Juhl Clean Energy Assets, Inc., The Stephenson
National Bank and Trust, Berutti Energy LLC, and Gambit LLC.
On December 17, 2017, Juhl, Flambeau Hydro, LLC, and Renewable
World Energies, LLC entered into a Loan Agreement under which Juhl
loaned to Flambeau Hydro $7 million to be used for debt retirement,
capital improvements, and other general business purposes.
On August 26, 2021, Juhl, Flambeau Hydro, and RWE entered into the
Amended and Restated Loan Agreement under which Juhl loaned to
Flambeau Hydro an additional $1.8 million to be used for costs
associated with a transformer purchase and interconnection upgrade
at Flambeau Hydro's Maquoketa hydroelectric power plant, the
acquisition of Eau Galle Hydro, LLC, and for other general business
purposes.
On March 18, 2022, Juhl, Flambeau Hydro, and RWE entered into a
Memorandum of Understanding under which Flambeau Hydro sought
additional financing to, among other things, (a) refinance existing
debt with SNBT, (b) refinance the 2021 Note, (c) repurchase and
recapitalize Grande Pointe Power Corporation, and (d) fund capital
improvements for one of Iowa Hydro, LLC's hydroelectric
facilities.
On May 23, 2022, Juhl, Flambeau Hydro, and RWE entered into a
Second Amended and Restated Loan Agreement under which Juhl loaned
to Flambeau Hydro an addition $6.5 million (which retired the 2021
Loan) for the purposes set forth in the March 18, 2022 memorandum
of understanding.
In addition, Juhl extended a $250,000 line of credit.
Based on the 2017 Loan, the 2022 Loan, and the line of credit, the
Debtors believe that the principal balance owing to Juhl is $13.750
million.
In 2015, RWE and SNBT executed a Revolving Credit and Term Loan
Agreement under which SNBT loaned to RWE $3.3 million. On December
21, 2017, the parties refinanced the 2015 Loan. RWE executed a
promissory note payable to SNBT in the principal amount of $6.61
million. The Debtors believe that the current balance is $1.956
million.
On September 20, 2022, Sugarloaf Hydro, LLC executed a Promissory
Note payable to Berutti Energy in the principal amount of $550,000,
with interest accruing at the rate of 10% per annum, and a
six-month maturity date. HEG and LCO Hydro, LLC each executed
personal guaranties in favor of Berutti Energy. In addition, HEG
granted Berutti Energy a continuing security interest in HEG's
membership interest in LCO. That same day, HEG executed a
Collateral Assignment of Membership Interest in favor of Berutti
Energy.
On December 29, 2022, Sugarloaf Hydro executed an Amended
Promissory Note which increased the principal balance to $625,000,
and had a maturity date of March 19, 2023. The outstanding balance
remains at $625,000. On March 3, 2023, Berutti Energy filed a UCC
financing statement (20230306000383-6) indicating a security
interest in HEG's membership interest in LCO.
On March 10, 2023, the Debtors executed a promissory note in favor
of Gambit LLC for $250,000, with the funds used to pay retainers to
the Debtors' proposed professionals.
The Debtors propose interest-only adequate protection payments to
Juhl, SNBT and Berutti:
(a) Juhl: Interest-only payments in the amount of $84,760 to
commence on April 28, 2023, and to continue each month thereafter.
(b) SBNT: Interest-only payments in the amount of $9,618, to
commence on or before April 28, 2023, and to continue each month
thereafter.
(c) Berutti Energy: Interest-only payments in the amount of
$5,137, to commence on or before April 28, 2023, and to continue
each month thereafter.
The Debtors also believe those secured creditors are adequately
protected by substantial equity cushions. In addition, the Debtors
will (a) keep in full force and effect all casualty insurance and
(b) provide reports of their receipts and distributions consistent
with the monthly reporting requirements for chapter 11 cases.
A copy of the Debtors' motion and budget is available at
https://bit.ly/3ToiI4G from PacerMonitor.com.
The Debtor projects total disbursements, on a weekly basis, as
follows:
$68,715 for the week ending March 24, 2023;
$68,715 for the week ending March 31, 2023;
$68,715 for the week ending April 7, 2023;
$68,715 for the week ending April 14, 2023;
$68,715 for the week ending April 21, 2023; and
$68,715 for the week ending April 28, 2023.
About Harris Energy Group, Inc.
Harris Energy Group, Inc. and affiliates own, operate, and develop
hydroelectric power plants in Wisconsin, Michigan, Iowa, and
Illinois, generating power for sale to public utilities,
governmental agencies, and private power producers. The plants
generate power when water from rivers or lakes flows through the
blades of a turbine. The turbines are connected to a generator that
makes electricity, which is then sold to either the Midcontinent
Independent System Operation or other public entities or private
companies through power purchase agreements.
Harris Energy and its affiliates sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. E.D. Wisc. Lead Case No.
23-21117) on March 16, 2023. In the petition signed by William D.
Harris, chairman, HEG disclosed up to $50,000 in assets and up to
$1 million in liabilities.
Paul G. Swanson, Esq., at Steinhilber Swanson LLP, represents the
Debtors as legal counsel.
HYRECAR INC: Taps Zukin Partners as Investment Banker
-----------------------------------------------------
Hyrecar Inc. received approval from the U.S. Bankruptcy Court for
the District of Delaware to employ Zukin Partners, LLC as
investment banker.
The Debtor requires an investment banker to:
(a) assist in identifying potential acquirers;
(b) prepare marketing materials for distribution and
presentation to third parties interested in exploring a transaction
including a confidential information memorandum (CIM) and a
"teaser" summary of the CIM assisting the Debtor in establishing an
electronic data room and data room procedures;
(c) assist the Debtor in planning for dialogue with and
presentation to parties to a potential transaction;
(d) advise the Debtor in qualifying bidders to participate in a
transaction; and
(e) provide other services necessary to accomplish a transaction
including testimony if requested; and
(f) coordinate with the Debtor's legal counsel regarding matters
related to the negotiation of transaction documents, approval of a
transaction in bankruptcy court and the closing of a transaction.
The firm will be paid as follows:
-- A retainer of $50,000 to be credited against any closing
fee.
-- $110,000 in advisory fees, paid in weekly installments of
$10,000, beginning the first Friday after the court's entry of an
order approving Zukin's employment, which will be credited against
any closing fee.
-- Closing fee of $195,000, less the retainer and advisory fees
previously paid, plus (a) 3 percent of the transaction value, if
any, to the Debtor in excess of $8,207,500 and up to $10,000,000;
(b) 6 percent of the transaction value, if any, to the Debtor in
excess of $10,000,000, and up to $20,000,000; and (c) 4 percent of
the transaction value, if any, to the Debtor in excess of
$20,000,000.
James Zukin, a managing partner at Zukin Partners, disclosed in a
court filing that his firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
James Zukin
Zukin Partners, LLC
11726 San Vicente Blvd Suite 222
Los Angeles, CA 90049
Tel: (424) 317-0178
Email: info@zukinpartners.com
About Hyrecar Inc.
HyreCar Inc. is a nationwide leader operating a carsharing
marketplace for ridesharing and food and package delivery
nationwide via its proprietary technology platform.
HyreCar filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 23-10259) on Feb. 25,
2023, with $1 million to $10 million in both assets and
liabilities. Mark Allen, manager of HyreCar, signed the petition.
The Debtor tapped Andrew J. Roth-Moore, Esq., at Cole Schotz, P.C.
as legal counsel and Zukin Partners, LLC as investment banker.
INDIGO PALMS: No Resident Complaints, 5th PCO Report Says
---------------------------------------------------------
The patient care ombudsman for Indigo Palms, LLC, filed with the
U.S. Bankruptcy Court for the Middle District of Florida a fifth
report regarding the quality of patient care provided at the
company's assisted living facility in Daytona Beach, Calif.
According to the report, which covers the period Dec. 21, 2022,
through Feb. 20, 2023, no complaints concerning the medical care
being provided at the facility were filed with the ombudsman
program by or on behalf of residents during the reporting period.
The PCO's designee contacted five families of residents via
telephone to discuss the care their loved ones receive. Most family
members are content with the services being provided. Residents are
encouraged to do what they can for themselves but receive
assistance with their activities of daily living as needed. There
were no concerns regarding medications, doctor visits, or
transportation.
In addition, two of the five family members do the laundry of their
resident family member. The other family members voiced no
complaints about laundry. Family members stated to contact Darren
Pedigo, LPN, Resident Care Coordinator, if they have any concerns
to address. The family members indicated that they understand how
to contact the Ombudsman Program if they have any concerns or
questions.
In terms of staffing requirement, Indigo Palms consistently
exceeded the minimum requirement during the reporting period based
on the PCO's review of staff schedules and payroll reports.
A copy of the fifth ombudsman report is available for free at
https://bit.ly/3JqmXbh from PacerMonitor.com.
The PCO can be reached through her attorney:
Ana M. Gargollo-McDonald, Esq.
Legal Advocate
Department of Elder Affairs, LTCOP
4040 Esplanade Way
Tallahassee, FL 32399
Telephone: (850)414-2181
Email: mcdonalda@elderaffairs.org
About Indigo Palms
A Florida limited liability company, Indigo Palms, LLC leases and
operates an assisted living facility located at 507 Healthcare
Drive, Daytona Beach, Fla.
Indigo Palms filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-01080) on March 25,
2022, with up to $100,000 in assets and up to $10 million in
liabilities. Robert Altman serves as Subchapter V trustee.
Judge Tiffany Payne Geyer oversees the case.
Kenneth D. Herron, Jr., Esq. at Herron Hill Law Group, PLLC, serves
as the Debtor's legal counsel.
The patient care ombudsman appointed in the Debtor's case is
represented by Lynn C. Hearn, Esq.
INTEGRATED COOLING: Court OKs Interim Cash Collateral Access
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Florida,
Pensacola Division, authorized Integrated Cooling Experts, Inc. to
use cash collateral effective as of the petition date.
The Debtor is authorized to utilize the cash collateral that United
Refrigeration, Inc. has an interest in through the date of the
final hearing on the Motion, conditioned on the Debtor paying
United $500 per month, with the first payment being due April 3,
2023.
As adequate protection, United will have a replacement lien and
security interest in the Debtor's assets to the same extent United
held a properly perfected prepetition security interest or lien in
assets immediately prior to the bankruptcy filing.
Hancock Whitney Bank is directed to release garnished funds in the
amount of $6,671.
A copy of the motion is available at https://bit.ly/3FBfNzX from
PacerMonitor.com.
About Integrated Cooling Experts, Inc.
Integrated Cooling Experts, Inc. operates an HVAC and equipment
repair and installation business in Gulf Breeze, Florida.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Fla. Case No. 23-30159) on March 13,
2023. In the petition signed by Daniel Cotton, president, the
Debtor disclosed up to $50,000 in assets and up to $500,000 in
liabilities.
Judge Jerry C. Oldshue, Jr.
Byron W. Wright III, Esq., at Bruner Wright, P.A., represents the
Debtor as legal counsel.
INVACARE CORPORATION: Taps Baker & Hostetler as Special Counsel
---------------------------------------------------------------
Invacare Corporation and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ Baker
& Hostetler, LLP as special counsel.
The Debtors need the firm's legal assistance in connection with the
Master Information Technology Services Agreement they entered into
with Birlasoft Solutions Inc., and any potential litigation related
to the agreement.
The firm will be paid at these rates:
Partners $580 to $940 per hour
Of Counsel $520 per hour
Associates $395 per hour
Paraprofessionals $225 per hour
During the 90 days immediately preceding the petition date, Baker &
Hostetler received $283,721.91 in payments from the Debtors on
account of pre-bankruptcy fees and expenses.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Baker &
Hostetler disclosed the following:
Question: Did Baker & Hostetler agree to any variations from,
or alternatives to, its standard billing arrangements for
this engagement?
Answer: Yes. Baker & Hostetler has agreed to a discounted rate
structure for this matter. The firm has agreed to a 10% courtesy
discount on the Birlasoft matter from its standard billing rates.
Question: Do any of the Baker & Hostetler professionals in
this engagement vary their rate based on the geographic
location of the Debtors' Chapter 11 cases?
Answer: No.
Question: If Baker & Hostetler has represented the Debtors in
the 12 months prepetition, disclose Baker & Hostetler's billing
rates and material financial terms for the prepetition engagement,
including any adjustments during the 12 months prepetition. If
Baker & Hostetler's billing rates and material financial terms have
changed postpetition, explain the difference and the reasons for
the difference.
Answer: Baker & Hostetler's current hourly rates for services
rendered on behalf of the Debtors range as follows: (1) Partners,
$580 to $940 per hour; (2) Of Counsel, $520 per hour; (3)
Associates, $395 per hour; (4) Paraprofessionals, $225 per hour.
Baker & Hostetler represented the Debtors during the 12-month
period before the petition date using the following hourly rates:
(1) Partners, $580 to $940 per hour; (2) Of Counsel, $520 per hour;
(3) Associates, $320 to $475 per hour; (4) Paraprofessionals, $275
to $320 per hour.
Question: Have the Debtors approved Baker & Hostetler's budget
and staffing plan, and, if so, for what budget period?
Answer: Yes, for the period from the petition date through
July 31, 2023.
Michael VanNiel, Esq., a partner at Baker & Hostetler, disclosed in
a court filing that the firm's attorneys neither hold nor represent
any interest adverse to the Debtors and their estates.
The firm can be reached at:
Michael A. VanNiel, Esq.
Baker & Hostetler, LLP
Key Tower 127 Public Square, Suite 2000
Cleveland, OH 44114-1214
Tel: +1.216.861.7698
Fax: +1.216.696.0740
Email: mvanniel@bakerlaw.com
About Invacare Corporation
Headquartered in Elyria, Ohio, Invacare Corporation (IVC) is a
leading manufacturer and distributor in its markets for medical
equipment used in non-acute care settings. The company provides
clinically complex medical device solutions for congenital (e.g.,
cerebral palsy, muscular dystrophy, spina bifida), acquired (e.g.,
stroke, spinal cord injury, traumatic brain injury, post-acute
recovery, pressure ulcers) and degenerative (e.g., ALS, multiple
sclerosis, elderly, bariatric) ailments. Invacare employs
approximately 3,400 associates and markets its products in more
than 100 countries around the world.
Invacare Corp. and two U.S. subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case
No. 23-90068) on Jan. 31, 2023. In the petition signed by Kathleen
Leneghan, senior vice president and chief financial
officer, Invacare Corp. disclosed $500 million to $1 billion in
both assets and liabilities.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Kirkland and Ellis, McDonald Hopkins, LLC and
Jackson Walker, LLP as bankruptcy counsels; Baker & Hostetler, LLP
as special counsel; Huron Consulting Services, LLC as financial
advisor; Miller Buckfire & Co., LLC as investment banker; and Epiq
Corporate Restructuring, LLC as claims, noticing and solicitation
agent and administrative advisor. Street Advisory Group, LLC serves
as strategic communications advisor to the Debtors.
The DIP Term Loan Lenders led by Cantor Fitzgerald Securities, as
administrative agent, and GLAS Trust Corporation Limited, as
collateral agent, retained Davis Polk & Wardwell LLP, Ducera
Partners, Porter Hedges LLP, Baker & McKenzie LLP, McDermott Will &
Emery LLP, Shipman & Goodwin LLP as advisors.
PNC Bank, National Association, and the ABL DIP Lenders, retained
Blank Rome LLP, and B. Riley Advisory Services as advisors.
Brown Rudnick LLP serves as legal counsel while GLC Advisors & Co.,
LLC serves as investment banker to the ad hoc committee of
unsecured notes.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Kilpatrick Townsend & Stockton, LLP.
INVACARE CORPORATION: Taps Huron Consulting as Financial Advisor
----------------------------------------------------------------
Invacare Corporation and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ Huron
Consulting Services, LLC as their financial advisor.
The firm's services include:
A. Financial Advisory Services
1. Assist in the development of a plan of reorganization
and disclosure statement;
2. Provide expert testimony in support of a reorganization
plan, disclosure statement and other matters as needed;
3. Support the bankruptcy reporting requirements (e.g.,
statements of financial affairs, schedules of assets and
liabilities, and monthly operating reports);
4. Assist with the ongoing management of the
debtor-in-possession (DIP) budget and any required reporting under
the DIP credit agreement;
5. Assist in analyzing and developing potential strategies
to address the Debtors' existing obligations and liabilities,
including (i) determining potential creditor recoveries under
alternative scenarios; and (ii) claims reconciliation and
objections; and
6. Support the Debtors and their advisors in managing and
responding to data requests from various constituents.
B. Transformation Services
1. Lead the CIM preparation, due diligence, evaluation of
potential buyer proposals, and buyer negotiations related to
potential sales of assets or business segments as requested by the
Debtors;
2. In conjunction with the Debtors' initiative sponsors,
help accelerate the execution of the consolidation of the North
American manufacturing footprint to enhance manufacturing capacity
utilization and reduce operating costs to the extent the Debtors'
liquidity position permits; and
3. Provide other services as requested by the Debtors or
the special committee of the Board of Directors.
The firm will be paid at these rates:
Managing Director $975 to $1,315 per hour
Senior Director $950 per hour
Director $700 to $800 per hour
Manager $600 per hour
Associate $500 per hour
During the 90-day period prior to the petition date, the Debtors
paid Huron $2,354,283.07 in the aggregate for professional services
performed and expenses incurred.
John DiDonato, managing director at Huron, disclosed in a court
filing that his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
John C. DiDonato
Huron Consulting Services, LLC
1166 Avenue of the Americans
3rd Floor, NY 10036
Tel: (212) 785-1900
About Invacare Corporation
Headquartered in Elyria, Ohio, Invacare Corporation (IVC) is a
leading manufacturer and distributor in its markets for medical
equipment used in non-acute care settings. The company provides
clinically complex medical device solutions for congenital (e.g.,
cerebral palsy, muscular dystrophy, spina bifida), acquired (e.g.,
stroke, spinal cord injury, traumatic brain injury, post-acute
recovery, pressure ulcers) and degenerative (e.g., ALS, multiple
sclerosis, elderly, bariatric) ailments. Invacare employs
approximately 3,400 associates and markets its products in more
than 100 countries around the world.
Invacare Corp. and two U.S. subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case
No. 23-90068) on Jan. 31, 2023. In the petition signed by Kathleen
Leneghan, senior vice president and chief financial
officer, Invacare Corp. disclosed $500 million to $1 billion in
both assets and liabilities.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Kirkland and Ellis, McDonald Hopkins, LLC and
Jackson Walker, LLP as bankruptcy counsels; Baker & Hostetler, LLP
as special counsel; Huron Consulting Services, LLC as financial
advisor; Miller Buckfire & Co., LLC as investment banker; and Epiq
Corporate Restructuring, LLC as claims, noticing and solicitation
agent and administrative advisor. Street Advisory Group, LLC serves
as strategic communications advisor to the Debtors.
The DIP Term Loan Lenders led by Cantor Fitzgerald Securities, as
administrative agent, and GLAS Trust Corporation Limited, as
collateral agent, retained Davis Polk & Wardwell LLP, Ducera
Partners, Porter Hedges LLP, Baker & McKenzie LLP, McDermott Will &
Emery LLP, Shipman & Goodwin LLP as advisors.
PNC Bank, National Association, and the ABL DIP Lenders, retained
Blank Rome LLP, and B. Riley Advisory Services as advisors.
Brown Rudnick LLP serves as legal counsel while GLC Advisors & Co.,
LLC serves as investment banker to the ad hoc committee of
unsecured notes.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Kilpatrick Townsend & Stockton, LLP.
INVACARE CORPORATION: Taps Jackson Walker as Co-Counsel
-------------------------------------------------------
Invacare Corporation and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ
Jackson Walker, LLP as conflicts counsel and as co-counsel with
Kirkland and Ellis.
The firm's services include:
a. providing legal advice to the Debtors regarding local rules,
practices and procedures, including Fifth Circuit law;
b. providing certain services in connection with the
administration of the Debtors' Chapter 11 cases, including, without
limitation, preparing agendas, hearing notices, and witness and
exhibit lists, and coordinating with chambers;
c. reviewing and commenting on the proposed drafts of pleadings
to be filed with the court;
d. at the request of the Debtors, appearing in court and at any
meeting with the U.S. Trustee and creditors;
e. provide legal advice and services on any matter on which
Kirkland and Ellis or McDonald Hopkins, LLC may have a conflict or
as needed based on specialization; and
f. other necessary legal services.
The firm will be paid at these rates:
Partners $765 to $1,075 per hour
Associates $535 to $750 per hour
Paraprofessionals $175 to $205 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The Debtors paid the firm a retainer of $50,000.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Jackson
Walker disclosed the following:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed postpetition, explain the
difference and the reasons for the difference.
Response: The rates of attorneys at the firm range from $475 to
$1,075 an hour while the paraprofessional rates range from $230 to
$250 per hour. The firm represented the Debtors during the weeks
immediately before the petition date, using the foregoing hourly
rates.
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: The firm has not prepared a budget and staffing
plan.
Matthew Cavenaugh, Esq., a partner at Jackson Walker, disclosed in
a court filing that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Matthew D. Cavenaugh, Esq.
Jackson Walker LLP
1401 McKinney Street, Suite 1900
Houston, TX 77010
Tel: (713) 752-4200
Fax: (713) 752-4221
Email: mcavenaugh@jw.com
About Invacare Corporation
Headquartered in Elyria, Ohio, Invacare Corporation (IVC) is a
leading manufacturer and distributor in its markets for medical
equipment used in non-acute care settings. The company provides
clinically complex medical device solutions for congenital (e.g.,
cerebral palsy, muscular dystrophy, spina bifida), acquired (e.g.,
stroke, spinal cord injury, traumatic brain injury, post-acute
recovery, pressure ulcers) and degenerative (e.g., ALS, multiple
sclerosis, elderly, bariatric) ailments. Invacare employs
approximately 3,400 associates and markets its products in more
than 100 countries around the world.
Invacare Corp. and two U.S. subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case
No. 23-90068) on Jan. 31, 2023. In the petition signed by Kathleen
Leneghan, senior vice president and chief financial
officer, Invacare Corp. disclosed $500 million to $1 billion in
both assets and liabilities.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Kirkland and Ellis, McDonald Hopkins, LLC and
Jackson Walker, LLP as bankruptcy counsels; Baker & Hostetler, LLP
as special counsel; Huron Consulting Services, LLC as financial
advisor; Miller Buckfire & Co., LLC as investment banker; and Epiq
Corporate Restructuring, LLC as claims, noticing and solicitation
agent and administrative advisor. Street Advisory Group, LLC serves
as strategic communications advisor to the Debtors.
The DIP Term Loan Lenders led by Cantor Fitzgerald Securities, as
administrative agent, and GLAS Trust Corporation Limited, as
collateral agent, retained Davis Polk & Wardwell LLP, Ducera
Partners, Porter Hedges LLP, Baker & McKenzie LLP, McDermott Will &
Emery LLP, Shipman & Goodwin LLP as advisors.
PNC Bank, National Association, and the ABL DIP Lenders, retained
Blank Rome LLP, and B. Riley Advisory Services as advisors.
Brown Rudnick LLP serves as legal counsel while GLC Advisors & Co.,
LLC serves as investment banker to the ad hoc committee of
unsecured notes.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Kilpatrick Townsend & Stockton, LLP.
INVACARE CORPORATION: Taps McDonald Hopkins as Co-Counsel
---------------------------------------------------------
Invacare Corporation and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ
McDonald Hopkins, LLC as co-counsel with Kirkland and Ellis.
The firm's services include:
a. advising the Debtors with respect to their powers and
duties in the continued management and operation of their
businesses and properties;
b. advising and consulting on the conduct of the Debtors'
Chapter 11 cases, including all of the legal and administrative
requirements of operating in Chapter 11;
c. attending meetings and negotiating with representatives of
creditors and other parties in interest;
d. taking all necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the Debtors'
behalf, defending any action commenced against the Debtors, and
representing the Debtors in negotiations concerning litigation in
which they are involved, including objections to claims filed
against the estates;
e. preparing pleadings;
f. representing the Debtors in connection with obtaining
authority to continue using cash collateral and post-petition
financing;
g. advising the Debtors in connection with any potential sale
of assets;
h. appearing before the bankruptcy court and any appellate
courts to represent the interests of the estates;
i. advising the Debtors regarding tax matters;
j. taking any necessary action on behalf of the Debtors to
negotiate, prepare, and obtain approval of a disclosure statement
and confirmation of a Chapter 11 plan and all documents related
thereto; and
k. other necessary legal services.
The firm will charge these hourly fees:
Members $390 - $1,020
Of Counsel $345 - $990
Associates $265 - $585
Paralegals $180 - $360
In addition, the firm will seek reimbursement for out-of-pocket
expenses incurred.
In November 2022, the Debtors paid $250,000 to McDonald Hopkins as
advance payment retainer. Subsequently, the Debtors made
additional advance retainer payments in the total amount of
$964,364.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases,
McDonald Hopkins disclosed the following:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed postpetition, explain the
difference and the reasons for the difference.
Response: The firm's current hourly rates for services rendered
on behalf of the Debtors in the two months prepetition range as
follows: $390 to $1,020 for members, $345 to $990 for of counsel,
$265 to $585 for associates, $180 to $360 for paralegals.
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: Yes, the firm has agreed to provide the Debtors with
weekly report of fees and expenses incurred in their Chapter 11
cases.
Shawn Riley, Esq., a member of McDonald Hopkins, disclosed in a
court filing that his firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Shawn M. Riley, Esq.
McDonald Hopkins, LLC
600 Superior Avenue, Suite 2100
Cleveland, OH 44114
Tel: (216) 348-5400
Fax: (216) 348-5474
About Invacare Corporation
Headquartered in Elyria, Ohio, Invacare Corporation (IVC) is a
leading manufacturer and distributor in its markets for medical
equipment used in non-acute care settings. The company provides
clinically complex medical device solutions for congenital (e.g.,
cerebral palsy, muscular dystrophy, spina bifida), acquired (e.g.,
stroke, spinal cord injury, traumatic brain injury, post-acute
recovery, pressure ulcers) and degenerative (e.g., ALS, multiple
sclerosis, elderly, bariatric) ailments. Invacare employs
approximately 3,400 associates and markets its products in more
than 100 countries around the world.
Invacare Corp. and two U.S. subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case
No. 23-90068) on Jan. 31, 2023. In the petition signed by Kathleen
Leneghan, senior vice president and chief financial
officer, Invacare Corp. disclosed $500 million to $1 billion in
both assets and liabilities.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Kirkland and Ellis, McDonald Hopkins, LLC and
Jackson Walker, LLP as bankruptcy counsels; Baker & Hostetler, LLP
as special counsel; Huron Consulting Services, LLC as financial
advisor; Miller Buckfire & Co., LLC as investment banker; and Epiq
Corporate Restructuring, LLC as claims, noticing and solicitation
agent and administrative advisor. Street Advisory Group, LLC serves
as strategic communications advisor to the Debtors.
The DIP Term Loan Lenders led by Cantor Fitzgerald Securities, as
administrative agent, and GLAS Trust Corporation Limited, as
collateral agent, retained Davis Polk & Wardwell LLP, Ducera
Partners, Porter Hedges LLP, Baker & McKenzie LLP, McDermott Will &
Emery LLP, Shipman & Goodwin LLP as advisors.
PNC Bank, National Association, and the ABL DIP Lenders, retained
Blank Rome LLP, and B. Riley Advisory Services as advisors.
Brown Rudnick LLP serves as legal counsel while GLC Advisors & Co.,
LLC serves as investment banker to the ad hoc committee of
unsecured notes.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Kilpatrick Townsend & Stockton, LLP.
INVACARE CORPORATION: Taps Miller Buckfire as Investment Banker
---------------------------------------------------------------
Invacare Corporation and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ
Miller Buckfire & Co., LLC as their investment banker.
The firm's services include:
a. General Services. Miller Buckfire & Co. will familiarize
itself with the business, operations, properties, financial
condition and prospects of the Debtors and assist them in
structuring and effecting the financial aspects of certain
transactions.
b. Financing Services. If the Debtors pursue a financing, Miller
Buckfire & Co. will:
i. Assist in structuring and effecting a financing;
ii. Identify and contact potential investors; and
iii. Participate or otherwise assist in negotiations with
investors; and
iv. Consider with the Debtors the advisability of a memorandum
for use in soliciting potential investors and, if advisable,
prepare and develop the financing offering memorandum.
c. Transaction Services. If the Debtors pursue a transaction,
Miller Buckfire & Co. will:
i. Assist in structuring any new securities to be issued in
connection with the transaction;
ii. Participate or otherwise assist in negotiations with
entities or groups affected by the transaction;
iii. Assist in developing and seeking approval of the
transaction under the Bankruptcy Code or otherwise;
iv. Participate in hearings before the court in which such
cases are in connection with Miller Buckfire & Co.'s other
services, including related testimony, in coordination with the
Debtors' counsel.
d. Sale Services. If the Debtors pursue a sale, Miller Buckfire
& Co. will:
i. Assist with the sale;
ii. Identify and contact potential acquirers;
iii. Participate or otherwise assist in negotiations with
acquirers; and
iv. Prepare and develop a sale memorandum for use in soliciting
potential acquirers.
The firm will be paid as follows:
a. Monthly Fee. A monthly fee of $25,000. The final monthly fee
will be reduced (and repaid to the Debtors by Miller Buckfire & Co.
if and to the extent prepaid by the Debtors) to correspond to any
partial month of service.
b. Financing Fee. A fee, due upon first funding of each
financing, equal to:
i. 1 percent of the gross proceeds of any secured indebtedness
financing; plus
ii. 3 percent of the gross proceeds of any convertible
indebtedness or unsecured indebtedness financing; plus
iii. 5 percent of the gross proceeds of any other financing,
including equity and equity-linked securities and other obligations
(but excluding, for clarity, convertible indebtedness).
c. Milestone Fee. $4 million, due upon the first sale or
transaction, if any. For clarity, no more than one milestone fee
may be due.
John Damico, managing director at Miller Buckfire & Co., disclosed
in a court filing that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
John D'Amico
Miller Buckfire & Co., LLC
787 Seventh Avenue
New York, NY 10019
Tel: (212) 887-7777/(212) 895-1830
Email: john.damico@millerbuckfire.com
About Invacare Corporation
Headquartered in Elyria, Ohio, Invacare Corporation (IVC) is a
leading manufacturer and distributor in its markets for medical
equipment used in non-acute care settings. The company provides
clinically complex medical device solutions for congenital (e.g.,
cerebral palsy, muscular dystrophy, spina bifida), acquired (e.g.,
stroke, spinal cord injury, traumatic brain injury, post-acute
recovery, pressure ulcers) and degenerative (e.g., ALS, multiple
sclerosis, elderly, bariatric) ailments. Invacare employs
approximately 3,400 associates and markets its products in more
than 100 countries around the world.
Invacare Corp. and 2 U.S. subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case
No. 23-90068) on January 31, 2023. In the petition signed by
Kathleen Leneghan, senior vice president and chief financial
officer, the Debtor disclosed up to $1 billion in both assets and
liabilities.
The Debtors tapped Kirkland and Ellis, LLP and Kirkland and
International LLP as bankruptcy counsel, McDonald Hopkins, LLC as
bankruptcy co-counsel, Huron Consulting Group as restructuring
advisor, Miller Buckfire and Co. as financial advisor and
investment banker, and Epiq Corporate Restructuring, LLC, as
claims, noticing, and solicitation agent and administrative
advisor. Street Advisory Group, LLC is serving as strategic
communications advisor to the company. Baker & Hostetler LLP as
special counsel.
Judge Christopher M. Lopez oversees the cases.
The DIP Term Loan Lenders led by Cantor Fitzgerald Securities, as
administrative agent, and GLAS Trust Corporation Limited, as
collateral agent, have retained Davis Polk & Wardwell LLP, Ducera
Partners, Porter Hedges LLP, Baker & McKenzie LLP, McDermott Will &
Emery LLP, Shipman & Goodwin LLP as advisors.
PNC Bank, National Association, and the ABL DIP Lenders, have
retained Blank Rome LLP, and B. Riley Advisory Services as
advisors.
Brown Rudnick LLP is serving as legal counsel and GLC Advisors &
Co., LLC is serving as investment banker to the ad hoc committee of
unsecured notes.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Kilpatrick Townsend & Stockton, LLP.
JG FOOD: Taps Licenciado Carlos Alberto Ruiz as Legal Counsel
-------------------------------------------------------------
JG Food and Entertainment, LLC received approval from the U.S.
Bankruptcy Court for the District of Puerto Rico to employ
Licenciado Carlos Alberto Ruiz, LLC to handle its Chapter 11 case.
The firm will be paid at the rate of $275 per hour and will be
reimbursed for out-of-pocket expenses incurred.
The firm received from the Debtor a retainer of $6,000.
Carlos Alberto Ruiz Rodriguez, Esq., a partner at Licenciado Carlos
Alberto Ruiz, disclosed in a court filing that his firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Carlos Alberto Ruiz Rodriguez
Licenciado Carlos Alberto Ruiz, LLC
P.O. Box 1298
Caguas, PR 00726-1298
Tel: (787) 286-9775
Email: carlosalbertoruizquiebras@gmail.com
About JG Food and Entertainment
JG Food And Entertainment LLC, filed a Chapter 11 bankruptcy
petition (Bankr. D.P.R. Case No. 23-00603) on March 1, 2023, with
as much as $1 million in both assets and liabilities.
The Debtor is represented by Licenciado Carlos Alberto Ruiz, LLC.
JOHN KNOX VILLAGE: Fitch Affirms BB+ Rating on $122M Revenue Bonds
------------------------------------------------------------------
Fitch Ratings has affirmed the 'BB+' rating on approximately $122
million of revenue bonds issued by The Industrial Development
Authority of The City of Lee's Summit, MO on behalf of John Knox
Village (JKV). Fitch has also affirmed JKV's Issuer Default Rating
(IDR) at 'BB+'.
The Rating Outlook is Stable.
Entity/Debt Rating Prior
----------- ------ -----
John Knox
Village (MO) LT IDR BB+ Affirmed BB+
John Knox
Village (MO)
/General
Revenues/1 LT LT BB+ Affirmed BB+
SECURITY
Debt payments are secured by a pledge of the unrestricted gross
revenues of the obligated group, a first mortgage lien on all the
real property constituting JKV's core campus (excluding property
south of NW O'Brien Road), and a debt service reserve fund.
ANALYTICAL CONCLUSION
The 'BB+' rating and Stable Outlook reflects census levels for the
independent living units (ILUs) and assisted living units (ALUs)
that have remained relatively stable in FY22. Similar to sector
trends, JKV has experienced pressures in supply chains and
increased wages for employees, which management is addressing, as
performance through 3Q23 is stronger than that in FY22.
JKV is on track with strategic plans to replace ageing units with
Meadows Phase I, II and the Villa initiatives. Management reports
that the board has recently approved the predevelopment phase of a
52-unit courtyard project, which is anticipated to break ground in
FY25 assuming pre-sale targets are met. While the exact financing
plans are not yet finalized, JKV estimates project costs of $20
million which are expected to be funded with combination of $15
million of temporary debt and $5 million of permanent debt. Fitch
believes JKV can absorb the plan of finance as currently
contemplated at the 'BB+' rating. Given JKV's successful execution
and fill up of prior phases and the fact that the next construction
phase will be entrance fee ILUs, Fitch believe that this project
will be accretive upon stabilization.
KEY RATING DRIVERS
Revenue Defensibility: 'bbb'
Independent Living Occupancy and Market Position are Stable
In FY22, JKV's averaged an ILU occupancy of 86%, AL occupancy of
65%, and a SNF occupancy of 74%. However, as of 3Q FY23, ILU
occupancy increased to 92%, AL increased to 86%, and SNF decreased
to 64%. The increase in occupancy can be attributed to taking
ageing, no longer marketable units offline and converting eight
ALUs to memory care. In FY24, management is planning to lower the
healthcare census to further align with staffing challenges.
JKV is on track with strategic plans to replace ageing units with
Meadows Phase I, II and the Villa initiatives. Meadows Phase I,
which opened in 2018, reached stabilization shortly thereafter.
Phase II opened in December 2022 and as of Feb. 28, 37 units were
occupied with management forecasting a 90% occupancy of the
building by the end of May. Lastly, the Villa Initiative, which
consists of phase VII and VIII, seeks to reposition older cottages
incrementally, using entrance fee proceeds while not incurring
additional debt. Phase VII included the demolition of 11 older and
smaller units that were replaced with seven new units which were
fully occupied upon completion in calendar year 2021. Phase VIII
includes the construction of seven new villas with five of the
units having deposits as of December 2022.
The community remains highly affordable with the average entrance
fee of about $270,000 and average resident net worth of $1.6
million. JKV implemented a 5% increase in ILU entrance fees and a
5.9% increase in ILU/ALU monthly service fees for FY24 with little
pushback from residents of the increases. As of 3Q23, JKV's revenue
mix was comprised of ILU at 47%, ALU at 20%, SNF at 21%, and Home
and Community based services at 12%.
Operating Risk: 'bb'
Core Operations Remain Sufficient
JKV is a predominantly type B contract life plan community (LPC).
The community's operating performance aligns with a 'weak'
assessment but is adequate at the current rating level. JKV's
four-year averages plus the most recent nine months figures for
operating ratio, NOM and NOMA are 107.5%, -2.5%, and 13.5%,
respectively.
JKV's recent strategic capital plans were funded with a combination
of operating cash flow and debt. Five-year average
capex-to-depreciation through 3Q22 has been approximately 118%. As
of December 2023, average age of plant is somewhat elevated at 14.7
years, which management is addressing through various initiatives
such as the Meadows and Villas projects and the recently
board-approved 52-unit ILU expansion. JKV's capex plans comprise of
the IL replacement project (Villas Initiative - Phase VI), as well
as the Meadows Phase II project, which Fitch believes will further
improve JKVs offerings.
JKV posted a revenue-only MADS of 0.3x as of 3Q23. JKV's previous
four-year average for revenue-only MADS was 0.4 x, with MADS as a
percentage of revenue and debt-to-net available are 11.2% and
10.1x, respectively. If JKV, goes ahead with the proposed
expansion, Fitch believes that capital spending will increase in
the near term and JKV's key capital metrics can remain consistent
with current levels as the expansion project is built and filled.
Financial Profile: 'bb'
Stable Operations and New Project Support Adequate Liquidity
JKV reported cash to adjusted debt of 34.7% and a MADS coverage of
1.4x through the first nine months of FY23. Additionally, JKV's
days cash on hand (DCOH) dropped 37 days since March 31 to 205 as
of Dec. 31. This is primarily as a result of a $4 million
unrealized loss to their investment portfolio. JKV's leverage
profile remains consistent with a 'bb' assessment throughout
Fitch's stress case scenario, factoring in the contemplated plan of
finance for the 52-unit expansion, which assumes a period of
economic and operational volatility followed by recovery.
Asymmetric Additional Risk Considerations
There are no asymmetric risk factors affecting this rating
determination.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Meadows Phase II construction and fill-up projections falling
short of Fitch's expectations, causing an increase in operating
expenses and deferral of cash flow generation to satisfy pro forma
aggregate debt service.
- Deterioration in operating performance resulting in decreased
operating ratios, capital related metrics or sustained DCOH below
200 days.
- Material escalation in project costs or a change in the plan of
finance for the new 52-unit expansion could pressure the rating.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- As JKV continues with its' repositioning projects, Fitch does not
expect positive movement on the rating over the outlook period.
CREDIT PROFILE
JKV is located in Lee's Summit, MO, with 995 (894 marketable) ILUs,
182 ALU (120 non-memory care with 62 memory care) and 193 available
SNF beds which will be reduced to 122 beds in 4Q FY23. Additional
operations include a home health agency, hospice services, a
24-hour ambulance and paramedic service and a foundation. JKV is
one of the largest single-site LPCs in the country by both acreage
and number of units and is the second largest single-site
not-for-profit continuing care retirement community (CCRC) in the
2020 LeadingAge Ziegler 200. JKV offers both rental and type B
entrance fee contracts. JKV had total operating revenues of $65,283
in FY22.
Fitch's analysis is based on JKV's obligated group (OG). The John
Knox Village Foundation was removed from the OG in October 2017.
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.
JOHN'S FAMILY: Court Confirms First Amended Chapter 11 Plan
-----------------------------------------------------------
Judge Stacey L. Meisel has entered an order confirming the First
Amended Chapter 11 Plan of John's Family Inc. as amended and
modified herein.
Article I is amended to the add the following:
The Debtor shall file and serve Notice of the Effective Date
once the Plan is confirmed. The Debtor will remain a
debtor-in-possession with all attendant duties and responsibilities
until the Effective Date occurs.
Article II. C. 1. is amended to add the following:
Wiley Lavender Maknoor P.C. ("Wiley Firm") has been retained as
Debtor's special counsel [ECF 110]. The Wiley Firm will have an
administrative claim in the estimated amount of $5,000.
Article II. F. 1 is amended to add the following:
This Plan is funded by the proceeds upon the closing of the
Contribution Agreement. If the Contribution Agreement does not
close, the deposit provided by the Buyer will be returned if it is
no fault of the Buyer. The one-hundred percent (100%) stock of the
Debtor will revert back to Mr. Kwak.
Article IV. E. is amended to add the following:
If Confirmation of this Plan does not occur, the Plan shall be
deemed null and void. This Court shall retain jurisdiction to
convert or dismiss the Debtor's case if the sale of the
Contribution Agreement does not close and the Plan fails to go
effective.
All outstanding monthly operating reports shall be filed no later
no March 17, 2023.
If any objection to confirmation of the Plan has not been withdrawn
prior to entry of this Confirmation Order, all such objections,
including the Objections, are overruled.
The transfer/sale of any real property be and hereby is transferred
free and clear of liens, claims, and encumbrances of any kind with
valid liens, claims and encumbrances to attach to the proceeds of
sale and free of any tax imposing a stamp, transfer or similar tax
under Section 1146(a) of the Bankruptcy Code. This order can be
filed with any State of New Jersey recording office and such
recording office shall remove and cancel any judgment or liens of
record on the Avalon Property.
Attorneys for the Debtor:
Anthony Sodono, III, Esq.
Sari B. Placona, Esq.
McMANIMON, SCOTLAND & BAUMANN, LLC
75 Livingston Avenue
Roseland, NJ 07068
Tel: (973) 622-1800
E-mail: asodono@msbnj.com
splacona@msbnj.com
About John's Family Inc.
John's Family Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Case No. 22-17234) on Sept. 13,
2022. In the petition signed by Kun Kwak, its shareholder, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Stacey L. Meisel oversees the case.
Anthony Sodono, III, Esq., at McManimon, Scotland & Baumann, LLC,
is the Debtor's counsel.
JTG VENTURES: Silverstein's Involuntary Chapter 7 Dismissed
-----------------------------------------------------------
Chief Bankruptcy Judge Terrence L. Michael for the Northern
District of Oklahoma has dismissed the involuntary Chapter 7
petition brought by Steven B. Silverstein against JTG Ventures,
LLC, captioned as In Re: JTG Ventures, LLC, Involuntary Chapter 7,
Debtor, Case No. 22-10966-M, (Bankr. N.D. Okla.).
This case started with a dispute between JTG Ventures, LLC and
Steven B. Silverstein. JTG was engaged in some sort of business
relating to the sale and/or rental of condominiums. Apparently,
Silverstein was, at one time, involved in the day-to-day operations
of JTG, but that involvement ceased in either 2012 or 2014. Another
individual involved in JTG who plays a large role in this story is
Jeffrey Wolf, who was also deeply involved in JTG.
On April 11, 2017, an action was filed in the District Court in and
for Tulsa County, Oklahoma, entitled "JTG Ventures, LLC, and
Jeffrey Wolf, Plaintiffs vs. Steven B. Silverstein, Defendant."
Subsequently, Silverstein filed a motion in the State Court Action
seeking the appointment of a receiver "over the assets of JTG
Ventures, LLC, J.W. Evergreen Foundation, the Woodside Lane
Condominium Project, a/k/a Silver Sands Apartments," all located in
Tulsa, Oklahoma. An order was entered in the State Court Action
appointing C. David Rhoades as Receiver. The assets subject to the
receivership are 87 condominiums located in the area of 66th and
Peoria Streets in the City of Tulsa (the Peoria Condos).
On Oct. 11, 2022, Rhoades sought permission in the State Court
Action to sell the Peoria Condos. Under the terms of the Sale
Motion, Rhoades will offer the Peoria Condos for sale by auction in
early March 2023.
On the same day Rhoades filed the Sale Motion, Silverstein filed an
involuntary Chapter 7 petition against JTG in this Court.
Silverstein was the only petitioning creditor, and is, based upon
the record before this Court, the only creditor of JTG.
The District Court in and for Tulsa County, Oklahoma has been the
home of the State Court Action since 2017 and remains readily
available to conclude all matters affecting JTG and Silverstein. It
has resulted in a determination that Silverstein is owed over $1.5
million by JTG and others, and is well on its way to completion.
The process for the sale of the Peoria Condos has been approved,
and, according to Rhoades, completion of the sale process is
imminent.
Based upon the Court's record, the Court finds that "JTG has one
and only one creditor: Silverstein. Whatever the net proceeds are
in the State Court Action, Silverstein claims them as his own, and
there is nothing in the record before the Court to contradict that
position. . . The only alleged "asset" of JTG is an undefined
fraudulent transfer action, which the Court presumes is similar (if
not identical to) the fraudulent transfer action brought by
Silverstein in the State Court Action. . . The dispute between JTG
and Silverstein is in good hands in the State Court Action. . .
this is a matter that can and should be decided in the State Court
Action."
The Court finds and concludes that "Silverstein was quite candid
about the motivation behind the filing of this involuntary
petition: he no longer wished to have Rhoades be the person in
charge of selling the Peoria Condos, he wanted to reduce or
eliminate his out-of-pocket expenses, and he wanted to prevent the
sale process contemplated in the State Court Action from going
forward. Let us not forget that the structure of the State Court
Action is entirely a creature of Silverstein's own choosing. . .
and initially supported the efforts of Rhoades to sell the Peoria
Condos. When he became unhappy with the litigation path he had
chosen, with Rhoades and the progress of the State Court Action, he
sought a mulligan in this Court. There is a simple name for this
conduct: forum shopping. It is not to be countenanced. . . the test
for abstention has been overwhelmingly satisfied. Abstention is not
only warranted, but is demanded by the facts and equities of this
case."
A full-text copy of the Memorandum Opinion dated March 16, 2023 is
available at https://tinyurl.com/5n8bukpe from Leagle.com.
KABBAGE INC: Plan Modified, Providing Temporary Injunction
----------------------------------------------------------
Bankruptcy Judge Craig T. Goldblatt for the District of Delaware,
on Wednesday March 15, 2023, has issued a letter ruling to
supplement the reasoning set forth in the bench ruling entered
during the confirmation hearing of Kabbage, Inc.'s plan held on
March 13, 2023.
Because of the parties' very good work, all the objections to
confirmation filed by creditors were resolved prior to the hearing.
The U.S. Trustee, however, objected to confirmation on the ground
that the plan improperly granted a discharge to a liquidating
debtor in violation of 11 U.S.C. Section 1141(d)(3). The U.S.
Trustee correctly pointed out that the language of the plan
injunction was materially identical to the language of Section
524(a)'s discharge injunction and was thus the functional
equivalent of the discharge to which the Debtors were not
entitled.
In response, the Debtors acknowledged that they are ineligible for
a discharge under Section 1141(d) but argued that the provisions of
their plan, operate as an injunction rather than a discharge. As
such, the debtors argued that the injunction was appropriate even
if it amounted to a "de facto" discharge.
While the plan (as originally drafted) provides for the liquidation
of the Debtors, it does not create a separate post-confirmation
liquidating trust that would be eligible to take free and clear
title to the debtors' assets under Section 1141(c). Instead, those
assets remain with the legal entities that consisted of the
prepetition Debtors, which are referred to after the effective date
of the plan as the Wind Down Estates. Those entities are directed
by the Wind Down Officer.
Judge Goldblatt determines that: "Because the legal entities that
made up the prepetition Debtors will not end up as corporate shells
upon the effective date but will instead hold assets that are
intended to be distributed to creditors under the plan, the parties
had good reason to protect the Debtors and the Wind Down Estates
from the holders of prepetition claims who might seek to defeat the
operation of the plan by taking action against the post-bankruptcy
entities on account of their prepetition claims. . . The Debtors
here, of course, do not need injunctive protection once they no
longer have any assets. Their only concern was preventing creditors
from acting against the post-effective date entities while they do
have assets. . . Once the entities have distributed their assets in
accordance with the plan, and are reduced to corporate shells,
there is no longer any need to protect them. . . The readily
available solution. . . is to afford those entities not permanent
injunctive relief, but rather temporary injunctive relief that will
remain in effect only as long as those entities hold assets."
Counsel for the U.S. Trustee agreed (appropriately) that if the
injunctive relief enjoyed by the Debtors and the Wind Down Estates
is temporary rather than permanent, it is not the functional
equivalent of a discharge, and the granting of such relief would
not run afoul of Section 1141(d)(3) or the purposes it serves.
Likewise, the Debtors agreed to modify the plan so that it provides
for a temporary injunction that only remains in place so long as
the post-confirmation entities hold assets. Once those entities are
empty shells, the temporary injunction will terminate. Accordingly,
the plan has been revised to provide that the relief afforded to
the Debtors and the Wind Down Estates is temporary rather than
permanent.
A full-text copy of the Letter Ruling dated March 15, 2023 is
available at https://tinyurl.com/4th9fpse from Leagle.com.
About Kabbage Inc. d/b/a KServicing
Founded in 2010 and headquartered in Atlanta, Ga., Legacy Kabbage,
a predecessor of Kabbage Inc. (doing business as KServicing) --
http://www.kservicing.com/-- was one of the leading fintech
providers of working capital to small businesses for over a decade.
Legacy Kabbage began as a proprietary online lending platform for
small businesses, providing loan services to over 250,000 American
small businesses, many of which were businesses that struggled to
receive adequate funding through traditional banking institutions.
From 2020-2021, the company provided and facilitated necessary
funding to small business owners through PPP loans during the
COVID-19 pandemic. The company's existing technology infrastructure
spearheaded its PPP work, which led to a total of $7 billion in
loans being originated by the company.
The origination and servicing of PPP Loans and small business loans
to eligible borrowers was critical during a time of unprecedented
health and economic uncertainty brought about by the COVID-19
pandemic. On Aug. 16, 2020, much of the company's business was sold
to American Express Travel Related Services Company, Inc. As a
result of the merger, KServicing now operates in a limited capacity
as (i) a servicer and subservicer of PPP Loans, (ii) a software
services provider for lenders of PPP Loans, and (iii) a servicer of
a minor portfolio of non-PPP small business loans.
To implement the wind down of their businesses, on Oct. 3, 2022,
Kabbage, Inc. d/b/a KServicing and certain of its affiliates each
filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code (Bankr. D. Del. Lead Case No.
22-10951). Judge Craig T. Goldblatt oversees the cases.
Kabbage Inc. estimated $500 million to $1 billion in assets and
debt as of the bankruptcy filing.
The Debtors tapped Weil, Gotshal & Manges, LLP as general counsel;
Richards, Layton & Finger, PA as local counsel; AlixPartners, LLC
as financial advisor; KPMG International Limited as fraud review
services provider; Jones Day, LLP as government investigations
counsel; and Marc Sullivan, managing director at Phoenix Executive
Services, LLC, as chief financial officer. Omni Agent Solutions,
Inc. is the Debtors' claims agent and administrative advisor.
Greenberg Traurig, LLP serves as counsel to the Debtors' board of
directors.
LAURA'S ORIGINAL: Court OKs Cash Collateral Access Thru April 21
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California,
authorized Laura's Original Boston Brownies, Inc. to use the cash
collateral of Comerica Bank on an interim basis in accordance with
the budget, with a 10% variance, through April 21, 2023.
Comerica Bank asserts an interest in the Debtor's cash collateral.
As previously reported by the Troubled Company Reporter, Comerica
is owed approximately $1.960 million. Comerica filed two UCC-1
financing statements with the California Secretary of State on
March 25, 2021 as File #: U210033218324 and File #: U210033219124
asserting liens against all of Debtor's personal property of every
kind.
On the Petition Date, the Debtor had cash on hand of approximately
$60,864, inventory valued at $2.216 million, and accounts
receivable valued at $409,370. The Debtor anticipates its
post-petition accounts receivable to increase significantly during
the course of the case. The Debtor's projected growth will
adequately protect Comerica to the extent a replacement lien is
provided.
As adequate protection, Comerica is granted a full replacement lien
on and security interest in all personal property of the Debtor
acquired post-petition as described in Comerica's security
agreements executed by the Debtor in Comerica's favor.
A hearing on the matter is set for April 17 at 2 p.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3JqEVuw from PacerMonitor.com.
The Debtor projects total operating expenses, on a monthly basis,
as follows:
$279,391 for March 2023;
$236,253 for April 2023; and
$158,840 for May 2023.
About Laura's Original Boston Brownies, Inc.
Laura's Original Boston Brownies, Inc. offers low sugar, high
fiber, and clean label products. The Debtor sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Cal. Case No.
23-00656) on March 13, 2023. In the petition signed by Laura
Katleman, chief executive officer, the Debtor disclosed $6,651,309
in assets and $6,498,970 in liabilities.
Judge Christopher B. Latham oversees the case.
Paul Leeds, Esq., at Franklin Soto Leeds LLP, represents the Debtor
as legal counsel.
LIBERTY INTERACTIVE: Moody's Cuts CFR to B3 & Unsec. Notes to Caa2
------------------------------------------------------------------
Moody's Investors Service downgraded Liberty Interactive LLC's
corporate family rating to B3 from B1, its probability of default
rating to B3-PD from B1-PD, and its senior unsecured ratings to
Caa2 from B3. Moody's also downgraded QVC, Inc.'s senior secured
ratings to B2 from Ba3. The outlook is changed to stable from
negative. The speculative grade liquidity rating (SGL) remains
SGL-2.
The downgrades reflect the deterioration in operating performance
and credit metrics in fiscal 2022 at the consolidated entity,
Liberty's parent company Qurate. In 2022, Qurate faced falling
customer counts (currently approximately 16% below 2019 levels),
14% revenue decline (11% on a constant currency basis), higher
operating costs and a very promotional environment which led EBITDA
to drop about 48% (approximately 45% on a constant currency basis)
from the prior year. Consequently, leverage and interest coverage
significantly weakened with Moody's adjusted debt/EBITDA increasing
to 6.9x at year-end 2022 from 3.61x at year-end 2021 while
EBITA/Interest fell to 1.65x from 3.73x over the same time period.
Moody's expects Qurate's performance to stabilize and begin to
improve starting in the latter half of 2023 due to management
actions to boost revenue, the execution of cost cuts and lower
freight and input costs. However, leverage is still anticipated to
remain elevated compared to historical levels with debt/EBITDA
forecasted to approach 5.3x. EBITA/Interest is also anticipated to
improve to slightly below 2.0x at year-end 2023. Longer-term,
leverage and coverage are expected to further improve by year-end
2024. However, the downgrade reflects the execution risk associated
with the projected turnaround, particularly in customer counts,
over 2023-2024.
Downgrades:
Issuer: Liberty Interactive LLC
Corporate Family Rating, Downgraded to B3 from B1
Probability of Default Rating, Downgraded to B3-PD
from B1-PD
Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded
to Caa2 (LGD6) from B3 (LGD6)
Senior Unsecured Regular Bond/Debenture, Downgraded to
Caa2 (LGD6) from B3 (LGD6)
Issuer: QVC, Inc.
Senior Secured Regular Bond/Debenture, Downgraded to
B2 (LGD3) from Ba3 (LGD3)
Outlook Actions:
Issuer: Liberty Interactive LLC
Outlook, Changed To Stable From Negative
Issuer: QVC, Inc.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
Liberty's B3 corporate family rating reflects that the company's
weak credit metrics and the execution risks it is facing as it
seeks to restore its EBITDA levels in a challenging retail
environment. Qurate's operational performance has suffered in 2022
as it has contended with higher costs, lower customer counts and
supply chain disruption from the fire and the decommissioning of
its second largest distribution facility located in Rocky Mount,
North Carolina. These pressures mounted as consumer demand,
particularly in key areas such as electronics and home, has
normalized from elevated levels during the pandemic and declined
below pre-pandemic levels as the consumer environment has become
more challenging. The company also had to manage through excess
inventory exacerbated by the Rocky Mount fire and a heavily
promotional retail environment in 2022 which further compressed
margins. Although order to delivery times have returned to pre-fire
levels and inventory levels have improved, the company must improve
its operational efficiencies as it works to rebuild its customer
base. Its QXH (QVC and HSN) business which focuses on
differentiating its offering through its ability to entertain,
inform, and providing exclusive product is also contending with
secular trends that include a growing number of consumers who are
canceling their cable subscriptions, increased price transparency
and shorter product life cycles.
Offsetting these headwinds, Qurate does have a significant position
within online shopping which has historically led to solid
operating margins and cash flow generation from its portfolio of
operating assets. Liberty is continuing to focus on increasing its
streaming of video content to increase its customer reach. The
company has raised significant funds through sale leasebacks,
should recover additional insurance proceeds related to the fire
and realize cost improvements over 2023-2024 from lower freight and
commodity costs and the benefits from $60 million in run-rate
cost-savings. Despite upcoming debt maturities, Moody's views
Qurate's liquidity as good primarily because of material revolver
availability ($2.1 billion), cash balance ($1.275 billion), $60
million in run-rate cost saves from 1Q'23 workforce reductions,
estimated 2023 free cash flow of approximately $350 million and
additional liquidity derived from the recent sale leaseback (gross
proceeds of approximately $180 million) completed in the first
quarter of 2023. Moody's expects the company to remain in
compliance with its financial maintenance covenant over the next 12
months.
The stable outlook reflects Moody's expectation that profitability
and free cash flow generation is expected to improve in 2023 as
Qurate works to address falling customer count, demand weakness and
to rationalize its cost structure. The outlook also reflects
Moody's expectation that the company will maintain good liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Liberty consistently improves
sales, operating performance and customer counts. Good liquidity,
free cash flow generation and a balanced financial strategy would
also be required. Quantitatively, the company could be upgraded if
debt/EBITDA was sustained below 5.0x and EBITA/Interest was
sustained above 2.0x.
The ratings could be downgraded if operational performance does not
improve including a stabilization of customer counts, liquidity
weakens or if its financial strategy meaningfully changes.
Quantitatively, ratings would be downgraded if debt/EBITDA is
sustained above 6.0x or EBITA/Interest is sustained below 1.25x
Headquartered in Englewood, Colorado, Liberty Interactive LLC, is a
wholly owned subsidiary of its parent Qurate Retail, Inc., formerly
named Liberty Interactive Corporation. Qurate operates the QVC,
HSN, Cornerstone and Zulily brands and holds equity interests in
other smaller assets. Moody's credit analysis considers the
consolidated Qurate organization, and all credit metrics quoted are
at the Qurate level. QVC, Inc. was founded in 1986 and has
operations in the US, UK, Germany, Japan and Italy. Annual revenue
at Qurate was about $12.1 billion for year-end 2022.
The principal methodology used in these ratings was Retail
published in November 2021.
LIGHT OF PEACE: Taps Law Offices of Oliver & Cheek as Counsel
-------------------------------------------------------------
Light of Peace Missionary Baptist Church, Inc. received approval
from the U.S. Bankruptcy Court for the Eastern District of North
Carolina to employ The Law Offices of Oliver & Cheek, PLLC to
handle its Chapter 11 case.
The firm will be paid based upon its normal and usual hourly
billing rates and will be reimbursed for out-of-pocket expenses
incurred.
The Debtor paid the firm a retainer of $20,000.
Benjamin Eisner, Esq., a partner at The Law Offices of Oliver &
Cheek, disclosed in a court filing that his firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Benjamin R. Eisner, Esq.
The Law Offices of Oliver & Cheek, PLLC
P.O. Box 1548
New Bern, NC 28563
Tel: (252) 633-1930
Fax: (252) 633-1950
Email: ben@olivercheek.com
About Light of Peace
Light of Peace Missionary Baptist Church, Inc., a non-profit
religious organization in Rocky Mount, N.C., filed its voluntary
petition for Chapter 11 protection (Bankr. E.D.N.C. Case No.
23-00515) on Feb. 24, 2023, with $1,931,973 in assets and $230,000
in liabilities. Barbara Murphy, secretary, signed the petition.
Judge Pamela W. Mcafee oversees the case.
Benjamin R. Eisner, Esq., at The Law Offices of Oliver & Cheek,
PLLC is the Debtor's bankruptcy counsel.
LITHIA MOTORS: S&P Alters Outlook to Stable, Affirms 'BB+' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from positive and
affirmed its 'BB+' issuer credit rating on Lithia Motors Inc.
The stable outlook reflects S&P's expectation that Lithia will
maintain leverage of about 3x-4x and FOCF to debt of at least 10%
even as it invests in expanding its dealership business by
acquisitions, its Driveway online business, and its DFC business.
S&P said, "We expect Lithia's leverage and free cash flow in the
next three years will be weaker than we previously expected due to
faster normalization in margins and its aggressive growth plans.
Lithia has benefited from unsustainably high margins the last
couple of years, and those margins are likely to weaken faster than
expected. Used car margins are already somewhat below levels from
before the COVID-19 pandemic as prices and demand have fallen. We
now expect that new car prices will fall more quickly this year and
margins will revert toward pre-pandemic levels, particularly with
Ford and Stellantis. Lithia has material exposure to these brands,
and inventories have already started to recover. With lower
margins, we now expect significant investments in acquisitions,
growth of DFC, and share buybacks, which will likely increase debt
to EBITDA above 3x. The company's 2022 cash flow significantly
reduced due to investment in DFC. Going forward, Lithia is likely
to tap the asset-backed securities markets to fund DFC growth. But
we still expect some ongoing support from Lithia's core operations
as the company grows its captive business through 2025. Given the
lower margins, increasing capex, and some support for DCF, we now
expect that FOCF to debt will remain below 15% over the next three
years.
"Our affirmation of the 'BB+' rating despite somewhat weaker
forecast credit metrics reflects our improved view of Lithia's
business. The company has improved its scale rapidly in recent
years, having increased revenues to $28 billion in 2022 from $13
billion in 2020. It is now as large as AutoNation Inc. and Penske
Automotive Group Inc., the three largest publicly rated
dealerships. The company continues to diversify geographically
across the U.S. It now has dealerships in Canada and recently
announced its acquisition of Jardine Motors in the U.K. Despite
having acquired this scale rather quickly, we think Lithia has done
well integrating and running the new dealerships, demonstrated by
margins in line with similarly rated peers. We think part of this
success is due to a strategic shift away from complicated
turnarounds of distressed dealerships to a greater focus on buying
higher-quality assets. We also think Lithia has a strong online
offering with its Driveway brand that should position it well for
online sales growth.
"In our view, Lithia's somewhat more aggressive financial policy
will preclude it from sustaining investment-grade metrics over the
next two years while it pursues its substantial growth targets. For
some time, Lithia has been focused on getting to $50 billion in
revenues by 2025. It spent $2.7 billion on acquisitions in 2021 and
$1.2 billion in 2022. We continue to expect the company to spend
$1.2 billion-$1.5 billion per year on acquisitions, but unlike
2021, we do not expect it to issue further equity. Also in 2022,
the company invested significant capital into Driveway Finance and
bought back $688 million of shares. While Lithia has publicly
expressed a desire to be investment grade and has a target of 2x-3x
leverage, in the next few years we expect it will likely prioritize
growth targets over a conservative financial policy. Given the
still relatively fragmented nature of the dealership industry, we
think this strategic rationale makes sense and is consistent with
the strategy of similarly rated peers.
"The stable outlook reflects our expectation that Lithia will
maintain leverage of 3x-4x and free cash flow to debt of at least
10%, even as it invests in expanding its dealership business by
acquisitions, its Driveway online business, and its DFC business."
S&P could lower its rating on Lithia if:
-- Leverage exceeds 4x; or
-- FOCF to debt falls below 10% for an extended period.
This could occur if the company engages in an even faster pace of
acquisitions or more aggressive share buybacks that increase
leverage, or margins deteriorate more than expected due to internal
operational missteps or significantly weaker industry
fundamentals.
S&P could upgrade Lithia in the next 12 months if:
-- The company maintains leverage comfortably below 3x and
FOCF-to-debt ratio above 15%;
-- It extends its track record of efficiently integrating
acquisitions while ramping up Driveway and DFC and managing SG&A as
a percent of sales; and
-- S&P believes its strategic business, financial policies,
governance, and capital structure are consistent with a higher
rating.
ESG credit indicators: E-2, S-2, G-2
S&P said, "ESG factors have an overall neutral influence on our
credit rating analysis of Lithia Motors. As an auto retailer that
generates most of its profits and cash flow from parts and service
and financing, we believe the business model will remain resilient
for the foreseeable future. Over the next few decades, we expect
the types of components for repair will shift. Batteries, battery
coolant, power units, and electrically operated engine components
and accessories will gradually replace repairs for internal
combustion engine vehicles."
LLM INTERNET: Taps Davidoff Hutcher & Citron as Legal Counsel
-------------------------------------------------------------
LLM Internet, Inc. seeks approval from the U.S. Bankruptcy Court
for the Eastern District of New York to employ Davidoff Hutcher &
Citron, LLP as its legal counsel.
The Debtor requires legal counsel to:
a. give advice with respect to the powers and duties of the
Debtor and the continued management of its property and affairs;
b. negotiate with creditors, work out a plan of reorganization
and take the necessary legal steps in order to effectuate such a
plan;
c. prepare legal papers;
d. appear before the bankruptcy court;
e. attend meetings and negotiate with representatives of
creditors and other parties in interest;
f. advise the Debtors in connection with any potential
refinancing of secured debt and any potential sale of their
business;
g. represent the Debtors in connection with obtaining
post-petition financing;
h. take any necessary action to obtain approval of a disclosure
statement and confirmation of a plan of reorganization; and
i. perform all other necessary legal services.
The firm will be paid at these rates:
Attorneys $450 to $850 per hour
Paraprofessionals $195 to $260 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Robert Rattet, Esq., a partner at Davidoff, disclosed in a court
filing that his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Robert L. Rattet, Esq.
Davidoff Hutcher & Citron, LLP
120 Bloomingdale Road
White Plains, NY 10605
Tel: (914) 381-7400
Fax: 212-286-1884
Email: rlr@dhclegal.com
About LLM Internet
LLM Internet, Inc., a company in Brooklyn, N.Y., filed its
voluntary petition for Chapter 11 protection (Bankr. E.D.N.Y. Case
No. 23-40371) on Feb. 2, 2023, with as much as $1 million to $10
million in both assets and liabilities. Haim Pinhas, vice-president
of LLM Internet, signed the petition.
Judge Jil Mazer-Marino oversees the case.
Robert L. Rattet, Esq., at Davidoff Hutcher & Citron, LLP serves as
the Debtor's legal counsel.
LUCIRA HEALTH: Gets OK to Hire Armanino LLP as Financial Advisor
----------------------------------------------------------------
Lucira Health, Inc. received approval from the U.S. Bankruptcy
Court for the District of Delaware to employ Armanino, LLP as its
financial advisor.
The firm's services include:
a. advising the Debtor on a strategic plan, liquidity
management, and creditor negotiations, and providing sale advice;
b. reviewing and assessing assets and liabilities, financial
processes and cash flow projections;
c. interviewing management team regarding historic activities,
current challenges, and additional issues that could impact the
strategic plan, and review of customer contracts and obligations;
d. reviewing a schedule of all obligations (a waterfall) with the
Debtor's finance team by product line and identification of
opportunities to restructure or renegotiate obligations;
e. providing financial counsel to the Debtor's management, as
requested, regarding approaches to extend cash runway or reduction
of cash burn, and related communications and messaging;
f. advising the Debtor on and leading negotiations and
communicating directly with creditors to support a go-forward plan
to maximize value, and developing materials to support such
discussions;
g. advising the Debtor on general issues, approaches and the
Debtor's sale process, including the preparation of a sale memo,
initiation of outreach to new targets, providing support for buyer
diligence and negotiation support in concert with a broker; and
h. providing such other advisory services as may be agreed upon
by Armanino and the Debtor.
Armanino will be paid at these rates:
Partners/Senior Managing Directors $425 to $695 per hour
Directors $375 to $540 per hour
Managers $250 to $425 per hour
Consultants/Staff $195 to $325 per hour
The firm received unapplied advance payments from the Debtor in
excess of pre-bankruptcy billings in the amount of $276,500.
H. Michael Hogan, a partner at Armanino, disclosed in a court
filing that his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
H. Michael Hogan
Armanino LLP
12657 Alcosta Blvd Suite 500
San Ramon, CA 94583-4600
Tel: (925) 790-2600
Fax: (925) 790-2601
About Lucira Health
Founded in 2013, Lucira is a medical technology company focused on
the development and commercialization of transformative and
innovative infectious disease test kits.
Lucira Health filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Del., Case No. 23-10242) on
Feb. 22, 2023. As of Dec. 31 2022, the Debtor posted total assets
of $145,897,301 and total debt of $84,720,814.
Judge Mary F. Walrath oversees the case.
The Debtor tapped Young Conaway Stargatt & Taylor, LLP and Cooley,
LLP as legal counsels; Armanino, LLP as financial advisor; and
Donlin, Recano & Company, Inc. as claims and noticing agent and
administrative advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtor's Chapter
11 case. The committee is represented by Brya Michele Keilson, Esq.
LUCIRA HEALTH: Gets OK to Hire Donlin as Administrative Advisor
---------------------------------------------------------------
Lucira Health, Inc. received approval from the U.S. Bankruptcy
Court for the District of Delaware to employ Donlin Recano &
Company, Inc. as administrative advisor.
The Debtor requires an administrative advisor to:
a. assist with, among other things, any required solicitation,
balloting, tabulation and calculation of votes as well as preparing
any appropriate reports, as required in furtherance of confirmation
of a Chapter 11 plan;
b. generate an official ballot certification and testify, if
necessary, in support of the ballot tabulation results;
c. in connection with the balloting services, handle requests
for documents;
d. gather data in conjunction with the preparation, and assist
with the preparation, of the Debtor's schedules of assets and
liabilities and statements of financial affairs;
e. provide a confidential data room, if requested;
f. manage and coordinate any distributions pursuant to a
confirmed Chapter 11 plan; and
g. provide other claims processing, noticing, solicitation,
balloting, and administrative services.
The hourly rates charged by the firm for its services are as
follows:
Executive Management No Charge
Senior Bankruptcy Consultant $158 to $194 per hour
Case Manager $144 to $158 per hour
Consultant/Analyst $117 to $140 per hour
Technology/Programming Consultant $86 to $109 per hour
Clerical $35 to $45 per hour
The Debtor paid the firm a retainer of $10,000.
Nellwyn Voorhies, a partner at Donlin, disclosed in a court filing
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Nellwyn Voorhies
Donlin, Recano & Company, Inc.
6201 15th Avenue
Brooklyn, NY 11219
Tel: (212) 481-1411
About Lucira Health
Founded in 2013, Lucira is a medical technology company focused on
the development and commercialization of transformative and
innovative infectious disease test kits.
Lucira Health filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Del., Case No. 23-10242) on
Feb. 22, 2023. As of Dec. 31 2022, the Debtor posted total assets
of $145,897,301 and total debt of $84,720,814.
Judge Mary F. Walrath oversees the case.
The Debtor tapped Young Conaway Stargatt & Taylor, LLP and Cooley,
LLP as legal counsels; Armanino, LLP as financial advisor; and
Donlin, Recano & Company, Inc. as claims and noticing agent and
administrative advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtor's Chapter
11 case. The committee is represented by Brya Michele Keilson, Esq.
MAGNOLIA OIL: S&P Affirms 'B+' ICR on Recent Price Deck Revision
----------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' issuer credit rating on
U.S.-based oil and gas exploration and production company Magnolia
Oil & Gas Corp. At the same time, S&P affirmed its 'BB-'
issue-level rating and '2' recovery rating on the company's
unsecured debt.
The stable outlook reflects S&P's view that Magnolia's credit
metrics will remain strong over the next 12-24 months, with funds
from operations (FFO) to debt above 100% and positive discretionary
cash flow (DCF).
The rating affirmation reflects S&P's expectation of strong credit
measures despite our recent downward natural gas price deck
revision.
S&P said, "Following our recent downward natural gas price deck
revision, we expect Magnolia's credit metrics to remain strong over
the next 12-24 months. Based on our current assumptions, we expect
the company's FFO to debt to be above 100% over the next two years,
with debt to EBITDA below 1.0x, while we also expect the company to
generate meaningful positive DCF."
The company's small size and scale constrain the rating.
S&P said, "We view the company's smaller proved reserve base and
production level relative to peers, and its high geographic
concentration, as limiting factors on the ratings. As at year-end
2022, Magnolia had 157 million barrels of oil equivalent (boe) of
proved reserves (80% proved developed) and we expect 2023
production of around 83 mboe/d, which is at the lower end of the
range for 'B+' rated peers such as SM Energy, Northern Oil & Gas
and Permian Resources." All of the company's reserves and
production are in South Texas, from the Eagle Ford shale and Austin
Chalk formations. Nearly 40% of its 2023 production is expected to
be from Karnes County, and 60% from the Giddings field (primarily
in Grimes, Washington, Lee, and Fayette counties).
S&P anticipates the company will increase production nearly 10%
this year, driven largely by the development of the Giddings field.
Magnolia holds 460,000 net acres in field, where it primarily
targets the Austin Chalk, which lies above the Eagle Ford. Despite
a history of mixed results from other operators in the play, the
company's development program in the Austin Chalk continues to
improve, with lower costs achieved through greater operating
efficiency gains (20% higher compared with 2021) such as fewer
drilling days per well, an improvement in stimulation stages per
day, and longer laterals. In 2023, the company expects to average
approximately four wells per pad with average lateral lengths of
about 8,000 feet in Giddings.
Overall, the company expects to maintain a two-rig drilling program
in 2023, with total capital spending in the range of $490
million-$520 million, which we expect to be within the company's
target of 55% of EBITDAX.
S&P said, "We expect Magnolia to use its free cash flows for
shareholder distributions and potential small bolt-on
acquisitions.
"We expect Magnolia to continue allocating a sizeable portion of
its free cash flow toward shareholder distributions. This includes
the company's ongoing share repurchase program, through which it
targets to buy back 1% of its outstanding shares each quarter,
while also modestly increasing its base dividends. We also expect
the company to pursue small accretive bolt-on oil and gas property
acquisitions in its core operating areas.
"Our stable outlook reflects our view that Magnolia's FFO to debt
will remain in excess of 100%, while it generates significant
positive DCF and increases production and reserves. Our outlook
also incorporates the company's policy of spending around 55% of
EBITDAX or less on internal growth, allowing for significant free
cash flow generation.
"We could lower the rating if we expected FFO to debt to approach
45% or debt to EBITDA to approach 2.0x on a sustained basis. This
would most likely occur if commodity prices were to weaken below
our price deck assumptions and the company did not reduce spending
or distributions, or if the company did not meet our oil production
expectations.
"We could raise the rating if the company improved the scale of its
proved developed reserves and production to levels more consistent
with 'BB-' rated peers, while maintaining FFO to debt comfortably
above 45%, and adequate liquidity."
ESG credit indicators: : E-4,S-2,G-2
S&P said, "Environmental factors are a negative consideration in
our rating analysis of Magnolia as the E&P industry contends with
an accelerating energy transition and adoption of renewable energy
sources. We believe falling demand for fossil fuels will decrease
profitability and returns for the industry as it fights to retain
and regain investors that seek higher return investments."
MARKET FORCE: Main Street's $26M Loan at Steep Discount
-------------------------------------------------------
Main Street Capital Corporation has marked its $26,079,000 loan
extended to Market Force Information LLC to market at $1,610,000 or
6% of the outstanding amount, as of December 31, 2022, according to
a disclosure contained in Main Street's Form 10-K for the fiscal
year ended December 31, 2022, filed with the Securities and
Exchange Commission on February 24, 2023.
Main Street is a participant in a Secured Debt Loan to Market Force
Information LLC. The loan accrues interest at a rate of 12% (12%
Payment In Kind rate) per annum. The loan matures on July 28,
2023.
Main Street classified the debt as non-accrual and non-income
producing.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market (LMM) companies and debt capital to middle market (Middle
Market) companies. The portfolio investments of MSCC and its
consolidated subsidiaries are typically made to support management
buyouts, recapitalizations, growth financings, refinancing and
acquisitions of companies that operate in a variety of industry
sectors. MSCC seeks to partner with entrepreneurs, business owners
and management teams and generally provides one-stop financing
alternatives within its LMM investment strategy.
Market Force Information LLC provides marketing information
services. The Company offers strategic advisory, technology,
customer survey, employee engagement, social media reviews and
monitoring, and market research services. Market Force Information
serves retail, restaurant, hospitality, grocery, movie theaters,
studios, banking, and finance industries.
MEHLING ORTHOPEDICS: U.S. Trustee Appoints Joseph Tomaino as PCO
----------------------------------------------------------------
Andrew Vara, U.S. Trustee for Regions 3 and 9, appointed Joseph
Tomaino as patient care ombudsman for Mehling Orthopedics, LLC.
The appointment was made pursuant to the order from the U.S.
Bankruptcy Court for the District of New Jersey directing the
appointment of a patient care ombudsman. The U.S. Trustee is
authorized to appoint a patient care ombudsman in Mehling's Chapter
11 case under Section 333(a)(1) of the Bankruptcy Code.
Mr. Tomaino disclosed in a court filing that he has no connections
with the company, creditors or any party in interest.
A copy of the notice is available for free at
https://bit.ly/3aL5k8q from PacerMonitor.com.
About Mehling Orthopedics
Mehling Orthopedics, LLC is a health care business in Hackensack,
N.J. It operates an orthopedic trauma practice dedicated to
creating individualized treatment plans for traumatic injuries and
disabilities, including orthopedic trauma and sports-related
injuries.
Mehling Orthopedics sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. N.J. Case No. 23-11121) on Feb. 10,
2023, with up to $50,000 in both assets and liabilities. Brian
Mehling, member of Mehling Orthopedics, signed the petition.
Melinda D. Middlebrooks, Esq., at Middlebrooks Shapiro, P.C.,
represents the Debtor as legal counsel.
MILLION DOLLAR SMILE: Seeks Cash Collateral Access Thru Sept 2
--------------------------------------------------------------
Million Dollar Smile, LLC asks the U.S. Bankruptcy Court for the
Southern District of California for authority to use cash
collateral on a final basis through September 2, 2023.
The Debtor requires the use of cash collateral to operate its
business and pay expenses.
The Debtor faced serious financial and legal challenges that led to
the chapter 11 filing. MDS had considerable and unsustainable
growth before and during the COVID-19 pandemic. Sales increased
tremendously and then fell off, the COVID boom and bust. MDS
expanded its sales, increased its costs, took out loans and then
the bottom fell out in or about the Summer of 2021. Hard money
lenders and others demanded payment, used hard ball tactics to
collect monies, including levies on credit card processing
companies and MDS' bank accounts and contacted business, including
merchant processors, with whom the Debtor did business and scared
those business away from working with MDS. MDS could not stay
online selling products and could not do larger wholesale sales
given the collection efforts.
J.P. Morgan Chase Bank likely holds the senior lien and likely is
fully secured and followed by First Corporate Solutions,
representative for an undisclosed entity, and it may be partially
secured.
The parties that also assert an interest in the Debtor's cash
collateral are First Corporate Solutions, Fasanara Securitisation,
S.A., and Funding Metrics d/b/a Lindini.
The creditors' claims total $195,860 plus accruing interest and
fees.
Priority taxes likely include a claim for income tax by the
Internal Revenue Service for $125,000 for years 2016 to 2019. The
Debtor believes it paid all taxes owed to the Franchise Tax Board.
Some of the IRS' claim likely is non-priority. The Debtor's
non-priority unsecured claims amount to $1,137,760.
The Debtor believes the $195,860 owed to creditors -- while listed
as secured -- are wholly unsecured.
The Debtor contends the Senior Lenders' interests are adequately
protected for at least these reasons:
a. The Debtor will continue to operate its business.
b. Operating the business creates additional revenues.
c. All assets are adequately insured.
d. Providing replacements lien to these two secured creditors
to the extent their prepetition lien attached to the Debtor's
property prepetition and with the same validity, priority, and
description of collateral. To be clear, if there is a defect in a
security interest prepetition, that same defect would apply
post-petition.
e. The Debtor and Chase have agreed to the adequate protection
payment that the Debtor is to make to Chase.
A copy of the Debtor's request is available at
https://bit.ly/3LMGDsC from PacerMonitor.com.
About Million Dollar Smile, LLC
Million Dollar Smile, LLC offers oral hygiene and beauty products.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Cal. Case No. 23-00001) on January 2,
2023. In the petition signed by Angelo De Simone, managing member,
the Debtor disclosed up to $500,000 in assets and upt o $10 million
in liabilities.
Steven R. Fox, Esq., at The Fox Law Corporation, Inc., is the
Debtor's legal counsel.
MUSC HEALTH-ORANGEBURG: S&P Withdraws 'B' Issuer Credit Rating
--------------------------------------------------------------
S&P Global Ratings withdrew its 'B' issuer credit rating (ICR) on
the Orangeburg-Calhoun Counties Regional Medical Center (doing
business as MUSC Health-Orangeburg), S.C., due to insufficient
information. The rating had been placed on CreditWatch with
developing implications on Nov. 18, 2022. The ICR reflects general
creditworthiness of the issuer and is not specific to a particular
series of bonds.
"Specifically, the withdrawal reflects our lack of receipt of
adequate and timely financial and strategic information necessary
to resolve the CreditWatch placement and maintain surveillance of
the rating in accordance with our applicable criteria and
policies," said S&P Global Ratings credit analyst Wendy Taylor.
Such financial information includes, for example, the fiscal year
2022 audited financial statements or similar financial information.
Such strategic information includes, for example, additional
details regarding the recent March 1, 2023, affiliation with the
unrated Medical University of South Carolina (MUSC). The ICR
withdrawal, was preceded, in accordance with our policies, by any
change to the rating that S&P considered appropriate given
available information.
NATIONAL CINEMEDIA: Moody's Cuts CFR to C, Alters Outlook to Stable
-------------------------------------------------------------------
Moody's Investors Service downgraded National CineMedia, LLC's (NCM
or National CineMedia) ratings, including the Corporate Family
Rating to C from Caa3 and the Probability of Default Rating (PDR)
to C-PD/LD (/LD designation indicates a limited default under
Moody's definition) from Caa3-PD. The ratings outlook was changed
to stable from negative.
The /LD designation reflects NCM's missed interest payment on its
senior unsecured 5.75% notes and the subsequent failure to make the
payment during the original thirty-day grace period. The downgrade
of the CFR to C reflects the default under Moody's definition and
Moody's expectation for below average recovery for the debt
capitalization in default.
Downgrades:
Issuer: National CineMedia, LLC
Corporate Family Rating, Downgraded to C from Caa3
Probability of Default Rating, Downgraded to C-PD/LD (/LD
appended) from Caa3-PD
Senior Secured Bank Credit Facility, Downgraded to Ca (LGD4) from
Caa2 (LGD3)
Senior Secured Regular Bond/Debenture, Downgraded to Ca (LGD4)
from Caa2 (LGD3)
Senior Unsecured Regular Bond/Debenture, Downgraded to C (LGD6)
from Ca (LGD6)
Outlook Actions:
Issuer: National CineMedia, LLC
Outlook, Changed to Stable from Negative
RATINGS RATIONALE
National CineMedia's C CFR reflects its heavily levered capital
structure that Moody's views as unsustainable, weak operating
performance and limited financial flexibility given weak liquidity
and near-term maturities and an expectation for lower than average
recovery for the debt capitalization at default. NCM's liquidity is
weak as the company failed to make interest payments during the
grace period and has entered an amendment with its unsecured
lenders to extend the grace period to 47 days from 30 days. The
company disclosed in a form 8-K filed on March 16 that NCM is
engaged in negotiations with certain lenders regarding its
indebtedness and that it had not reached an agreement as of the
date of the filing [1].
NCM's liquidity is constrained by high likelihood of a covenant
breach as soon as quarter ending March 31, 2023 and high
refinancing risk with two almost fully drawn revolvers maturing in
June 2023. As of September 30, 2022, the availability under NCM's
$175 million revolver was $6.8 million, net of $167 million
outstanding and $1.2 million in letters of credit. NCM's $50
million incremental revolver was fully drawn. As of September 30,
2022 NCM LLC had $60.9 million cash, and holdco NCM, Inc had $13.9
million cash. NCM has been burning cash or generated near
break-even free cash flow every quarter since the onset of the
pandemic. Moody's expects that in 2023 NCM's free cash flow will
likely turn positive, but it will not be sufficient to enable NCM
to pay revolvers in full at maturity.
NCM's covenant suspension period ended in December 2022. Starting
in Q1 2023, NCM's revolver and term loan are subject to a
continuing maximum net total leverage ratio (as defined in the
facility agreement) and a springing net senior secured leverage
covenant. Moody's does not believe the company can comply with its
leverage covenants in the first quarter 2023 absent a waiver.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company reduces debt
sufficiently to achieve a tenable capital structure with improved
liquidity.
The principal methodology used in these ratings was Media published
in June 2021.
Headquartered in Centennial, Colorado, National CineMedia, LLC is a
privately held joint venture operator of a leading digital
in-theater advertising network in North America. National
CineMedia, Inc. is NCM's publicly traded managing owner and held a
47.5% ownership interest in NCM as of September 29, 2022. The
remaining interest is split equally between the founding member
theaters Cinemark Holdings, Inc. (25.4%), Regal CineMedia Holdings,
LLC (23.6%) and AMC Entertainment, Inc. (3.5%).
NCL CORP: S&P Alters Outlook to Stable, Affirms 'B' ICR
-------------------------------------------------------
S&P Global Rating revised our outlook on global cruise operator NCL
Corp. Ltd. to stable from negative and affirmed all of its ratings,
including the 'B' issuer credit rating.
The stable outlook reflects S&P's expectation that the company will
significantly improve its credit metrics through 2024, despite the
incremental debt from its ship deliveries in 2023, on an
anticipated increase in its revenue and EBITDA as it operates under
more normal operating conditions and its occupancy levels recover
to pre-pandemic levels.
NCL's 2023 booked position provides it with sufficient revenue
visibility and will likely support a significant improvement in its
credit measures this year. The company entered the year with a
cumulative booked position of approximately 62% for full year 2023,
with higher prices than it reported in 2019 despite a 19% increase
in its capacity relative to that period. The company's booked
position was aided by a strong 2023 Wave season, which is the
period early in the year during which cruise operators typically
see significant booking activity for vacations. A record level of
bookings in January, combined with additional record bookings in
November (during Black Friday and Cyber Monday), increased NCL's
2023 booked position beyond its results as of the same time in 2019
despite a significant increase in its capacity. Management also
mentioned on its earnings call that its booking window in the
fourth quarter was elongated relative to the same period in 2019, a
further sign of booking patterns moving back towards pre-pandemic
levels. Lastly, the company's onboard revenue was about 25% above
its 2019 levels.
NCL's current booked position and pricing provide it with increased
revenue visibility and will likely support a continued recovery in
its occupancy to historical levels beginning in the second quarter.
This will likely significantly expand its revenue and EBITDA
compared with 2022 (and drive higher revenue than in 2019). S&P
said, "Therefore, we assume NCL's 2023 leverage could plausibly
improve to about 7.0x under our current base-case forecast, which
compares with our 7.5x downgrade threshold for the current rating.
Furthermore, we expect the company could materially improve its
leverage in 2024, largely due to a full year of contributions from
the ships it received in 2023 and its lack of ship deliveries in
2024 (and thus no incremental ship-level debt)."
Increasing macroeconomic risks, inflation, and high fuel costs
could impair NCL's cash flow recovery. Rising prices and interest
rates will likely eat away at household purchasing power in 2023.
S&P said, "Therefore, we now expect the U.S. economy will fall into
a shallow and short recession over the next 12 months. Our
economists believe it is too soon to assess the full impact of the
fallout from the collapse of Silicon Valley Bank. However, for now,
we think the macroeconomic effects will be limited. Consumer
confidence would be the most likely macro channel to be affected by
the uncertainty around current events, which could lead to a
steeper-than-expected slowdown. While our base-case scenario
already incorporates a minor recession, we can't rule out the
potential for a harder landing if the Federal Reserve ramps up
interest rates through 2023 to quell inflation or the current
uncertainties in the banking sector weaken consumer confidence."
Although the shift in spending toward experiences and away from
goods may continue, weakening macroeconomic conditions and lower
accumulated savings could eventually cause consumers to pull back
on travel spending. In a recession, cruise operators typically
lower their prices to fill ships. If operators discount prices, it
could slow their cash flow recovery and leverage improvement
following years of very depressed cash flow and extraordinarily
high leverage, especially if fuel and other costs remain elevated
because of geopolitical events and inflation.
Fuel costs historically comprised about 10% of cruise operators'
total operating expenses. S&P expects this percentage will increase
given the significantly higher fuel prices relative to 2019, which
could weaken the cruise companies' EBITDA and margin recovery.
NCL's hedging program could reduce the impact of fuel price
volatility on its results this year because it currently hedges 50%
of its forecast 2023 consumption. Nevertheless, its fuel costs will
still be much higher than they were before the pandemic. Despite
these risks, the current wider-than-usual gap between the price of
a cruise vacation and the price of a land-based vacation may alter
the typical industry discounting dynamics during a recession.
Additionally, an elongating booking curve and a strong wave season
in early 2023, following the elimination of many COVID-19
restrictions, provides good visibility into the company's revenue
and cash flow recovery in the strong summer season. This is because
significant spikes in cancellations are unusual during typical
recessions.
The industry has high capital intensity, particularly related to
the delivery of ships, which could delay the company's
deleveraging. Cruise operators generally must commit to deliveries
several years in advance. While operators generally obtain
financing commitments for ships before their delivery--and often at
the same time as they contract the ship's delivery--incremental
debt to finance ship deliveries can lead to a significant
deterioration in their credit measure during periods of operating
weakness because their debt balances are increasing while their
EBITDA is declining. S&P believes NCL's planned ship orders, which
include three ships in 2023 with expected new-build capital
expenditure (capex) of $2.4 billion, will increase its debt and
slow its ability to reduce its leverage this year, despite its
material cash flow recovery, because the company will incur roughly
$1.9 billion in export credit financing for these ships. NCL does
not have any ship deliveries scheduled for 2024, though it will
continue making progress payment for its remaining ships on order.
This will likely allow NCL to more rapidly improve its leverage in
2024.
Further, during periods of steep demand declines, incremental
capacity from new ships often exacerbates pricing pressure as
operators try to match their supply with demand. Given the
significant disruption stemming from the COVID-19 pandemic caused
and the extraordinary amount of debt operators incurred to survive
the long period of associated cash burn, S&P believes the operators
may be more measured in exercising future ship options and
committing to additional ship orders as they try to repair their
highly leveraged balance sheets.
S&P said, "The stable outlook reflects our expectation that NCL
will significantly improve its credit measures in 2023, despite the
incremental debt from its ship deliveries, supported by anticipated
revenue and EBITDA growth as it operates under more normal
operating conditions and its occupancy recovers to pre-pandemic
levels by summer 2023.
"We could lower our rating on NCL if its operating performance in
2023 is weaker than we expect such that we no longer believe its
leverage will improve below our 7.5x downgrade threshold or we
estimate it will be unable to generate positive free operating cash
flow (net of committed ship financing). We could also lower our
rating if we anticipate any strain on NCL's liquidity position,
which would likely occur due to weaker-than-expected demand because
of a more negative effect from the anticipated U.S. recession than
we assume in our current base case or additional operating
restrictions that impair its operations.
"While unlikely in 2023 given our leverage forecast, we could raise
our ratings on NCL if we expect it to sustain S&P Global
Ratings-adjusted leverage of under 6.5x even after incorporating
its incremental ship debt."
ESG credit indicators: To E-3, S-4, G-2; From E-3, S-5, G-2
S&P believes health and safety factors have moderated enough to
revise its social credit indicator to S-4 from S-5. NCL's improving
occupancy and forward booked position suggest the COVID-related
restrictions and consumer fears around cruising will be less of an
overhang this year. Nevertheless, health and safety factors remain
a negative consideration in S&P's credit rating analysis of NCL,
which reflects the leverage overhang from the incremental debt it
issued during the pandemic to finance its long period of
significant cash burn. NCL also faces other health and safety risks
like accidents that could negatively affect its earnings and brand
perception. Environmental factors are a moderately negative
consideration because of the company's heavy use of fuel, which
creates greenhouse gas emissions, as well as its exposure to waste
and pollution risks and increasing environmental regulations. These
risks could lead to an increase in its required investment spending
or fines if not properly managed.
Environmental, social, and governance (ESG) credit factors for this
change in credit rating/outlook and/or CreditWatch status:
-- Health and safety
NICE VIEW 82: Seeks to Hire Joel M. Aresty P.A. as Legal Counsel
----------------------------------------------------------------
Nice View 82, LLC (DE) seeks approval from the U.S. Bankruptcy
Court for the Southern District of Florida to employ Joel M.
Aresty, P.A. as its legal counsel.
The Debtor requires legal counsel to:
a. give advice with respect to the powers and duties of the
Debtor and the continued management of its business operations;
b. advise the Debtor with respect to its responsibilities in
complying with the Office of the U.S. Trustee's Operating
Guidelines and Reporting Requirements and with the rules of the
court;
c. prepare legal documents;
d. protect the interest of the Debtor in all matters pending
before the court; and
e. represent the Debtor in negotiation with its creditors in
the preparation of a Chapter 11 plan.
The firm will be paid an hourly fee of $440 and will be reimbursed
for out-of-pocket expenses incurred.
The firm will be paid a retainer in the amount of $11,000, plus
$2,000 costs. The Debtor paid in advance the amount of $5,000.
Joel Aresty, Esq., a partner at Joel M. Aresty, P.A., disclosed in
a court filing that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Joel M. Aresty, Esq.
Joel M. Aresty, P.A.
309 1st Ave S
Tierra Verde, FL 75202
Telephone: (305) 904-1903
Facsimile: (800) 899-1870
Email: Aresty@Mac.com
About Nice View 82
Nice View 82, LLC (DE) filed a Chapter 11 bankruptcy petition
(Bankr. S.D. Fla. Case No. 23-11520) on Feb. 27, 2023, with as much
as $1 million in both assets and liabilities. Judge Laurel M.
Isicoff oversees the case.
The Debtor is represented by Joel M. Aresty, P.A.
NOSRAT LLC: Seeks Cash Collateral Access
----------------------------------------
Nosrat LLC asks the U.S. Bankruptcy Court for the Eastern District
of New York for authority to use cash collateral as that term is
defined in 11 U.S.C. section 363(a).
The Debtor requires the use of cash collateral to pay ordinary
operating expenses such as debt service, taxes, insurance, and
legal fees.
The Debtor owns real property at 343-349 Nostrand Avenue and
415-419 Gates Avenue, Brooklyn, New York.
The Property was appraised at $22.740 million in September 2017.
The Property is encumbered by a mortgage in the amount of about
$11.767 million in favor of First National Bank of Long Island. The
mortgage obligation is current.
On February 16, 2022, following a Kings County jury verdict, an $8
million judgment was entered against the Debtor arising from a
wintertime slip and fall case on the sidewalk outside a dance
studio that rents space from the Debtor. Plaintiff Nataki Caver,
who sprained her ankle, alleged ligament damage and severe pain
that will last for the rest of her life and cause her to walk with
a cane. The Debtor's liability insurance covers only $1 million of
the claim.
The Debtor filed an appeal but could not bond the appeal since
bonding companies require a cash security equal to 115% of the
judgment amount. A sheriff's sale was scheduled for March 8, 2023.
The Debtor filed the Chapter 11 petition to preserve and protect
the Debtor's interest in the Property during the appellate process.
Aside from the Mortgagee's claim and the personal injury judgment,
both of which are protected by liens, creditors included a $100,000
disputed water bill, a $130,000 SBA COVID-19 disaster loan and
about $900,000 of general unsecured vendor and loan claims.
The Debtor believes the Property value is far in excess of the
amount owed on the Loan. Moreover, the Debtor proposes that to use
the Lender's cash collateral solely to (a) maintain the value of
the Property though payment of the expenses substantially in accord
with the Budget, (b) maintain the cash it collects over and above
its expenditures in its debtor in possession account pending
further order of the Court, and (c) to the extent that the Lender
does not have a post-petition security interest in the Debtor's
post-petition assets, grant the Lender a security interest in such
assets to the extent of any diminution of cash collateral.
A hearing on the matter is set for April 19, 2023 at 10 a.m.
A copy of the Debtor's motion and budget is available at
https://bit.ly/3n5mDr4 from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$3,300 for March 2023;
$43,300 for March 2023;
$43,300 for March 2023;
$31,300 for March 2023;
$43,300 for March 2023; and
$43,300 for March 2023.
About Nosrat LLC
Nosrat LLC owns real property at 343-349 Nostrand Avenue and 415-
419 Gates Avenue, Brooklyn, New York. The Property is a mixed-use
eight building apartment complex with five stores and 54 apartments
on the northeast corner of Nostrand Avenue and Gates Avenue in
Bedford Stuyvesant.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-70776) on March 7,
2023. In the petition signed by Enrique Ventura, as controller, the
Debtor disclosed $25,002,000 in assets and $20,923,965 in
liabilities.
Judge Alan S. Trust oversees the case.
Mark Frankel, Esq., at Backenroth Frankel & Krinsky, LLP,
represents the Debtor as legal counsel.
POLARIS PARENT: S&P Affirms 'B-' ICR, Outlook Stable
----------------------------------------------------
S&P Global Ratings affirmed all ratings on Polaris Parent LLC
(d/b/a Solera), including its 'B-' issuer credit rating.
S&P said, "The stable outlook on Solera reflects our expectations
that the company will materially improve its EBITDA base and EBITDA
margins such that it generates free cash flow to debt of around
1.5% over the next 12 months and continues to improve. While the
company will have negative net cash flow in fiscal 2023, we expect
it will maintain sufficient total liquidity. The outlook also
reflects our expectations for leverage to decrease to below 9x and
for it to improve over the next 12 months.
"The large bulk of Solera's recent liquidity constraints have been
caused by nonrecurring cash outflows rather than a deterioration of
Solera's core business and we expect Solera will have reduced
operational flexibility as it takes a more proactive approach to
preserve and generate cash. Solera's liquidity position
significantly dwindled from $348 million of cash and $188 million
revolver availability in March 2022, to around $207 million of cash
and $30 million revolver availability as of December 2022, a total
decline of around $300 million of availability liquidity. The two
largest contributors to this shortfall are acquisition related
earnout and deferred payments which we expect to be around $189
million by fiscal year-end 2023 along with stock option exercises
that represented another $65 million of outflows during fiscal
2023. Although Solera has one remaining earnout payment of up to
$62 million due by the end of April 2023, we view the recent
outflows as nonrecurring.
"We also expect Solera will receive the incremental cash flow
benefit of reducing elevated inventory levels which grew
significantly after aggressive over ordering during the peak of
supply chain shortages. We also expect the company will improve on
its accounts-receivable collection which has grown over the past
several quarters, mostly due to billing disruptions during its
integration of Omnitracs and DealerSocket. We view these proactive
actions taken by Solera as necessary to maintain an adequate
liquidity position given that large swings in working capital
outflows due to unforeseen macroeconomic trends could cause
underperformance relative to our base case. We expect its core
business can generate around $100 million of FOCF in fiscal 2024,
which should allow it to fund its remaining earn-out payment as
well as its $53 million of debt servicing while providing Solera
with sufficient liquidity and the ability to manage its core
operational cash requirements.
"Solera's EBITDA base has been pressured by elevated one-time items
to related to foreign exchange headwinds, SLA credits as a result
of data center migrations, and investments related to its auto
financing business, all of which have contributed to EBITDA
shortfalls with S&P Global Ratings-estimated EBITDA margins
declining to 36.5% in fiscal 2023 from about 40% in 2022. We view
most of these costs to be transitory in nature and expect them to
significantly wind down in 2023 as foreign exchange headwinds
normalize and the company takes a leaner approach to its investment
distribution. We expect the company to execute its cost
restructuring plan, which includes previously actioned headcount,
operating efficiencies, and spend optimization.
"While Solera has achieved some of the straightforward steps of its
cost-optimization strategy, it is in the early stages of executing
the more complex pieces like consolidation of information
technology (IT) infrastructure as well as integrating new
platforms, which will take several quarters and could lead to
operational disruptions. There is also the risk that some of the
cost to achieve these synergies could be higher than expected and
which could delay the pace of margin accretion. We expect actions
taken by the company as well as a normalization of supply chain
trends will lead to improved EBITDA margins which we expect to be
around 41% in fiscal 2024 and growing further as the company
achieves additional cost savings. However, faster growth of its
lower margin offerings may continue to be headwind.
"Furthermore, we expect Solera's leverage to be around 9.9x at
fiscal year-end 2023 and we expect deleveraging to the mid-8x area
to stem from revenue growth along with realization of its cost
synergy plan. Historically, Solera has been very aggressive with
its acquisition strategy and has not shied away from taking on high
leverage to do so, but we expect a more moderate acquisition plan
as the company integrates and optimizes its capital structure. We
view the company's achievement of sustained organic revenue growth
in the low single digits and EBITDA growth as the main path to
continued sustainability of its $8.3 billion capital structure.
Solera faces minimal refinancing risk given most of its debt
matures in 2028 and we believe its long-term cash generation will
continue to improve as interest rates normalize, which could
potentiality occur even faster than expected if the Federal Reserve
pivots away from its higher interest rate plans in the wake of
recent banking struggles across the world.
"The stable outlook on Solera reflects our expectations that the
company will materially improve its EBITDA base and EBITDA margins
such that it generates free cash flow to debt of around 1.5% over
the next 12 months and continues to improve. While the company will
have negative net cash flow in fiscal 2023, we expect it will
maintain sufficient total liquidity. The outlook also reflects our
expectations for leverage to decrease to below 9x and for it to
improve over the next 12 months."
S&P could lower its rating on Solera if:
-- Its transaction-based revenue declines are worse than expected,
leading to negative FOCF generation or weakened liquidity.
-- Adjusted leverage doesn't improve from elevated levels,
weakening FOCF generation insufficient to service debt or interest
coverage lead S&P's to believe that its capital structure is
unsustainable. This could be caused by prolonged revenue declines
and margin pressures or key customer losses and business
disruptions related to management's global restructuring or
integration efforts.
While unlikely over the next year given the elevated starting
leverage, S&P could raise the rating if:
-- Leverage remains lower than 8x and FOCF to debt consistently
higher than 5%; and
-- Revenue expands as the company gains market share.
ESG credit indicators: E-2, S-2, G-3
S&P said, "Governance factors are a modestly negative consideration
in our credit rating analysis of Polaris (doing business as
Solera). We believe Polaris's highly leveraged financial risk
profile points to corporate decision-making that prioritizes the
interests of the controlling owners. This also reflects the
generally finite holding periods and a focus on maximizing
shareholder returns."
PREMIER CAJUN: Court OKs Interim Cash Collateral Access
-------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Alabama,
Southern Division, authorized Premier Cajun Kings, LLC to use cash
collateral up to $1.910 million on an interim basis during the
first two weeks of the case and prior to the entry of a Final
Order.
The Debtor requires immediate authority to use cash collateral to
permit, among other things, (a) fund the orderly operation of the
Debtor's business, (b) the management and preservation of the
Debtor's assets, (c) the maintenance of the Debtor's business
relationships with customers, vendors, and contract parties, and
(d) the satisfaction of other working capital and operational needs
including the fees and expenses of the chapter 11 case.
On January 7, 2021, Premier Cajun, and Manraj Sidhu and PNC Bank,
National Association -- as successor-in-interest to BBVA USA f/k/a
Compass Bank -- as sole Lender, entered into the Amended and
Restated Credit Agreement, which provided the Borrower with an
asset-based term loan credit facility. The Credit Facility consists
of:
(a) a $9.961 million term loan facility
(b) a $3 million delayed draw term loan facility, and
(c) a $5 million development loan facility.
The Prepetition Secured Obligations matured on September 30, 2022,
however, they will also be deemed to have been automatically
accelerated on the Petition Date as a result of the commencement of
the Chapter 11 Case in accordance with the terms of the Prepetition
Loan Documents and all commitments of the Prepetition Secured Party
have been terminated.
PNC has a first-priority security interest in all of the Debtor's
assets, including cash and accounts receivable. As of the Petition
Date, the amount outstanding to the Prepetition Secured Party is
$8.3 million.
As adequate protection, the Prepetition Secured Party is granted an
additional and replacement valid, binding, enforceable,
non-avoidable, and automatically perfected, nunc pro tunc to the
Petition Date, postpetition security interest in and first priority
senior lien on the Debtor's post-petition assets.
The Prepetition Secured Party is also granted, subject only to a
Carve-Out, an allowed superpriority administrative expense claim as
provided for in U.S.C. section 507(b), payable from and having
recourse to all prepetition and postpetition property of the Debtor
and all proceeds thereof.
The Debtor will pay the Prepetition Secured Party $25,000 per week
for each of the first eight weeks of the Chapter 11 Case.
The Carve-Out means:
(a) Statutory fees payable to the Bankruptcy Administrator
pursuant to 28 U.S.C. section 1930(a)(6) with respect to the
Debtor;
(b) The allowed fees and costs of the Debtor's claims and
noticing agent, if any, subject in all respects to the terms of the
Interim Order; and
(c) The allowed fees and expenses actually incurred by persons
or firms retained by the Debtor or any Committee on or after the
Petition Date.
The events that constitute a "Termination Event" includes:
(a) May 5, 2023;
(b) The failure to have a Final Order entered, in form and
substance acceptable to the Prepetition Secured Party on or before
April 4, 2023, unless otherwise agreed in writing by the
Prepetition Secured Party;
(c) The failure by the Debtor to have filed on the docket of
the Chapter 11 Case a bid procedures motion containing an executed
stalking horse asset purchase agreement for all or substantially
all of the assets of the Debtor, both in form and substance
acceptable to the Prepetition Secured Party, on or before March 15,
2023;
(d) The failure by the Debtor to have obtained entry of a bid
procedures order, in form and substance acceptable to the
Prepetition Secured Party, on or before April 4, 2023;
(e) The failure by the Debtor to comply with any of the
deadlines contained in such bid procedures order;
(f) The failure by the Debtor to have obtained entry of an
order approving the sale of all or substantially all of the assets
of the Debtor, in form and substance acceptable to the Prepetition
Secured Party, on or before April 28, 2023;
(g) The failure by the Debtor to close on a sale of all or
substantially all of the assets of the Debtor on or before May 5,
2023;
(h) The failure by the Debtor to make, or cause to be made,
any payment under the Interim Order to the Prepetition Secured
Party when due;
(i) The failure by the Debtor to deliver to the Prepetition
Secured Party any of the material documents or other material
information required to be delivered pursuant to the Interim Order
when due or any such documents or other information will contain a
material misrepresentation;
(j) The failure by the Debtor to comply with any Approved
Budget covenants; and
(k) The Debtor will grant, create, incur or suffer to exist
any postpetition liens or security interests other than those
granted pursuant to the Interim Order.
A further hearing on the matter is set for April 4 at 1:30 a.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3yNNf2j from PacerMonitor.com.
The Debtor projects total operating disbursements, on a weekly
basis, as follows:
$247,000 for the week ending March 24, 2023;
$646,000 for the week ending March 31, 2023;
$245,000 for the week ending April 7, 2023;
$1,200,000 for the week ending April 14, 2023;
$233,000 for the week ending April 21, 2023; and
$639,000 for the week ending April 28, 2023.
About Premier Cajun Kings, LLC
Premier Cajun Kings, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Ala. Case No. 23-00656) on March
14, 2023. In the petition signed by Joginder Sidhu, Personal Rep.
for Estate of deceased sole member Manraj Sidhu, the Debtor
disclosed up to $10 million in assets and up to $50 million in
liabilities.
Judge D. Sims Crawford oversees the case.
Jesse S. Vogtle, Jr., Esq., at Holland and Knight, LLP, represents
the Debtor as legal counsel.
PREMIER MEDICAL: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Premier Medical, Inc.
6000 A Pelham Road
Greenville, SC 29601
Chapter 11 Petition Date: March 21, 2023
Court: United States Bankruptcy Court
District of South Carolina
Case No.: 23-00814
Judge: Hon. Helen E. Burris
Debtor's Counsel: Robert H. Cooper, Esq.
THE COOPER LAW FIRM
150 Milestone Way, Ste B
Greenville, SC 29615
Tel: 864-271-9911
Fax: 864-232-5236
Email: thecooperlawfirm@thecooperlawfirm.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Kevin Murdock as sole owner.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/LF62AYY/Premier_Medical_Inc__scbke-23-00814__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. CloudFund, LLC Merchant Loan $270,000
400 Rekka Blvd, Ste
165-101
Suffern, NY 10901
2. Dash Courier Service $73,362
PO Box 11049
Charlotte, NC 28220
3. Diversified Property $129,987
Ventures, LLC
c/o Cushman & Wakefield
PO Box 5160
Glen Allen, VA 23058
4. Experian Health Inc. $128,316
PO Box 846133
Los Angeles, CA 90084
5. Fisher Healthcare $73,433
Attn 001686
Atlanta, GA 30384
6. Greenville County $214,424
Tax Assessor
301 University
Ridge, Ste 700
Greenville, SC 29601
7. Illumina Inc $333,444
12864 Collection
Center Dr
Chicago, IL 60693
8. Jant Pharmacal Corp $107,773
16530 Ventura Blvd
#512
Encino, CA 91436
9. Kudzu Staffing Inc $105,199
PO Box 51627
Powdersville, SC
29673
10. Lab Logistics LLC $112,784
PO Box 84938
Chicago, IL 60689
11. Legacy Capital 26, LLC Merchant Loan $1,167,250
290 Harbor Drive
Stamford, CT 06902
12. Life Technologies Corp $204,586
12088 Collection
Center Dr
Chicago, IL 60693
13. Myhommelabs $90,000
6366 College Blvd
Overland Park, KS
66211
14. Pulse Consulting $110,000
2400 Veterans Mem
Blvd 510
Kenner, LA 70062
15. Quest Diagnostics $151,339
Atl
PO Box 74736
Atlanta, GA 30374
16. Radla Capital, LLC Merchant Loan $329,868
161-10A Union
Street 2nd Floor
Flushing, NY 11366
17. Roche Diagnostics Corp $120,000
Mail Code 5508
Charlotte, NC 28272
18. UPS $124,793
PO Box 7247-0244
Philadelphia, PA
19170
19. Vessell Medical $6,923,182
6000 A Pelham Road
Greenville, SC 29615
20. Vox Funding SPV1, LLC Merchant Loan $1,456,000
14 E 44th St 4th Floor
New York, NY 10017
PROJECT ALPHA: Moody's Affirms B3 CFR & Alters Outlook to Stable
----------------------------------------------------------------
Moody's Investors Service affirmed Project Alpha Intermediate
Holding, Inc.'s ("Qlik") B3 Corporate Family Rating, B3-PD
Probability of Default Rating, and B3 rating to the Backed Senior
Secured Bank Credit Facility. The outlook was changed to stable
from positive.
The change in outlook to stable reflects heightened refinancing
risk of the company's term loan due April 2024 following the
withdrawal of Qlik's previously proposed amend and extend
transaction. Moody's expects that Qlik's standalone metrics will
remain appropriate for the B3 rating, inclusive of leverage
remaining near 6x and positive free cash flow (FCF) generation.
This is predicated on an improvement in sales and earnings, which
were constrained in 2022 by a continued revenue model shift,
impacts of foreign exchange, investments into cloud infrastructure,
and macroeconomic pressures.
Over the next year, Qlik should benefit from a reduced impact of
the revenue model shift, pricing actions, cost savings initiatives,
and reduced investments. Continued macroeconomic pressures and
elevated interest rates can potentially pressure growth
assumptions. The ratings and stable outlook could be revised
depending on the final capital structure post the pending Talend
acquisition. Furthermore, the stable outlook reflects Moody's
expectation that Qlik will refinance its maturing debt in the near
term.
Affirmations:
Issuer: Project Alpha Intermediate Holding, Inc.
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Backed Senior Secured Bank Credit Facility, Affirmed B3 (LGD3)
Outlook Actions:
Issuer: Project Alpha Intermediate Holding, Inc.
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
Qlik's CFR is constrained by the company's moderate financial
leverage, narrow scope of products within the competitive business
intelligence and analytics (BIA) as well as data integration
markets, and challenges of converting existing perpetual license
users to subscription licenses. Qlik competes against large and
well capitalized firms with superior distribution and bundling
capabilities including Microsoft, SAP, and Salesforce (Tableau).
Moody's believe the probability of Qlik deploying aggressive
financial policies is high as a private, controlled company.
Qlik benefits from an increasingly recurring revenue profile and
good geographic diversity. The company's solutions are consistently
regarded as a leader in the BIA market, which partially mitigates
the intense competitive pressures of the industry. The company's
weak liquidity profile is underpinned by its debt maturing in the
next 12-18 months. At the same time, Qlik continues to generate
positive free-cash-flow (FCF) and has around $275 million of total
liquidity (approximately $200 million cash and $75 million revolver
availability) as of September 30, 2022.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Qlik's ratings could be upgraded if the company builds a track
record of conservative financial policies, sustains debt/CASH
EBITDA below 6x, and generates FCF/debt in the mid-to-high single
digit range for an extended period.
Qlik's ratings could be downgraded should the company's operating
performance weaken such that debt/CASH EBITDA remains above 7x or
FCF/debt is sustained in the low single digit range. In addition,
Qlik's ratings would be negatively pressured if liquidity
deteriorates or if debt maturities are not addressed in a timely
manner.
ESG CONSIDERATIONS
ESG considerations have a highly negative impact (CIS-4) on Qlik's
credit profile, primarily driven by the company's governance risks
characterized by aggressive financial policies. Qlik has a highly
negative exposure to governance risks (G-4). Qlik's propensity for
aggressive financial policies remains elevated while under private
equity firm Thoma Bravo's ownership. The use of debt to enhance
equity returns is a common strategy for private equity firms and
can impede Qlik's ability to achieve meaningful deleveraging over
time. The company is privately held and the majority of board
members have an affiliation with Thoma Bravo. Qlik has moderately
negative credit exposure (S-3) to social considerations primarily
from human capital and data security risks. Qlik has moderate human
capital risks from its dependence on highly skilled technical and
engineering talent, challenges characteristic of the software
sector broadly. The company has moderately negative credit exposure
arising from reputational risks associated with potential cyber and
data security breaches of its products or internal networks.
The principal methodology used in these ratings was Software
published in June 2022.
Qlik is a provider of business intelligence, data analytics, and
data integration solutions to over 36,000 unique customers
worldwide. The Company's software products help users integrate and
harmonize disparate data streams to improve analysis across
different groups and lines of business within an organization. The
solutions are delivered on-premise via term licenses or through the
cloud as a Software-as-a-Service (SaaS) solution. Qlik is wholly
owned by private equity firm Thoma Bravo following the take-private
LBO in August 2016. Revenue for the twelve months ending September
30, 2022 was over $880 million.
PURDUE PHARMA: Bankruptcy Court Okays $9-Mil. Funding for HRT
-------------------------------------------------------------
The Bankruptcy Court on March 21, 2023, approved Purdue Pharma
providing Harm Reduction Therapeutics (HRT) up to $9 million in
additional financial support to fund commercial readiness for HRT's
low-cost over-the-counter (OTC) intranasal naloxone spray,
tradename RiVive.* Naloxone is an opioid antagonist rescue
medication used to reverse the effects of a life-threatening opioid
overdose.1
HRT is an independent, 501(c)(3) non-profit pharmaceutical company
whose sole mission is to prevent opioid overdose deaths by making
low-cost intranasal naloxone available as an OTC product. In
support of HRT's mission, since 2018 Purdue has provided financial
contributions, technical expertise, and rights to data. The
additional funding approved today will help HRT continue its work
toward making OTC naloxone nasal spray available to the public.
"We are grateful to our creditors for their support of this
important effort to help abate the opioid crisis and save lives by
making naloxone nasal spray more accessible and affordable," said
Craig Landau, MD, President and CEO of Purdue Pharma. "We
appreciate FDA's support of the development of OTC naloxone
products that will expand access to this lifesaving medication,2
and we are proud to support HRT's work to get this product into the
hands of people who need it."
In December 2022, FDA accepted and granted priority review to HRT's
New Drug Application for RiVive™. HRT anticipates an approval
decision from FDA in July 2023. Pending FDA approval, HRT expects
to launch in the U.S. in early 2024.
"With growing support among both the public and government health
agencies toward expanding naloxone access with OTC products, we are
on the brink of a major inflection point in our mission to prevent
opioid overdose deaths," said Dr. Michael Hufford, Co-Founder and
Chief Executive Officer of Harm Reduction Therapeutics. "RiVive™
has been developed as a low-cost, easily obtainable medicine to
protect families and communities from overdose deaths, and we look
forward to making it available as widely and cheaply as possible,
after FDA approval."
Consistent with previous funding commitments to HRT, neither Purdue
nor any of its creditors will receive any revenues, royalties, or
profits associated with potential future sales of HRT's OTC
naloxone nasal spray.
*This information discusses investigational use of an agent in
development and is not intended to convey conclusions about
efficacy or safety. There is no guarantee that OTC naloxone
intranasal spray will successfully complete development or gain FDA
approval.
About Purdue Pharma
Purdue Pharma L.P. and its subsidiaries --
http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers and caregivers.
Purdue's subsidiaries include Adlon Therapeutics L.P., focused on
treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and
related disorders; Avrio Health L.P., a consumer health products
company that champions an improved quality of life for people in
the United States through the reimagining of innovative product
solutions; Imbrium Therapeutics L.P., established to further
advance the emerging portfolio and develop the pipeline in the
areas of CNS, non-opioid pain medicines, and select oncology
through internal research, strategic collaborations and
partnerships; and Greenfield Bioventures L.P., an investment
vehicle focused on value-inflection in early stages of clinical
development.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and as state
attorneys general file lawsuits against manufacturers. More than
2,000 states, counties, municipalities and Native American
governments have sued Purdue Pharma and other pharmaceutical
companies for their role in the opioid crisis in the U.S., which
has contributed to the more than 700,000 drug overdose deaths in
the U.S. since 1999.
OxyContin, Purdue Pharma's most prominent pain medication, has been
the target of over 2,600 civil actions pending in various state and
federal courts and other fora across the United States and its
territories.
On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated
debtors each filed a voluntary petition for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-23649), after reaching terms of a preliminary agreement for
settling the massive opioid litigation. The Debtors' consolidated
balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets
and $562 million in liabilities.
U.S. Bankruptcy Judge Robert Drain oversees the cases.
The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP as
legal counsels; PJT Partners as investment banker; AlixPartners as
financial advisor; and Grant Thornton, LLP as tax structuring
consultant. Prime Clerk, LLC, is the claims agent.
Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the
official committee of unsecured creditors appointed in the Debtors'
bankruptcy cases.
David M. Klauder, Esq., is the fee examiner appointed in the
Debtors' cases. The fee examiner is represented by Bielli &
Klauder, LLC.
* * *
U.S. Bankruptcy Judge Robert Drain in early September 2021 approved
a plan to turn Purdue into a new company (Knoa Pharma LLC) no
longer owned by members of the Sackler family, with its profits
going to fight the opioid epidemic. The Sackler family agreed to
pay $4.3 billion over nine years to the states and private
plaintiffs and in exchange for a lifetime legal immunity. The deal
resolves some 3,000 lawsuits filed by state and local governments,
Native American tribes, unions, hospitals and others who claimed
the company's marketing of prescription opioids helped spark and
continue an overdose epidemic.
Separate appeals to approval of the Plan have already been filed by
the U.S. Bankruptcy Trustee, California, Connecticut, the District
of Columbia, Maryland, Rhode Island and Washington state, plus some
Canadian local governments and other Canadian entities.
In early March 2022, Purdue Pharma reached a nationwide settlement
over its role in the opioid crisis, with the Sackler family members
boosting their cash contribution to as much as $6 billion. The
settlement was hammered out with attorneys general from the eight
states -- California, Connecticut, Delaware, Maryland, Oregon,
Rhode Island, Vermont and Washington -- and D.C. who had opposed
the previous settlement.
QUORUM HEALTH: CHS Defendants' Motion to Dismiss Granted in Part
----------------------------------------------------------------
In the adversary proceeding captioned as In re: QUORUM HEALTH
CORP., Chapter 11, Reorganized Debtor. DANIEL H. GOLDEN, as
Litigation Trustee of the QHC LITIGATION TRUST and WILMINGTON
SAVINGS FUND SOCIETY, FSB, solely in its capacity as Indenture
Trustee, Plaintiffs, v. COMMUNITY HEALTH SYSTEMS, INC.;
CHS/COMMUNITY HEALTH SYSTEMS, INC.; REVENUE CYCLE SERVICE CENTER,
LLC; CHSPSC, LLC; PROFESSIONAL ACCOUNT SERVICES, INC.; PHYSICIAN
PRACTICE SUPPORT, LLC; ELIFIBILITY SCREENING SERVICES, LLC; W.
LARRY CASH; RACHEL SEIFERT; ADAM FEINSTEIN; AND CREDIT SUISSE
SECURITIES (USA) LLC, Defendants, Case No. 20-10766 (BLS), Adv.
Pro. No. 21-51190 (BLS), (Bankr. D. Del.), Bankruptcy Judge Brendan
Linehan Shannon grants in part the Motion to Dismiss filed by
Community Health Systems, Inc. and related entities and officers of
CHS (the CHS Defendants).
Judge Shannon grants the Motion to Dismiss as to Counts One and Two
of the Complaint against CHS and CHS-2. Counts One and Two of the
Complaint seek to avoid and recover the Spin-Off Dividend as
constructive and intentional fraudulent transfers under 11 U.S.C.
Sections 544 and 550 and applicable state fraudulent transfer law.
The Complaint describes the transfer as follows: "QHC paid the
Spin-Off Dividend to CHS's wholly owned indirect subsidiary
BridgeCo, which then merged with and into CHS-2, which is also
wholly owned by CHS." Judge Shannon finds that "the overarching
transfer that the Plaintiffs seek to avoid in Counts One and Two of
the Complaint is the transfer from Quorum to CHS-2. The Plaintiffs
cannot escape application of Section 546(e) by claiming that the
transfer to BridgeCo (a non-qualifying participant) is avoidable
and may be recovered from CHS-2 (a qualifying participant) as a
subsequent transferee."
Judge Shannon finds that the safe harbor of Section 546(e) preempts
the Plaintiffs' ability to pursue avoidance claims under state law
fraudulent transfer law as assignees of the Senior Noteholders.
Judge Shannon concludes that the Spin-Off Dividend was made
pursuant to a securities contract, i.e., the Separation and
Distribution Agreement between CHS and Quorum, and is a qualifying
transfer under Section 546(e).
The CHS Defendants also assert that the Court must dismiss certain
state law claims that attack transfers otherwise protected by
Section 546(e). In particular, the CHS Defendants argue for
dismissal of the claims for recovery under theories of illegal
dividend, aiding and abetting illegal dividend, and unjust
enrichment (Counts Thirteen, Fourteen and Fifteen). The Defendants
contend that allowing a plaintiff to assert state law claims to
recover the same payments which were held to be unavoidable under
Section 546(e) "would render the Section 546(e) exemption
meaningless and would wholly frustrate the purpose behind that
section."
Judge Shannon denies CHS Defendants' motion to dismiss Counts
Thirteen, Fourteen and Fifteen as barred by the safe harbor of
Section 546(e). On this issue, Judge Shannon agrees with the
holding in the case of Lehman Bros. Holdings Inc. v. JPMorgan Chase
Bank (In re Lehman Bros. Holdings Inc.), 469 B.R. 415, 450 (Bankr.
S.D.N.Y. 2012), in which the court wrote: "The safe harbors are not
all encompassing and do not offer fail safe protection against
every cognizable claim made in relation to transactions that may
fit within the statutory framework. . . The plain language of
section 546(e), read literally, provides limited immunity but does
not bar Plaintiffs from maintaining all common law claims,
intentional fraud claims and any other claims not expressly
embraced by section 546(e)."
Finally, the CHS Defendants argue that the unjust enrichment claim
is time-barred and must be dismissed because the transfer occurred
on April 29, 2016 -- nearly four years before the petition date --
beyond Delaware's three-year statute of limitations. On the other
hand, the Plaintiffs assert that the statute of limitations was
tolled because the fraudulent activity prevented the injury from
being discovered.
Judge Shannon agrees with the Plaintiffs that at this stage of the
proceedings, the Court cannot determine whether the statute of
limitations has been tolled and the Motion to Dismiss the unjust
enrichment claim on this basis will be denied.
A full-text copy of the Opinion dated March 16, 2023 is available
at https://tinyurl.com/ymvctem3 from Leagle.com.
About Quorum Health
Quorum Health Corporation -- http://www.quorumhealth.com/-- is an
operator of general acute care hospitals and outpatient services in
the United States. Through its subsidiaries, the Company owns,
leases or operates a diversified portfolio of 22 affiliated
hospitals in rural and mid-sized markets located across 13 states
with an aggregate of 1,817 licensed beds. The Company also
operates Quorum Health Resources, LLC, a leading hospital
management advisory and consulting services business.
Quorum Health incurred net losses attributable to the company of
$200.25 million in 2018, $114.2 million in 2017, and $347.7 million
in 2016.
As of Sept. 30, 2019, Quorum Health had $1.52 billion in total
assets, $1.72 billion in total liabilities, $2.27 million in
redeemable non-controlling interest, and a total deficit of $203.36
million.
On April 7, 2020, Quorum Health Corporation and 134 affiliates
sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
20-10766) to seek confirmation of a pre-packaged plan.
McDermott Will & Emery LLP and Wachtell, Lipton, Rosen & Katz
served as the Company's legal counsel, MTS Health Partners, L.P.
served as financial advisor and Alvarez & Marsal North America, LLC
acted as restructuring advisor.
Kirkland & Ellis LLP served as legal counsel and Jefferies LLC
served as financial advisor to the ad hoc noteholder group, which
agreed to equitize their note claims into new equity of the Company
and invested $200 million of new equity capital in the Company.
Milbank LLP served as legal counsel and Houlihan Lokey, Inc. served
as financial advisor to the ad hoc group of term lenders.
The Company in June 2020 won approval of its reorganization plan.
Members of the ad hoc noteholder group will hold substantially all
of the reorganized Company's equity.
RAYMOND C. GREEN: Involuntary Chapter 11 Case Summary
-----------------------------------------------------
Alleged Debtor: Raymond C. Green Trust
155 Federal Street, Suite 1300
Boston, MA 02110
Involuntary Chapter
11 Petition Date: March 21, 2023
Court: United States Bankruptcy Court
District of Massachussets
Case No.: 23-10411
Petitioners' Counsel: Neil Kreuzer, Esq.
LAW OFFICES OF NEIL KREUZER
268 Newbury Street, 4th Floor
Boston, MA 02116
Tel: (617) 872-5347
Email: nkreuzer@aol.com
- and -
Nicholas Fiorillo, Esq.
3 Kales Way
Harwich Port, MA 02646
Tel: (508) 776-7219
Email: metrowestrealty@yahoo.com
A full-text copy of the Involuntary Petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/65NTQIY/Raymond_C_Green_Trust__mabke-23-10411__0001.0.pdf?mcid=tGE4TAMA
Alleged creditors who signed the petition:
Petitioner Nature of Claim Claim Amount
1. Ocean Development Partners, LLC
2. Fiorillo Family Revocable Trust
3 Kales Way
Harwich Port, MA 02646
3. Ocean Vacations Realty Trust
3 Kales Way
Harwich Port, MA 02646
RECONEXT: Moody's Lowers CFR & Senior Secured Debt to Caa2
----------------------------------------------------------
Moody's Investors Service downgraded 4L Holdings Corporation's
("Reconext") Corporate Family Rating to Caa2 from Caa1.
Concurrently, Moody's downgraded the Probability of Default Rating
to Caa2-PD from Caa1-PD, and the senior secured bank credit
facility to Caa2 from Caa1. The outlook is negative.
The rating downgrades reflect heightened refinancing risk of the
company's outstanding facilities, including the ABL revolver due
October 2023 and senior secured term loan due February 2024. Should
Reconext refinance these maturities on terms that improve the
sustainability of the capital structure, Moody's would likely take
positive rating actions.
Downgrades:
Issuer: 4L Holdings Corporation
Corporate Family Rating, Downgraded to Caa2 from Caa1
Probability of Default Rating, Downgraded to Caa2-PD from Caa1-PD
Senior Secured 1st Lien Bank Credit Facility, Downgraded to Caa2
(LGD4) from Caa1 (LGD3)
Outlook Actions:
Issuer: 4L Holdings Corporation
Outlook, Remains Negative
RATINGS RATIONALE
Reconext's ratings are constrained by increasing refinancing risk
with less than 12 months remaining until the company's current
capital structure matures. Further constraining the ratings are
weak EBITDA margins and declining sales; thin free cash flow (FCF)
generation, with negative FCF in the past two years; weak quality
of earnings reliant on significant one-time add backs; shifting
demand and product life-cycles for aftermarket electronics that
results in earnings volatility; and the challenges of operating
within a highly competitive market with modest customer
concentration, with the largest and top ten customers accounting
for roughly 10% and 50% of revenue.
The ratings are supported by the company's consistent deleveraging
efforts and the expectation for debt/EBITDA to approach 3x in the
next 12-18 months; the company's diverse geographic footprint and
improved diversification of services and customers; and potential
for FCF generation in the next year as certain one-time costs
subside and margins continue to improve.
Reconext has weak liquidity evidenced by near-term debt maturities
and negative free cash flow generation.
ESG Considerations have a very highly negative (CIS-5) impact on 4L
Holdings Corporation's credit profile. These considerations include
governance concerns regarding the company's imminent debt
maturities, a prior bankruptcy, and meaningful private equity
ownership.
The negative outlook reflects heightened refinancing risk. Over the
next 12-18 months, Moody's expects the company will continue to
improve its EBITDA profile and can potentially generate positive
FCF as it improves and optimizes its programs and certain one-time
costs lessen. Moody's expectation for multiple quarters of economic
contraction in 2023 could pressure expected growth.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could consider a rating upgrade if Reconext refinance these
maturities on terms that improve the sustainability of the capital
structure. Downward rating pressure could develop if the company
does not show signs of refinancing its outstanding debt or if
liquidity becomes constrained with less than $10 million of total
liquidity available.
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in February 2023.
4L Holdings Corporation ("Reconext") is a provider of end-to-end
aftermarket life-cycle services for electronics. The Company serves
manufacturers, operators, retailers, data centers, and large
corporations within the consumer electronics, customer premises
equipment, enterprise network and data storage, IoT, mobile, and
point of sale equipment industries. Services include returns
management and fulfillment, testing and grading, repair and
refurbishment, asset recovery, and trade-in. The company has an
operational footprint of roughly 2.5 million square feet across 18
manufacturing and distribution facilities in the Americas, APAC,
and Europe. Reconext emerged from bankruptcy in February 2020 under
the ownership of a lender group comprised of the company's previous
secured creditors and private equity firm Vector Capital. Revenue
for the twelve months ending December 31, 2022 was just under $400
million.
REMARK HOLDINGS: Sells $2.5M Convertible Debentures to Ionic
------------------------------------------------------------
Remark Holdings, Inc. entered into a debenture purchase agreement
on March 14, 2023, with Ionic Ventures, LLC, pursuant to which the
Company authorized the issuance and sale of two convertible
subordinated debentures in the aggregate principal amount of
$2,778,000 for an aggregate purchase price of $2,500,000. The
first debenture is in the original principal amount of $1,667,000
for a purchase price of $1,500,000, which was issued on March 14,
2023, and the second debenture is in the original principal amount
of $1,111,000 for a purchase price of $1,000,000. The Second
Debenture will be issued on the earlier of (x) the 30th day after
the date of execution of the Debenture Purchase Agreement and (ii)
the date of the filing of the initial Resale Registration Statement
covering the Registrable Securities, provided that all the
conditions in the Debenture Purchase Agreement are satisfied or
waived.
The Debentures accrue interest at a rate of 10% per annum, of which
two years of interest is guaranteed and deemed earned in full on
the first day following the issuance date. The interest rate on
the Debentures increases to a rate of 15% per annum if the
Debentures are not fully paid, converted or redeemed by the second
anniversary of each debenture or upon the occurrence of certain
trigger events, including, but not limited to, the suspension from
trading or the delisting of the Company's common stock from the
Nasdaq Capital Market for three consecutive trading days. If the
Debentures are not fully paid or converted by their respective
Maturity Dates, the original aggregate principal amount of the
Debentures will be deemed to have been $3,333,600 from their
issuance dates.
The Debentures automatically convert into shares of common stock at
the earlier of (i) the effectiveness of the initial registration
statement registering the resale of certain Registrable Securities
as such term is defined in the Registration Rights Agreement
including, without limitation, the shares issuable upon conversion
of the Debentures, and (ii) 181 days after the issuance date of
each Debenture. The number of shares of common stock issuable upon
conversion of each Debenture shall be determined by dividing the
outstanding balance under each Debenture (including all accrued and
unpaid interest and accrued and unpaid late charges, if any) by a
conversion price that is the lower of (x) 80% (or 70% if the
Company's common stock is not then trading on Nasdaq) of the
average of the two lowest volume-weighted average prices ("VWAPs")
over a specified measurement period following the conversion date
(the "Variable Conversion Price"), and (y) $1.40 (the "Fixed
Conversion Price"), subject to full ratchet anti-dilution
protection in the event the Company issues certain equity
securities at a price below the then Fixed Conversion Price. The
Debentures are unsecured and expressly junior to any of its
existing or future debt obligations.
Notwithstanding anything to the contrary, under no circumstances
shall the Variable Conversion Price be less than the floor price of
$0.20 as specified in the Debentures. Additionally, in the event
of a bankruptcy, the Company is required to redeem the Debentures
in cash in an amount equal to the then outstanding balance of the
Debentures multiplied by 120%. The Debentures further provide that
we will not effect the conversion of any portion of the Debentures,
and the holder thereof will not have the right to a conversion of
any portion of the Debentures, to the extent that after giving
effect to such conversion, the holder together with its affiliates
would beneficially own more than 4.99% of the outstanding shares of
the Company's common stock immediately after giving effect to such
conversion. Furthermore, the Company may not issue shares of
common stock underlying the Debentures if such issuance would
require the Company to obtain stockholder approval under the Nasdaq
rules or until such stockholder approval has been obtained.
The offer and sale of the securities in connection with the
Debentures will be made pursuant to the exemption from registration
provided by Section 4(a)(2) of the Securities Act, as amended
and/or Rule 506(b) of Regulation D promulgated thereunder.
Concurrently with entering into the Debenture Purchase Agreement,
the Company also entered into a registration rights agreement with
Ionic, in which the Company agreed to file with the Securities and
Exchange Commission one or more registration statements, as
necessary, and to the extent permissible and subject to certain
exceptions, to register under the Securities Act of 1933, as
amended, the resale of the shares of the Company's common stock
issuable upon conversion of the Debentures and the shares of common
stock that may be issued to Ionic if the Company fails to comply
with its obligations in the Registration Rights Agreement. The
Registration Rights Agreement requires that the Company file,
within 15 calendar days after the Company files its Annual Report
on Form 10-K for the fiscal year ended Dec. 31, 2022, the Resale
Registration Statement and use commercially reasonable efforts to
have the Resale Registration Statement declared effective by the
SEC on or before the earlier of (i) 90 days after signing of the
Registration Rights Agreement (or 120 days if such registration
statement is subject to full review by the SEC) and (ii) the 2nd
business day after the Company is notified it will not be subject
to further SEC review. If the Company fails to file or have the
Resale Registration Statement declared effective by the specified
deadlines, then in each instance, the Company will issue to Ionic
150,000 shares of its common stock within two trading days after
such failure, and with respect to the Conversion Shares, the
Company will additionally pay in cash, as liquidated damages, an
amount equal to 2% of the amount then currently outstanding under
the Debenture for failure to file and have the Resale Registration
Statement declared effective by the same deadlines set forth above
for each 30-day period after each such failure.
Mudrick Note Purchase Agreement
On March 14, 2023, the Company also entered into a Note Purchase
Agreement with certain institutional lenders affiliated with
Mudrick Capital Management, LP. Subject to the terms and
conditions of the Mudrick Note Agreement, the Company will issue
and sell to each Holder (as defined in the Mudrick Note Agreement)
certain notes payable in the amount specified in the Mudrick Note
Agreement in exchange for the cancellation of the outstanding
principal balance on the existing loan under the Senior Secured
Loan Agreement, dated as of Dec. 3, 2021, as amended by the First
Amendment to the Senior Secured Loan Agreement, dated as of Aug. 3,
2022 by and among Remark, certain of its subsidiaries as guarantors
and the Senior Lenders.
The Senior Lender Notes bear interest at a rate of 20.5% per annum,
which shall be payable on the last business day of each month
commencing on May 31, 2023. The interest rate will increase by two
percent and the principal amount outstanding under the Senior
Lender Notes and any unpaid interest thereon may become immediately
due and payable upon the occurrence of any event of default under
the Mudrick Note Agreement.
All amounts outstanding under the Senior Lender Notes, including
all accrued and unpaid interest, will be due and payable in full on
Oct. 31, 2023. To secure the payment and performance of the
Company's obligations under the Mudrick Note Agreements, the
Company has granted to TMI Trust Company, as the collateral agent
on behalf of the Holders, a continuing security interest in all
assets of Remark, subject to certain exceptions as set forth in the
Mudrick Note Agreement.
In connection with the Company's entry into the Mudrick Note
Agreement, the Company agreed to an extension fee of $750,000,
which amount was paid in kind by capitalizing it to the principal
of the Senior Lender Notes. All unpaid interest which had accrued
under the Loan Agreement to, but not including, March 14, 2023 was
capitalized to the principal of the Senior Lender Notes.
About Remark Holdings
Remark Holdings, Inc. (NASDAQ: MARK) --
http://www.remarkholdings.com-- delivers an integrated suite of AI
solutions that help organizations monitor, understand, and act on
threats in real-time. Remark consists of an international team of
sector-experienced professionals that have created video analytics.
The Company's GDPR-compliant and CCPA-compliant solutions focus on
market sectors including retail, federal and state governmental
entities, public safety, hospitality, and transportation. Remark
maintains its headquarters in Las Vegas, Nevada, with an additional
North American office in New York and New York and international
offices in London, England, and Chengdu, China.
As of Sept. 30, 2022, the Company had $16.69 million in total
assets, $31.38 million in total liabilities, and a total
stockholders' deficit of $14.69 million.
Los Angeles, California-based Weinberg & Company, the Company's
auditor since 2020, issued a "going concern" qualification in its
report dated March 31, 2022, citing that the Company has suffered
recurring losses from operations and negative cash flows from
operating activities and has a negative working capital and a
stockholders' deficit that raise substantial doubt about its
ability to continue as a going concern.
RICE ENTERPRISES: Files Emergency Bid to Use Cash Collateral
------------------------------------------------------------
Rice Enterprises, LLC asks the U.S. Bankruptcy Court for the
Western District of Pennsylvania for authority to use cash
collateral and provide adequate protection to BMO Harris N.A., its
primary lender.
On December 24, 2019, the Debtor and BMO Harris entered into a
credit agreement wherein the Lender agreed to make a term loan to
the Debtor in the principal amount of $1.4 million and a
non-Revolving Line of Credit in the principal amount of $1.725
million. On February 1, 2021, the Debtor and the Lender entered
into a subsequent credit agreement, which was amended on February
1, 2022, wherein the Lender agreed to make a second Non-Revolving
Loan to the Debtor in the principal amount of $1.520 million.
As of the Petition Date, the Debtor believes the balance due
under:
-- Term Loan I is $849,181,
-- Line of Credit I is $1.313 million, and
-- Line of Credit II is $1.284 million.
The Loans are secured by substantially all of the Debtor's assets.
The basic adequate protection offered to the Lender consists of
replacement security interests and liens on the Debtor's Assets,
including cash collateral, to the same extent, priority and
validity as its valid and enforceable prepetition liens.
The Debtor asserts that the Court should grant its request to use
cash collateral as the Lender is adequately protected by an equity
cushion in the Assets, as well as the Debtor's continued payments
of principal and interest pursuant to the budget.
A copy of the motion is available at https://bit.ly/3Fu3dCw from
PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3JqM2TB from
PacerMonitor.com.
The Debtor projects total controllable expenses, on a weekly basis,
as follows:
$111,856 for the week ending March 18, 2023;
$111,856 for the week ending March 25, 2023;
$111,856 for the week ending April 1, 2023;
$111,856 for the week ending April 8, 2023;
$111,856 for the week ending April 15, 2023;
$111,856 for the week ending April 22, 2023; and
$111,856 for the week ending April 29, 2023.
About Rice Enterprises, LLC
Rice Enterprises, LLC operates in the restaurants industry. In the
petition signed by Michele Rice, sole member, the Debtor disclosed
up to $50 million in assets and up to $10 million in liabilities.
Kirk B. Burkley, Esq., at Bernstein-Burkley, PC, represents the
Debtor as legal counsel.
ROCKLEY PHOTONICS: Unsecured Creditors Unimpaired in Plan
---------------------------------------------------------
Judge Lisa G. Beckerman has entered an order approving the
Disclosure Statement and confirming the Revised Second Amended
Prepackaged Chapter 11 Plan of Reorganization of Rockley Photonics
Holdings Limited.
All objections, responses, reservations, statements, and comments
to the Plan, other than those resolved, adjourned, or withdrawn
with prejudice prior to, or on the record at, the Combined
Hearings, are overruled on the merits in all respects. All
withdrawn objections, if any, are deemed withdrawn with prejudice.
All objections to Confirmation not filed and served prior to the
deadline for filing objections to the Plan set forth in the
Combined Hearing Notice, if any, are deemed waived and will not be
considered by the Court.
The transactions described in the Plan, the Plan Documents, and
this Confirmation Order, including the Restructuring Transactions,
are hereby approved. Whether prior to, on or after the Effective
Date, as applicable, and without any further order of the Court,
other authority, or corporate action, the Debtor or the Reorganized
Debtor, as applicable, and their respective directors, managers,
officers, employees, members, agents, attorneys, financial
advisors, and investment bankers, are authorized and empowered
pursuant to section 1142(b) of the Bankruptcy Code and other
applicable nonbankruptcy law to, and shall, (i) grant, issue,
execute, deliver, file, or record any agreement, document, or
security, and the documents contained in the Plan or the Plan
Documents (as modified, amended, and supplemented pursuant to the
provisions of the Plan governing such modifications, amendments,
and supplements), or any other documents related thereto, and (ii)
take any action necessary, advisable, or appropriate to implement,
effectuate, and consummate the Plan, the Plan Documents, or this
Confirmation Order, in accordance with their terms.
The Debtor or the Reorganized Debtor, as applicable, are authorized
to implement and consummate the Restructuring Transactions (as may
be modified, amended, and supplemented pursuant to the provisions
of the Plan governing such modifications, amendments, and
supplements) pursuant to the Plan, the Plan Documents, and this
Confirmation Order, and are authorized to execute and deliver all
necessary documents or agreements required to perform their
obligations thereunder. The Restructuring Transactions pursuant to
the Plan and the Plan Documents are approved and authorized in all
respects. The Debtor or the Reorganized Debtor, as applicable, are
authorized and directed, without the need for any future corporate
action, to take all actions necessary, appropriate, or desirable to
enter into, implement, and consummate the contracts, instruments,
releases, agreements, or other documents created or executed in
connection with the Plan, the Plan Documents, and the Restructuring
Transactions. In accordance with section 1142 of the Bankruptcy
Code and applicable nonbankruptcy law, such actions may be taken
without further action by stockholders, members, managers,
directors, or partners.
On the Effective Date, the Reorganized Debtor shall enter into the
Exit Financing (the terms of which are set forth in the Exit
Financing Documents). The Court hereby (i) approves the Exit
Financing (including the Reorganized Debtor's entry into the Exit
Financing Documents and all other transactions and related
agreements contemplated thereby) and all other actions to be taken,
undertakings to be made, obligations to be incurred, and fees and
expenses to be paid, including the payment or reimbursement of any
fees, indemnities and expenses under or pursuant to any such
documents and agreements in connection therewith, by the Debtor or
the Reorganized Debtor, as applicable, pursuant to the Exit
Financing Documents and (ii) authorizes the Debtor or the
Reorganized Debtor, as applicable, to (A) execute and deliver those
documents and agreements necessary and appropriate to implement the
Exit Financing, including the Exit Financing Agreements and the
other Exit Financing Document, and incur or pay any fees and
expenses pursuant to the Exit Financing Documents; (B) enter into,
perform under, and consummate the transactions contemplated by the
Exit Financing Documents; and (C) distribute the proceeds of the
Exit Financing in accordance with the terms and conditions of the
Exit Financing Documents, in each case without further notice to or
order of the Court, act or action under applicable law, regulation,
order, or rule or the vote, consent, authorization or approval of
any Person or Entity (other than as expressly required by the Exit
Financing Documents). On and as of the Effective Date, the Exit
Financing Documents (including the Exit Financing proceeds
distributed thereunder) shall constitute legal, valid, binding and
authorized indebtedness and obligations of the Reorganized Debtor,
enforceable against the Reorganized Debtor and the other parties
thereto, as applicable, in accordance with their respective terms
and such indebtedness and obligations shall not be, and shall not
be deemed to be, enjoined or subject to discharge, impairment,
release or avoidance.
Insurance policies issued to, or insurance agreements entered into
by, the Debtor prior to the Petition Date (including, any policies
covering directors' or officers' conduct) shall continue in effect
after the Effective Date. To the extent that such insurance
policies or agreements are considered to be Executory Contracts or
Unexpired Leases, the Plan shall constitute a motion to assume or
ratify such insurance policies and agreements, and, subject to the
occurrence of the Effective Date, the entry of this Confirmation
Order shall constitute approval of such assumption pursuant to
section 365(a) of the Bankruptcy Code and a finding by the
Bankruptcy Court that each such assumption is in the best interest
of the Debtor and its Estate. Unless otherwise determined by the
Bankruptcy Court pursuant to a Final Order or agreed to by the
parties thereto prior to the Effective Date, no payments shall be
required to cure any defaults of the Debtor existing as of the
Confirmation Date with respect to each such insurance policy.
Classes 1, 2, 5 and 6 are unimpaired by the Plan pursuant to
section 1124 of the Bankruptcy Code. The Voting Classes, Classes 3
and 4, are impaired and have voted to accept the Plan. Classes 7
and 8 (together, the "Rejecting Classes") are conclusively presumed
to have rejected the Plan pursuant to section 1126(g) of the
Bankruptcy Code and will not receive or retain any property on
account of their Claims or Interests and, accordingly, such Claims
or Interests are impaired and such Holders are conclusively
presumed to have rejected the Plan pursuant to section 1126(g) of
the Bankruptcy Code. Thus, section 1129(a)(8) of the Bankruptcy
Code is not satisfied; however, as described below, the Plan can
nevertheless be confirmed over the deemed non-acceptance of the
Rejecting Classes pursuant to section 1129(b) of the Bankruptcy
Code.
Classes 3 and 4 are impaired Classes of Claims that voted to accept
the Plan, determined without including any acceptance of the Plan
by any insider. Accordingly, the Plan satisfies section 1129(a)(10)
of the Bankruptcy Code.
Prepackaged Plan
Rockley Photonics Holdings Limited submitted a Revised Second
Amended Prepackaged Chapter 11 Plan of Reorganization.
The Debtor seeks to consummate the Restructuring Transactions on
the Effective Date of the Plan. The Debtor is the proponent of the
Plan within the meaning of section 1129 of the Bankruptcy Code.
This Plan is supported by the Prepetition Noteholders who
collectively hold Super Senior Notes in aggregate principal amount
of approximately $90.65 million and Existing Notes in aggregate
principal amount of approximately $29.31 million.
Under the Plan, holders of Class 5 General Unsecured Claims will
receive, at the election of the Debtor (with the consent of the
Prepetition Noteholders):
(i) payment in full in Cash of the amount of its Allowed
General Unsecured Claim plus postpetition interest to the extent
necessary under applicable law to render such Unsecured Claim
Unimpaired on the later of (A) the Effective Date and (B) the date
such Allowed General Unsecured Claim becomes payable in the
ordinary course of business in accordance with the terms and
conditions of the particular transaction giving rise to such
Allowed General Unsecured Claim;
(ii) reinstatement of such Allowed General Unsecured Claim; or
(iii) other treatment rendering its Allowed General Unsecured
Claim Unimpaired in accordance with section 1124 of the Bankruptcy
Code.
Class 5 is unimpaired.
On or before the Effective Date, the Debtor or the Reorganized
Debtor, as applicable, shall enter into any transaction and take
all actions as may be necessary or appropriate to effectuate the
Plan and any transaction described in, approved by, contemplated
by, or necessary to effectuate the Plan that are consistent with
and pursuant to the terms and conditions of the Plan. These
transactions may include, as applicable, the issuance of all
securities, notes, instruments, certificates, and other documents
required to be issued pursuant to the Plan, (collectively, the
"Restructuring Transactions"). The actions to implement the
Restructuring Transactions may include: (1) the execution and
delivery of the Exit Financing Documents, and any filing related
thereto; (2) the issuance of the Reorganized Rockley Equity; (3)
execution of the Private Placement Documents and implementation of
the Prepetition Noteholder Private Placement; (4) the execution and
delivery of the New Governance Documents, and (5) all other actions
that the Debtor determines to be necessary or advisable, including
making filings or recordings that may be required by applicable Law
in connection with the Plan. All Holders of Claims and Interests
receiving distributions pursuant to the Plan and all other
necessary parties in interest, including any and all agents
thereof, shall prepare, execute, and deliver any agreements or
documents, including any subscription agreements, and take any
other actions as the Debtor determine are necessary or advisable to
effectuate the provisions and intent of the Plan.
The Debtor and the Prepetition Noteholders shall cooperate in good
faith to structure the Restructuring Transactions in a tax
efficient manner.
The Confirmation Order shall and shall be deemed to, pursuant to
sections 1123 and 363 of the Bankruptcy Code, authorize, among
other things, all actions as may be necessary or appropriate to
effect any transaction described in, approved by, contemplated by,
or necessary to effectuate the Plan, including the Restructuring
Transactions, including, for the avoidance of doubt, any and all
actions required to be taken under applicable non-bankruptcy Law.
The Debtor shall fund distributions under the Plan, as applicable,
with (1) the issuance of the Reorganized Rockley Equity; (2)
proceeds from issuance of the Exit Financing; (3) proceeds from
issuance of the Reorganized Rockley Equity pursuant to the
Prepetition Noteholder Private Placement; and (4) Cash on hand.
Each distribution and issuance referred to in Article VI of the
Plan shall be governed by the terms and conditions set forth in the
Plan applicable to such distribution or issuance and by the terms
and conditions of the instruments or other documents evidencing or
relating to such distribution or issuance, which terms and
conditions shall bind each Entity receiving such distribution or
issuance.
Prior to the Effective Date, the Debtor shall document and
implement the Exit Financing on terms and conditions consistent
with the Plan. On the Effective Date, the Reorganized Debtor and
the Prepetition Noteholders shall execute and deliver the Exit
Financing Documents. Confirmation of the Plan shall be deemed
approval of (a) the Exit Financing Documents and (b) all
transactions contemplated thereby and all actions to be taken and
undertakings to be made, and obligations to be incurred by the
Reorganized Debtor in connection therewith, including the payment
of all fees, indemnities, expenses, and other payments provided for
therein and authorization of the Reorganized Debtor to enter into
and execute the Exit Financing Documents, and such other documents
as may be required to effectuate the treatment afforded by the Exit
Financing without further notice to or order of the Bankruptcy
Court, subject to the consent of the Prepetition Noteholders. For
clarity and avoidance of doubt, the Holders of Allowed Super Senior
Notes Claims will purchase (Pro Rata based on their respective
ownership interest in the Allowed Super Senior Notes or as
otherwise mutually agreed among such Holders) Exit Financing in an
aggregate amount of approximately $20.9 million; provided, however,
that the approximately $20.9 million purchase obligation shall be
reduced dollar for dollar by $5.08 million of Allowed Super Senior
Notes Claims that will convert into Exit Financing on the Effective
Date.
On the Effective Date, all of the Liens and security interests to
be granted in accordance with the Exit Financing Documents, as
applicable, (a) shall be deemed to be granted, (b) shall be legal,
binding, and enforceable Liens on, and security interests in, the
collateral granted thereunder in accordance with the terms of the
Exit Financing Documents and (c) shall be deemed automatically
perfected on the Effective Date and senior in priority to all other
Liens, subject only to such Liens and security interests as may be
permitted to be senior under the Exit Financing Documents, as
applicable. The Exit Financing and all the Liens and security
interests to be granted in accordance with the Exit Financing
Documents shall not be subject to avoidance, recharacterization,
equitable subordination or any other challenge for any purposes
whatsoever and shall not constitute preferential transfers,
fraudulent transfers or voidable transactions (or similar concepts)
under the Bankruptcy Code or any applicable non-bankruptcy Law. The
Reorganized Debtor and the persons and entities granting such Liens
and security interests shall be authorized to make all filings and
recordings, and to obtain all governmental approvals and consents
necessary to establish and perfect such Liens and security
interests under the provisions of the applicable state, federal, or
other Law that would be applicable in the absence of the Plan and
the Confirmation Order (it being understood that perfection shall
occur automatically by virtue of the entry of the Confirmation
Order and any such filings, recordings, approvals, and consents
shall not be required), and will thereafter cooperate to make all
other filings and recordings that otherwise would be necessary
under applicable Law to give notice of such Liens and security
interests to third parties.
The Debtor or Reorganized Debtor, as applicable, shall use Cash on
hand to fund distributions to certain Holders of Allowed Claims,
consistent with the terms of the Plan and subject to the consent of
the Prepetition Noteholders.
Counsel for the Debtor:
John A. Pintarelli, Esq.
Dania Slim, Esq.
Kwame O. Akuffo, Esq.
Alana A. Lyman, Esq.
PILLSBURY WINTHROP SHAW PITTMAN LLP
31 West 52nd Street
New York, NY 10019-6131
Tel: (212) 858-1000
Fax: (212) 858-1500
E-mail: john.pintarelli@pillsburylaw.com
dania.slim@pillsburylaw.com
kwame.akuffo@pillsburylaw.com
alana.lyman@pillsburylaw.com
- and -
Joshua D. Morse, Esq.
Jonathan Doolittle, Esq.
PILLSBURY WINTHROP SHAW PITTMAN LLP
Four Embarcadero Center, 22nd Floor
San Francisco, CA 94111-5998
Tel: (415) 983-1000
Fax: (415) 983-1200
E-mail: joshua.morse@pillsburylaw.com
jonathan.doolittle@pillsburylaw.com
A copy of the Order dated March 10, 2023, is available at
https://bit.ly/3LiojaS from PacerMonitor.com.
A copy of the Plan of Reorganization dated March 10, 2023, is
available at https://bit.ly/3mK5umy from PacerMonitor.com.
About Rockley Photonics
Rockley Photonics Holdings Limited specializes in the research and
development of integrated silicon photonics chipsets. The Company
has developed a ground-breaking versatile, application specific,
third generation silicon photonics platform specifically designed
for the optical integration challenges facing numerous mega-trend
markets. The Company has partnered with multiple tier-1 customers
across markets to deliver complex optical systems required for
transformational sensors, communications, and medical product
realization.
Rockley Photonics filed a Chapter 11 bankruptcy petition (Bankr.
S.D.N.Y Case No. 23 10081) on Jan. 23, 2023. In the petition signed
by Richard A. Meier, chief executive officer, the Debtor disclosed
$90,880,000 in assets and $120,733,000 in liabilities.
The Debtor tapped PILLSBURY WINTHROP SHAW PITTMAN LLP as bankruptcy
counsel; JEFFERIES LLC as investment banker; and ALVAREZ & MARSAL,
LLC as financial advisor. WALKERS LAW FIRM is the Cayman Islands
counsel. KROLL, LLC, is the claims agent.
ROOF IT BETTER: May 16 Plan Confirmation Hearing Set
----------------------------------------------------
Judge Mindy A. Mora has entered an order conditionally approving
the Disclosure Statement of Roof It Better, LLC.
The Court will conduct the confirmation hearing and consider final
approval of the Disclosure Statement and any timely-filed fee
applications will be held on May 16, 2023 at 2:30 pm in 1515 N.
Flagler Drive, 8th Floor, Courtroom A, West Palm Beach, FL 33401.
All other interested parties may choose to attend the hearing
remotely using the services of Zoom Video Communications, Inc.,
which permits remote participation by video or by telephone.
The following deadlines apply with respect to the confirmation
hearing and hearing on fee applications:
* The deadline for serving this order, disclosure statement,
plan, and ballots (30 days before the confirmation hearing) will be
on April 16, 2023.
* The deadline for objections to Claims (14 days before
confirmation hearing) will be on May 2, 2023.
* The deadline for filing and serving fee applications (24 days
before confirmation hearing) will be on April 22, 2023.
* The deadline for filing and serving notice summarizing all
fee applications (21 days before the confirmation hearing) will be
on April 25, 2023.
* The deadline for filing ballots accepting or rejecting plan
(7 days before confirmation hearing, per Local Rule 3018-1) will be
on May 9, 2023.
* The deadline to file motions under Fed. R. Civ. P. 43(a) (7
business days before confirmation hearing) will be on May 5, 2023.
* The deadline for objections to confirmation (3 business days
before confirmation hearing) will be on May 11, 2023.
* The deadline for objections to Final Approval of the
Disclosure Statement (3 business days before confirmation hearing)
will be on May 11, 2023.
* The deadline for filing Proponent's Report and Confirmation
Affidavit (3 business days before confirmation hearing) will be on
May 11, 2023.
* The deadline for filing Local Form 71 "Individual Debtor
Certificate for Confirmation Regarding Payment of Domestic Support
Obligations and Filing of Required Tax Returns" (individual cases
only) (3 business days before confirmation hearing) will be on May
11, 2023.
* The Deadline for Filing Exhibit Register and Uploading Any
Exhibits a Party Intends to Introduce into Evidence at the
confirmation hearing13 (3 business days before confirmation
hearing) will be on May 11, 2023.
The Debtor's counsel:
Craig I. Kelley, Esq.
KELLEY, FULTON, KAPLAN & ELLER, P.L.
1665 Palm Beach Lakes Blvd., Suite 1000
West Palm Beach, FL 33401
Tel: (561) 491-1200
Fax: (561) 684-3773
E-mail: bankruptcy@kelleylawoffice.com
About Roof It Better
Roof It Better, LLC, a residential and commercial roofing
contractor, sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-14651) on June 15,
2022. In the petition signed by Teresa Mehaffey, manager, the
Debtor disclosed $123,739 in assets and $2,102,056 in liabilities.
Judge Mindy A. Mora oversees the case.
The Debtor tapped Craig I. Kelley, Esq., at Kelley, Fulton, Kaplan
& Eller PL as counsel and Venita Ackerman, CPA, at Ackerman
Rodgers, CPA, PLLC as accountant.
ROOSEVELT UNIVERSITY: Moody's Alters Outlook on B1 Rating to Neg.
-----------------------------------------------------------------
Moody's Investors Service has revised Roosevelt University, IL's
outlook to negative from stable and has affirmed its B1 issuer
rating. Roosevelt had approximately $254 million of total debt as
of August 31, 2022. At the same time, Moody's have affirmed the B1
rating on the roughly $35 million of outstanding Series 2007
revenue bonds issued through the Illinois Finance Authority.
RATINGS RATIONALE
The revision of outlook to negative reflects Moody's expectations
for weakening operating performance and enrollment pressures amid a
difficult regional student market. The outlook revision also
incorporates the university's high financial leverage with total
debt to operating revenue over 2x in fiscal 2022. Ongoing
challenges with the integration of Robert Morris University
Illinois (RMUI) which Roosevelt acquired in 2020 have added to
enrollment management and retention challenges. Management's path
toward narrowing fiscal 2023 and 2024 budget gaps will focus on
expense reduction and program realignment, while using financial
reserves to bridge remaining shortfalls.
The affirmation of the B1 rating incorporates elevated volatility
in operating performance and debt service coverage. Debt service
consumes approximately 11% of operating expenses, with high fixed
costs and supplemental endowment draws limiting growth in financial
reserves for the foreseeable future. Weak operating performance
yielded thin debt service coverage of 1.0x in fiscal 2022.
Favorably, Roosevelt has had good wealth with $163 million in total
cash and investments at the end of fiscal 2022, in addition to
highly valued real estate which provides a potential source for
monetization of assets.
The B1 rating on the Series 2007 revenue bonds incorporates the
issuer rating and the general obligation nature of the debt.
RATING OUTLOOK
The negative outlook reflects continued operating performance and
enrollment management pressures in the demographically challenged
Chicago metropolitan area. The outlook also incorporates
difficulties that Roosevelt's debt burden places on its ability to
execute strategic initiatives intended to strengthen student
demand, restore structurally balanced operations, and rebuild
liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
Significant improvement in operating performance that
provides sustained debt service coverage over 1.25x
as calculated by Moody's
Sustained improvements in market position indicated by
increasing enrollment, operating scope, and net
tuition revenue growth
Material growth of cash and investments and liquidity
relative to debt and operations
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
Decline of unrestricted liquidity or further weakening
of operating revenue
Failure to make progress toward stabilizing enrollment
and net student revenue
Material reduction in unrestricted financial reserves,
leading to an inability to maintain debt service
coverage above the covenanted ratio
LEGAL SECURITY
All bonds are a general obligation, enhanced by a pledge of the
university's gross revenue. The Series 2007 rated bonds, however,
are not backed by a mortgage pledge nor do they have a debt service
reserve fund (DSRF) or financial covenants as do the outstanding
unrated bonds. The unrated Series 2018A, 2018B, 2019A, 2020A and
2020B bonds are secured on a parri-passu basis and by a mortgage
pledge with an appraised value in 2019 of $328 million. There is an
additional bonds test. The Series 2018A, 2018B, 2019A, 2020A and
2020B bonds contain an unrestricted cash and investments to MADS
covenant that is tested twice annually. Roosevelt must maintain
coverage of no less than 150% through fiscal 2022, no less than
175% in fiscal years 2023 and 2024 and no less than 200% in fiscal
2025 and beyond. Failure to do so would require consultative review
with a cure period that extends several years. The covenanted ratio
stood at 156% as of fiscal 2022. There is no cross-default
provision between the unrated bonds and the rated series 2007
bonds.
PROFILE
Founded in 1945, Roosevelt University is a moderate sized private
university offering undergraduate, graduate and professional degree
programs at its campuses in downtown Chicago and in Schaumburg, a
northwest suburb of Chicago, and online. The university enrolled
3,318 full-time equivalent students in Fall 2022, with operating
revenue of approximately $115 million.
METHODOLOGY
The principal methodology used in these ratings was Higher
Education Methodology published in August 2021.
S&Q DATA: Involuntary Chapter 11 Case Summary
---------------------------------------------
Alleged Debtor: S&Q Data LLC
268 Newbury Street, 4th Floor
Boston MA 02116
Involuntary Chapter
11 Petition Date: March 21, 2023
Court: United States Bankruptcy Court
District of Massachusetts
Case No.: 23-10410
Petitioners' Counsel: Neil Kreuzer, Esq.
LAW OFFICES OF NEIL KREUZER
268 Newbury Street, 4th Floor
Boston MA 02116
Tel: (617) 872-5347
Email: nkreuzer@aol.com
A full-text copy of the Involuntary Petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/KIHBM3Q/SQ_Data_LLC__mabke-23-10410__0001.0.pdf?mcid=tGE4TAMA
Alleged creditors who signed the petition:
Petitioner Nature of Claim Claim Amount
1. Gotspace Data Partners, LLC Debt $3,300,000
268 Newbury Street, 4th Floor
Boston MA 02116
2. Got Capital, LLC Debt $100,000
268 Newbury Street, 4th Floor
Boston MA 02116
3. Ocean Development Precinct I, LLC Debt $960,000
268 Newbury Street, 4th Floor
Boston MA 02116
SCHARN INDUSTRIES: Taps Law Office of Gary W Cruickshank as Counsel
-------------------------------------------------------------------
Scharn Industries, LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Massachusetts to employ the Law
Office of Gary W. Cruickshank.
The Debtor requires legal counsel to:
a. assist in the formulation and presentation of a Chapter 11
plan of reorganization and disclosure statement;
b. advise the Debtor as to its duties and responsibilities;
C. perform other legal services as may be required during the
course of the Debtor's Chapter 11 case.
The firm will be paid based upon its normal and usual hourly
billing rates and will be reimbursed for out-of-pocket expenses
incurred.
The firm received a retainer in the amount of $7,000.
As disclosed in court filings, the Law Office of Gary W.
Cruickshank does not represent any interest adverse to the Debtor
or the estate in the matters upon which the firm is to be engaged.
The firm can be reached through:
Gary W. Cruickshank, Esq.
Law Office of Gary W. Cruickshank
21 Custom House Street, Suite 920
Boston, MA 02110
Tel: 617-330-1960
Email: gwc@cruickshank-law.com
About Scharn Industries
Scharn Industries, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 23-10298) on Feb.
28, 2023. In the petition signed by Scott Scharn, manager, the
Debtor disclosed up to $100,000 in assets and up to $1 million in
liabilities.
Judge Janet E. Bostwick oversees the case.
The Debtor tapped Gary W. Cruickshank, Esq., at Cruickshank Law as
legal counsel and Robert S. Widell as accountant.
SPG HOSPICE: PCO Submits Sixth Interim Report
---------------------------------------------
Susan Goodman, the appointed patient care ombudsman for SPG
Hospice, LLC, filed with the U.S. Bankruptcy Court for the District
of Arizona a sixth interim report regarding the quality of patient
care provided at the company's health care facility.
The PCO has interacted with the Hospice Administrator, the Chief
Medical Officer (CMO), and the Director of Nursing (DON) thus far
in the wind-down process. While the situation is fluid, five
patients were reported as still in process relative to finalizing a
definitive alternative to SPG's hospice services.
The PCO feels confident that team members essential to licensure
and patient care remain in place and that patient choice has been
supported and honored in the transition process. Because the very
nature of hospice services includes supporting a patient's extended
family or support circle, the transition process can take a little
time to work through preferences and assessments.
To that end, the PCO expects the wind-down process to continue this
week. As stated in the third trustee report, the Chapter 11 trustee
has been in regular contact with the PCO on patient discussions
along with fielding employee questions relative to wind-down
logistics.
The PCO provided courtesy notice to the Bureau Chief at Arizona
Department of Health Services and the Overpayment and Bankruptcy
Division of the Centers for Medicare and Medicaid Services
regarding the closure decision. Once all patients are definitively
situated, the PCO will work to understand the plan for hospice
record disposition or storage. Because hospice is in the same
building as the telehealth entity, the PCO would expect sensitive
materials can be safely stored without much difficulty.
A copy of the sixth ombudsman report is available for free at
https://bit.ly/3FVUyt1 from PacerMonitor.com.
About SPG Hospice
Established in 2018, SPG Hospice, LLC provides hospice services
throughout Arizona but primarily located in the Phoenix
metropolitan area.
SPG Hospice's affiliate, Scottsdale Physicians Group, PLC, provides
hospitalist staffing services for hospitals and physician staffing
services to skilled nursing facilities and other post-acute
settings. Its workforce is comprised of medical providers and
disease support personnel.
Meanwhile, United Telehealth Corp., another SPG Hospice affiliate,
provides advanced virtual care medical services to patients in
their homes throughout Arizona. It combines the remote provider
aspect of traditional telemedicine with an in-person medical
technician "Tech" who is physically present with the patient in
their home or facility.
SPG Hospice, Scottsdale and United Telehealth Corp. sought
protection for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Ariz. Lead Case No. 22-02385) on April 19, 2022. At the
time of the filing, SPG Hospice listed up to $50,000 in assets and
up to $500,000 in liabilities.
Judge Eddward P. Ballinger, Jr. oversees the cases.
Jonathan P. Ibsen, Esq., at Canterbury Law Group, LLP serves as the
Debtors' legal counsel.
James Cross, the court-appointed Chapter 11 trustee for the
Debtors, tapped Terry A. Dake, Ltd. as general counsel; Baldwin
Moffitt Behm, LLP as tax preparer; and Kathy Steadman of
Coppersmith Brockelman, PLC as healthcare personnel and regulatory
compliance specialist.
Susan N. Goodman, Esq., at Pivot Health Law, LLC is the patient
care ombudsman appointed in the Debtors' bankruptcy cases.
STANADYNE LLC: Seeks to Hire Hughes Hubbard & Reed as Legal Counsel
-------------------------------------------------------------------
Stanadyne, LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Hughes
Hubbard & Reed, LLP as their legal counsel.
The Debtors require legal counsel to:
a. take all necessary actions to protect and preserve the
Debtors' estates, including the prosecution of actions on the
Debtors' behalf, the defense of any actions commenced against the
Debtors, the negotiation of disputes in which the Debtors are
involved, and the preparation of objections to claims filed against
the estates;
b. prepare legal papers;
c. attend meetings and negotiate with representatives of
creditors and other parties in interest;
d. represent the Debtors in connection with obtaining authority
to continue using cash collateral;
e. take any necessary action to negotiate, prepare and obtain
approval of a disclosure statement and confirmation of a Chapter 11
plan and all documents related thereto;
f. take all necessary actions to protect and preserve the value
of the Debtors' estates; and
g. performing all other necessary legal services for the Debtors
in connection with the prosecution of their Chapter 11 cases,
including (i) analyzing the Debtors' leases and contracts and the
assumption and assignment or rejection thereof; (ii) analyzing the
validity of liens against the Debtors; and (iii) advising the
Debtors on corporate and litigation matters.
The firm will be paid at these rates:
Partners $1,035 to $1,597.50 per hour
Associates $495 to $1,075 per hour
Legal Assistants $328.50 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The Debtor paid the firm an advance fee of $514,244.92.
Kathryn Coleman, Esq., a partner at Hughes Hubbard & Reed,
disclosed in a court filing that her firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Kathryn A. Coleman, Esq.
Christopher Gartman, Esq.
Hughes Hubbard & Reed, LLP
One Battery Park Plaza
New York, NY 10004-1482
Telephone: (212) 837-6000
Facsimile: (212) 422-4726
Email: katie.coleman@hugheshubbard.com
chris.gartman@hugheshubbard.com
About Stanadyne LLC
Stanadyne, LLC is a global automotive technology offering
engine-based fuel and air management systems. It is a developer
and manufacturer of fuel pumps and fuel injectors for diesel and
gasoline engines. The company is based in Jacksonville, N.C.
Stanadyne and its affiliates sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10207) on
Feb. 16, 2023. In the petition signed by its chief executive
officer, John Pinson, Stanadyne disclosed up to $500 million in
both assets and liabilities.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Hughes Hubbard and Reed, LLP and Young Conaway
Stargatt & Taylor, LLP as bankruptcy counsels; Teneo Capital LLC as
financial advisor; and Kurtzman Carson Consultants, LLC as claims,
noticing and balloting agent and administrative advisor.
STANADYNE LLC: Taps Kurtzman Carson as Administrative Advisor
-------------------------------------------------------------
Stanadyne, LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Kurtzman
Carson Consultants, LLC as administrative advisor.
The firm's services include:
a. assisting with, among other things, the preparation of the
Debtor's schedules of assets and liabilities, schedules of
executory contracts and unexpired leases and statements of
financial affairs;
b. assisting with, among other things, solicitation, balloting,
tabulation, and calculation of votes, as well as preparing any
appropriate reports required in furtherance of confirmation of any
Chapter 11 plan;
c. generating an official ballot certification and testifying,
if necessary, in support of the ballot tabulation results for any
Chapter 11 plan in the Debtor's Chapter 11 case;
d. generating, providing, and assisting with claim objections,
exhibits, claim reconciliations, and related matters; and
e. providing such other claim processing, noticing,
solicitation, balloting, and administrative services, as may be
requested by the Debtor from time to time.
Prior to the petition date, the Debtors paid the firm a retainer in
the amount of $30,000, and paid $10,000 for all pre-bankruptcy
services performed.
Robert Jordan, a senior managing director at Kurtzman, disclosed in
a court filing that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Robert Jordan
Kurtzman Carson Consultants, LLC
222 N. Pacific Coast Highway, 3rd Floor
El Segundo, CA 90245
Tel: (310) 823-9000
About Stanadyne LLC
Stanadyne, LLC is a global automotive technology offering
engine-based fuel and air management systems. It is a developer
and manufacturer of fuel pumps and fuel injectors for diesel and
gasoline engines. The company is based in Jacksonville, N.C.
Stanadyne and its affiliates sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10207) on
Feb. 16, 2023. In the petition signed by its chief executive
officer, John Pinson, Stanadyne disclosed up to $500 million in
both assets and liabilities.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Hughes Hubbard and Reed, LLP and Young Conaway
Stargatt & Taylor, LLP as bankruptcy counsels; Teneo Capital LLC as
financial advisor; and Kurtzman Carson Consultants, LLC as claims,
noticing and balloting agent and administrative advisor.
STANADYNE LLC: Taps Teneo Capital as Financial Advisor
------------------------------------------------------
Stanadyne, LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Teneo
Capital, LLC as financial advisor.
The Debtors require a financial advisor to:
(a) review and analyze the Debtors' business, operations,
assets, financial condition, business plan, strategy, and operating
forecasts;
(b) assist the Debtors in matters related to the administration
of their Chapter 11 cases, including attendance and appearance on
behalf of the Debtors at bankruptcy hearings, 341 meetings of
creditors, and related ancillary bankruptcy matters;
(c) attend meetings with the Debtors and other stakeholders as
required and participate in court hearings;
(d) assess the liquidity and near-term cash needs of the Debtors
by creating a 13- week cash flow model to act as a forecasting tool
designed to provide on-time information related to the Debtors'
liquidity;
(e) assist the Debtors and other professionals to develop
financing scenarios and address cash collateral matters;
(f) assist the Debtors and their legal advisors in structuring
internal communications regarding the proposed restructuring plan
and negotiate with lenders, customers and vendors regarding credit
terms and conditions;
(g) meet with the unsecured creditors committee and other
statutory or unofficial committees, if any, in connection with the
Chapter 11 cases, as necessary to provide general process updates
and to provide such information as may be requested by the
Debtors;
(h) coordinate activities and assist in communication with
outside constituents and advisors, including lenders and their
advisors;
(i) assist in the development of a disclosure statement and plan
of reorganization or asset sale process;
(j) analyze any merger, divestiture, joint venture, or
investment transaction, including the proposed structure and form
thereof;
(k) provide expert testimony and litigation support as mutually
agreed between Teneo and the Debtors; and
(l) assist the Debtors with such other matters as may be
requested that fall within Teneo's expertise.
The firm will be paid at these rates:
Managing Directors/Senior Advisors $800 to $1,300 per hour
Directors/Vice Presidents/Consultants $500 to $800 per hour
Associates/Analysts $350 to $500 per hour
Administrative Staff $200 to $300 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The retainer fee is $261,145.
James Feltman, a senior managing director at Teneo, disclosed in a
court filing that his firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
James S. Feltman
Teneo Capital LLC
280 Park Avenue, 4th Floor
New York, NY 10017
Tel: (212) 886-1600
Email: james.feltman@teneo.com
About Stanadyne LLC
Stanadyne, LLC is a global automotive technology offering
engine-based fuel and air management systems. It is a developer
and manufacturer of fuel pumps and fuel injectors for diesel and
gasoline engines. The company is based in Jacksonville, N.C.
Stanadyne and its affiliates sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10207) on
Feb. 16, 2023. In the petition signed by its chief executive
officer, John Pinson, Stanadyne disclosed up to $500 million in
both assets and liabilities.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Hughes Hubbard and Reed, LLP and Young Conaway
Stargatt & Taylor, LLP as bankruptcy counsels; Teneo Capital LLC as
financial advisor; and Kurtzman Carson Consultants, LLC as claims,
noticing and balloting agent and administrative advisor.
STANADYNE LLC: Taps Young Conaway Stargatt & Taylor as Co-Counsel
-----------------------------------------------------------------
Stanadyne LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Young
Conaway Stargatt & Taylor, LLP as co-counsel with Hughes Hubbard
and Reed, LLP.
The firm's services include:
a. providing legal advice and services regarding Local Rules,
local practices and procedures and providing substantive and
strategic advice on how to accomplish the Debtors' goals in
connection with the prosecution of their Chapter 11 cases;
b. reviewing, commenting or preparing drafts of documents to be
filed with the court as co-counsel;
c. appearing in court and at any meeting with the Office of the
U.S. Trustee and any meeting of creditors;
d. performing various services in connection with the
administration of the Debtors' Chapter 11 cases, including, without
limitation: (i) preparing agenda letters, certificates of no
objection, certifications of counsel, notices of fee applications
and hearings, and hearing binders of documents and pleadings; (ii)
monitoring the docket for filings and coordinating with Hughes
Hubbard & Reed on pending matters that need responses; (iii)
preparing and maintaining critical dates memoranda to monitor
pending applications, motions, hearing dates, and other matters and
the deadlines associated with the same; (iv) handling inquiries and
calls from creditors and counsel to interested parties regarding
pending matters and the general status of the Chapter 11 cases; and
(v) coordinating with Hughes Hubbard & Reed on any necessary
responses; and
e. performing all other services assigned by the Debtors, in
consultation with Hughes Hubbard & Reed.
The firm will be paid at these rates:
Michael R. Nestor $1,240 per hour
Andrew L. Magaziner $870 per hour
Ashley E. Jacobs $810 per hour
Andrew A. Mark $505 per hour
Carol Cox $475 per hour
Brenda Walters, Paralegal $365 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Young received a retainer in the total amount of $250,000.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Young
disclosed the following:
a. Young has not agreed to a variation of its standard or
customary billing arrangements for this engagement.
b. None of the firm's professionals included in this
engagement have varied their rate based on the geographic location
of the Chapter 11 cases.
c. Young was retained by the Debtors pursuant to an engagement
letter dated Feb. 8, 2023. The billing rates and material terms of
the pre-bankruptcy engagement are the same as the currently
proposed rates and terms.
d. The Debtors have approved or will be approving a
prospective budget and staffing plan for Young's engagement for the
post-petition period as appropriate. In accordance with the U.S.
Trustee Guidelines, the budget may be amended as necessary to
reflect changed or unanticipated developments.
Andrew Magaziner, Esq., a partner at Young, disclosed in a court
filing that his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Andrew L. Magaziner, Esq.
Michael R. Nestor, Esq.
Ashley E. Jacobs, Esq.
Andrew A. Mark, Esq.
Carol E. Cox, Esq.
Young Conaway Stargatt & Taylor, LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
Email: amagaziner@ycst.com
mnestor@ycst.com
ajacobs@ycst.com
amark@ycst.com
ccox@ycst.com
About Stanadyne LLC
Stanadyne, LLC is a global automotive technology offering
engine-based fuel and air management systems. It is a developer
and manufacturer of fuel pumps and fuel injectors for diesel and
gasoline engines. The company is based in Jacksonville, N.C.
Stanadyne and its affiliates sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10207) on
Feb. 16, 2023. In the petition signed by its chief executive
officer, John Pinson, Stanadyne disclosed up to $500 million in
both assets and liabilities.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Hughes Hubbard and Reed, LLP and Young Conaway
Stargatt & Taylor, LLP as bankruptcy counsels; Teneo Capital LLC as
financial advisor; and Kurtzman Carson Consultants, LLC as claims,
noticing and balloting agent and administrative advisor.
SVB FINANCIAL: Union Says FDIC Should Not Sell SVB to Apollo
------------------------------------------------------------
United Food and Commercial Workers International Union is calling
on the Federal Deposit Insurance Corporation not to sell Silicon
Valley Bank assets to Apollo Global Management, as long as Apollo's
insurance subsidiary Athene remains a creditor to SVB Financial
Group, the bank holding company.
"We think it's bad policy for FDIC to sell Silicon Valley Bank
assets at a potential discount to Apollo entities now, when it may
have to recover funds later from the parent company in competition
with Apollo entities in its Chapter 11 case," says Courtney
Alexander, the union's researcher.
Research shows that as of December 31, 2022, Athene's insurance
companies, which are wholly-owned by Apollo, owned $145 million of
debt obligations of SVB Financial Group.
The FDIC will likely need to seek assets of SVB Financial Group to
mitigate its losses, given that the FDIC has guaranteed full value
of Silicon Valley Bank's deposits and that bank holding companies
may be liable for losses borne by regulators in a bank wind-up. In
that event, FDIC could also be a creditor of SVB Financial, pitting
FDIC and Apollo's interests against each other by competing to
recover the most from the holding company in the developing Chapter
11 case. Ahead of that possibility, UFCW does not believe the FDIC
should consider selling some portion of the bank's portfolio to
Apollo at a potential discount.
"If FDIC does sell bank assets to Apollo now, it should demand
concessions from Apollo's Athene to preserve FDIC's fullest
recovery in the bankruptcy case of SVB Financial," Ms. Alexander
argued.
A March 14, 2023 Financial Times article entitled "Buyout titans
weigh purchases from Silicon Valley Bank loan book" quoted Apollo's
CEO about its interest in these FDIC assets:
"'The opportunity for us is to continue to be a conduit for
investors to take investment-grade type, safe yield opportunities
from the banking system to the investment marketplace to maintain
diversification of our financial system,' Marc Rowan, Apollo's
chief executive and co-founder, told the Financial Times."
According to Athene's Annual Statements filed with insurance
regulators for the period ending December 31, 2022:
* Athene Annuity and Life Company owned $62,642,480 face value
of SVB Financial GR Senior Unsecured Notes and $15,167,000 face
value of SVB Financial GR Junior Subordinated Notes as of December
31, 2022.
* Athene Annuity and Life Company also owned a limited partner
interest in SVB Innovation Credit Growth Fund IX, LP, valued at
$14,758,423 as of December 31, 2022.
* Athene Annuity and Life Assurance Company owned $49,763,660
SVB Financial GR Senior Unsecured Notes and $17,958,000 SVB
Financial GR Junior Subordinated as of December 31, 2022.
About SVB Financial Group
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. On the morning of
March 10, 2023, the California Department of Financial Protection
and Innovation seized SVB and placed it under the receivership of
the Federal Deposit Insurance Corporation (FDIC). SVB was the
nation's 16th largest bank and the biggest to fail since the 2008
financial meltdown.
On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 23-10367). The Hon. Martin
Glenn is the bankruptcy judge.
The Debtor had assets of $19,679,000,000 and liabilities of
$3,675,000,000 as of Dec. 31, 2022.
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. Kroll is the claims agent.
TIOGA ISD: Moody's Lowers Issuer & GOULT Ratings to B1
------------------------------------------------------
Moody's Investors Service has downgraded Tioga Independent School
District, TX's issuer and general obligation unlimited tax (GOULT)
ratings to B1 from Ba3. The district has approximately $5.3 million
in GOULT debt outstanding as of June 30, 2022. The outlook is
negative.
RATINGS RATIONALE
The downgrade to B1 reflects the continued deterioration of the
district's financial position with minimal liquidity and negative
general fund balance. The weak financial position has required the
district to cashflow borrow over the past several years to cover
operating costs and avoid defaulting on debt payments. The rating
also incorporates a limited economy with average resident income
and wealth levels, and a positive enrollment trend. The rating also
considers Moody's assessment of governance as a key rating driver.
The district does not maintain formal or informal financial or debt
policies, and budgeting of state aid - the largest revenue source -
has been overly optimistic over the past several years resulting in
significant negative budget to actual variances.
The B1 rating assigned to the district's general obligation
unlimited tax bonds is equivalent to the B1 issuer rating based on
the district's unlimited property tax that is dedicated to debt
service.
RATING OUTLOOK
The negative outlook reflects the challenges the district will face
regarding the significant escalation of lease revenue debt service
paid out of the general fund while trying to materially improve
financial performance and reserves. Due to inaccurate enrollment
estimates resulting in overpayment to the district, state aid
allotment will continue to be reduced which will likely result in
continued cash flow borrowing to cover operational costs.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Return to surplus operations that results in
significant improvement in fund balance and liquidity
-- Significant reduction in cash flow borrowing
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Unbalanced operations that lead to further decline
in reserves and increased reliance on cash flow borrowing
-- Inability to make full and timely debt payments
LEGAL SECURITY
The district's GOULT bonds are payable from a dedicated ad valorem
tax levied by the district on all taxable property without
limitation as to rate or amount. Certain series of the district's
bonds are further secured by the Texas Permanent School Fund's
commitment to pay debt service if necessary.
PROFILE
Tioga ISD is in Grayson County (Aa2) about 60 miles north of the
City of Dallas (A1 stable). Current enrollment is approximately 715
and facilities consist of one elementary/middle school and one high
school.
METHODOLOGY
The principal methodology used in these ratings was US K-12 Public
School Districts Methodology published in January 2021
TKEES INC: Files Emergency Bid to Use Cash Collateral
-----------------------------------------------------
TKEES, Inc. asks the U.S. Bankruptcy Court for the Southern
District of Florida, Broward Division, for authority to use cash
collateral.
The Debtor will use the cash collateral to, inter alia, fund
insurance and utilities expenses, and fund operating expenses in
order to maintain its business.
As of the Petition Date, the Debtor believes four creditors assert
secured claims against the estate:
-- Hilldun Corporation asserts a secured claim in the
approximate amount of $300,000. Per UCC financing statements filed
by Hilldun, the claim is secured by security interests in the
Debtor's accounts, instruments, contract rights, chattel paper,
documents and general intangibles.
-- Shopify Capital, Inc. asserts a secured claim in the
approximate amount of $290,536. Upon information and belief a UCC
financing statement filed against the Debtor by Corporation Service
Company, as a representative, perfects the Shopify debt. Per the
financing statement, the debt is secured by all assets of the
Debtor.
-- Windsor Private Capital asserts a secured claim in the
approximate amount of $5.832 million. However, no UCC financing
statements appear to have been filed by Windsor against the Debtor.
As such, any security interest Windsor may allege is not perfected
and subject to avoidance in the case.
-- Power One Capital Corp. asserts a secured claim in the
approximate amount of $369,221. As with Windsor, however, Power One
does not appear to have filed a UCC financing statement against the
Debtor. Its security interest is therefore unperfected and subject
to avoidance.
The Debtor proposes to use the cash collateral in accordance with
the terms of the Budget. The Debtor also requests that it be
authorized: (i) to exceed any line item on the Budget by an amount
equal to 10% of each such line item; or (ii) to exceed any line
item by more than 10% percent so long as the total of all amounts
in excess of all line items for the Budget do not exceed 10%
percent in the aggregate of the total Budget.
Adequate protection provided to the Creditors includes: (a) the
fact that the Budget is cash flow-positive and does not result in a
diminishment of the estate or the Creditors' secured claims, and
(b) a replacement lien for any use of cash collateral in any and
all assets of the Debtor, with such liens against the property of
the Debtor having the same seniority and entitled to the same level
of priority as the priority of the Creditors' liens against the
Debtor's property that existed prior to the Petition Date.
A copy of the motion is available at https://bit.ly/404jsP2 from
PacerMonitor.com.
About TKEES, Inc.
TKEES, Inc. is a manufacturer and seller of sandals and flip flops
for women. The Debtor sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-12126) on March
20, 2023. In the petition signed by Jesse Burnett, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Scott M. Grossman oversees the case.
Bradley S. Shraiberg, Esq., at Shaiberg Page PA, represents the
Debtor as legal counsel.
TRITON WATER: Moody's Cuts CFR to B3 & First Lien Term Loan to B2
-----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Triton Water
Holdings, Inc., including the company's Corporate Family Rating to
B3 from B2, Probability of Default Rating to B3-PD from B2-PD,
existing senior secured first lien term loan rating to B2 from B1,
and the existing unsecured notes rating to Caa2 from Caa1. The
rating outlook is stable.
The downgrades reflect Triton's weak free cash flow and high
debt/EBITDA leverage of 8.6x (on a Moody's adjusted basis) as of
September 30, 2022. Recent pricing actions, cost reduction
initiatives, and moderating inflation have the potential to support
deleveraging to below 7.0x over the next 12 months. Nonetheless,
category volumes are also softening and growing both volume and the
EBITDA margin in 2023 will be challenging amid pressure on consumer
spending and a likely promotional environment. In a challenging
macro environment with rising interest rates, high execution risk
thus remains as it relates to improving operating performance,
reducing debt/EBITDA leverage, and turning free cash flow to a
meaningfully positive level.
Triton has faced significant headwinds since mid-2021, including
inflationary pressures across resin, corrugate, fuel, freight, and
labor. Rising costs have resulted in weaker profitability, as
EBITDA (on a Moody's adjusted basis) has declined 21% for the nine
months ended September 30, 2022 compared to the prior year nine
month period, with the adjusted EBITDA margin declining roughly 450
bps. Meanwhile, revenues increased 13% over that period, largely
driven by pricing/mix of 12%, as volumes were up only 1%. The
company implemented pricing in 2021 to mitigate the impact of
inflation, but as costs continued to rise, additional pricing in
2022 was required. Triton took significant pricing on its US retail
business in 2022, including 5% pricing in April, followed by an
additional 6% in July, and the latest price increase of 10% in
early October. Pricing has lagged the cost increases though,
resulting in a profitability drag until the cost environment
normalizes and pricing catches up to costs. As a result of weaker
profitability, debt/EBITDA leverage (on a Moody's adjusted basis)
has increased to 8.6x for the LTM period ended September 30, 2022,
compared to 7.3x at December 31, 2021.
Absent further business disruptions and spikes in input costs,
Moody's projects 4Q22 EBITDA (on a Moody's adjusted basis) to grow
sequentially compared to 3Q22 at a double digit rate, followed by
double digit adjusted EBITDA growth in full year 2023 compared to
2022 – resulting in debt/EBITDA leverage (on a Moody's adjusted
basis) declining to below 7.0x over the next 12 months. Moody's
expectations reflect benefits from the latest pricing in October
and moderating inflation on key cost categories such as resins,
fuel, and freight. Downside risks remain though as the cost
environment remains volatile, and certain costs such as electricity
and warehousing are projected to increase in 2023. Volumes in 3Q22
declined 4% compared to the prior year, with the Retail business
declining 6%. The company indicated the Retail segment decline was
largely due to SAP system implementation issues as the company
transitioned to a standalone IT system in September 2022 and this
resulted in production inefficiencies that negatively impacted
sales performance in September and October. Additionally, with the
latest pricing increase, there is increasing risk of consumers
trading down to lower priced alternatives such as private label
bottled water, or decreasing consumption of bottled water. The
category is highly competitive with high private label penetration,
and substantial price increases could have negative impacts on
volume.
Triton's liquidity is adequate, supported by full access to an
undrawn $350 million ABL revolving credit facility ($322 million
availability excluding $21 million of letters of credit
outstanding) expiring in 2026, and a sizable $261 million cash
balance as of September 30, 2022. The ABL revolver is governed by a
springing fixed charge coverage ratio of 1.0x which is tested if
excess availability falls below the greater of 10% of the line cap
or $25 million. Moody's does not expect the covenant to be tested
in the next 12-18 months, though rising interest rates and sizable
capital spending will likely reduce the FCCR cushion in 2023. A
highly adjusted credit agreement EBITDA calculation will likely
provide some additional cushion within the covenant. The term loan
does not have financial maintenance covenants.
From a cash flow perspective, Moody's projects a free cash flow
burn in 4Q22 of roughly $50-$100 million, with the negative cash
flow driven primarily by working capital and elevated capital
spending, resulting in a full year projected free cash flow burn of
$225-$275 million. The negative free cash flow in 2022 is projected
to be fully funded with cash on the balance sheet, as the company
ended 2021 with $488 million of cash. Therefore, Moody's still
projects the company to end 2022 with adequate liquidity. In 2023,
Moody's projects free cash flow to improve by more than $125
million, but remain negative because of a large working capital
cash drag in 1H23 that is primarily related to the seasonal
increase in production activity and timing of payments ahead of the
peak summer sales season. Nonetheless, Moody's expects meaningful
free cash flow improvement compared to 2022 driven by EBITDA
growth, lower capital spending, and lower non-recurring cash
expenses as the company had large cash outflows related to the SAP
transition in 2022. These positive impacts will be partially offset
by higher interest expense, as the company has a $2.8 billion
outstanding term loan that is exposed to floating rates as the
company does not have interest rate hedges to mitigate the impact
of rising rates. While Moody's expects free cash flow to turn
positive in 2024 on further EBITDA recovery and lower one-time cash
costs, free cash flow is still projected to be less than $100
million due to the high interest burden.
Moody's took the following rating actions:
Downgrades:
Issuer: Triton Water Holdings, Inc.
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to
B3-PD from B2-PD
Senior Secured 1st Lien Term Loan, Downgraded to
B2 (LGD3) from B1 (LGD3)
Senior Unsecured Regular Bond/Debenture, Downgraded to
Caa2 (LGD5) from Caa1 (LGD5)
Outlook Actions:
Issuer: Triton Water Holdings, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Triton's B3 CFR reflects its low product diversity, weak free cash
flow, and high debt/EBITDA leverage of 8.6x (on a Moody's adjusted
basis) as of September 30, 2022. Recent pricing actions and
moderating inflation support deleveraging to below 7.0x over the
next 12 months. Nonetheless, in a challenging macro environment
with rising interest rates, high execution risk remains as it
relates to improving operating performance, reducing debt/EBITDA
leverage, and turning free cash flow to a meaningfully positive
level. Category volumes are also softening and growing both volume
and the EBITDA margin in 2023 will be challenging amid pressure on
consumer spending and a likely promotional environment. The ratings
also reflect Triton's aggressive financial policy under private
equity ownership as shareholders took a sizeable distribution in
December 2021, shortly after the March 2021 LBO transaction. The
bottled water category is also highly competitive with high private
label penetration. Within branded bottled water, Triton also
competes with more diversified and financially stronger companies
in the North America beverages sector that have greater capacity to
fund sustainability investments and more negotiating leverage with
retailers.
The ratings are supported by Triton's diverse customer base,
leading market position and leading regional brands in the US
retail bottled water category, which is a gradually growing,
on-trend consumer category. Triton's ReadyRefresh(R) business,
about 25% of sales, also has a leading position in the home and
office beverage delivery segment. The ratings are also supported by
the company's adequate liquidity, including full access to an
undrawn $350 million ABL revolving credit facility and a $261
million cash balance as of September 30, 2022.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects that the company's adequate liquidity
including the cash balance and a large undrawn revolver provides
some flexibility to execute on the earnings growth initiatives and
reduce leverage.
A rating downgrade could occur if the company is unable to generate
substantial earnings improvement, debt/EBITDA is sustained above
8.0x, liquidity deteriorates, or free cash flow fails to turn
positive. A rating downgrade could also occur if the company
pursues a more aggressive financial policy or if supply chain and
SAP challenges persist, resulting in lower efficiency or higher
capital spending.
A rating upgrade could occur if Triton is able to improve operating
performance, including sustained organic revenue growth and a
higher EBITDA margin. The company would also need to sustainably
generate comfortably positive free cash flow, maintain good
liquidity, and maintain a financial strategy that results in
debt/EBITDA sustained below 6.5x, and EBITDA minus capex to
interest coverage approaching 1.5x.
ESG CONSIDERATIONS
ESG considerations have a very highly negative credit impact
(CIS-5) on Triton's rating. The CIS score reflects Triton's private
equity ownership and Moody's expectation for an aggressive
financial policy that leads to a rating that is several notches
below the level that is likely in the absence of ESG risks. Triton
is also moderately negatively exposed to environmental and social
risks.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Soft Beverages
published in September 2022.
COMPANY PROFILE
Headquartered in Stamford, Connecticut, Triton Water Holdings,
Inc., produces and sells regional spring water and purified
national water brands, through retail sales channels and through
its ReadyRefresh(R) direct-to-consumer and office delivery
services. Triton's key retail brands include Arrowhead(R), Deer
Park(R), Ice Mountain(R), Ozarka(R), Poland Spring(R),
Zephyrhills(R), Pure Life(R), and Splash. Net sales for the
trailing twelve months as of September 30, 2022 were approximately
$4.3 billion. The company is owned by private equity firms One Rock
Capital Partners and Metropoulos & Co. following a $4.3 billion
acquisition from Nestle in March 2021.
VESSEL MEDICAL: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Vessel Medical, Inc.
6000A Pelham Road
Greenville, SC 29615
Chapter 11 Petition Date: March 21, 2023
Court: United States Bankruptcy Court
District of South Carolina
Case No.: 23-00816
Judge: Hon. Helen E. Burris
Debtor's Counsel: Robert H. Cooper, Esq.
THE COOPER LAW FIRM
150 Milestone Way, Ste B
Greenville, SC 29615
Tel: 864-271-9911
Fax: 864-232-5236
Email: thecooperlawfirm@thecooperlawfirm.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Kevin Murdock as sole owner.
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/KOHBS4Q/Vessel_Medical_Inc__scbke-23-00816__0001.0.pdf?mcid=tGE4TAMA
VITAL PHARMACEUTICALS: Taps C Street Ahead of Bankruptcy Auction
----------------------------------------------------------------
Ewan Larkin of PRWeek reports that Vital Pharmaceuticals, the owner
of Bang Energy, has brought on C Street Advisory Group after filing
for Chapter 11 bankruptcy protection in Q4 of last 2022.
C Street is serving as Vital's strategy and communications firm,
managing external and internal comms, effective last week,
according to a source familiar with the matter.
Vital said in October that it was filing for Chapter 11. At the
time, it had more than 1,000 employees and nearly $600 million in
assets.
The filing followed a string of lawsuits, including a case against
former exclusive distributor PepsiCo. Most notably, competitor
Monster Energy won $293 million in damages after alleging Bang
falsely advertised the ingredients and health benefits of its
products.
On Thursday, March 9, 2022, days after it was reported that Vital
was set for bankruptcy court auction, the Bang owner shuffled its
executive leadership. It said in a statement that founder Jack
Owoc would exit his roles as CEO and chief science officer and
leave the company's board. Chief technology officer John DiDonato
was named Vital's interim CEO, effectively immediately. Vital also
promoted Bang Energy EVP of sales Gene Bukovi to COO.
As well as Bang, Vital produces products including keto-friendly
Meltdown, Quash, Vooz and Redline.
In November, BlockFi turned to C Street for strategic restructuring
and communications support after it filed for Chapter 11.
About Vital Pharmaceuticals
Since 1993, Florida-based Vital Pharmaceuticals, Inc., doing
business as Bang Energy and as VPX Sports, has developed
performance beverages, supplements, and workout products to fuel
high-energy lifestyles. VPX Sports is the maker of Bang energy
drinks, among other consumer products.
Vital Pharmaceuticals, Inc., along with certain of its domestic
subsidiaries and affiliates, filed voluntary petitions for
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Fla. Lead Case No. 22-17842) on Oct. 10, 2022.
VPX estimated $500 million to $1 billion in assets and liabilities
as of the bankruptcy filing.
The Hon. Scott M. Grossman is the case judge.
The Debtors tapped Latham & Watkins, LLP as general bankruptcy
counsel; Berger Singerman, LLP as local counsel; Haynes and Boone,
LLP and Faulkner ADR Law, PLLC as special counsels; Huron
Consulting Group, Inc. as CTO services provider; and Rothschild &
Co US, Inc. as investment banker. Stretto, Inc. is the notice,
claims and solicitation agent.
The U.S. Trustee for Region 21 appointed an official committee of
unsecured creditors on Nov. 1, 2022. The committee tapped
Lowenstein Sandler, LLP as general bankruptcy counsel; Sequor Law,
P.A. as local counsel; and Lincoln Partners Advisors, LLC as
financial advisor.
VOYAGER DIGITAL: Govt. Renews Effort to Stop Sale to Binance
------------------------------------------------------------
Steven Church of Bloomberg News reports that US officials are
trying to block key parts of the sale of bankrupt Voyager Digital
Ltd. to Binance.US, the American arm of the world's biggest crypto
exchange, while the government appeals a judge's approval of the
deal.
The government opposes any limits on its ability to punish anyone
involved in the proposal and a related bankruptcy-exit plan that US
Bankruptcy Judge Michael E. Wiles approved last week, a Justice
Department lawyer said in court Tuesday, March 14, 2023.
Other aspects of the deal could go forward, but not the legal
protections included as part of Voyager's Chapter 11 plan,
Assistant US Attorney Larry said.
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.
WEWORK COS: Davis Polk Advises Noteholders on Debt Recapitalization
-------------------------------------------------------------------
Davis Polk is advising an ad hoc group of unsecured noteholders to
WeWork Companies LLC in connection with a comprehensive debt
recapitalization transaction that includes, among other things, (1)
the issuance of $500 million new first-lien notes, offered to all
public unsecured noteholders and backstopped by the ad hoc group,
(2) the issuance of $175 million new first-lien delayed-draw notes
to a third-party investor pursuant to a securities purchase and
commitment agreement, (3) the rollover of $300 million of
first-lien notes currently held or that may be issued to SoftBank
into new first-lien notes or new first-lien delayed-draw notes, (4)
an offer to exchange public unsecured notes into (i) subject to a
participation in the new first-lien notes, second-lien notes and
equity, (ii) new third-lien exchange notes and equity, or (iii)
equity, (5) an offer to exchange (i) $250 million unsecured notes
held by SoftBank affiliates into second-lien convertible exchange
notes and equity and (ii) $359.5 million of unsecured notes held by
SoftBank affiliates into new third-lien exchange notes and equity,
(6) the equitization of the remaining unsecured notes held by
SoftBank affiliates, and (7) consent solicitations with respect to
the public unsecured notes. On March 17, 2023, the ad hoc group,
which collectively holds approximately 60% of WeWork’s public
unsecured notes, executed a transaction support agreement with
WeWork and SoftBank, pursuant to which the ad hoc group has agreed
to support the transactions by, among other things, exchanging
their unsecured notes for second-lien notes and participating in
and backstopping the offering of $500 million of new first-lien
notes.
WeWork is one of the leading global flexible space providers
committed to delivering technology-driven turnkey solutions,
flexible spaces and community experiences. WeWork serves a
membership base of businesses large and small through its network
of more than 800 locations around the world.
The Davis Polk restructuring team included partner Eli J. Vonnegut,
counsel Robert (Bodie) Stewart and Joanna McDonald and associates
Jacob Weiner, Stephen Ford, Alexander K.B. Shimamura, Sophy Ma and
Mary Kudolo. The finance team included partner David Hahn and
counsel Andrei Takhteyev. The capital markets team included partner
Pedro J. Bermeo and counsel Stephen A. Byeff. The tax team included
partner Lucy W. Farr and counsel Leslie J. Altus. All members of
the Davis Polk team are based in the New York office.
Davis Polk refers to Davis Polk & Wardwell LLP, a New York limited
liability partnership, and its associated entities.
About WeWork
WeWork Inc. (NYSE: WE) is a global flexible workspace provider,
serving a membership base of businesses large and small through its
network of 756 locations as of December 2021. With that global
footprint, the Company has worked to establish itself as the
preeminent brand within the flexible workspace category, by
combining prime locations and unique design with member-first
hospitality and exceptional community experiences.
WeWork reported a net loss of $4.63 billion in 2021, a net loss of
$3.83 billion in 2020, and a net loss of $3.77 billion in 2019. As
of Sept. 30, 2022, WeWork had $18.33 billion in total assets,
$21.09 billion in total liabilities, and a total deficit of $2.74
billion.
* * *
As reported by the TCR on Dec. 7, 2022, Fitch Ratings downgraded
WeWork Companies LLC and WeWork Inc.'s (f/k/a The We Co) Long-Term
Issuer Default Ratings (LT IDRs) to 'CCC' from 'CCC+'.
WEWORK COS: S&P Downgrades ICR to 'CC' on Announced Exchange Offer
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on WeWork Cos.
LLC to 'CC' from 'CCC+'. In addition, S&P lowered its issue-level
rating on the 7.875% senior unsecured notes ($669 million
outstanding as of Dec. 31, 2022) due 2025 to 'CC' from 'CCC+'.
S&P said, "The negative outlook reflects our expectation that we
will lower our issuer credit rating on the company to 'SD'
(selective default) upon the completion of the proposed exchange
offer. Shortly after restructuring, we would raise the ratings to a
level that reflects the ongoing risk of a conventional default or
future distressed restructurings.
"We view the announced exchange offer as distressed and tantamount
to default. The downgrade follows WeWork's announcement that it
entered into a transaction support agreement with certain
affiliates of SoftBank Group Corp. and eligible bondholders,
representing approximately 57% of the aggregate principal amount
outstanding of the issuers' 7.875% senior notes due 2025 and
approximately 68% of the aggregate principal amount outstanding of
the issuers' 5.00% senior notes due 2025, Series II. The Exchange
offer will consist of offers to exchange all the 7.875% and 5.00%
senior unsecured notes into either new debt or equity at a discount
to par. In addition, SoftBank will convert $1.04 billion of its
5.00% senior unsecured notes into equity at a discount to par and
exchange the remaining $609.5 million of its 5.00% senior unsecured
notes into new debt and equity, at a discount to par. In connection
with the proposed transaction, WeWork plans to issue $500 million
of new first-lien notes and $475 million of new first-lien delayed
draw notes, and extend its guarantees with Softbank Vision Fund II
for the letter of credit facility to August 2027.
"The proposed transaction will reduce WeWork's debt burden by about
$1,500 million and extend its maturity wall from 2025 to 2027. We
acknowledge the transaction offers meaningful cash interest cost
savings and reduces leverage, which provides the company with
financial flexibility, increasing the possibility of eventually
reaching free cash flow generation.
"However, we view the proposed exchange offer as tantamount to
default because we believe lenders will receive less than
originally promised given the principal amount of new securities
offered is less than the original par amount, the new securities'
maturities extend beyond the original, and the timing of payments
is slowed through the addition of a payment-in-kind feature for
more than half the interest on the proposed notes. In our view,
WeWork is pursuing this transaction because its capital structure
is unsustainable and the company has limited options to reduce its
debt burden and improve its cash flow organically.
"The negative outlook reflects our expectation that we will lower
the issuer credit rating on WeWork to 'SD' upon completion of the
proposed exchange offer.
"We will likely lower the issuer credit rating to 'SD' upon
completion of the proposed exchange offer. Shortly after
restructuring, we would raise the ratings to a level that reflects
the ongoing risk of a conventional default or future distressed
restructurings.
"While unlikely, we could raise the issuer credit rating if WeWork
does not complete the proposed exchange offer and the company
establishes a clear plan to avoid any future debt restructuring."
ESG credit indicators: E-2, S-3, G-3
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Utiliman Utility Contractors LLC
Bankr. N.D. Ga. Case No. 23-40378
Chapter 11 Petition filed March 14, 2023
See
https://www.pacermonitor.com/view/6ADRSKQ/Utiliman_Utility_Contractors_LLC__ganbke-23-40378__0001.0.pdf?mcid=tGE4TAMA
represented by: Thomas T. McClendon, Esq.
JONES & WALDEN, LLC
E-mail: tmcclendon@joneswalden.com
In re Mingle Banquet Facility LLC
Bankr. D. Md. Case No. 23-11690
Chapter 11 Petition filed March 14, 2023
See
https://www.pacermonitor.com/view/RLBUY7Q/Mingle_Banquet_Facility_LLC__mdbke-23-11690__0001.0.pdf?mcid=tGE4TAMA
represented by: Chidi Onukwugha, Esq.
ONUKWUGHA & ASSOCIATES, LLC
E-mail: attorneyonukwugha@gmail.com
In re 51 Hills LLC
Bankr. E.D.N.Y. Case No. 23-40849
Chapter 11 Petition filed March 14, 2023
See
https://www.pacermonitor.com/view/J6PNGQA/51_Hills_LLC__nyebke-23-40849__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Wonder Corps Holdings, LLC
Bankr. D. Rhode Island Case No. 23-10173
Chapter 11 Petition filed March 14, 2023
See
https://www.pacermonitor.com/view/7JDXZOY/Wonder_Corps_Holdings_LLC__ribke-23-10173__0001.0.pdf?mcid=tGE4TAMA
represented by: Kevin D. Heitke, Esq.
HEITKE COOK ASSOCIATES LLC
E-mail: kdh@HCALAWRI.com
In re BEF, LLC
Bankr. N.D. Cal. Case No. 23-40291
Chapter 11 Petition filed March 15, 2023
See
https://www.pacermonitor.com/view/Y5PKYLA/BEF_LLC__canbke-23-40291__0001.0.pdf?mcid=tGE4TAMA
represented by: Geoffrey E. Wiggs, Esq.
LAW OFFICES OF GEOFF WIGGS
E-mail: Geoff@wiggslaw.com
In re Brandon Noon and Kristin Noon
Bankr. M.D. Fla. Case No. 23-00977
Chapter 11 Petition filed March 15, 2023
represented by: Jake Blanchard, Esq.
In re Randy Noon and Kimberly Noon
Bankr. M.D. Fla. Case No. 23-00975
Chapter 11 Petition filed March 15, 2023
represented by: Jake Blanchard, Esq.
BLANCHARD LAW, P.A.
In re Stephen S. Chang
Bankr. M.D. Fla. Case No. 23-00536
Chapter 11 Petition filed March 15, 2023
represented by: Byron Wright, Esq.
In re RMG Sports Group Inc
Bankr. N.D. Ga. Case No. 23-52472
Chapter 11 Petition filed March 15, 2023
See
https://www.pacermonitor.com/view/PGPITEY/RMG_Sports_Group_Inc__ganbke-23-52472__0001.0.pdf?mcid=tGE4TAMA
Case Opened
In re Jonas Kennen Drucker
Bankr. D. Nev. Case No. 23-50159
Chapter 11 Petition filed March 15, 2023
represented by: J. Craig Demetras, Esq.
In re Cocomoes, LLC
Bankr. D. Nev. Case No. 23-50160
Chapter 11 Petition filed March 15, 2023
See
https://www.pacermonitor.com/view/VXV6IEI/COCOMOES_LLC__nvbke-23-50160__0001.0.pdf?mcid=tGE4TAMA
represented by: Kevin A. Darby, Esq.
DARBY LAW PRACTICE
E-mail: kevin@darbylawpractice.com
In re The 105-31 150th Street Realty LLC
Bankr. E.D.N.Y. Case No. 23-40875
Chapter 11 Petition filed March 15, 2023
See
https://www.pacermonitor.com/view/VPWZPJA/The_105-31_150th_Street_Realty__nyebke-23-40875__0001.0.pdf?mcid=tGE4TAMA
represented by: Richard F. Artura, Esq.
PHILLIPS, ARTURA & COX
E-mail: Bankruptcy@pwqlaw.com
In re Xavier Mitchell
Bankr. C.D. Cal. Case No. 23-10325
Chapter 11 Petition filed March 16, 2023
represented by: Jeffrey Shinbrot, Esq.
In re Ocean Trans, Inc.
Bankr. E.D. Cal. Case No. 23-20817
Chapter 11 Petition filed March 16, 2023
See
https://www.pacermonitor.com/view/KVZI55A/Ocean_Trans_Inc__caebke-23-20817__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Timothy S Hughes
Bankr. M.D. Fla. Case No. 23-00545
Chapter 11 Petition filed March 16, 2023
represented by: Edward Peterson, Esq.
In re Russell Samuel Adler
Bankr. S.D. Fla. Case No. 23-12068
Chapter 11 Petition filed March 16, 2023
represented by: Susan Lasky, Esq.
In re Russell Samuel Adler
Bankr. S.D. Fla. Case No. 23-12068
Chapter 11 Petition filed March 16, 2023
represented by: Susan Lasky, Esq.
In re Home Healthcare Renewal Services, Inc.
Bankr. N.D. Ill. Case No. 23-03562
Chapter 11 Petition filed March 16, 2023
See
https://www.pacermonitor.com/view/BTJVOHQ/Home_Healthcare_Renewal_Services__ilnbke-23-03562__0001.0.pdf?mcid=tGE4TAMA
represented by: William J. Factor, Esq.
FACTORLAW
E-mail: wfactor@wfactorlaw.com
In re Absolute Home Health, LLC
Bankr. N.D. Ill. Case No. 23-03559
Chapter 11 Petition filed March 16, 2023
See
https://www.pacermonitor.com/view/BKKOYII/Absolute_Home_Health_LLC__ilnbke-23-03559__0001.0.pdf?mcid=tGE4TAMA
represented by: William J. Factor, Esq.
FACTORLAW
E-mail: wfactor@wfactorlaw.com
In re Glenwood Road Estates, LLC
Bankr. E.D.N.Y. Case No. 23-40889
Chapter 11 Petition filed March 16, 2023
See
https://www.pacermonitor.com/view/66CFXIQ/Glenwood_Road_Estates_LLC__nyebke-23-40889__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Susan Stanley
Bankr. S.D.N.Y. Case No. 23-22204
Chapter 11 Petition filed March 16, 2023
represented by: Narotam Rai, Esq.
In re Dennis Gerald McLaughlin
Bankr. W.D. Okla. Case No. 23-10633
Chapter 11 Petition filed March 16, 2023
represented by: Phillip Spratt, Esq.
SPRATT LAW FIRM
In re Historia Inspired LLC
Bankr. W.D. Pa. Case No. 23-10126
Chapter 11 Petition filed March 16, 2023
See
https://www.pacermonitor.com/view/L2K5OVA/Historia_Inspired_LLC__pawbke-23-10126__0001.0.pdf?mcid=tGE4TAMA
represented by: Christopher M. Frye, Esq.
STEIDLl & STEINBERG, P.C.
E-mail: chris.frye@steidl-steinberg.com
In re Shifrin & Associates
Bankr. E.D. Mo. Case No. 23-40921
Chapter 11 Petition filed March 17, 2023
See
https://www.pacermonitor.com/view/NEUWKRY/Shifrin__Associates__moebke-23-40921__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert E. Eggmann, Esq.
CARMODY MACDONALD P.C.
E-mail: ree@carmodymacdonald.com
In re Tesorina, LLC
Bankr. N.D.N.Y. Case No. 23-60174
Chapter 11 Petition filed March 17, 2023
See
https://www.pacermonitor.com/view/4OJ4Q3Y/Tesorina_LLC__nynbke-23-60174__0001.0.pdf?mcid=tGE4TAMA
represented by: Peter A. Orville, Esq.
ORVILLE & MCDONALD LAW, P.C
In re Hemp Synergistics LLC
Bankr. W.D. Pa. Case No. 23-20582
Chapter 11 Petition filed March 17, 2023
See
https://www.pacermonitor.com/view/LQIKNEI/Hemp_Synergistics_LLC__pawbke-23-20582__0001.0.pdf?mcid=tGE4TAMA
represented by: Michael J. Roeschenthaler, Esq.
WHITEFORD, TAYLOR & PRESTON, LLP
In re Happy Uncle, LLC
Bankr. D. Md. Case No. 23-11822
Chapter 11 Petition filed March 19, 2023
See
https://www.pacermonitor.com/view/I6NNSYQ/Happy_Uncle_LLC__mdbke-23-11822__0001.0.pdf?mcid=tGE4TAMA
represented by: Charles M. Maynard, Esq.
LAW OFFICE OF CHARLES M. MAYNARD
E-mail: cmaynard@maynardlawgroup.com
In re Allen Wayne Jeter
Bankr. D. Ariz. Case No. 23-01710
Chapter 11 Petition filed March 20, 2023
In re The Litigation Practice Group P.C.
Bankr. C.D. Cal. Case No. 23-10571
Chapter 11 Petition filed March 20, 2023
See
https://www.pacermonitor.com/view/PERO5TA/The_Litigation_Practice_Group__cacbke-23-10571__0001.0.pdf?mcid=tGE4TAMA
represented by: Joon M. Khang, Esq.
KHANG & KHANG LLP
E-mail: joon@khanglaw.com
In re Michael Erich Hofmann
Bankr. E.D. Cal. Case No. 23-90111
Chapter 11 Petition filed March 20, 2023
represented by: Brian S. Haddix, Esq.
In re Martin Arthur Neely
Bankr. N.D. Cal. Case No. 23-30160
Chapter 11 Petition filed March 20, 2023
represented by: Brent D. Meyer, Esq.
MEYER LAW GROUP LLP
Email: brent@meyerllp.com
In re Gerriann Vovk
Bankr. E.D.N.Y. Case No. 23-40918
Chapter 11 Petition filed March 20, 2023
represented by: Alla Kachan, Esq.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
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public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
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than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
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The Sunday TCR delivers securitization rating news from the week
then-ending.
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S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
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Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
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*** End of Transmission ***