/raid1/www/Hosts/bankrupt/TCR_Public/230324.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, March 24, 2023, Vol. 27, No. 82
Headlines
129 N WALNUT: May Use $35,000 of Cash Collateral Thru May 8
1600 HICKS ROAD: Court Enjoins Bank's Collection Actions vs. Qadris
77 VARET: Court OKs Cash Collateral Access on Final Basis
A+ REMODELING: Enters Settlement w/ Enabnit & Mid-Century Insurance
AFSHARFIRM LLC: Starts Subchapter V Case; Lender Seeks Stay Relief
AINOS INC: Raises US$3 Million From Private Placement
ALPHATEC HOLDINGS: Has $14 Million Deposit at SVB
AMERICAN TELECONFERENCE: Main Street Writes Off $2.9M Loan
AMERICAN TELECONFERENCE: Steep Discount for $14M Main Street Loan
ANOINTED SECURITY: Seeks to Hire El Bufete Del Pueblo as Counsel
AQUA SHIELD: Updates Reorganizing Plan Disclosures
ARBORWORKS LLC: Main Street Marks $29.7M Loan at 16% Off
ARBORWORKS LLC: Main Street Marks $4.6M Loan at 16% Off
ARCTIC GLACIER: S&P Downgrades ICR to 'CCC', Outlook Negative
ASPIRA WOMEN'S: Has No Cash Deposits at Silicon Valley Bank
ATS WORKHOLDING: Main Street Marks $1.9M Loan at 67% Off
ATS WORKHOLDING: Main Street Marks $3M Loan at 67% Off
ATX NETWORKS: Main Street Marks $3.3M Loan at 23% Off
AVINGER INC: To Resume Sales Under 2022 ATM Offering Agreement
AVIS BUDGET: Moody's Ups CFR to Ba3 & Senior Unsecured Notes to B1
AVISON YOUNG: S&P Downgrades ICR to 'CCC+', Outlook Negative
BCM CRE OPPORTUNITY: Case Summary & One Unsecured Creditor
BIRCHINGTON LLC: Taps 10Ninety Group as Bookkeeper, Manager
BIRCHINGTON LLC: Taps Burns Law Firm as Bankruptcy Counsel
BON WORTH: Court OKs Deal on Cash Collateral Access
BOXED INC: Seeking Sale Offers, Considering Bankruptcy Filing
BRAINERD INDUSTRIES: Case Summary & 20 Top Unsecured Creditors
BRAINWORKS SOFTWARE: Main Street Marks $7M Loan at 59% Off
BRAND INDUSTRIAL: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg.
BRIDGER STEEL: Court OKs Cash Collateral Access
BRISTOW GROUP: S&P Affirms 'B' ICR on New Contract, Outlook Stable
BUCA C LLC: Main Street Marks $17.3M Loan at 29% Off
BURKE BRANDS: Court OKs Cash Collateral Access Thru April 7
BURLEY FOODS: Gets OK to Hire Carolina Restaurant as Broker
CAMBER ENERGY: Reports $107.7 Million Net Loss for 2022
CBC RESTAURANT: U.S. Trustee Appoints Creditors' Committee
CCC CONSULTING: Has Deal on Cash Collateral Access
CHESTER, PA: 2 New Retiree Committee Members Appointed
CHESTNUT RIDGE: Court OKs Access to Cash Collateral Thru April 14
CHESTNUT RIDGE: U.S. Trustee Appoints Creditors' Committee
CHICK LUMBER: Gets Court Nod to Use Cash Collateral Thru June 30
CHRISTONE DISTRIBUTION: Seeks Cash Collateral Access
CLARIOS GLOBAL: S&P Upgrades ICR to 'B+', Outlook Stable
CLARIUS BIGS: Main Street Virtually Writes Off $2.7M Loan
CLAROS MORTGAGE: S&P Alters Outlook to Negative, Affirms 'B+' ICR
CLINTON NURSERIES: CN Trust's Summary Judgment Bid Denied
CLUBHOUSE MEDIA: Further Reduces Debt by $95K
COCOMOES LLC: Seeks Cash Collateral Access
COLUMBIAN MUTUAL: A.M. Best Keeps B(Fair) Rating on Review
CORNERSTONE ONSITE: Assets Sale Proceeds to Fund Plan Payments
CORNERSTONE ONSITE: Has $650,000 DIP Loan From Southern Spear
CRYPTO CO: Borrows $54K From 1800 Diagonal
CUSTOM ALLOY: Cash Collateral Hearing Adjourned to March 27
CWI CHEROKEE: Seeks Cash Collateral Access
DAKTRONICS INC: Signs Standstill Agreement With Alta Fox
DANNY & CORIE: U.S. Trustee Unable to Appoint Committee
DIEBOLD NIXDORF: S&P Downgrades ICR to 'CCC', On Watch Negative
DIOCESE OF NORWICH: Plan Must Help Abuse Victims, Says Judge
EDGEWATER CONSTRUCTION: Case Summary & 20 Top Unsecured Creditors
ELANCO ANIMAL: Moody's Cuts CFR to Ba3 & Sr. Secured Debt to Ba2
EMERALD ELECTRICAL: Court OKs Cash Collateral Access Thru March 30
EMPIRE SPORTS: Engages Negotiations with StubHub; Amends Plan
FARMERS COOPERATIVE: Court OKs Cash Collateral Access Thru May 16
FIRST REPUBLIC: Fitch Cuts IDR to 'B', Still on Watch Negative
FTE NETWORKS: Board Cancels 4.2M Shares Issued to TTP8
FULLER AND FULLER: Commences Subchapter V Bankruptcy
FUSE LLC: Main Street Marks $1.8M Loan at 16% Off
FXI HOLDINGS: Proposed Debt Exchange No Impact on Moody's Caa2 CFR
GARUDA HOTELS: Wins Interim Cash Collateral Access Thru May 25
GCI LLC: S&P Raises Senior Unsecured Debt Rating to 'B+'
GLOBAL MIXED: Seeks to Use $16,000 of Cash Collateral
GRADE A HOME: Starts Subchapter V Case to Stop Foreclosure
GRADE A HOME: Wins Cash Collateral Access Thru July 31
GREEN ROADS: CBD Producer Files for Chapter 11
HALL CATTLE: Wins Interim OK to Use Cash Collateral
HDIP INC: Unsecureds to be Paid in Full in Subchapter V Plan
HISTORIA INSPIRED: Seeks Cash Collateral Access
HOUGHTON MIFFLIN: Fitch Affirms LongTerm IDR at 'B', Outlook Stable
IBIO INC: Has No Cash Deposits at Silicon Valley Bank
IMMANUEL SOBRIETY: Court OKs Interim Cash Collateral Access
INDEPENDENT PET: Main Street Marks $18.4M Loan at 59% Off
INGRAM MICRO: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
INTERMEDIA HOLDINGS: Main Street Marks $20M Loan at 23% Off
ISAGENIX INTERNATIONAL: Main Street Marks $5M Loan at 70% Off
IVANTI SOFTWARE: Fitch Alters Outlook on B LongTerm IDR to Negative
JOERNS HEALTHCARE: Main Street Says Steep Discount for $4M Loan
KCW GROUP: Case Summary & 10 Unsecured Creditors
KEY DIGITAL: Files for Chapter 11 Bankruptcy Protection
KREATIIVELY KREATIVE: Files Chapter 11 Bankruptcy Protection
LOGIX ACQUISITION: Main Street Marks $19.6M Loan at 18% Off
LONGRUN PBC: Seeks to Hire Verdolino & Lowey as Accountant
LOYALTY VENTURES: $30MM DIP Loan from LoyaltyOne Has Interim OK
LOYALTY VENTURES: Seeks Chapter 11 Bankruptcy Protection
LUMEN TECHNOLOGIES: S&P Downgrades ICR to 'B', Outlook Negative
M & T REAL ESTATE: SkyBeam Says Pro Se Petition Filed in Bad Faith
MANZELLA PROPERTIES: Has Deal on Cash Collateral Access
MARSHALL SPIEGEL: Adelman's Interim Fee Application Granted in Part
MH CORBIN: Main Street Marks $6.1M Loan at 26% Off
MIRACLE CENTER: Court OKs Deal on Cash Collateral Access
MIRAGE INTERNATIONAL: Court OKs Cash Collateral Access Thru May 19
MOUNTAIN EXPRESS: Court OKs Interim Cash Collateral Access
NATIVE ENGINEERS: Seeks Cash Collateral Access Thru May 20
NBG ACQUISITION: Main Street Marks $3.8M Loan at 77% Off
NEPHROS INC: Incurs $7.1 Million Net Loss in 2022
NEXREV LLC: Main Street Marks $11.4M Loan at 26% Off
NEXTSPORT INC: Has Cash Collateral Access Thru June 30
NGL & EROSION: Court OKs Interim Cash Collateral Access
NGL & EROSION: Files Subchapter V Case
NORMANDIE LOFTS: Wins Cash Collateral Access Thru March 31
NORTH SHORE MANOR: Court OKs Cash Collateral Access Thru April 25
ONASSET INTELLIGENCE: Main Street Marks $2.1M Loan at 41% Off
ONASSET INTELLIGENCE: Main Street Marks $4.4M Loan at 41% Off
ONASSET INTELLIGENCE: Main Street Marks $964,000 Loan at 41% Off
ONASSET INTELLIGENCE: Main Street Marks $983,000 Loan at 41% Off
ONE ALLIANCE: A.M. Best Puts 'B' Fin. Strength Rating on Review
ORDER OF UNITED: A.M. Best Cuts Issuer Credit Rating to 'b'
OSPEMIFENE ROYALTY: Main Street Writes Off $4.4M Loan
PACIFIC BEND: Court OKs Cash Collateral Access Thru April 30
PANDORA SERVICING: Trial in Bluegreen's Lawsuit Continued to May 8
QUEST PATENT: Signs Series of Agreements With QPRC Finance
RAINMAKER HEALTH: Court OKs Cash Collateral Access Thru April 19
RC HOME: Court OKs Cash Collateral Access Thru April 14
RECONDITION PROS PENN: Starts Subchapter V Bankruptcy Case
REINZ WISCONSIN GASKET: Cook May Pursue Appointment of Receiver
RESEARCH NOW: Main Street Marks $19.9M Loan at 24% Off
REVERSE MORTGAGE: Unsecureds Get 2.7% to 6.1% in Liquidating Plan
RIGHT CHOICE: Court OKs Interim Cash Collateral Access
SCRATCH SERVICE: Continued Operations to Fund Plan
SHERLOCK STORAGE: Gets OK to Hire Victory Real Estate as Broker
SKYBLUEOCEAN LTD: Bids for 50% Stake in Sino Jet Due April 10
SOLER & SOLER: Files Emergency Bid to Use Cash Collateral
SORRENTO THERAPEUTICS: Appointment of Equity Committee Sought
SOURCEWATER INC: Files Emergency Bid to Use Cash Collateral
STANADYNE LLC: Wins Interim Cash Collateral Access
TESORINA LLC: Files Emergency Bid to Use Cash Collateral
TOP SPORTS: Seeks to Hire Lane Law Firm as Bankruptcy Counsel
TRANSIT PHYSICAL: Seeks Cash Collateral Access
TSS ACQUISITION: Creditors to Get Proceeds From Liquidation
TUTOR PERINI: S&P Downgrades ICR to 'B-', Outlook Negative
URBAN COMMONS: Asset Sale & Litigation Proceeds to Fund Plan
US TELEPACIFIC: Main Street Marks $18.3M Loan at 63% Off
UTILIMAN UTILITY: Seeks Cash Collateral Access
VIDA CAPITAL: Main Street Marks $15.4M Loan at 22% Off
VILLAGE CENTER: Seeks Cash Collateral Access
VYANT BIO: Closes San Diego Facility
WBS CAPITAL: Case Summary & Six Unsecured Creditors
WEWORK INC: Delays Filing of Annual Report
YAK ACCESS: Moody's Lowers PDR to D-PD on Debt Restructuring
[] BOOK REVIEW: Hospitals, Health and People
*********
129 N WALNUT: May Use $35,000 of Cash Collateral Thru May 8
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The U.S. Bankruptcy Court for the Eastern District of New York
authorized 129 N Walnut Street LLC to use cash collateral on an
interim basis in accordance with the budget through May 8, 2023.
The Debtor is permitted to pay post-petition expenses of up to
$45,000 and only pay actual and necessary expenses of its operation
as set forth in the budget.
To the extent of the diminution in the value of any interest it has
in rents, Basis Multifamily Finance I LLC, is granted a first
priority lien on (i) all property acquired by the Debtor after the
filing of the case and any proceeds thereof, and (ii) any of the
Debtor's assets not already subject to Basis' alleged security
interest and any proceeds thereof -- in addition to any existing
liens it may hold on the Property and the Rents or otherwise.
As further adequate protection, the Debtor must pay Basis $27,954
on or before March 31 and April 30, which may be paid from the
Rents. Basis will be granted an allowed superpriority
administrative expense claim, pursuant to Section 507(b) of the
Bankruptcy Code, with priority over all administrative expense
claims and unsecured claims against the Debtor, to the extent of
the diminution of its alleged interest in the value of the Rents.
Basis will not have any lien on any avoidance actions under
subchapter 5 of the Bankruptcy Code. Any substitute lien or
adequate protection claim granted will be subordinate to (i) the
payment of United States Trustee's fees pursuant to 28 U.S.C. Sec.
1930 (a)(6) plus interest at the statutory rate for any fees not
paid in a timely manner, and any fees payable to the Clerk of the
Bankruptcy Court; and (ii) reasonable fees and expenses of a
Chapter 7 trustee allowable pursuant to 11 U.S.C. section 726(b) in
an amount not to exceed $10,000.
A copy of the order is available at https://bit.ly/3FEAL14 from
PacerMonitor.com.
About 129 N Walnut Street LLC
129 N Walnut Street LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-42104) on
September 2, 2022. In the petition signed by Samuel Rosenbaum, its
managing member, the Debtor disclosed up to $10 million in both
assets and liabilities.
129 N Walnut Street LLC owns a 41-unit apartment building in 129 N
Walnut Street LLC. The Property is currently fully occupied. The
Property is the Debtor's sole tangible asset. The Debtor's sole
source of revenue are the rents paid by tenants at the Property.
Judge Elizabeth S. Stong oversees the case.
The Law Offices of Isaac Nutovic is the Debtor's counsel.
1600 HICKS ROAD: Court Enjoins Bank's Collection Actions vs. Qadris
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In the adversary proceeding entitled In re: 1600 HICKS ROAD LLC,
Chapter 11, Debtor. 1600 HICKS ROAD LLC, Plaintiff, v. EH NATIONAL
BANK, Defendant, Case No. 22 B 13205, Adv. No. 23 A 16, (Bankr.
N.D. Ill.), Bankruptcy Judge David D. Cleary for the Northern
District of Illinois grants the motion for a preliminary injunction
filed by the Debtor, 1600 Hicks Road LLC.
1600 Hicks Road LLC seeks a preliminary injunction to halt efforts
by EH National Bank to enforce a deficiency judgment against Anam
Qadri and Saleem Qadri.
The question raised here "is whether the injunction sought by the
Debtor is likely to enhance the prospects for a successful
resolution of the disputes attending its bankruptcy." And, if so,
whether denial of the requested injunction will "endanger the
success of the bankruptcy proceedings." If the answer to both
questions is yes, then an injunction, pursuant to section 105, is
"appropriate to carry out the provisions" of the Bankruptcy Code.
The Debtor is owned and managed by Anam and Saleem Qadri, who are
brothers. They are the only owners and managers of the Debtor. The
Qadris also own and operate Exotic Motors Inc., which is the
Debtor's sole tenant. The Qadris' only employment is as officers of
Exotic Motors and managers of the Debtor.
The Court finds and concludes that "the fate of Exotic Motors is
entwined with the Debtor's. If the court declined to enter the
requested injunction, this would jeopardize the rent available to
fund the Debtor's reorganization. If the Debtor is unable to
reorganize, the real property is not available for Exotic Motors to
operate. Entering a preliminary injunction that pauses the
collection of the deficiency judgment while the Debtor is in the
process of reorganizing provides a benefit to all. It promotes an
overall settlement."
The Court further points out that "without an injunction, the
Debtor stands to suffer very real harm. The Bank will be delayed in
its collection efforts, but only until the date of Debtor's
confirmation hearing. In this sense, it is no different from any
other creditor that participates in a chapter 11 case, taking the
good -- the promise of a stronger, reorganized debtor with the
ability to pay claims -- with the bad. . . the Debtor may not be a
blue-chip Fortune 500 company seeking to protect its directors and
officers. But it is just as important -- if not more -- to protect
the ability of a small business, like the Debtor, to reorganize."
The record demonstrates that an injunction is likely to enhance the
prospects for a successful reorganization and will serve the public
interest. Accordingly, the Court enjoins the proceedings and
collection actions by the Bank against the Qadris.
A full-text copy of the Memorandum Opinion and Order dated March
17, 2023 is available at https://tinyurl.com/yc7n3ph5 from
Leagle.com.
About 1600 Hicks Road
Rolling Meadows, Ill.-based 1600 Hicks Road, LLC sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No.
22-13205) on Nov. 14, 2022. Anam Qadri, partner, signed the
petition. At the time of the filing, the Debtor disclosed total
assets of $1,930,100 and total liabilities of $2,700,000.
Judge David D. Cleary oversees the case.
David P. Lloyd, Esq. at David P. Lloyd, Ltd. represents the Debtor
as counsel.
77 VARET: Court OKs Cash Collateral Access on Final Basis
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The U.S. Bankruptcy Court for the Eastern District of New York
authorized 77 Varet Holding Corp., as Member Debtor, and 162-164
82nd St. LLC, as Property Debtor, to use cash collateral on a final
basis in accordance with their agreement with East 82nd Holdco LLC
as assignee of Dime Community Bank.
As previously reported by the Troubled Company Reporter, the
Debtors need access to funds through the use of cash collateral to
enable them to preserve and enhance the value of their assets for
the benefit of creditors.
Prior to the bankruptcy filing date, the Lender's
predecessor-in-interest, Dime Community Bank, made a loan to
162-164 82nd in the original maximum principal amount of $10.5
million, evidenced by the Consolidated and Restated Mortgage Note
dated as of June 15, 2017, executed by 162-164 82nd in favor of
Dime in the amount of $10.5 million.
The Parties acknowledge and agree that the Mortgage Loan is secured
by, among other things, the Consolidation, Modification and
Extension Agreement, dated as of June 15, 2017, executed by 162-164
82nd in favor of Dime and by other security instruments, if any,
specified in the Mortgage Loan Documents.
Prior to the Filing Date, Dime made a mezzanine loan to Varet in
the original maximum principal amount of $1.5 million, evidenced by
the Mezzanine Promissory Note dated as of June 15, 2017, executed
by Borrower in favor of Dime in the amount of $1.5 million.
The Parties acknowledge and agree that the Mezzanine Loan is
secured by, among other things, the Pledge and Security Agreement,
dated as of June 15, 2017, executed by the Borrower in favor of
Dime and by other security instruments specified in the Mezzanine
Loan Documents.
Before the Filing Date, on June 29, 2021, Dime sold and assigned
the Prepetition Loan Documents to the Lender.
As of the Varet Filing Date, Varet was, and still is, indebted to
the Lender in the amount of not less than $2.058 million plus
accrued and unpaid costs and expenses.
As of the 162-164 82nd Filing Date, 162-164 82nd was, and still is,
indebted to the Lender in the amount of not less than $15.492
million, plus accrued and unpaid interest and costs and expenses.
To adequately protect the Lender for the cash collateral, the
Stipulation provides the Debtors will grant the Lender customary
protections including replacement liens and regular reporting.
A copy of the stipulation is available at https://bit.ly/3Lx1tfL
from PacerMonitor.com.
A copy of the order is available at https://bit.ly/401AVaG from
PacerMonitor.com.
About 77 Varet Holding Corp.
77 Varet Holding Corp. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-42316) on Sept.
21, 2022. In the petition filed by David Goldwasser, as manager,
the Debtor reported assets between $10 million and $50 million and
liabilities between $1 million and $10 million.
Judge Nancy Hershey Lord oversees the case.
The Debtor is represented by Kevin J. Nash, Esq., at Goldberg
Weprin Finkel Goldstein LLP, as counsel.
A+ REMODELING: Enters Settlement w/ Enabnit & Mid-Century Insurance
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A+ Remodeling & Construction Inc. submitted a First Amended Small
Business Chapter 11 Plan of Reorganization dated March 20, 2023.
The Debtor intends to fund the Plan through continued operations of
the Debtor's business. Debtor seeks to restructure its debts with
the IRS, American Momentum Bank, and other creditors to improve its
cash flow and ease its ability to make payments under this Plan.
The Debtor has settled its lawsuit against its insurance broker,
Daniel Enabnit, and the insurance company, Mid-Century Insurance
Company. The Settlement brought into the estate $45,000 to be used
to make payments under the Plan.
The Debtor fell behind on the payment of its employment and income
taxes for several years pre-petition to the IRS. The IRS's claim
arises from the non-payment of taxes, the accrual of interest, and
the imposition of penalties. On December 15, 2022, the IRS filed in
the claims register amended Proof of Claim No. 2 (the "IRS Claim"),
asserting a total claim in the amount of $177,997.63. The IRS Claim
consists of three components: a secured claim of $98,046.97, an
unsecured priority claim of $35,341.72, and a general unsecured
claim of $44,608.94.
Debtor's Plan of Reorganization provides for the continued
operations of the Debtor to make payments to its creditors as set
forth in this Plan. Debtor seeks to confirm a consensual plan of
reorganization so that all payments to creditors required under the
Plan will be made directly by the Debtor to its creditors.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 5 cents on the dollar. This Plan also provides for
the payment of administrative and priority claims in full.
Class 1 consists of Secured Tax Claim of Lubbock Central Appraisal
District. The Lubbock Central Appraisal District ("LCAD") filed
Proof of Claim No. 1 in the amount of $11,708.27 for ad valorem
property taxes against the personal property of the Debtor. The
Debtor will pay the Allowed secured tax claim of the LCAD, plus
accrued statutory interest, in 48 equal monthly installments with
the first payment due on the 5th day of the first full month after
the Effective Date and continuing thereafter until paid in full.
The LCAD will maintain its statutory liens against the personal
property owned by the Debtor until the Allowed secured tax claim is
paid in full.
Class 2 consists of the Secured Tax Claim of Internal Revenue
Service. The IRS filed amended Proof of Claim No. 2 in the total
amount of $177,997.63. The IRS asserts that $98,046.97 of its claim
is secured by the Debtor's assets (the "IRS Secured Claim"). The
IRS Secured Claim is composed of tax liability in the amount of
$55,287.83, penalty in the amount of $27,944.68, and interest to
the petition date of $14,814.46.
The Debtor proposes to pay the allowed IRS Secured Claim, after
application of $37,695.67, the subordination of the penalty, and
the payment of all funds remaining from the Settlement after
payment of outstanding administrative expenses, in 48 equal monthly
installments with the first payment due on the 5th day of the first
full month after the Effective Date and continuing thereafter until
paid in full. The allowed IRS Secured Claim shall accrue interest
at the 7% per annum from the Effective Date until paid in full. The
IRS shall retain its lien against the Debtor's assets until the
allowed IRS Secured Claim is paid in full.
Class 4 consists of Administrative Convenience Class. This Class
consists of the holders of unsecured claims of $20,000.00 or less.
The Debtor estimates that the total amount of Unsecured Claims in
this class total approximately $50,000.00. The Plan provides for
the Unsecured Creditors which have Allowed Claims in this class to
be paid 5% of the value of their claim in cash on the Effective
Date of the Plan.
Like in the prior iteration of the Plan, the Plan provides for the
Debtor to make monthly payments over the next 60 months to Allowed
General Unsecured Creditors such that Allowed General Unsecured
Creditors will receive 5% of the amount of their Allowed Claim.
The Debtor will continue to operate its residential and commercial
construction business. Through the Debtor's continued operations,
the Debtor will make the Plan payments called for herein to its
creditors.
A full-text copy of the First Amended Plan dated March 20, 2023 is
available at https://bit.ly/3FNlRFz from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Brad W. Odell, Esq.
Mullin Hoard & Brown, LLP
P.O. Box 2585
Lubbock, TX 79408-2585
Telephone: (806) 765-7491
Facsimile: (806) 765-0553
Email: bodell@mhba.com
About A+ Remodeling and Construction
A+ Remodeling and Construction, Inc., is a Texas corporation
company which owns and operates a construction business in and
around Lubbock, Texas. The company's sole shareholder is Jerry
Bumpas. A+ Remodeling provides construction and remodeling
services to residential and commercial properties. A+ Remodeling
uses subcontractors and other contract labor to perform
construction jobs for its customers.
A+ Remodeling sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 22-50066) on May 9,
2022. In the petition signed by Jerry Bumpas, president, the
Debtor disclosed up to $500,000 in assets and up to $1 million in
liabilities.
Brad W. Odell, Esq., at Mullin Hoard and Brown, LLP is the Debtor's
counsel.
AFSHARFIRM LLC: Starts Subchapter V Case; Lender Seeks Stay Relief
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Afsharfirm LLC filed for chapter 11 protection in the Western
District of Texas. The Debtor elected on its voluntary petition to
proceed under Subchapter V of chapter 11 of the Bankruptcy Code.
The Debtor filed its schedules on March 16, 2023. In its
schedules, it listed six parcels of real property which it
described as "rental property." Loan Ranger Capital Investments
REIT, LLC. is listed as the lienholder on four of the six
properties, namely, the properties at 502 West Park Avenue, Temple,
TX 76501, 915 S. 45 th Street, Temple, TX 76504, 1218 Paseo Del
Cobre, Temple TX 76502, and 932 E. 53rd Street, Austin, TX 78751.
Although the Debtor did not list any unexpired leases on its
Schedule G, it stated that it had received income for 2023 year to
date of $35,000
Loan Ranger quickly filed with the Bankruptcy Court a motion for
relief from automatic stay to foreclose on the Debtor's real
property. According to Loan Ranger, the Debtor's loans have
matured or are about to mature without any sign that the Debtor has
a plan for restructuring its debt.
According to court filings, Afsharfirm LLC 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 telephonic meeting of creditors under 11 U.S.C. Section 341(a) is
slated for March 29, 2023 at 10:00 a.m.
About Afsharfirm LLC
Afsharfirm LLC is a limited liability company in Texas that owns
six parcels of real property
Afsharfirm LLC filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No.
23-60110) on March 7, 2023. In the petition filed by Ali Afshar
Shandiz, as sole member, the Debtor reported assets between
$500,000 and $1 million and liabilities between $1 million and $10
million.
The case is overseen by Honorable Bankruptcy Judge Michael M.
Parker.
Brad W. Odell has been appointed as Subchapter V trustee.
The Debtor is represented by:
Tyler S. Sims, Esq.
Sims Law, PLLC
463 Westfield Blvd #503
Temple, TX 76502
AINOS INC: Raises US$3 Million From Private Placement
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Ainos, Inc. announced it has entered into two convertible note
purchase agreements, under which the Company has issued and sold
two convertible promissory notes in a principal amount of US$3
million to certain investors.
The Notes will mature in two years following the issuance, bearing
interest at the rate of 6% per annum. At any time after the
issuance and before the maturity date, the Notes are convertible
into the common shares of the Company. The conversion price is
US$1.50 per Common Share, subject to adjustment as set forth in the
Notes. Unless previously converted, the Company shall repay the
outstanding principal amount plus all accrued but unpaid interest
on the maturity date. The Note shall be an unsecured general
obligation of the Company.
Chun-Hsien Tsai, Ainos' Chairman of the Board, president, and chief
executive officer, commented, "We would like to thank our new
investors for their recognition of our strong growth potential.
This transaction bolsters our financial position and provides us
with additional capital as we advance the monetization of our
innovative product pipeline."
This note and the underlying securities represented hereby have not
been registered under the United States Securities Act of 1933, as
amended, or under any other securities laws. The note and the
securities represented hereby are being offered pursuant to a safe
harbor from registration under Regulation S promulgated under the
Act. Accordingly, the Notes and the underlying securities may not
be offered or sold in the United States except pursuant to an
effective registration statement or an applicable exemption from
the registration requirements of the Act and such applicable state
securities laws.
About Ainos
Ainos, Inc. (www.ainos.com), formerly known as Amarillo
Biosciences, Inc., is a diversified healthcare company engaged in
the research and development and sales and marketing of
pharmaceutical and biotech products. The Company is engaged in
developing medical technologies for point-of-care testing and safe
and novel medical treatment for a broad range of disease
indications. The Company is a Texas corporation incorporated in
1984.
Ainos reported a net loss of $3.89 million for the year ended Dec.
31, 2021, compared to a net loss of $1.45 million for the year
ended Dec. 31, 2020. As of Sept. 30, 2022, the Company had $39.08
million in total assets, $2.65 million in total liabilities, and
$36.43 million in total stockholders' equity.
Houston, Texas-based PWR CPA, LLP, the Company's auditor since
2020, issued a "going concern" qualification in its report dated
March 18, 2022, citing that the Company has negative working
capital at Dec. 31, 2021, has incurred recurring losses and
recurring negative cash flow from operating activities, and has an
accumulated deficit which raises substantial doubt about its
ability to continue as a going concern.
ALPHATEC HOLDINGS: Has $14 Million Deposit at SVB
-------------------------------------------------
Alphatec Holdings, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that the Company maintains
deposit accounts with Silicon Valley Bank, Santa Clara, California
("SVB") of approximately $14.0 million that are used for its
day-to-day operations.
On March 10, 2023, the Company became aware that the Federal
Deposit Insurance Corporation issued a press release stating that
SVB was closed by the California Department of Financial Protection
and Innovation, which appointed the FDIC as receiver. On March 12,
2023, the Company became aware that the U.S. Treasury Department,
the Federal Reserve and the FDIC jointly announced enabling actions
that fully protect all depositors of SVB.
The Company said it also holds cash and cash equivalents in
accounts with other financial institutions, including money market
investment accounts through SVB as agent. These money market
investment accounts are comprised primarily of U.S. government
backed securities of the highest investment grade and are intended
to provide short-term liquidity to the Company. These accounts are
not considered deposits with SVB, are not considered part of the
FDIC receivership, and are considered separate property of the
Company. In addition, as disclosed in the Company's Annual Report
on Form 10-K for the year ended Dec. 31, 2022, filed with the U.S.
Securities and Exchange Commission on Feb. 28, 2023, the Company
holds a $50.0 million revolving credit facility with MidCap
Financial Trust (and affiliated entities) of which $35.0 million
was drawn as of Dec. 31, 2022. Further, as disclosed in the
Company's Current Report on Form 8-K, filed with the SEC on Jan. 9,
2023, the Company also holds a fully-funded term loan with
Braidwell Transaction Holdings LLC – Series 1 (and affiliated
entities) in the amount of $100.0 million, which is held in
accounts with other (non-SVB) financial institutions, and a delayed
draw term loan facility with Braidwell in an aggregate principal
amount not to exceed $50.0 million.
The Company affirms its expectation that its cash and cash
equivalents held outside of SVB will be sufficient to operate the
Company's business and meet its cash requirements for the
foreseeable future.
About Alphatec Holdings
Alphatec Holdings, Inc. (ATEC) (www.atecspine.com), through its
wholly-owned subsidiaries, Alphatec Spine, Inc. and SafeOp
Surgical, Inc., is a medical device company dedicated to
revolutionizing the approach to spine surgery through clinical
distinction. ATEC architects and commercializes approach-based
technology that integrates seamlessly with the SafeOp Neural
InformatiX System to provide real-time, objective nerve information
that can enhance the safety and reproducibility of spine surgery.
Alphatec reported a net loss of $152.15 million for the year ended
Dec. 31, 2022, a net loss of $144.33 million for the year ended
Dec. 31, 2021, a net loss of $78.99 million for the year ended Dec.
31, 2020, a net loss of $57 million for the year ended Dec. 31,
2019, and a net loss of $28.97 million for the year ended Dec. 31,
2018. As of Dec. 31, 2022, the Company had $513.37 million in
total assets, $138.87 million in total current liabilities, $349.51
million in long-term debt, $26.56 million in operating lease
liabilities (less current portion), $11.54 million in other
long-term liabilities, $23.60 million in redeemable preferred
stock, and a total stockholders' deficit of $36.71 million.
AMERICAN TELECONFERENCE: Main Street Writes Off $2.9M Loan
----------------------------------------------------------
Main Street Capital Corporation has marked its $2,980,000 loan
extended to American Teleconferencing Services, Ltd. to market at
$168,000 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 Senior Secured Debt to American
Teleconferencing Services, Ltd. The loan accrues interest at a rate
of 7.50% (L+6.50%) per annum. The loan was scheduled to matured
January 31, 2023.
Main Street classified the Loan as a non-accrual and non-income
producing investment.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
American Teleconferencing Services, Ltd., doing business as
Premiere Global Services, Inc., provides communication solutions.
The Company offers audio and web-based conferencing and
collaboration services. Premiere Global Services serves
information technology, enterprise, small business, and marketing
industries worldwide.
AMERICAN TELECONFERENCE: Steep Discount for $14M Main Street Loan
-----------------------------------------------------------------
Main Street Capital Corporation has marked its $14,370,000 loan
extended to American Teleconferencing Services, Ltd. to market at
$808,000 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 Senior Secured Debt to American
Teleconferencing Services, Ltd. The loan accrues interest at a rate
of 7.50% (L+6.50%) per annum. The loan matures on June 8, 2023.
Main Street classified the Loan as a non-accrual and non-income
producing investment.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
American Teleconferencing Services, Ltd., doing business as
Premiere Global Services, Inc., provides communication solutions.
The Company offers audio and web-based conferencing and
collaboration services. Premiere Global Services serves
information technology, enterprise, small business, and marketing
industries worldwide.
ANOINTED SECURITY: Seeks to Hire El Bufete Del Pueblo as Counsel
----------------------------------------------------------------
Anointed Security Services, Inc. seeks approval from the U.S.
Bankruptcy Court for the District of Puerto Rico to hire El Bufete
Del Pueblo, PSC as its legal counsel.
The Debtor requires legal counsel to:
(a) give advice with respect to rights, powers, duties and
obligations of the Debtor in the administration of its Chapter 11
case, the operation of its business, and the management of its
property;
(b) prepare pleadings and applications, and conduct
examinations incidental to administration;
(c) advise and represent the Debtors in connection with all
applications, motions or complaints for reclamation, adequate
protection, sequestration, relief from stay, appointment of a
trustee or examiner, and all other similar matters;
(d) develop the relationship of the status of the Debtor to
the claims of creditors;
(e) assist in the formulation and presentation of a Chapter 11
plan pursuant to Chapter 11 Subsection V of the Bankruptcy Code and
concerning any and all matters relating thereto; and
(f) perform all other legal services.
El Bufete Del Pueblo will charge $200 per hour for its services.
The firm received a retainer in the amount of $5,000.
As disclosed in court filings, El Bufete Del Pueblo does not hold
nor represent any interest adverse to the Debtor or its estate.
The firm can be reached through:
Hector Figueroa Vincenty, Esq.
El Bufete Del Pueblo, PSC
Luisa Street 61Apartment 1-A Condado
San Juan, PR 00907
Phone: (787) 378-1154
Email: quiebras@elbufetedelpueblo.com
About Anointed Security Services
Anointed Security Services, Inc. sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 23-00365)
on Feb. 10, 2023, with $100,001 to $500,000 in both assets and
liabilities. Judge Mildred Caban Flores oversees the case.
Hector J. Figueroa Vincenty, Esq., at El Bufete Del Pueblo, PSC
represents the Debtor as counsel.
AQUA SHIELD: Updates Reorganizing Plan Disclosures
--------------------------------------------------
Aqua Shield, Inc., submitted a Revised Second Amended Small
Business Disclosure Statement describing Revised Second Amended
Chapter 11 Plan of Reorganization dated March 20, 2023.
The Plan will be financed from continuing operating income,
reorganized business operations of the Debtors, from the timely
collections of outstanding receivables, as well as from funds
accumulated in the Debtors' Debtor in Possession accounts. The
payments under the Settlement agreement with Kroll & O'Connor was
made in full.
The Revised Second Amended Disclosure Statement altered this
paragraph: "all Persons and Governmental Units shall be permanently
enjoined by Bankruptcy Code Section 524 from asserting against the
Debtor, its successors, including the Reorganized Debtor, or their
assets or properties, any other further Claims, or Administrative
Claims, based upon any act or omission, transaction, or other
activity of any kind or nature that occurred prior to the effective
date. The discharge shall void ay judgment against the Debtor and
the Reorganized Debtor at any time obtained to the extend that it
relates to a Claim, or Administrative Claim to the extent permitted
by Bankruptcy Code section 1141, 524 and 506 (d).
The Second Amended Disclosure Statement does not alter the proposed
treatment for unsecured creditors and the equity holder:
* Class II Unsecured Claim shall consist of the unsecured
claim of Krol & O'Connor, in the amount of $654,658. The plan
offers the unsecured creditor Krol & O'Connor a settlement payment
in the amount of $140,000, which represents 21% of its general
unsecured claim. In consideration of the mutually agreed terms,
Krol & O'Connor shall, upon the approval of the settlement terms by
the Bankruptcy Court return a consenting ballot in favor of the
Debtor's Plan of Reorganization. Further, following the entry of
the confirmation order by the Bankruptcy Court, the Debtor plans to
apply to the Supreme Court, New York County, for an order vacating
the judgment entered by the Clerk of the Supreme Court, New York
County, on October 28, 2020, in the action entitled Krol & O'Connor
v. Aqua Shield, Inc., Index no. 651928/2018. Kroll & O'Connor shall
neither oppose such application, nor be required to take any steps
in support thereof. The Settlement Agreement with Kroll & O'Connor
was approved by the Court order dated May 18, 2022. The payment
under the Settlement agreement was made in full.
* Class III Unsecured Claim shall consist of the unsecured
claim of Stephen Frampton and Korri Frampton in the amount of
$100,000. According to the terms of the Settlement agreement
reached by and between the parties, in full and final satisfaction
of Stephen and Korri Frampton's claim against the Debtor, the
Debtor will pay to Stephen Frampton and Korri Frampton the amount
of $21,000.00 which represents 21% of its general unsecured claim.
On Nov. 18, 2022, the Debtor filed a motion to approve the
Settlement Agreement with Stephen and Korri Frampton pursuant to
Rule 9019 of the Federal Rules Bankruptcy, on shortened notice.
* Class IV consists of Equity interest holders. Igor
Korsunsky, the 95% equity interest holders, and Yelena Korsunskaya,
the 5% equity interest holder, shall retain their interest in the
Debtor following Confirmation, in consideration of a new value
contribution, being made by them as the equity holder toward the
payment of general unsecured creditor claims, as needed.
A full-text copy of the Revised Second Amended Disclosure Statement
dated March 20, 2023 is available at https://bit.ly/3FNmKy6 from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Alla Kachan, Esq.
2799 Coney Island Ave., Suite 202
Brooklyn, NY 11235
Tel: (718) 513-3145
Fax: (347) 342-315
E-mail: alla@kachanlaw.com
About Aqua Shield
Aqua Shield, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20-73191) on Oct. 16,
2020. The case was eventually transferred to the appropriate office
under Case No. 20-43635. Judge Nancy Lord oversees the case.
At the time of the filing, the Debtor had estimated assets of
between $100,001 and $500,000 and liabilities of between $500,001
and $1 million.
The Debtor is represented by the Law Offices of Alla Kachan, P.C.
Bruce Arthur Lean, CPA serves as the Debtor's accountant.
ARBORWORKS LLC: Main Street Marks $29.7M Loan at 16% Off
--------------------------------------------------------
Main Street Capital Corporation has marked its $29,722,000 loan
extended to ArborWorks LLC to market at $25,065,000 or 84% 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 Senior Secured Debt to ArborWorks
LLC. The loan accrues interest at a rate of 13.56% (L+9%) per
annum. The loan matures on November 9, 2026.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
ArborWorks LLC was founded in 2009. The company's line of business
includes providing ornamental shrub and tree services.
ARBORWORKS LLC: Main Street Marks $4.6M Loan at 16% Off
-------------------------------------------------------
Main Street Capital Corporation has marked its $4,678,000 loan
extended to Arborworks LLC to market at $3,945,000 or 84% 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 Senior Secured Debt to Arborworks
LLC. The loan accrues interest at a rate of 13.56% (L+9%) per
annum. The loan matures on November 9, 2026.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
Arborworks LLC was founded in 2009. The company's line of business
includes providing ornamental shrub and tree services.
ARCTIC GLACIER: S&P Downgrades ICR to 'CCC', Outlook Negative
-------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Arctic
Glacier Group Holdings Inc. to 'CCC' from 'CCC+' and its
issue-level rating on its revolver and first-lien term loan to
'CCC' from 'CCC+'. The recovery rating remains '3', which indicates
meaningful (50%-70%; rounded estimate: 50%) recovery in the event
of a payment default.
The negative outlook indicates that S&P could lower the rating
within the next 12 months if it believes default is imminent.
The downgrade reflects Arctic's nearing maturity of its term loan,
which further increases refinancing risk and risk of a default
within the next 12 months.
The company's capital structure, consisting of a $40 million
revolver, $440 million first-lien term loan, and $40 million
first-lien term loan, is now fully current following the revolver
becoming current in December 2023 and the term loans becoming
current this month on March 20, 2023. S&P said, "Though we expect
the company's trajectory of steadily improving operating metrics in
2022 will continue into 2023, we note Arctic's still elevated
leverage of approximately 8.1x for the 12 months ended Sept. 30,
2022, remains high. This could make it challenging for the company
to extend its maturities on satisfactory terms, particularly within
a high interest rate and volatile market climate. Despite operating
largely in-line with expectations and improving its cash balance
with recent asset sales, the company's debt service may become
onerous under new terms given current market conditions, under
which the company's debt is trading at a yield to maturity above
15%."
S&P said, "We now view Arctic's liquidity as weak because the
maturity of its term loans would pose an additional liquidity
strain if extension or refinancing plans are not set in place and
the company is forced to repay its debt in the near future.
"Given company's revolver is current, we continue to not consider
it as a liquidity source in our analysis. The company had a cash
balance of approximately $34 million as of Sept. 30, 2022 and
recently received an additional $25 million of proceeds following
the divestiture of its Midwest ice business in late 2022 – the
combination of which we expect will be sufficient to cover the
company's peak working capital use of $25 million in the next
couple quarters. Still, it currently does not have sufficient
liquidity to address a potential repayment of its term loans
(approximately $448 million outstanding as of Sept. 30, 2022)
within the next year absent a refinancing or extension. The
seasonality of Arctic's business results in more working capital
build in the first half of the year, with cash build skewed toward
the second half of the year following summer sales and collection
of receivables. If cash flow generation within the next two
quarters is weaker due to lower demand in a weakening economy,
Arctic would potentially have to draw deeper into its revolver
prior to its term loan becoming current. This could pose additional
risk to refinancing its term loan and revolver. Additionally, a
likely increase in borrowing costs in current market conditions
should the company be able to successfully refinance its debt would
also strain cash flow and compromise liquidity."
Operating performance improved in 2022, and S&P's base case assumes
current EBITDA levels can be sustained
S&P said, "We forecast leverage of approximately 8x at the end of
2022, dropping further to the mid-7x area in 2023, with
approximately $10 million-$15 million of free operating cash flow
(FOCF) in 2023. The company's S&P Global Ratings-adjusted leverage
has declined from 9x at the end of 2021. This de-leveraging is
primarily due to improved sales from returned demand in the retail,
grocery, supercenter, and food service sectors throughout the year,
along with new account wins, and pricing. Furthermore, the
company's successful execution of its centralized routing and bag
size standardization initiatives during the year has improved its
cost base, allowing for improved S&P Global Ratings-adjusted EBITDA
margin in line with our expectations of about 21% for the 12 months
ended Sept. 30, 2022. Though higher fuel and labor costs will
continue to be headwinds for the remainder of 2022 and into 2023,
we expect the company to continue executing its identified
procurement and accounts receivable/payable centralization selling,
general, and administrative projects during 2023. This should allow
the company to sustain current EBITDA levels despite the current
inflationary environment.
"The negative outlook indicates that we could lower the rating over
the next 12 months if we believe default scenarios are imminent,
either because the company cannot refinance or because borrowing
costs become prohibitively high.
"We could lower the rating if a default, distressed exchange, or
redemption appear to be inevitable within six months.
"We could take a positive rating action if Arctic successfully
refinances its capital structure on satisfactory terms."
ASPIRA WOMEN'S: Has No Cash Deposits at Silicon Valley Bank
-----------------------------------------------------------
Aspira Women's Health Inc. confirmed that it does not hold cash
deposits or securities at Silicon Valley Bank.
About Aspira Women's Health
Formerly known as Vermillion, Inc., Aspira Women's Health Inc. --
http://www.aspirawh.com-- is transforming women's health with the
discovery, development and commercialization of innovative testing
options and bio-analytical solutions that help physicians assess
risk, optimize patient management and improve gynecologic health
outcomes for women. OVA1 plus combines its FDA-cleared products
OVA1 and OVERA to detect risk of ovarian malignancy in women with
adnexal masses. ASPiRA GenetiXSM testing offers both targeted and
comprehensive genetic testing options with a gynecologic focus.
With over 10 years of expertise in ovarian cancer risk assessment
ASPIRA has expertise in cutting-edge research to inform its next
generation of products. Its focus is on delivering products that
allow healthcare providers to stratify risk, facilitate early
detection and optimize treatment plans.
Aspira Women's reported a net loss of $31.66 million for the year
ended Dec. 31, 2021, a net loss of $17.91 million for the year
ended Dec. 31, 2020, a net loss of $15.24 million for the year
ended Dec. 31, 2019, and a net loss of $11.37 million for the year
ended Dec. 31, 2018. As of Sept. 30, 2022, the Company had $23.94
million in total assets, $12.76 million in total liabilities, and
$11.18 million in total stockholders' equity.
In its Quarterly Report dated November 10, 2022, Aspira Women's
Health said it has incurred significant net losses and negative
cash flows from operations since inception and it also expects to
continue to incur a net loss and negative cash flows from
operations for 2022. There can be no assurance that the Company
will achieve or sustain profitability or positive cash flow from
operations. Given these conditions, there is substantial doubt
about the Company's ability to continue as a going concern.
ATS WORKHOLDING: Main Street Marks $1.9M Loan at 67% Off
--------------------------------------------------------
Main Street Capital Corporation has marked its $1,901,000 loan
extended to ATS Workholding, LLC to market at $634,000 or 33% 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 ATS
Workholding, LLC. The loan accrues interest at a rate of 15% per
annum. The loan matures on August 16, 2023.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
ATS manufactures collet chucks and pneumatic cylinder packages for
rotary tables, indexers and grinders.
ATS WORKHOLDING: Main Street Marks $3M Loan at 67% Off
------------------------------------------------------
Main Street Capital Corporation has marked its $3,015,000 loan
extended to ATS Workholding, LLC to market at $1,005,000 or 33% 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 ATS
Workholding, LLC. The loan accrues interest at a rate of 15% per
annum. The loan matures on August 16, 2023.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
ATS manufactures collet chucks and pneumatic cylinder packages for
rotary tables, indexers and grinders.
ATX NETWORKS: Main Street Marks $3.3M Loan at 23% Off
-----------------------------------------------------
Main Street Capital Corporation has marked its $3,396,000 loan
extended to ATX Networks Corp. to market at $2,598,000 or 77% 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 an Unsecured Debt to ATX Networks
Corp. The loan accrues interest at a rate of 10% (10% Payment In
Kind) per annum. The loan matures on September 1, 2028.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
ATX Network Corp. provides cable networks. The Company offers
optical access, access networking, video processing, audio content
management, and media distribution services.
AVINGER INC: To Resume Sales Under 2022 ATM Offering Agreement
--------------------------------------------------------------
Avinger, Inc. has determined to resume sales under an At the Market
Offering Agreement, up to an aggregate offering price of
$1,149,028.
As previously disclosed, on May 20, 2022, Avinger entered into the
ATM Agreement with H.C. Wainwright & Co., LLC, as sales agent,
pursuant to which the Company may offer and sell shares of the
Company's common stock, par value $0.001 per share, initially up to
an aggregate offering price of $7,000,000, from time to time in an
at-the-market public offering. On Aug. 3, 2022, the Company
determined to suspend sales under the ATM Agreement and terminated
the continuous offering of the initial aggregate offering price of
$7,000,000. As of Aug. 3, 2022, the Company had sold an aggregate
of $979,303 in shares of its common stock under the ATM Agreement.
The Shares sold under the ATM Agreement will be offered and sold
pursuant to the Company's shelf registration statement on Form S-3
(Registration No. 333-263922), which was initially filed with the
Securities and Exchange Commission on March 29, 2022 and declared
effective on April 7, 2022, and a prospectus supplement and the
accompanying prospectus relating to the at-the-market offering
filed with the SEC on March 17, 2023.
Because there is no minimum offering amount required pursuant to
the ATM Agreement, the total number of Shares to be sold under the
ATM agreement, if any, and proceeds to the Company, if any, are not
determinable at this time. The Company expects to use any net
proceeds primarily for working capital and general corporate
purposes, which may include research and development of the
Company's Lumivascular platform products, preclinical and clinical
trials and studies, regulatory submissions, expansion of its sales
and marketing organizations and efforts, intellectual property
protection and enforcement and capital expenditures. The Company
has not yet determined the amount of net proceeds to be used
specifically for any particular purpose or the timing of these
expenditures. The Company may use a portion of the net proceeds to
acquire complementary products, technologies or businesses or to
repay principal on its debt; however, it currently has no binding
agreements or commitments to complete any such transactions or to
make any such principal repayments from the proceeds of this
offering, although it does look for such acquisition opportunities.
Accordingly, the Company's management will have significant
discretion and flexibility in applying the net proceeds from the
sale of these securities.
About Avinger
Headquartered in Redwood City, California, Avinger, Inc. --
http://www.avinger.com-- is a commercial-stage medical device
company that designs and develops image-guided, catheter-based
system for the diagnosis and treatment of patients with Peripheral
Artery Disease (PAD).
Avinger reported a net loss applicable to common stockholders of
$27.24 million for the year ended Dec. 31, 2022, a net loss
applicable to common stockholders of $21.59 million for the year
ended Dec. 31, 2021, a net loss applicable to common stockholders
of $22.87 million for the year ended Dec. 31, 2020, a net loss
applicable to common stockholders of $23.03 million for the year
ended Dec. 31, 2019, and a net loss applicable to common
stockholders of $35.69 million for the year ended Dec. 31, 2018.
San Francisco, California-based Moss Adams LLP, the Company's
auditor since 2017, issued a "going concern" qualification in its
report dated March 15, 2023, citing that the Company's recurring
losses from operations and its need for additional capital raise
substantial doubt about its ability to continue as a going concern.
AVIS BUDGET: Moody's Ups CFR to Ba3 & Senior Unsecured Notes to B1
------------------------------------------------------------------
Moody's Investors Service upgraded the corporate family rating of
Avis Budget Car Rental, LLC ("Avis") to Ba3 from B1. Moody's also
upgraded the probability of default rating to Ba3-PD from B1-PD,
and upgraded the senior unsecured rating of Avis and Avis Budget
Finance PLC to B1 from B2. Moody's affirmed the senior secured
rating of Avis at Ba1. The outlook is stable. The speculative grade
liquidity rating was upgraded to SGL-2 from SGL-3.
The ratings upgrade reflects Moody's expectation that Avis will
generate robust earnings and returns, despite a change from
unusually favorable market conditions that will result in lower
revenue per day, abating capital gains, and higher interest
expense. The affirmation of the senior secured rating reflects the
sizeable proportion of senior secured debt in Avis' capital
structure, including the $725 million outstanding under the Term
Loan C which the company arranged in March 2022.
Upgrades:
Issuer: Avis Budget Car Rental, LLC
Corporate Family Rating, Upgraded to Ba3 from B1
Probability of Default Rating, Upgraded to Ba3-PD from B1-PD
Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3
Backed Senior Unsecured Regular Bond/Debentures, Upgraded to
B1 (LGD5) from B2 (LGD5)
Issuer: Avis Budget Finance PLC
Backed Senior Unsecured Regular Bond/Debentures, Upgraded to
B1 (LGD5) from B2 (LGD5)
Affirmations:
Issuer: Avis Budget Car Rental, LLC
Backed Senior Secured Bank Credit Facility, Affirmed Ba1 (LGD2)
Outlook Actions:
Issuer: Avis Budget Car Rental, LLC
Outlook, Remains Stable
Issuer: Avis Budget Finance PLC
Outlook, Remains Stable
RATINGS RATIONALE
The Ba3 corporate family rating reflects the competitive position
that Avis holds in the car rental industry relative to its US and
European peers. Avis' revenues are fairly diversified across
on-airport and off-airport operations, leisure and corporate
travel, and by geography. Strategically, Avis is intently focused
on enhancing customer experience, operational efficiency,
connectivity, and fleet discipline.
Despite its oligopolistic nature, the car rental market is highly
competitive and poses several challenges that Avis has to contend
with. These challenges include the cyclical nature of the industry,
the possibility of future imbalances between industry fleet levels
and customer demand, a heavy reliance on capital markets to fund
annual fleet purchases, and the need to adapt to an evolving
transportation landscape.
Moody's expects that the car rental market will normalize in the
course of 2023, resulting in pressure on last year's peak cycle
earnings due to lower revenue per day, abating capital gains on the
sale of used vehicles, and higher interest expense. Nonetheless,
Moody's projects that Avis' pre-tax income margin will be a robust
14.8% in 2023, before softening to the low teens in 2024.
Debt/EBITDA will gradually increase as the benefit from capital
gains lessens but will remain below 4 times.
The stable outlook is predicated on Moody's expectation that Avis
will continue to generate solid earnings and cash flow over the
next 12 months, notwithstanding a retreat from the very favorable
market conditions in the last two years.
Moody's anticipates that liquidity will remain good (SGL-2),
supported by a cash balance of at least $500 million and typically
around $1 billion of available capacity under the company's
revolving credit facility. Avis' ability to dispose used vehicles
expeditiously remains critical when demand wanes to raise proceeds
that can be deployed to meet the company's debt obligations.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded with evidence that Avis manages its
assets efficiently, while industry fleet capacity and capital
allocation remain disciplined. Metrics that would reflect such
performance include pre-tax income as a percent of sales of at
least 10%; EBITA/average assets of around 10%; and debt/EBITDA
below 3.25 times. Good liquidity is also a requirement for an
upgrade, including prudent management of collateral in the
company's vehicle funding programs.
The ratings could be downgraded if Avis is unable to manage fleet
utilization consistently at approximately 70%, if revenue per
vehicle per day drops considerably, if Avis' ability to dispose
vehicles becomes constrained, or if there is a steep drop in used
vehicle prices that would require Avis to increase collateral under
its vehicle financing programs. Metrics that contribute to a rating
downgrade include pre-tax income as a percent of sales of less than
7.5%, EBITA/average assets of less than 7%, or debt/EBITDA
sustained above 4 times.
The principal methodology used in these ratings was Equipment and
Transportation Rental published in February 2022.
Avis Budget Car Rental, LLC is one of the world's leading car
rental companies, operating under the Avis, Budget, and Zipcar
brands in more than 10,000 rental locations worldwide. Revenue in
2022 was $12 billion.
AVISON YOUNG: S&P Downgrades ICR to 'CCC+', Outlook Negative
------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Avison Young
(Canada) Inc. to 'CCC+' from 'B-'. The outlook is negative.
S&P also lowered its rating on Avison Young's first-lien term loan
due 2026 to 'CCC+' from 'B-'. The '4' recovery rating indicates its
expectation of an average (35%) recovery in an event of default.
S&P said, "Our downgrade and outlook revision reflects our
expectation that Avison Young will have reduced earnings, strained
liquidity, and EBITDA coverage of cash interest below 1.0x owing to
lower capital markets and leasing activities. For the nine months
ended Sept. 30, 2022, Avison Young adjusted EBITDA was C$17 million
compared with C$38 million in the same period last year, based on
S&P's calculation. The company's EBITDA cash interest coverage
declined to 1.4x for the nine months ended Sep. 30, 2022, from 2.1x
in year-end 2021. We expect EBTIDA cash interest coverage to
decline below 1.0x over the next 12 months reflecting weaker
operating performance and higher debt servicing costs.
"We think Avison Young is dependent on favorable business,
financial, and economic conditions, including significant capital
markets and leasing growth, which may be difficult to achieve in
2023. CRE capital markets revenue declined across the industry
during the second half of 2022, and we believe the company will
continue to operate in a challenging environment in 2023 amid
higher interest rates, capitalization rates, and uncertainty among
buyers and sellers on market values. As a result, we expect the
company to operate with negative operating cash flow in 2023. As of
Sept. 30, 2022, the company had C$14 million cash on its balance
sheet and C$79 million remaining availability on its revolving
credit facility. For the nine months ended Sept. 30, 2022, the
company had around C$62 million net cash outflow from operating
activities. In 2023 we expect the company to actively manage its
operating expense and discretionary spending.
The proposed liquidity facilities, with a total capacity of C$50
million (provided by the Caisse de depot et placement du Quebec
fund), and temporary covenant waiver on the revolver, partially
reduce the immediate liquidity risk. The new funding consists of a
US$11 million (C$15 million) first lien delay draw term loan (DDTL)
facility and a C$35 million second lien DDTL facility. The first
lien facility is expected to have the same pricing and maturity
date as the existing US$75 million senior secured term loan issued
in August 2022. The C$35 million second lien liquidity facility
matures in one year. As part of the expected transaction, the
company's revolving credit facility will be downsized to US$70
million from US$80 million, and the springing covenant of 5.25x
maximum total leverage at 35% drawdown will be temporarily waived
for all quarters in 2023. However, starting in the first and second
quarters of 2024, the company's revolving credit facility will be
subject to the springing maximum total leverage covenant again. A
new minimum liquidity covenant was also introduced in the amendment
which requires the company to maintain at least $10 million cash on
its balance sheet at the end of each month.
BCM CRE OPPORTUNITY: Case Summary & One Unsecured Creditor
----------------------------------------------------------
Debtor: BCM CRE Opportunity Fund LLP
4820 Bay Parkway
Brooklyn, NY 11229
Business Description: The Debtor is engaged in activities
related to real estate.
Chapter 11 Petition Date: March 22, 2023
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 23-40964
Judge: Hon. Jil Mazer-Marino
Debtor's Counsel: Avrum J. Rosen, Esq.
LAW OFFICES OF AVRUM J. ROSEN, PLLC
38 New St
Huntington, NY 11743-3327
Tel: 631-423-8527
Fax: 631-423-4536
Email: arosen@ajrlawny.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Judith Klein as managing member.
The Debtor listed BCM CRE Opp. Fund I LLP as its only unsecured
creditor holding a claim of $2,515,410.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/QKD4XPI/BCM_CRE_OPPORTUNITY_FUND_LLP__nyebke-23-40964__0001.0.pdf?mcid=tGE4TAMA
BIRCHINGTON LLC: Taps 10Ninety Group as Bookkeeper, Manager
-----------------------------------------------------------
Birchington, LLC seeks approval from the U.S. Bankruptcy Court for
the District of Columbia to employ Tina Shaw of The 10Ninety Group,
LLC as bookkeeper and general business manager.
The Debtor has a hotel management company under contract, namely,
Urgo Hotels, L.P., which is designated for specific functions
covering a broad range of services related to the management of the
Holiday Inn Express. However, the Debtor has many bookkeeping
requirements that fall through what it calls the "cracks" and the
bankruptcy area presents many duties, which do not fall within the
scope of coverage of Urgo Hotels (e.g. monthly operating reports,
U.S. Trustee communications and follow through, schedules and
statement of financial affairs, and other obligations).
Ms. Shaw will cover those duties and will appear at hearings as
required. Her compensation for such services other than monthly
operating reports is $150 per hour. Meanwhile, Ms. Shaw will be
paid $650 per month for the monthly operating reports.
As disclosed in court filings, Ms. Shaw and 10Ninety Group are
"disinterested" within the meaning of Section 101(14) of the
Bankruptcy Code.
Ms. Shaw can be reached at:
Tina Shaw
The 10Ninety Group, LLC
7989 Fernham Lane
Forestville, MD 20747
Tel: (202) 370-1092
Email: Info@10ninetygroup.Com
About Birchington LLC
Birchington, LLC owns and operates the Holiday Inn Express situated
at 317 K St., NW, Washington DC
Birchington sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.D.C. Case No. 23-00057) on Feb. 20, 2023,
with $100,001 to $500,000 in assets and $50 million to $100 million
in liabilities. Habte Sequar, manager, signed the petition.
Judge Elizabeth L. Gunn oversees the case.
The Debtor tapped John D. Burns, Esq., at the Burns Law Firm, Inc.
as legal counsel and Tina Shaw of The 10Ninety Group, LLC as
bookkeeper and general business manager.
BIRCHINGTON LLC: Taps Burns Law Firm as Bankruptcy Counsel
----------------------------------------------------------
Birchington, LLC seeks approval from the U.S. Bankruptcy Court for
the District of Columbia to employ The Burns Law Firm, LLC as its
legal counsel.
The firm's services include:
(a) providing the Debtor with legal advice concerning its powers
and duties and assisting from a bankruptcy necessity any ancillary
litigation ongoing with the Debtor;
(b) preparing legal papers;
(c) filing and prosecuting adversary proceedings against parties
adverse to the Debtor or its estate;
(d) preparing a disclosure statement or plan of reorganization;
and
(e) other necessary legal services.
The firm will be paid at these rates:
Partners $595 per hour
Associates $455 per hour
Paralegals $295 per hour
In addition, the firm will receive reimbursement for its
out-of-pocket expenses.
The Debtor paid the firm a pre-bankruptcy retainer of $22,000.
John Burns, Esq., a partner at The Burns Law Firm, 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. Burns, Esq.
The Burns Law Firm, LLC
6303 Ivy Lane, Suite 102
Greenbelt, MD 20770
Tel: (301) 441-8780
Email: info@burnsbankruptcyfirm.com
About Birchington LLC
Birchington, LLC operates a hotel in Washington, D.C.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.D.C. Case No. 23-00057) on Feb. 20, 2023,
with $100,001 to $500,000 in assets and $50 million to $100 million
in liabilities. Habte Sequar, manager, signed the petition.
Judge Elizabeth L. Gunn oversees the case.
The Debtor tapped John D. Burns, Esq., at the Burns Law Firm, Inc.
as legal counsel and The 10Ninety Group, LLC as bookkeeper and
general business manager.
BON WORTH: Court OKs Deal on Cash Collateral Access
---------------------------------------------------
The US Bankruptcy Court for the Eastern District of New York
authorized Bon Worth Holdings, Inc. to use cash collateral on an
interim basis in accordance with its agreement with Crossroads
Funding II, LLC and Saturn Five Health LLC, through April 23,
2023.
As of the Petition Date, the Debtor was a party to the Loan and
Security Agreement by and between the Debtor and the Lender, dated
November 12, 2019, in the original maximum advance amount of $2
million, as amended by the First Amendment to Loan and Security
Agreement dated October 1, 2022, and all other agreements,
documents and instruments executed or delivered with, to, or in
favor of the Lender.
As of the Petition Date, the Debtor was indebted to the Lender in
an aggregate outstanding principal amount of not less than $1.757
million.
The Debtor has an immediate need to use the Lender Cash Collateral
in order to, among other things, permit the orderly continuation of
the operation of its business, minimize the disruption of its
business operations, and preserve and maximize the value of the
assets of the Debtor's bankruptcy estate to maximize the recovery
to all creditors of the Estate.
The Debtor reasonably believes the value of the Estate will be
maximized by its efforts to continuing operations, and the use of
the Lender Cash Collateral is essential to continuing those
operations.
Saturn asserts an interest in the Lender Cash Collateral on account
of the security interest in the Debtor's inventory and proceeds
thereof granted to Saturn by the Debtor in an Amended Standstill
and Common-Interest Agreement, dated March 4, 2021, and for which a
UCC-1 financing statement was duly filed with the Delaware
Department of State, as collateral for an obligation which Saturn
asserts is owing by the Debtor in the amount of not less than $18
million, plus all interest accrued and accruing thereon, together
with all costs, fees, and expenses.
As adequate protection, the Lender and Saturn are granted pursuant
to sections 361 and 363 of the Bankruptcy Code, valid, binding,
enforceable and perfected replacement liens upon and security
interests in all assets of the Debtor, regardless of whether the
assets are acquired by the Debtor prior to the Petition Date or
after the Petition Date, and will be senior to all other security
interests in, liens on, or claims against any of the Collateral,
subject to the Carve Out.
The Adequate Protection Liens will have the same relative priority
as existed prior to the Petition Date with respect to their
security interests in the Pre-Petition Lender Collateral.
The Adequate Protection Liens will be enforceable against the
Debtor, its estate and any successors thereto.
The Adequate Protection Liens and the Adequate Protection
Superpriority Claim will be subordinate solely to (a) fees under 28
U.S.C. section 1930 and 31 U.S.C. section 3717, and (b) the costs
of administrative expenses not to exceed $10,000 in the aggregate
that are permitted to be incurred by any Chapter 7 trustee in the
event of a conversion of the Debtor's Chapter 11 case pursuant to
Bankruptcy Code section 1112.
As further adequate protection for the Diminution in Value, the
Lender and Saturn are granted as and to the extent provided by
section 507(b) of the Bankruptcy Code allowed superpriority
administrative expense claims in the Chapter 11 case and any
Successor Cases.
The Adequate Protection Superpriority Claims will have priority
over all administrative expense claims and unsecured claims against
the Debtor and its Estate now existing or hereafter arising, of any
kind or nature whatsoever, subject to the Carve Out. As between
Lender and Saturn, the Adequate Protection Superpriority Claims
will have the same relative priority as existed prior to the
Petition Date with respect to their security interests in the
Pre-Petition Lender Collateral.
These events constitute an Event of Default:
i. The failure by the Debtor to perform, in any respect, any
of the terms, provisions, conditions, covenants, or obligations
under the Interim Order;
ii. The entry of any order by the Court granting relief from or
modifying the automatic stay of Bankruptcy Code section 362(a);
iii. Dismissal of the Chapter 11 case or conversion of the
Chapter 11 case to a Chapter 7 case, or appointment of a Chapter 11
trustee, or examiner with enlarged powers, or other responsible
person; and/or
iv. A default by the Debtor in reporting financial or
operational information as and when required under the Interim
Order or the Pre-Petition Lender Agreements that is not cured
within 2 business days after written notice to the Debtor and its
counsel.
A copy of the order is available at https://bit.ly/3JWRHlX from
PacerMonitor.com.
About Bon Worth Holdings, Inc.
Bon Worth Holdings, Inc. operates a retail clothing business and
owns 28 brick and mortar stores and one online store and maintains
an office in Brooklyn, New York.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-43213) on December 29,
2022. In the petition signed by Dan Young, its president, the
Debtor disclosed up to $50,000 in assets and up to $20 million in
liabilities.
Judge Jil Mazer-Marino oversees the case.
Lawrence F. Morrison, Esq., at Morrison Tenenbaum PLLC, is the
Debtor's legal counsel.
BOXED INC: Seeking Sale Offers, Considering Bankruptcy Filing
-------------------------------------------------------------
Boxed, Inc. (NYSE:BOXD) said in a regulatory filing mid-March 2023
that it might file for bankruptcy as it continues to explore a
possible sale of the business less than two years after going
public through a merger with a special-purpose acquisition company,
or SPAC.
Boxed on March 17, 2023, filed a notification of its late filing
with respect to its annual report on Form 10-K for the fiscal year
ended December 31, 2022 (the “2022 Form 10-K”).
On March 6, 2023, Boxed Inc. said that on March 1, 2023, the
Company and its subsidiaries (collectively with the Company, the
"Guarantors" and, the Guarantors together with the Borrower, the
"Obligors") entered into a forbearance agreement (the
“Forbearance Agreement”) by and among the Obligors, the
BlackRock affiliated lenders (the “Lenders”) under that certain
credit agreement, dated as of August 4, 2021 (as amended, the
“Credit Agreement”), and the administrative agent for the
Lenders (the “Administrative Agent”).
Pursuant to the Forbearance Agreement, the Lenders agreed to
forbear any rights or remedies under the Credit Agreement, other
applicable loan documents and applicable law, as well as any rights
or remedies arising under that certain second lien credit facility,
dated as of January 20, 2023 (the “Second Lien Credit
Facility”), from a default or any cross-default under the Second
Lien Credit Facility, to which the Lenders would otherwise be
entitled, as further described in the Company’s Current Report on
Form 8-K filed with the SEC on March 6, 2023.
The Company has directed a considerable amount of time and effort
toward discussions and negotiations with respect to the Forbearance
Agreement as well as with regard to exploring strategic
alternatives, restructuring the Company’s financing arrangements
and related liabilities and improving liquidity. The Forbearance
Agreement requires the Borrower to satisfy certain milestones.
According to a March 17 filing with the SEC, the Company continues
to have discussions with the Lenders and the Lenders have provided
limited extensions for the satisfaction of these milestones to
permit the Company and the Lenders to continue their discussions.
The achievement of such milestones and the consequent outcome of
the aforementioned discussions remains uncertain. In consideration
of the significant amount of time devoted by management with
respect to the Forbearance Agreement and discussions with other
stakeholders regarding the foregoing matters, which has also
required a dedication of the Company’s personnel and resources
that precluded the Company from completing the preparation and
review of its financial statements and disclosures for the
reporting period, the uncertainty regarding the achievement of
applicable Borrower milestones and the time required by management
to evaluate fully and disclose the potential consequences of such
discussions in the Company’s financial statements and 2022 Form
10-K, the Company is unable to file its 2022 Form 10-K on or before
the prescribed filing date without unreasonable effort or expense.
Significant Disruptions
The Company’s day-to-day operations and business have experienced
significant disruptions which have materially adversely affected
the Company’s earnings, liquidity and cash flows. The Company’s
net loss for the year ended December 31, 2022 is expected to
increase to approximately $115 million as compared to approximately
$69 million for the year ended December 31, 2021. The Company's
cash and cash equivalents are expected to decrease to approximately
$21 million for the year ended December 31, 2022 as compared to
approximately $105 million for the year ended December 31, 2021.
Key Employees
On March 10, 2023, the Company entered into retention agreements
with certain key employees, including each of Chieh Huang, the
Company’s Chief Executive Officer, Mark Zimowski, the Company’s
Chief Financial Officer, and Alison Weick, the Company's President
of eCommerce.
The Board of Directors previously authorized the Company to enter
into retention agreements, upon the recommendation from the
Compensation Committee, in order to retain critical talent in an
effort to maximize value during a period of significant volatility.
Each key employee, including Messrs. Huang and Zimowski and Ms.
Weick, that entered into a retention agreement received a lump-sum
payment equal to 33.33% of the individual’s annual base salary,
less applicable tax withholdings and deductions (each, a "Retention
Payment"), provided that such individual must remain continuously
employed with the Company through the earlier of (i) June 30, 2023
or (ii) (a) the consummation of a transaction that effectuates a
recapitalization or restructuring of a material portion of the
Company’s outstanding indebtedness, (b) the acquisition, merger
or other business combination pursuant to which a majority of the
business, equity or operating assets of the Company is sold,
purchased or combined with another entity or company or (c) in the
event of a liquidation or dissolution of the Company (collectively,
the "Retention Date"). If prior to the Retention Date, a key
employee, resigns their employment for any reason, other than due
to their death or disability, or they are terminated by the Company
for Cause (as defined in the Retention Agreement), the key employee
will not earn any portion of the Retention Payment and must repay
the entire amount of the Retention Payment (net of tax
withholdings) to the Company no later than 30 (thirty) days
following the date on which such officer’s employment is
terminated. Furthermore, the key employees have elected to waive
any cash bonuses earned based on the achievement of individual
performance objectives for the fiscal year ended December 31, 2022,
as per their employment agreements.
Possible Chapter 11
On March 10, 2023, Silicon Valley Bank ("SVB") was closed by the
California Department of Financial Protection and Innovation, and
the Federal Deposit Insurance Corporation (the "FDIC") was
appointed as receiver of SVB. As of that date, the Company held the
majority of its cash deposits and other liquid instruments in SVB
accounts. In connection with entering into a lending facility with
SVB in June 2014, the Company was obligated to maintain its bank
accounts with SVB and continued to do so after such loan was repaid
in full in connection with ongoing cash management initiatives and
corporate credit card programs with SVB. As of March 13, 2023, the
Company has transferred a majority of its cash out of its SVB
accounts and is establishing a new commercial banking relationship.
The remaining cash balances in its SVB accounts will be used to
fund the Company's near term obligations while it establishes its
new commercial banking accounts with the goal of transferring all
remaining cash balances to its new commercial banking relationship
as soon as practicable. At this time, the successor entity to SVB
has confirmed that it is operating as usual, and has communicated
to the Company that it intends to honor the letters of credit SVB
issued on behalf of the Company that are fully collateralized by
funds in the Company's SVB accounts. The Company is working to
secure the funds collateralizing the letters of credit and
establishing new letters of credit for the beneficiaries with its
new commercial banking relationship.
According to the March 14 SEC filing, the Company, with support
from its financial advisors Solomon Partners and Cowen, is actively
soliciting proposals for the sale of all or substantially all of
its assets, as well as other material transactions that would
improve its liquidity position. The Company continues to evaluate
its options, which may include potentially filing for relief under
the U.S. Bankruptcy Code and other strategic alternatives.
* * *
According to Seeking Alpha, the SEC disclosure comes after a
Seeking Alpha report a month ago that the company had talked to two
potential suitors about a purchase of the company. Boxed has had
talks with AEON Co. Ltd (OTCPK:AONNY) and at least one other
suitor, according to a person familiar with the matter.
Boxed has seen its stock plunge 96% since it went public through a
de-SPAC in December 2021. While Boxed (BOXD) was originally mainly
known for shipping boxes filled with toilet paper and potato chips,
the company also moved into the software-as-service or SaaS
business and that business is called Spresso.
About Boxed
Boxed, Inc. (NYSE:BOXD) is an e-commerce retailer and an e-commerce
enabler. The Company operates an e-commerce retail service that
provides bulk pantry consumables to businesses and household
customers, without the requirement of a "big-box" store membership.
This service is powered by the Company's own purpose-built
storefront, marketplace, analytics, fulfillment, advertising, and
robotics technologies. Boxed further enables e-commerce through its
Software & Services business, which offers customers in need of an
enterprise-level e-commerce platform access to its end-to-end
technology. On the Web: http://www.boxed.com/
BRAINERD INDUSTRIES: Case Summary & 20 Top Unsecured Creditors
--------------------------------------------------------------
Debtor: Brainerd Industries Incorporated
680 Precision Court
Miamisburg, OH 45342
Business Description: Brainerd is a fabricated metal product
manufacturer in Miamisburg, Ohio.
Chapter 11 Petition Date: March 22, 2023
Court: United States Bankruptcy Court
Southern District of Ohio
Case No.: 23-30432
Judge: Hon. Guy R. Humphrey
Debtor's Counsel: Patricia J. Friesinger, Esq.
COOLIDGE WALL CO., L.P.A.
33 West First Street, Suite 200
Dayton, OH 45402
Tel: 937-223-8177
Fax: 937-223-6705
Email: friesinger@coollaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Gregory W. Fritz as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/SERXVTA/Brainerd_Industries_Incorporated__ohsbke-23-30432__0001.0.pdf?mcid=tGE4TAMA
BRAINWORKS SOFTWARE: Main Street Marks $7M Loan at 59% Off
----------------------------------------------------------
Main Street Capital Corporation has marked its $7,056,000 loan
extended to Brainworks Software, LLC to market at $2,916,000 or 41%
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 Brainworks
Software, LLC. The loan accrues interest at a rate of 12.50%
(P+9.25%) per annum. The loan matured July 22, 2019.
Main Street classified the loan as a non-accrual and non-income
producing investment. Main Street said the maturity date is under
on-going negotiations with the portfolio company and other lenders,
if applicable.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
Brainworks Software provides advertising sales and newspaper
circulation software. Brainworks software has been installed at
over 1,000 North American newspapers over the past 30 years.
Products include fully integrated web-based classified, digital and
display advertising, circulation, billing, accounts receivable, ad
tracking, web-based ad proofing, contract and credit management,
classified pagination, ROP ad layout, and a state-of-the art
web-based CRM.
BRAND INDUSTRIAL: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg.
-------------------------------------------------------------------
Moody's Investors Service downgraded Brand Industrial Services,
Inc.'s Probability of Default Rating to Caa3-PD from Caa1-PD,
Corporate Family Rating to Caa2 from Caa1, senior secured term loan
B and senior secured revolving credit facility to Caa1 from B3 and
senior unsecured notes to Ca from Caa3. The outlook was changed to
negative from stable.
"The downgrade of Brand Industrial Services, Inc.'s ratings
reflects concerns over the company's ability to refinance its
upcoming debt maturities on favorable terms," stated James Wilkins,
Moody's Vice President - Senior Analyst. "The company's financial
results have been improving, but the company's high debt levels in
this rising interest rate environment could result in Brand's
interest burden increasing significantly and raises questions
regarding the sustainability of its capital structure."
The following summaries the ratings activity:
Downgrades:
Issuer: Brand Industrial Services, Inc.
Corporate Family Rating, Downgraded to Caa2
from Caa1
Probability of Default Rating, Downgraded to Caa3-PD
from Caa1-PD
Senior Secured 1st Lien Revolving Credit Facility, Downgraded
to Caa1 (LGD2) from B3 (LGD3)
Senior Secured 1st Lien Term Loan B, Downgraded to Caa1 (LGD2)
from B3 (LGD3)
Senior Unsecured Regular Bond/Debenture, Downgraded to Ca (LGD5)
from Caa3 (LGD5)
Outlook Actions:
Issuer: Brand Industrial Services, Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
The downgrade of Brand's CFR to Caa2 reflects uncertainty over the
timing and nature of a refinancing of its debt, its weak liquidity
as well as the unpredictability of the pace of recovery in the
company's earnings and ability to generate positive free cash flow.
The high debt level and potential concerns over the sustainability
of Brand's capital structure raises the risk for future
transactions that could be viewed as distressed exchanges, which is
reflected in the Caa3-PD PDR. Governance risk considerations are
material to this rating action given Brand's private equity
ownership and aggressive financial policy. Brand has a high
absolute level of debt and high leverage, which coupled with a
history of no meaningful free cash flow generation since 2017,
rising interest rates and an uncertain macro-economic outlook,
could make it difficult for the company to refinance its debt on
acceptable terms. Higher current market interest rates will
increase Brand's interest burden, if the principal amount of debt
is not reduced. Additionally, the company has interest rate caps
that mitigate the impact of rising interest rates on a portion of
its debt, but expire in the second quarter 2024. If the company's
operating results do not continue to recover, the company's capital
structure may not be sustainable.
Brand has weak liquidity, reflecting the springing maturity of
Brand's revolving credit facility in May 2024 that the company
currently relies on for letters of credit. The majority of Brand's
debt (revolving credit facility, receivables securitization
facility, term loan) matures in 2024 and must be refinanced in the
near-term and the $1 billion of senior unsecured notes mature in
July 2025. In February 2023, the company obtained an extension of
the initial revolver springing maturity date to May 2024, which
gives it additional time to complete a refinancing. Moody's expects
Brand's existing cash balances ($104 million as of year-end 2022)
and funds from operations will be adequate to fund the company's
operating needs over the next 12-15 months, but it will not
generate sufficient free cash flow to meaningfully increase its
cash balances or reduce debt. The $687 million revolving credit
facility matures in February 2025, but has a springing maturity
date of May 7, 2024, if more than $300 million of the term loan
($2,670 million balance as of December 31, 2022) remains
outstanding on that date. As of year-end 2022, the revolver had $40
million of borrowings and $190 million of letters of credit leaving
$457 million in availability, subject to limitations on borrowings
imposed by the revolver financial covenant. The revolver has a
springing leverage covenant of net secured debt-to-EBITDA (as
defined under the credit agreement which excludes outstanding
borrowing under the accounts receivable facility) of 6.5x, which is
triggered if over 35% of the revolver is drawn. Secured leverage as
of year-end 2022 was less than 6.5x. Additionally, the company has
a receivables financing facility due December 2, 2024, under which
$565 million in borrowings and $5 million in letters of credit were
outstanding as of December 31, 2022.
The Caa2 Corporate Family Rating reflects the company's very high
leverage, low profitability, lack of material free cash generation
over the past five years such that debt has been modestly rising,
and uncertainty over its ability to generate positive free cash
flow over the next 12-18 months. Moody's expects that leverage will
remain elevated and could restrict the company's operating,
strategic and financial flexibility. Despite Moody's expectation
for revenue and EBITDA growth during 2023 and 2024, Moody's expects
total debt-to-EBITDA (including Moody's adjustments) to remain
elevated (8.4x as of year-end 2022). The rating also considers the
company's scale, geographic diversity, leading market position in a
highly fragmented market, diversified revenue stream, a broad
customer base of more than 30,000 customers and high levels of
recurring revenues.
The Caa1 rating on the company's senior secured debt is one notch
higher than Brand's Caa2 CFR, reflecting their priority position
relative to the company's senior unsecured notes. The Ca rating to
the company's senior unsecured notes is two notches below the CFR
and results from their junior position in Brand's capital structure
and the fact that there is a much greater amount of higher priority
secured debt than senior unsecured notes. The parent and US
subsidiaries of the borrower guarantee all the debt.
The negative outlook reflects uncertainty over the pace of recovery
in Brand's operations and the company's ability to refinance its
debt on favorable terms. There is a risk that the refinancing of
existing debt at market rates and potential lackluster cash flow
generation will stress the company's ability to service its debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The rating could be upgraded if Brand achieves a long-term solution
to its debt refinancing needs, liquidity is adequate and
EBITA-to-interest expense is sustained above 1.0x. A downgrade
could be considered if the company's liquidity position or ability
to service its debt deteriorates or Moody's view on the potential
recovery for debtholders were to be lowered.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Headquartered in Atlanta, GA, Brand Industrial Services, Inc. is
the largest provider of scaffolding, insulation, coatings and other
industrial services within the following market segments in North
America: upstream, midstream, and downstream oil & gas, power
generation, industrial and infrastructure. The company is majority
owned by Clayton, Dubilier & Rice and Brookfield Business Partners.
BRIDGER STEEL: Court OKs Cash Collateral Access
-----------------------------------------------
The U.S. Bankruptcy Court for the District of Montana authorized
Bridger Steel, Inc. to use cash collateral from the sales of
equipment and from payment of prepetition accounts and
authorization for the sale of property.
The Debtor desires to sell certain surplus equipment and use the
cash collateral, after payment of the first position purchase money
lien, if any, in order to fund operations, primarily a March 17,
2023 payroll which is necessary to preserve the business operations
as a going concern and arrange to pay its outstanding creditors
through a Chapter 11 plan.
PSB Credit Services, LCF Group Inc., and Seamless Capital Group,
LLC hold blanket liens on the Debtor's Property.
Midland Equipment Finance and Machinery Finance Resources each hold
a purchase money lien secured by certain property. As a result,
upon sale of the RAS XXL Center Metal Folder, the proceeds will
first satisfy Midland's lien on this equipment, with the remaining
proceeds retained by Debtor. Similarly, upon sale of the SWI
Marxman Pro Slitting Line, the proceeds will first satisfy MFR's
lien on this equipment, with the remaining proceeds retained by the
Debtor.
The Debtor is permitted to sell the property for a purchase price
of at least as much as identified in the Motion; specifically:
a. A RAS XXL Center Metal Folder for $320,000;
b. A SWI Marxman Pro Slitting Line to SWI for $250,000;
c. A SWI 5 Ton Powered Decoiler for $20,000;
d. A SWI 5 Ton Powered Decoiler for $20,000;
e. A SWI 5 Ton Decoiler for $15,000;
f. A SWI Marxman SS1220 Trim Slitter for $60,000;
g. A 2015 Dodge 5500 truck for $35,200; and
h. A Two-inch Industrial power seamer kit, Piccolo seamer
25/38, 2011 Piccolo seamer, ESE Power seamer, and two-inch ML power
seamer each for $2500.
The Debtor will pay the purchase money liens on the equipment sold.
Pursuant to 11 U.S.C. section 363(f), the sales will otherwise be
free and clear of liens of PSB, LCF, and Seamless Capital Group,
LLC.
A final hearing on the matter is set for March 28 at 9 a.m.
A copy of the order is available at https://bit.ly/3Jwm0OC from
PacerMonitor.com.
About Bridger Steel
Bridger Steel Inc. --
https://www.bridgersteel.com/about/bridger-steel -- is a
manufacturer of metal panel systems for roofing, siding & wall,
interior, and fencing applications.
Bridger Steel Inc. filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. D. Mont. Case No. 23-20019) on February
25, 2023. In the petition filed by Dennis L. Johnson, as president,
the Debtor reported assets between $1 million and $10 million and
liabilities between $10 million and $50 million.
The Honorable Bankruptcy Judge Benjamin P. Hursh oversees the
case.
The Debtor is represented by James A. Patten, Esq., at Patten
Peterman Bekkedahl & Green.
BRISTOW GROUP: S&P Affirms 'B' ICR on New Contract, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on
Houston-based helicopter service provider Bristow Group Inc. S&P
also affirmed its 'BB-'issue-level rating on Bristow's senior
secured notes due 2028. The notes have a recovery rating of '1',
which indicates its expectation of very high (90%-100%; rounded
estimate: 95%) recovery in the event of payment default.
S&P said, "The stable outlook reflects our view that the company's
offshore energy segment will have modest growth over the next two
years while it faces elevated capital spending to prepare for its
new 10-year U.K. SAR 2G contract beginning late 2024. We expect FFO
to debt of around 20% and debt to EBITDA of 3x-3.5x."
Bristow's earnings and cash flow remain exposed to the highly
cyclical oil and gas exploration and production industry.
The company's offshore energy segment generated 65% of revenue in
2022 while 25% came from government services, including the
existing U.K. SAR contract. S&P said, "The new 10-year U.K. SAR 2G
contract provides revenue visibility and stable long-term cash
flows with a transition date beginning in late 2024. To prepare for
the contract, we expect higher-than-normal capital spending over
the next two years (Total capital spending of $100 million in 2023
and $125 million in 2024) to result in negative free cash flow, the
purchase of six new AW139s, reconfigurations of existing aircraft,
and two new seasonal bases." However, the company's cash balance of
$160 million at Dec. 31, 2022, organic cash flow, and approximately
$80 million available on its $85 million credit facility provide
support for the spending.
Although offshore activity has increased, as evidenced by higher
day rates, S&P expects a more gradual offshore recovery over the
next two years and assume modest top-line growth.
S&P said, "Pilot shortages and supply chain disruptions pressured
margins in 2022. However, we expect margins to slightly improve due
to better pricing, recovering supply chains, and easing
inflationary pressures. Further, we expect less volatility in
repairs and maintenance costs now that the majority of the
company's heavy- and medium-body aircraft are on a power by hour
(PBH) maintenance agreement after buying-in its AW139 fleet in the
second half of 2022. As a result, we expect FFO to debt of around
20% and debt to EBITDA of 3.0x-3.5x over the next two years.
"Under our base-case assumptions, we expect elevated capital
spending over the next two years to result in negative free cash
flow, supported largely by cash on hand. As a result, financial
measures will remain relatively stable despite improving markets.
We expect Bristow to hold any excess cash on the balance sheet over
the next two years for liquidity instead of shareholder returns or
large acquisitions.
"The stable outlook reflects our view that the company's offshore
energy segment will have modest growth over the next two years
while it faces elevated capital spending for its new contract
beginning late 2024. We anticipate limited shareholder returns in
favor of the capital spending program. We expect FFO to debt of
around 20% and debt to EBITDA of 3x-3.5x.
"We could lower the rating if Bristow's leverage deteriorates, such
that FFO to debt approaches 12% for a sustained period. This would
most likely occur if demand for offshore helicopter services in the
oil and gas industry declines substantially, or if the company
purses an aggressive acquisition strategy or a shareholder return
policy that results in higher leverage.
"We could raise ratings if Bristow's leverage improves such that
FFO to debt approaches 30% and remains there for a sustained
period. Additionally, we would want to see a path to positive free
cash flow once the current elevated spending is completed. This
would most likely result from improved demand for Bristow's
services on increased offshore oil and gas activity, margin
improvement through better expense management, or material debt
reduction."
ESG credit indicators: E-4, S-2, G-2
S&P said, "Environmental factors are a negative consideration in
our credit rating analysis on Bristow Group Inc. due to our
expectation that the energy transition will result in lower demand
for services and equipment as accelerating adoption of renewable
energy sources lowers demand for fossil fuels. Additionally, the
industry faces an increasingly challenging regulatory environment,
both domestically and internationally, that has included limits on
offshore drilling and the pace of new and existing well permits.
Although Bristow primarily serves the offshore oil and gas sector,
we assess social factors as less material than pure offshore oil
field service providers, given Bristow's greater optionality to
serve other sectors; oil and gas end markets comprise about
two-thirds of Bristow's revenues, with government services
accounting for the bulk of the remainder."
BUCA C LLC: Main Street Marks $17.3M Loan at 29% Off
----------------------------------------------------
Main Street Capital Corporation has marked its $17,355,000 loan
extended to Buca C, LLC to market at $12,337,000 or 71% 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 to Buca C, LLC. The
loan accrues interest at a rate of 9% per annum. The loan matures
on June 30, 2023.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
Buca C, LLC owns and operates a restaurant. The Company serves
customers in the State of Florida.
BURKE BRANDS: Court OKs Cash Collateral Access Thru April 7
-----------------------------------------------------------
The U.S. Bankruptcy Court for the U.S. Bankruptcy Court for the
Southern District of Florida, Miami Division, authorized Burke
Brands, LLC, dba Don Pablo Coffee, to use the cash collateral of
U.S. Century Bank on an interim basis through April 7, 2023.
The Debtor is permitted to use cash collateral, as defined in 11
U.S.C. section 363(a), including the cash or noncash proceeds of
assets that were not cash collateral on the Petition Date up to the
amounts shown in the Budget, with a 10% variance.
Additionally, on or before March 30, the Debtor is directed to
provide the Lender:
-- a comparison between its projected and actual budget;
-- a projected budget beyond April 7;
-- a list of receivables that have been redirected to its
Debtor-in-Possession account located at Wells Fargo Bank; and
-- a list of receivables expected to be re-directed from its
prepetition bank account to its DIP Account.
As adequate protection for the use of cash collateral, the Lender
is granted valid, perfected replacement liens upon, and security
interests in, the Pre-petition Collateral, to the same extent,
validity and priority as Lender's existing prepetition liens on any
and all assets including but not limited to all cash generated
post-petition from the Lender's Pre-Petition Collateral.
In the event the Court ultimately determines Velocity Capital Group
or another Merchant Cash Advance company had a valid ownership or
security interest in the Debtor's receivables on December 29, 2022,
VCG or such other MCA will be granted a valid, perfected
replacement lien upon, and security interest in the Receivables, to
the same extent, validity and priority as any ownership interest
and/or liens of VCG or such other MCA determined by the Court to
have existed prepetition on the Receivables.
These events constitute an "Event of Default":
a. If a trustee is appointed in the Chapter 11 Case;
b. If the Debtor breaches any term or condition of the Order
or any of the Lender's loan documents, other than defaults existing
as of the Petition Date;
c. If the Case is converted to a case under Chapter 7 of the
Bankruptcy Code;
d. If the Case is dismissed; or
e. If any violation or breach of any provision of the Order
occurs.
A continued hearing on the matter is set for April 6 at 11:30 a.m.
by video conference.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/42Amdtc from PacerMonitor.com.
The Debtor projects total disbursements, on a weekly basis, as
follows:
$133,702 for the week ending March 18, 2023;
$128,026 for the week ending March 25, 2023;
$146,479 for the week ending April 1, 2023; and
$105,713 for the week ending April 8, 2023.
About Burke Brands LLC
Burke Brands LLC -- https://www.burkebrands.com/ -- is a privately
owned coffee company.
Burke Brands LLC filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
22-19932) on Dec. 30, 2022. In the petition filed by Darron Burke,
as manager, the Debtor reported assets and liabilities between $1
million and $10 million.
Judge Robert A. Mark oversees the case.
Linda Marie Leali has been appointed as Subchapter V trustee.
The Debtor is represented by Aaron A Wernick, Esq., at Wernick Law,
PLLC.
BURLEY FOODS: Gets OK to Hire Carolina Restaurant as Broker
-----------------------------------------------------------
Burley Foods, LLC received approval from the U.S. Bankruptcy Court
for the Western District of North Carolina to hire Carolina
Restaurant Brokerage, LLC to market and sell its property located
at 11318 N. Community House Road, Charlotte, N.C.
The broker will receive a commission of 10 percent of the sales
price or $15,000.
Carolina Restaurant Brokerage is a "disinterested person" within
the meaning of Section 101(14) of the Bankruptcy Code, as disclosed
in court filings/
The firm can be reached through:
Justin Scotto
Carolina Restaurant Brokerage, LLC
531 Brenton Road, #234
Denver, NC 29732
Fax: 704-973-9640
Email: carolinabroker@wesellrestaurants.com
About Burley Foods
Burley Foods, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D.N.C. Case No. 22-30532) on Nov. 1,
2022. In the petition filed by its chief executive officer, Marcus
R. Burley, the Debtor disclosed up to $50,000 in assets and up to
$1 million in liabilities.
Judge Laura T. Beyer oversees the case.
Cole Hayes, Esq., at Cole Hayes Law, is the Debtor's legal counsel.
CAMBER ENERGY: Reports $107.7 Million Net Loss for 2022
-------------------------------------------------------
Camber Energy, Inc. has filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss
attributable to common stockholders of $107.74 million on $597,255
of oil and gas sales for the year ended Dec. 31, 2022, compared to
a net loss attributable to common stockholders of $253.83 million
on $401,222 of oil and gas sales for the year ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $34.70 million in total
assets, $51.82 million in total liabilities, and a total
stockholders' deficit of $17.12 million.
Dallas, Texas-based Turner, Stone & Company, L.L.P., the Company's
auditor since 2021, issued a "going concern" qualification in its
report dated March 17, 2023, citing that the Company has suffered
recurring losses from operations, has a stockholder deficit and has
a net capital deficiency that raises substantial doubt about its
ability to continue as a going concern.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1309082/000147793223001554/cei_10k.htm
About Camber Energy
Based in Houston, Texas, Camber Energy, Inc. --
http://www.camber.energy-- is primarily engaged in the
acquisition, development and sale of crude oil, natural gas and
natural gas liquids from various known productive geological
formations, including from the Hunton formation in Lincoln, Logan,
Payne and Okfuskee Counties, in central Oklahoma; the Cline shale
and upper Wolfberry shale in Glasscock County, Texas; and
Hutchinson County, Texas, in connection with its Panhandle
acquisition which closed in March 2018.
CBC RESTAURANT: U.S. Trustee Appoints Creditors' Committee
----------------------------------------------------------
Andrew Vara, Acting U.S. Trustee for Regions 3 and 9, appointed an
official committee to represent unsecured creditors in the Chapter
11 case of CBC Restaurant Corp.
The committee members are:
1. Simon Property Group, Inc.
Attn: Ronald M. Tucker, Esq.
Vice President/Bankruptcy Counsel
225 West Washington Street
Indianapolis, IN 46204-3438
Phone: (317) 636-1600
Email: rtucker@simon.com
2. Brinker International, Inc.
Attn: Elizabeth Fruth, Esq., Sr.
Corporate Counsel
3000 Olympus Boulevard
Dallas, TX 75019
Phone: (972) 770-5889
Email: Elizabeth.Fruth@brinker.com
3. Amber Rose Pardue Arroyo
c/o David Bibiyan, Esq.
Bibiyan Law Group, PC
8484 Wilshire Boulevard, Suite 200
Beverly Hills, CA 90211
Phone: (310) 438-5555
Email: david@tomorrowlaw.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About CBC Restaurant
CBC Restaurant Corp. and its affiliates operate and franchise
quick-casual eateries under the name Corner Bakery Cafe. The
Debtors sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del. Lead Case No. 23-10245) on February 22, 2023.
In the petition signed by its chief executive officer and chief
operating officer, Jignesh Pandya, CBC Restaurant disclosed up to
$50 million in both assets and liabilities.
Judge Karen B. Owens oversees the cases.
The Debtors tapped Mette H. Kurth, Esq., at Culhane Meadows PLLC as
legal counsel and Hilco Trading LLC, doing business as Hilco
Global, as financial advisor and investment banker. Kurtzman Carson
Consultants, LLC is the Debtors' claims and noticing agent.
CCC CONSULTING: Has Deal on Cash Collateral Access
--------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Los Angeles Division, held a hearing March 22 to consider the
request of CCC Consulting 2 Corporation for continued access to
cash collateral. Following the hearing, the Court authorized the
Debtor to use cash collateral through and including September 30,
2023. A further interim hearing on the continued use of cash
collateral will take place on August 23 at 10:00 a.m.
CCC Consulting 2 and the U.S. Small Business Administration
previously advised the Bankruptcy Court that they have reached an
agreement regarding the Debtor's use of cash collateral and now
desire to memorialize the terms of this agreement into an agreed
order. The parties agreed that the Debtor may use cash collateral
in accordance with the budget, with a 20% variance.
The Debtor will not use the cash collateral for payment to insiders
unless and until the Debtor has satisfied all requirements under
the Bankruptcy Code and Local Bankruptcy Rule 2014-1 for payment to
insiders.
As adequate protection for the foregoing usage, the SBA is granted
a replacement lien against the Debtor's personal property assets
and the proceeds thereof, to the same extent, priority and validity
as the lien held by the SBA as of the Petition Date, and subject to
the same defenses and avoidance actions as those applicable to the
SBA's lien as of the Petition Date.
Any diminution in the value of the SBA's collateral pursuant to the
SBA loan over the life of the bankruptcy case will entitle the SBA
to a super-priority claim pursuant to 11 U.S.C. sections 503(b),
507(a)(2) and 507(b).
The Debtor will make monthly payments in the amount of $1,450 to
the SBA by the fifth day of that month for each of the months of
April, May and June 2023, followed by monthly payments in the
amount of $1,750 to the SBA by the fifth day of such month for each
of the months of July, August and September 2023. Absent further
stipulation, following the end of this second interim period, the
SBA will require the Debtor to make its full note payments in the
amount of $2,217 to the SBA, commencing October 5, 2023.
The Debtor will provide the SBA with all interim statements and
operating reports required to be submitted to the Office of the
United States Trustee, as the reports are submitted, and monthly
cash flow reports, broken down by the expense line item contained
in the Budget, within 20 days after the end of each calendar month.
As adequate protection for the foregoing usage, each Junior Secured
Creditor is granted a replacement lien against the Debtor's
personal property assets and the proceeds thereof, to the same
extent, priority and validity as the lien held by each Junior
Secured Creditor as of the Petition Date, and subject to the same
defenses and avoidance actions as those applicable to each Junior
Secured Creditor's lien as of the Petition Date.
The Debtor proposes to make monthly adequate protection payments to
each Junior Secured Creditor in the amount of $100.
A copy of the stipulation is available at https://bit.ly/40nAibq
from PacerMonitor.com.
About CCC Consulting Corporation
CCC Consulting Corporation, a company in West Covina, Calif, filed
its voluntary petition for Chapter 11 protection (Bankr. C.D.
Calif. Case No. 22-16853) on Dec. 16, 2022, with up to $50,000 in
assets and $1 million to $10 million in liabilities. Edmund
Cutting, chief executive officer and chief financial officer,
signed the petition.
Judge Ernest M. Robles oversees the case.
James E. Till, Esq., at LimNexus, LLP serves as the Debtor's legal
counsel.
CHESTER, PA: 2 New Retiree Committee Members Appointed
------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Charles Harris and
Joseph Morse, Jr. as new members of the official committee of
retired municipal employees in the Chapter 9 case of the City of
Chester, Pa.
The retiree committee is now composed of:
1. Mark Sarrocinsky
2. Joseph Bail
3. Alan Davis
4. Patrick Carr
5. Todd Nuttall
6. Stacy Landrum
7. Charles Bolgunas
8. Charles Harris
9. Joseph Morse, Jr.
About City of Chester
The City of Chester, Pennsylvania, filed a Chapter 9 bankruptcy
petition (Bankr. E.D. Pa. Case No. 22-13032) on Nov. 10, 2022.
Judge Ashely M. Chan oversees the case.
Tobey M. Daluz, Esq., at Ballard Spahr, LLP is the Debtor's
counsel.
On Feb. 6, 2023, the U.S. Trustee for Regions 3 and 9 appointed an
official retiree committee in the Debtor's Chapter 9 case. The
committee is represented by William J. Burnett, Esq., at
Flaster/Greenberg, P.C.
CHESTNUT RIDGE: Court OKs Access to Cash Collateral Thru April 14
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, granted Chestnut Ridge Associates, LLC interim
authority to use cash collateral in accordance with the budget,
with a 10% variance, through April 14, 2023.
The Debtor requires the use of cash collateral to continue the
operation of its business.
As adequate protection to Kingsgate Partner LLC for any diminution
in value of the Lender's collateral resulting from the Debtor's use
of cash or cash equivalents including rents and other cash
proceeds, the Lender is granted replacement liens in the Debtor's
unencumbered assets in the amount of such diminution in value,
including but not limited any unencumbered cash or cash equivalents
that do not constitute Cash Collateral, with the Replacement Liens
having the same level of priority as the Lender's liens and
security interests in the Debtor's real and personal property as
existed as of the Petition Date.
If, notwithstanding the grant of Replacement Liens, the Debtor's
use of cash collateral results in a diminution in value of the
Lender's collateral, including but not limited to its interest in
the cash collateral and real property collateral, such that any
portion of the Lender's claim is unsecured, the unsecured claim
will constitute a super-priority claim under 11 U.S.C. section
507(b) that is superior in priority to all other claims in the
case.
The Replacement Liens are subject and subordinate to a carve-out of
funds for all fees required to be paid to (i) the Clerk of the
Bankruptcy Court, and (ii) the Office of the United States
Trustee.
The Replacement Liens will be, valid, perfected, enforceable and
effective as of the Petition Date without the need for any further
action by the Debtor or the Lender, or the necessity of execution
or filing of any instruments or agreements.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3yTCZpv from PacerMonitor.com.
The Debtor projects $200,603 in total income and $37,087 in total
operating costs for the period ending April 14, 2023.
About Chestnut Ridge Associates LLC
Chestnut Ridge Associates LLC is primarily engaged in renting and
leasing real estate properties. The Debtor sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No.
23-90069) on February 5, 2023. In the petition signed by Andrew
Schreer, managing member, the Debtor disclosed up to $50 million in
both assets and liabilities.
Judge David R. Jones oversees the case.
Jeff P. Prostok, Esq., at Forshey & Prostok, LLP, represents the
Debtor as legal counsel.
CHESTNUT RIDGE: U.S. Trustee Appoints Creditors' Committee
----------------------------------------------------------
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Chapter 11 case of Chestnut
Ridge Associates, LLC.
The committee members are:
1. Estate of Joseph DeSalvo
21 Main St., Suite 151
Hackensack, NJ 07601
2. Neutex Advanced Energy Group
14340 Torrey Chase, Suite 410
Houston, TX 77014
3. SRS Real Estate Partners – Houston, LLC
2950 North Loop W, Suite 1125
Houston, TX 77092
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Chestnut Ridge Associates
Chestnut Ridge Associates, LLC is primarily engaged in renting and
leasing real estate properties. The company is based in Spring,
Texas.
Chestnut sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. S.D. Texas Case No. 23-90069) on Feb. 5, 2023. In the
petition signed by its managing member, Andrew Schreer, the Debtor
disclosed $10 million to $50 million in both assets and
liabilities.
Judge David R. Jones oversees the case.
Jeff P. Prostok, Esq., at Forshey & Prostok, LLP, represents the
Debtor as legal counsel.
CHICK LUMBER: Gets Court Nod to Use Cash Collateral Thru June 30
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Hampshire
authorized Chick Lumber, Inc. to use cash collateral on an interim
basis in accordance with the budget through June 30, 2023.
The Debtor may use and expend cash collateral to pay the costs and
expenses incurred by the Debtor in the ordinary course of business
to the extent provided for in the Budget up to $1,953,776 during
the period between April 1, 2023 and June 30, 2023.
The Debtor will make these Adequate Protection Payments on the last
day of each month:
$481.70 to Jeldwen, Inc.;
$24.66 to BFG Corporation (H2H NC Paint Tinter);
$37.83 to GreatAmerica Financial Services Corp.;
$0.00 to Citizens One Auto Finance;
$226.60 to Citizens One Auto Finance;
$211.94 to Citizens One Auto Finance;
$39.52 to Wells Fargo Equipment Finance, Inc. - Forklift;
$63.25 to Wells Fargo Equipment Finance, Inc. Moffett
Machine;
$82.22 to Hitachi Capital Financial; and
$1,197.93 to Citizens Financial Group, Inc., as the assignee
of the claim of American Express Bank, FSB.
If any payment due will not be timely made, the creditor entitled
to the payment will have the right to move the Court for an order
terminating the use of Cash Collateral by filing an affidavit of
default with the Court certifying (a) the amount of the payment
due, (b) the date such payment was due, and (c) the Debtor's
failure to make such payment, with service on the Debtor's counsel
and the United States Trustee.
Each Record Lienholder (including RBS Citizens on its own behalf
and as assignee of Amex FSB) is granted a replacement lien in, to
and on the Debtor's post-petition property of the same kinds and
types as the collateral in, to and on which it held or claims to
have held valid and enforceable, perfected liens on the Petition
Date as security for any loss or diminution in the value of the
collateral held by any such Record Lienholder on the Petition Date
which will have and enjoy the same priority as it had on the
Petition Date under applicable state law.
The replacement liens will be deemed valid and perfected
notwithstanding any requirements of non-bankruptcy law with respect
to perfection.
A further hearing on the matter is scheduled for June 21 at 11
a.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3FDz0B9 from PacerMonitor.com.
The Debtor projects total cash out, on a monthly basis, as
follows:
$580,447 for April 2023;
$665,513 for May 2023; and
$707,817 for June 2023.
About Chick Lumber
Chick Lumber, Inc. -- https://www.chicklumber.com/ -- is a dealer
of lumber, plywood, steel beams, engineered wood, trusses, steel
and asphalt roofing, windows, doors, siding, trim, stair parts, and
finish materials. It also offers drafting and design, installation,
delivery, outside sales, and plan reading and estimating services.
The Debtor sought Chapter 11 protection (Bankr. D.N.H. Case No.
19-11252) on Sept. 9, 2019, in Concord. In the petition signed by
Salvatore Massa, president, the Debtor disclosed between $1 million
and $10 million in both assets and liabilities.
Judge Bruce A. Harwood oversees the case.
William S. Gannon PLLC is the Debtor's legal counsel.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Oct. 3, 2019. The Committee is represented by
Goldstein & McClintock, LLLP as its legal counsel.
CHRISTONE DISTRIBUTION: Seeks Cash Collateral Access
----------------------------------------------------
Christone Distribution, Inc. asks the U.S. Bankruptcy Court for the
District of Nevada for authority to use cash collateral to continue
its operations and financial reorganization.
The Debtor's projected revenue and expenses are sufficient to cover
the operating costs of the Debtor.
The Debtor believes these creditors may assert an interest in the
cash collateral:
Creditor Estimated Claim Amount
-------- ----------------------
Amazon Business Credit $379,453
Byzfunder NY LLC $72,768
Forward Financing $65,250
Mulligan Funding $276,428
Marcus By Goldman Sachs $77,422
Absent authorization to use cash collateral, the Debtor will have
insufficient funds to maintain and preserve the value of the
Debtor's estate through continuous business operations enabling the
Debtor to provide replacement liens or adequate protection
payments.
A hearing on the matter is set for April 12, 2023 at 9:30 a.m.
A copy of the motion is available at https://bit.ly/3FDGsMy from
PacerMonitor.com.
About Christone Distribution
Christone Distribution, Inc. is a professional auto spares and
tires manufacturer in Las Vegas. It has operated with its partners
as a special online e-commerce supply chain platform with related
online orders' fulfillment services in distributing a variety of
aftermarket auto parts.
Christone Distribution filed its voluntary petition for Chapter 11
protection (Bankr. D. Nev. Case No. 23-10055) on Jan. 7, 2023, with
$100,000 to $500,000 in assets and $1 million to $10 million in
liabilities. Jing Liu, president of Christone Distribution, signed
the petition.
Judge Mike K. Nakagawa oversees the case.
Seth D. Ballstaedt, Esq.. at Ballstaedt Law Firm, LLC is the
Debtor's bankruptcy counsel.
CLARIOS GLOBAL: S&P Upgrades ICR to 'B+', Outlook Stable
--------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on U.S.–based
Clarios Global L.P. to 'B+' from 'B', reflecting improved credit
metrics and its belief that the company's profitability will
continue to improve through supportive demand trends and positive
operating performance.
S&P said, "At the same time, we raised our issue-level rating on
its senior secured debt to 'B+' from 'B'. The recovery rating
remains '3' (50%-70%; rounded recovery: 60%). We also assigned a
'B+' issue-level rating and '3' recovery rating (50%-70%; rounded
recovery: 60%) to the company's new $800 million revolving credit
facility. The new $800 million revolving facility was used to
refinance the company's existing $750 million revolving credit
facility. We also raised our issue-level rating on its senior
unsecured debt to 'B-' from 'CCC+', and the recovery rating remains
'6' (0%-10%; rounded recovery: 5%).
"The stable outlook reflects our expectation that Clarios will
maintain leverage below 6.5x and free operating cash flow (FOCF) to
debt above 3% over the next 12 months.
"The upgrade reflects the company's improved credit metrics through
debt repayment and sustained profitability, as well as our
expectation of further deleveraging over the next couple of
years."
Clarios has maintained leverage below 6.5x and FOCF to debt above
3% over the last year. This was driven by net debt reduction of
about $600 million over the last 12 months and solid FOCF in excess
of $300 million as it lowered its working capital use compared to
the prior-year period. S&P said, "We expect the company's credit
metrics to continue improving as automaker volumes start recovering
in the back half of 2023, adoption of higher-margin advanced
batteries increases in the aftermarket segment, and Clarios
continues paying down debt. We expect Clarios to deleverage to
about 5.5x by the end of fiscal 2023 and improve FOCF to debt
slightly to about 4%-4.5% as capital expenditure (capex) increases
to fund advanced battery growth investments."
S&P said, "We expect the top line and profitability to be supported
by automaker volume recovery, positive product mix, international
expansion, and pricing.
"We forecast global vehicle volume production to improve 4%-5% in
2023, which should drive higher sales by automakers and improve
operating leverage. We expect Clarios' higher-margin advanced
battery sales to outpace overall light vehicle growth as automakers
adopt them for their greater functionality and higher electrical
loads. Advanced batteries have roughly twice the profitability of a
conventional flooded lead acid battery, enhancing the company's
margin profile. Initially, this margin improvement will be limited
to lower volumes in the automaker segment. However, longer term, as
electric vehicles make up a greater percentage of the car parc, the
product and channel mix will become more positive as advanced
battery replacements will increase as a percentage of aftermarket
battery sales, which are 80% of overall battery volumes. Clarios
has been targeting China for new growth opportunities in which
adoption of electric vehicles is higher. This could create a
long-term strong OEM and aftermarket channel for its advanced
battery products. In 2022, Clarios increased its points of sale in
China to 8,813 from 3,832 in 2021. The company also has three
manufacturing facilities in China, controlling over 50% of the
installed AGM capacity in the country. We expect Clarios to
continue increasing prices to offset inflation, leveraging its
leading global market share position.
"We continue to expect Clarios to maintain leverage above 5x in the
longer term.
"While we expect further debt paydown in fiscal 2023, we forecast
leverage above 5x in 2023 and 2024. Particularly given the
company's financial sponsor ownership, any further rating upside
would depend on our expectation that it would maintain adjusted
leverage below 5x and FOCF to debt above 5% on a sustained basis,
with low risk of releveraging. We believe Clarios will increase
capex to support advanced battery growth as well as development of
its new smart AGM battery technology, which could prevent its FOCF
to debt from rising above 5% over a sustained period, particularly
if investments are accelerated.
"The stable outlook reflects our expectation that Clarios will
maintain leverage below 6.5x and FOCF to debt of above 3% over the
next 12 months through continued operating performance improvement
and supportive demand trends."
S&P could downgrade Clarios if it expects leverage could be
sustained above 6.5x or if FOCF to debt would decline below 3%.
This could happen if:
-- Inflationary headwinds are stronger than expected, resulting in
earnings decline without sufficient pricing and mix to offset; or
-- Supply chain volatility persists beyond our expectations such
that the top line, profitability, and cash flow are weaker than
expected; or
-- The company adopts a more aggressive financial policy,
utilizing debt to fund acquisitions, shareholder returns, or growth
investments.
S&P said, "We could raise the ratings if we expect Clarios to
maintain leverage below 5x and FOCF to debt above 5% on a sustained
basis and to adopt a financial policy consistent with maintaining
these metrics over the longer term. We would also expect the
company to maintain adequate liquidity." This could happen if:
-- The top line and profitability are stronger than expected due
to greater supply chain recovery, stronger than expected product
mix, and inflationary pressures abating; and
-- Clarios continues to use free cash flow toward optional debt
prepayment; and
-- S&P believes the company will commit to a less aggressive
financial policy over the long term consistent with maintaining
leverage below 5x and FOCF to debt above 5%, and the risk of
releveraging is low.
ESG credit indicators: E-2, S-2, G-3
S&P said, "Environmental factors have an overall neutral influence
on our credit rating analysis of Clarios (Power Solutions). While
the company operates in an environmentally unfriendly subindustry,
we view its track record of managing these risks as somewhat
offsetting. If not responsibly managed, lead-acid battery recycling
can pose serious public health risks through environmental
emissions and occupational exposure. A positive for the industry is
that 99% of automotive batteries are designed for recyclability and
conventional vehicle batteries are the most recycled consumer
product in the world. Also, the company's worker incident and
illness rates in the U.S. are better than industry standards."
CLARIUS BIGS: Main Street Virtually Writes Off $2.7M Loan
---------------------------------------------------------
Main Street Capital Corporation has marked its $2,756,000 loan
extended to Clarius BIGS, LLC to market at $19,000 or 1% 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 to Clarius BIGS,
LLC. The loan accrues interest at a rate of 15% (15% Payment In
Kind) per annum. The loan was scheduled to mature January 5, 2015.
Main Street classified the loan as a non-accrual and non-income
producing investment. Main Street said the maturity date is under
on-going negotiations with the company and other lenders.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
Clarius BIGS, LLC provides prints and advertising film financing.
CLAROS MORTGAGE: S&P Alters Outlook to Negative, Affirms 'B+' ICR
-----------------------------------------------------------------
S&P Global Ratings revised its outlook on Claros Mortgage Trust
Inc. (CMTG) to negative from stable. S&P affirmed the issuer credit
rating and senior secured debt ratings at 'B+'.
CMTG's CRE portfolio of higher-risk transitional loans, including
construction, land, and operating properties, exposes it to credit
and market risks, in our view. The company's asset quality has
deteriorated as loans with a risk rating of 4 or higher increased
to 17% as of December 31, 2022, from 11% on September 30, 2022. Of
total $1.35 billion in exposure to loans with a risk rating of 4 or
higher, three are '5' risk rated loans with an outstanding
principal balance of $351 million (4.7% of the portfolio's total
outstanding principal) and ten '4' risk rated loans with a total
principal balance of around $1 billion (13.3% of the portfolio's
total outstanding principal). For year-end 2022, CMTG's credit loss
reserves increased to $146 million, from $74 million in 2021. The
increase was primarily due to $60 million reserved for two
non-accrual loans in the four-quarter 2022. CMTG's four loans on
non-accruals made up about $418 million in principal balance or
about 5.5% of loans at principal.
As of February 12, 2023, CMTG's cash balance declined to $180
million cash from $306 million at year-end 2022. Additionally, CMTG
had $587 million in unencumbered loans and $152 million of undrawn
credit capacity (subject to lender consent), which it could use to
shore up liquidity. As of December 31, 2022, CMTG's repo facilities
had $5.0 billion financing capacity across six counterparties with
$4.0 billion outstanding. The repurchase facilities have a 25%-50%
recourse, with a weighted average recourse limitation of 28% as of
December 31, 2022. Any deterioration in asset quality or specific
collateral performance that causes a mark-to-market event could
strain its liquidity by causing margin calls. Another potential
liquidity need is funding unfunded commitments that are subject to
borrowers meeting conditions outlined in each loan agreement. As of
December 31, 2022, the company has $1.9 billion of future financing
commitments, of which, $929 million are expected to be funded in
2023. CMTG has $1.2 billion of expected or in-place financings to
fund its loan commitments.
ESG credit indicators: E-2, S-2, G-2
CLINTON NURSERIES: CN Trust's Summary Judgment Bid Denied
---------------------------------------------------------
Bankruptcy Judge James J. Tancredi for the District of Connecticut
denies the Motion for Summary Judgment filed by CN Trust -- the
Plaintiff and Clinton Nurseries' bankruptcy estate representative
authorized to pursue avoidance actions.
CN Trust commenced this Adversary Proceeding in 2019 against Pirtle
Nursery, Inc. to avoid and recover five prepetition transfers of
funds totaling $25,000 made by Clinton Nurseries of Maryland, Inc.
to Pirtle during the 90-day prepetition period. In its Complaint,
CN Trust seeks to: (i) avoid the Subject Transfers, (ii) deny all
defenses, (iii) recover the value of the Subject Transfers, (iv)
preserve the avoided transfers for the benefit of the bankruptcy
estate, and (v) disallow any Proof of Claim filed by Pirtle.
Pirtle asserts several affirmative defenses in its Answer. Pirtle
principally asserts an "agricultural lien defense," where Pirtle
argues that it held a security interest on CNM's tree crops grown
on Pirtle's Tennessee farm. Pirtle has also asserted core defenses
to liability for contemporaneous exchange, ordinary course of
business, and subsequent new value. In addition, Pirtle asserts the
following affirmative defenses: (i) that it took for value in good
faith without knowledge of the voidability of the transfer, (ii)
that the transfers did not diminish the estate because Pirtle
shipped the mature tree crops to CNM post-petition, and (iii) that
CNM has failed to state a claim upon which relief may be granted.
CN Trust's Motion for Summary Judgment is denied. Because the
existence and scope of Pirtle's "agricultural lien," if supported
by sufficient collateral value at the time of each Subject
Transfer, would defeat CN Trust's avoidance claim in Count One of
the Complaint, the Court will provide the parties with an
opportunity to properly support or address any assertions of fact
related to this issue. Thereafter, the Court will determine whether
there is a genuine issue of material fact to be tried in that
regard and whether it will grant summary judgment in favor of
Pirtle.
The Adversary Proceeding is In Re: CLINTON NURSERIES, INC., et al.,
Chapter 11, Debtors. CLINTON NURSERIES, INC., et al., by and
through the Official Committee of Unsecured Creditors as Authorized
Estate Representative to Pursue Avoidance Actions Plaintiffs, v.
PIRTLE NURSERY, INC., Defendant, Case No. 17-31897 (JJT) Jointly
Administered, Adv. Pro. Case No. 19-03030 (JJT), (D. Conn.).
A full-text copy of the Memorandum of Decision dated March 17, 2023
is available at https://tinyurl.com/3rvd3myy from Leagle.com.
About Clinton Nurseries
Founded in 1921, Clinton Nurseries, Inc. operates nurseries that
produce ornamental plants and other nursery products. It is based
in Westbrook, Conn.
Clinton Nurseries and its affiliates sought Chapter 11 protection
(Bankr. D. Conn. Lead Case No. 17-31897) on Dec. 18, 2017. At the
time of the filing, Clinton Nurseries listed as much as $50 million
in both assets and liabilities. Judge James J. Tancredi oversees
the cases.
Zeisler & Zeisler, P.C., serves as the Debtors' legal counsel.
Anthony Calascibetta, the Chapter 11 trustee appointed in the
Debtors' cases, is represented by Green & Sklarz, LLC.
CLUBHOUSE MEDIA: Further Reduces Debt by $95K
---------------------------------------------
Clubhouse Media Group, Inc. announced it has reduced its
outstanding debt by approximately $95,000. Clubhouse Media's
outstanding debt to noteholders remains approximately $4.3 million
(not including accrued interest), following the reduction.
"This is another step in the right direction," said Scott Hoey,
chief financial officer of Clubhouse Media. "We've made great
strides in the past few months in terms of reducing our outstanding
debt and strengthening our balance sheet."
About Clubhouse Media
Las Vegas, Nevada-based Clubhouse Media Group, Inc. is an
influencer-based social media firm and digital talent management
agency. The Company offers management, production and deal-making
services to its handpicked influencers. The Company's management
team consists of successful entrepreneurs with financial, legal,
marketing, and digital content creation expertise.
Clubhouse Media reported net loss of $22.25 million for the year
ended Dec. 31, 2021, compared to a net loss of $2.58 million for
the period from Jan. 2, 2020 (inception) to Dec. 31, 2020. As of
Sept. 30, 2022, the Company had $1.59 million in total assets,
$11.65 million in total liabilities, and $10.06 million in total
stockholders' deficit.
In its Quarterly Report filed on November 14, 2022, Clubhouse Media
Group stated, "The ability of the Company to continue as a going
concern is dependent upon the Company's ability to further
implement its business plan and generate revenues. The Company
will require additional cash funding to fund operations. Therefore,
the Company concluded there was substantial doubt about the
Company's ability to continue as a going concern."
COCOMOES LLC: Seeks Cash Collateral Access
------------------------------------------
Cocomoes, LLC asks the U.S. Bankruptcy Court for the District of
Nevada for authority to use cash collateral with the budget.
The Debtor requires the use of cash collateral to pay ordinary
expenses necessary for operation of its business.
Pre-petition, the Debtor obtained an EIDL loan from the Small
Business Administration, which is secured by essentially all of the
Debtor's personal property, including deposit accounts. The Debtor
owes the Secured Lender $500,000.
In addition to the SBA, there are 10 other creditors that have
filed UCC-1 Financing Statements with the Nevada Secretary of State
prior to the case being filed that may assert a security interest
against the Debtor's cash, which are Ifundco LLC, East Shore
Equities, Mr. Advance, CT Corporation, Corporation Service Co.,
Ocean Funding, and First Corporate Solutions.
At the time the case was filed, the Debtor's personal property was
valued at $44,662, which includes cash and cash equivalents of
$35,862, Equipment valued at $6,250, inventory valued at $1,450 and
other miscellaneous assets valued at 1,100.
The Debtor submits that secured creditors are adequately protected
by virtue of: (1) secured creditor's cash collateral will be used
to maintain and operate Debtor's business; (2) the value the
secured creditor's collateral is not decreasing; and (3) the
secured creditor will have a replacement lien against any
post-petition cash received by the Debtor.
A copy of the Debtor's motion and budget is available at
https://bit.ly/40qHtzz from PacerMonitor.com.
The Debtor projects $65,000 in total expenses.
About Cocomoes, LLC
Cocomoes, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Nev. Case No. 23-50160) on March 15,
2023. In the petition signed by Maurice Larimer, managing member,
the Debtor disclosed up to $50,000 in assets and up to $1 million
in liabilities.
Kevin A. Darby, Esq., at Darby Law Practice, represents the Debtor
as legal counsel.
COLUMBIAN MUTUAL: A.M. Best Keeps B(Fair) Rating on Review
----------------------------------------------------------
AM Best has maintained the under review with developing
implications status for the Financial Strength Rating of B (Fair)
and the Long-Term Issuer Credit Ratings of "bb+" (Fair) of
Columbian Mutual Life Insurance Company (Columbian) (Binghamton,
NY) and Columbian Life Insurance Company (Chicago, IL),
collectively referred to as Columbian Financial Group (CFG).
The Credit Ratings (ratings) reflect CFG's balance sheet strength,
which AM Best assesses as adequate, as well as its marginal
operating performance, neutral business profile and appropriate
enterprise risk management.
The Credit Ratings (ratings) were put under review with developing
implications shortly after CFG's announcement on June 29, 2021,
that its board of directors had approved a strategic transaction
with Constellation Insurance Holdings, Inc. (Constellation) that
includes the sponsored demutualization of Columbian to a stock
company with the issuance of all newly issued stock to
Constellation. Constellation is an insurance holding company backed
by two large Canadian institutional investors primarily engaged in
the management of pension plans, Caisse de Depot et Placement du
Québec and Ontario Teachers' Pension Plan Board. The transaction
provides for Constellation to invest up to $100 million to fund
cash payments to eligible policyholders and significantly
strengthen the capitalization of Columbian. The acquisition of
Columbian by Constellation will provide Columbian needed capital
support from a substantially larger organization while maintaining
its brand, management team and headquarters.
Despite an expected positive impact on capital from the planned
transaction with Constellation, the ratings will remain under
review with developing implications until all approvals are
finalized, the transaction closes and AM Best evaluates the overall
impact. The anticipated closing date is during the second quarter
of 2023. Until that time, AM Best will monitor the potential for
continued pressure on Columbian's risk-adjusted capitalization
primarily from the effects of the COVID-19 pandemic on the senior
market. In the interim, negative rating actions on CFG are possible
if its risk-adjusted capitalization continues to decline prior to
close of the transaction. Prior-year capital declines have stemmed
largely from the impact of the COVID-19 pandemic on life insurance
claims, traditionally lower interest rates on the valuation of
CFG's pension plan liability and a deferred income tax adjustment
from the implementation of the 2017 Tax Cut and Jobs Act. AM Best
notes that while there is potential for CFG's pension plan to be a
further drag on capitalization in the future, definitive steps were
taken to immunize the pension plan liability from further
volatility in 2020 and it since has become a less material factor.
CORNERSTONE ONSITE: Assets Sale Proceeds to Fund Plan Payments
--------------------------------------------------------------
Cornerstone Onsite, LLC, d/b/a Dent Well, filed with the U.S.
Bankruptcy Court for the Southern District of Texas a Plan of
Reorganization for Small Business dated March 19, 2023.
Cornerstone is a Texas Limited Liability Company which was formed
in 2011 by cofounders Charles Lusk and Scott Coleman, DDS. The
Debtor is a Dental Services Organization ("DSO") and
operates/manages 13 dental offices and one mobile unit in 4 states
including Texas, California, North Carolina and Utah.
In general the investors are no longer willing to provide funding
because of the on-going operational losses and the increased
expense of litigation. The Debtor's largest investor and lender,
Southern Spear, has advanced additional funds to: (i) allow the
Debtor to continue to operate and preserve its going concern value
while attempting to locate a purchaser and (ii) afford the Debtor
the time and resources needed to prepare to file its chapter 11
case. Southern Spear has also agreed to provide post-petition
financing during the Debtor's chapter 11 bankruptcy.
With the assistance of Skytale, the Debtor identified certain
locations which should be considered for sale or closure to
mitigate losses and improve cash flow and reevaluate if certain
locations under construction should be continued or halted.
Further, Skytale attempted to identify various operational
improvement initiatives without accurate and timely financial
information. The hope was that identifying these enhancements would
allow the Debtor to generate positive cash flow and thus make it an
attractive purchase target.
However, despite these recommended improvements the Debtor has not
been able to locate a potential purchaser even with Skytale's
extensive industry contacts. As a result, Southern Spear has agreed
to purchase substantially all of the Debtor's assets for
approximately $1,900,000. The vast majority of the purchase price
will be paid through a credit bid based on the amounts loaned by
Southern Spear to the Debtor both before and during the bankruptcy
case.
This Plan of Reorganization submitted by the Debtor is threefold.
First, subject to another purchaser offering a higher sales price
the Debtor will, pursuant to section 363 of the Bankruptcy Code,
sell substantially all of its assets to Southern Spear, Inc. for
approximately $1,900,000 of which $75,000 is cash and the remainder
of which will be a credit bid of the amounts Southern Spear has
loaned or will loan to the Debtor. Second, the Plan provides for
the resolution of any and all claims that Cornerstone has against
certain defendants in the Lusk Litigation.
Finally, the Plan contemplates the creation of a liquidation trust
which will liquidate any assets of value not sold to Southern
Spear, pursue claims on behalf of the Debtor's bankruptcy estate,
and thereafter make distributions on account of allowed claims.
On the Effective Date, a liquidation trust (the "Liquidation
Trust") will be created pursuant to that certain Liquidation Trust
Agreement (the "Trust Agreement"). Any assets not sold to Southern
Spear will become property of the Liquidation Trust. Such assets
include any equipment not acquired by Southern Spear ("Retained
Property"), $75,000 of cash on hand, $30,000 of settlement proceeds
from the Lusk Litigation and other claims including any Chapter 5
claims the Debtor may have. Thus, the Liquidation Trust will be
funded from three sources:
* Cash From Sale to Purchaser - unless another purchaser
agrees to purchase the Acquired Property for a greater amount,
Southern Spear will purchase the Acquired Property pursuant to the
Asset Purchase Agreement for an amount equal to (a) the full amount
of Purchaser's secured debt (which is estimated to be $1,825,000
("Southern Spear Secured Claim")) in the form of a credit bid and
(b) $75,000 in cash. To the extent the purchase price is greater
than the Southern Spear Secured Claim, either because Southern
Spear has increased its bid or because it is not the Purchaser,
subject to the Breakup Fee provided for in the Asset Purchase
Agreement, the Purchaser will pay the excess to the trustee of the
Liquidation Trust (the "Trustee") on behalf of the Liquidation
Trust.
* The Settling Defendants will pay $30,000 to the Trustee on
behalf of the Liquidation Trust in satisfaction of Cornerstone's
claims against the Settling Defendants in the Lusk Litigation.
* Pursuant to the terms of the Liquidation Trust, the Trustee
will sell (or abandon) the Retained Property and pursue claims on
behalf of the Liquidation Trust with the process of such activities
providing additional funding to the Liquidation Trust.
The funds in the Liquidation Trust will be used to pay
Administrative Claims and the Priority Unsecured (Class 5),
Unsecured Creditor-Trade Creditor claims (Class 6) and Unsecured
Creditor-Member claims (Class 7). The Trustee will sell or if
appropriate dispose of the Retained Property and collect any
remaining accounts or notes receivable (including those that must
be collected through litigation) and pursue any Chapter 5 claims as
the Trustee deems appropriate and cost-effective. Administrative
expenses of the Liquidation Trust, including without limitation the
attorney's fees of the Trustee in pursuing the collection of the
accounts and notes receivable and other claims, will be paid from
the funds in the Liquidation Trust.
The secured claims of Tax Claimants (Class 1), Equipment Lenders
(Class 2) and Southern Spear (Class 3) will be satisfied with the
sale of the Acquired Properties to Southern Spear. To the extent
that Southern Spear does not purchase equipment which secures the
claims of the Tax Claimants and Equipment Lenders, their claims
will be satisfied from either the Trustee selling the property or
by the Trustee abandoning the property to the Equipment Lenders.
Class 5 consists of Priority Unsecured. The Debtor is taxed as a
partnership (filing Form 1065) and thus is not subject to income
tax. As a result, it does not anticipate it will owe any federal
income taxes. However other taxing authorities may assert priority
tax claims. Accordingly, to the extent the IRS or any other taxing
entity has a Priority Unsecured Claim it will be a Class 5 Claim
which will be paid from the Liquidation Trust. This class is
unimpaired.
Class 6 is comprised of the approximately $821,000 in unsecured
claims of suppliers, vendors, landlords, labs and other non-member
creditors ("Trade Creditors"). After the Administrative Claims and
Class 1 through Class 5 Claims are paid in full, the Class 6 Claims
will be paid from the Liquidation Trust. As described in more
detail in the Trust Agreement, the first $100,000 will be shared
pro rata by Class 6 Claimants. If and to the extent that the
Liquidation Trust has more than $100,000 to distribute to unsecured
creditors, such additional amounts will be paid to the Class 6 and
Class 7 Claimants pro rata. This class is impaired.
Class 7 is comprised of the unsecured claims of the members of the
Debtor. The Member Lenders loaned approximately $500,000 (plus
accrued and unpaid interest) to the Debtor through various notes,
the Debtor believes are unsecured. Additionally, as a co-founder of
Cornerstone, Charles Lusk and an entity he controls, Sylvason, LLC,
are members. In the Lusk Litigation, Lusk and Sylvason assert
various claims against the Debtor. While the Debtor disputes those
claims, Lusk and Sylvason may also have unsecured claims against
the Debtor. If and to the extent that the Liquidation Trust has
more than $100,000.00 to distribute to unsecured creditors, such
additional amounts will be paid to the Class 6 and Class 7
Claimants pro rata. This class is impaired.
The remaining class includes the equity interest of Cornerstone's
members. As this is a liquidating Plan, the members will not
receive any distribution under the Plan. Class 8 is impaired and
will be deemed to have rejected the Plan since no disbursement will
be made to Class 8 members.
A full-text copy of the Chapter 11 Plan dated March 19, 2023 is
available at https://bit.ly/40uXPHg from PacerMonitor.com at no
charge.
About Cornerstone Onsite
Cornerstone Onsite, LLC, d/b/a Dent Well, is a Dental Services
Organization and operates/manages 13 dental offices and one mobile
unit in 4 states including Texas, California, North Carolina and
Utah.
Cornerstone Onsite filed a Chapter 11 bankruptcy petition (Bankr.
S.D. Tex. Case No. 23-30949) on March 17, 2023.
In the petition signed by John D. White, chair, the Debtor
disclosed $1 million to $10 million in assets and liabilities.
John Akard Jr., Esq. of COPLEN & BANKS, PC is the Debtor's Counsel.
CORNERSTONE ONSITE: Has $650,000 DIP Loan From Southern Spear
-------------------------------------------------------------
Cornerstone Onsite, LLC, dba Cornerstone, asks the U.S. Bankruptcy
Court for the Southern District of Texas, Houston Division, for
authority to use cash collateral and obtain post-petition
financing.
Cornerstone says most of investors are no longer willing to provide
funding. However, in addition to amounts it previously loaned, the
Debtor's largest investor and lender, Southern Spear, Inc., made
secured pre-petition loans to the Debtor in the principal amount of
$350,000 for the purpose of enabling its efforts to prepare for and
file its bankruptcy case, including, but not limited to meeting its
payroll obligations. Southern Spear has also agreed to provide
postpetition financing during the bankruptcy. This DIP Facility is
a $650,000 term loan which includes a roll-up of the $350,000
pre-petition secured debt advanced by Southern Spear. Thus,
Southern Spear is providing up to $300,000 of additional
post-petition financing.
Provided no default or event of default exists under the loan
documents, post-petition advances of up to $300,000 under the DIP
Facility will be available for borrowing in multiple tranches at
the discretion of Southern Spear and subject to the Budget. Subject
to the entry of the interim order, the first tranche of up to
$175,000 will be made available to the Debtor during the period
between the entry of the interim order and the entry of the final
order.
The DIP Facility matures on June 30, 2023.
The Debtor is required to comply with these milestones:
i. The Interim Order entered by no later than March 22, 2023.
ii. The Final Order entered by no later than April 21, 2023.
iii. The Plan filed as of the Petition Date.
iv. The order confirming the Plan entered no later than May 19,
2023.
v. The closing of the sale contemplated by the Plan no later
than June 19, 2023.
Southern Spear has agreed to purchase certain assets of the Debtor
with a credit bid of the amounts loaned by Southern Spear to the
Debtor before and during the bankruptcy, including the DIP Facility
and $75,000 in cash. The total purchase price at closing is
estimated to be approximately $1.9 million.
The Debtor's primary creditors are investors who also loaned money
to the Debtor, equipment and product suppliers and other various
noteholders. In total, the Debtor has approximately $1.8 million in
assets and $4.6 million in debt.
The Debtor may have as much as $2.15 million in potentially secured
debt which consists of approximately $230,000 in outstanding loans
from the purchase of specific pieces of dental equipment from
Patterson Dental Supply and Citizens First Bank and $1.98 million
in outstanding loans from members who also loaned money to the
Debtor. Of the $1.98 million in loans from members, approximately
$1.48 million is from Southern Spear, Inc.
In connection with entering into the Southern Spear Prepetition
Notes, the Debtor granted Southern Spear blank liens on all of its
assets and the proceeds thereof.
As a dental service organization, the Debtor collects funds from
the Dental Entities to pay the expenses of operating the dental
practices such as supplies, rent, utilities, payroll and other
expenses related to the management of the practices. On the
Petition Date, the Debtor had approximately $270,000 in its
accounts and the dental practice accounts it controls. The Debtor
is the borrower on equipment and other loans which are secured by
the Debtor's equipment and property. Without access to cash
collateral, the Debtor will have insufficient unencumbered funds to
meet its ongoing obligations of payroll and normal operating
expenses.
As adequate protection, the Debtor seeks to grant Southern Spear
post-petition replacement liens in its Collateral in the same order
and priority as existed on the date the case was filed as adequate
protection to the extent that prepetition collateral is expended
postpetition.
About Cornerstone Onsite, LLC
Cornerstone Onsite, LLC is a Dental Services Organization and
operates or manages 13 dental offices and one mobile unit in four
states including Texas, California, North Carolina and Utah.
Cornerstone's central business office is at 7575 San Felipe Street,
Suite 101 Houston, Texas 77063. Cornerstone does not own the dental
practices it manages. Rather, the dental practices are owned by
four separate dental entities (one for each state) and operate
under management agreements with the Company. The owners of the
Dental Entities are dentists and neither the Dental Entities nor
the dentists have filed bankruptcy.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-30949) on March 17,
2023. The petition was signed by John D. White, its chairman. The
Debtor has approximately $1.8 million in assets and $4.6 million in
debt.
John Akard Jr., Esq., at Coplen & Banks, PC, represents the Debtor
as legal counsel.
CRYPTO CO: Borrows $54K From 1800 Diagonal
------------------------------------------
Effective March 7, 2023, The Crypto Company borrowed funds pursuant
to a Securities Purchase Agreement entered into with 1800 Diagonal
Lending, LLC, and Diagonal purchased a convertible promissory note
from the Company in the aggregate principal amount of $54,250.
Pursuant to the SPA, the Company agreed to reimburse Diagonal for
certain fees in connection with entry into the SPA and the issuance
of the Note. The SPA contains customary representations and
warranties by the Company and Diagonal typically contained in such
documents.
The maturity date of the Note is March 2, 2024. The Note bears
interest at a rate of 10% per annum, and a default interest of 22%
per annum. Diagonal has the option to convert all of the
outstanding amounts due under the Note into shares of the Company's
common stock beginning on the date which is 180 days following the
date of the Note and ending on the later of: (i) the Maturity Date
and (ii) the date of payment of the default amount, as such term is
defined under the Note. The conversion price under the Note for
each share of common stock is equal to 65% of the lowest trading
price of the Company's common stock for the 10 trading days prior
to the conversion date. The conversion of the Note is subject to a
beneficial ownership limitation of 4.99% of the number of shares of
common stock outstanding immediately after giving effect to such
conversion. Failure of the Company to convert the Note and deliver
the common stock when due will result in the Company paying
Diagonal a monetary penalty for each day beyond such deadline.
The Company may prepay the Note in whole, however, if it does so
between the issuance date and the date which is 60 days from the
issuance date, the repayment percentage is 115%. If the Company
prepays the Note on or between the 61st day after issuance and the
90th day after issuance, the prepayment percentage is 120%. If the
Company prepays the Note on or between the 91st day after issuance
and 180 days after issuance, the prepayment percentage is 125%.
After such time, the Company can submit an optional prepayment
notice to Diagonal, however the prepayment shall be subject to the
agreement between the Company and Diagonal on the applicable
prepayment percentage.
Pursuant to the Note, as long as the Company has any obligations
under the Note, the Company cannot without Diagonal's written
consent, sell, lease or otherwise dispose of any significant
portion of its assets.
The Note contains standard and customary events of default such as
failing to timely make payments under the Note when due, the
failure of the Company to timely comply with the Securities
Exchange Act of 1934, as amended, reporting requirements and the
failure to maintain a listing on the OTC Markets. The occurrence
of any of the events of default, entitle Diagonal, among other
things, to accelerate the due date of the unpaid principal amount
of, and all accrued and unpaid interest on, the Note. Upon an
"Event of Default", interest shall accrue at a default interest
rate of 22%, and the Company may be obligated pay to the Diagonal
an amount equal to 150% of all amounts due and owing under the
Note.
The offer and sale of the Note to Diagonal was made in a private
transaction exempt from the registration requirements of the
Securities Act in reliance on exemptions afforded by Section
4(a)(2) of the Securities Act and Rule 506(b) of Regulation D
promulgated thereunder.
Separate from the entry into the SPA with Diagonal, effective March
13, 2023, the Company and AJB Capital Investments, LLC entered into
an agreement whereby, among other things, AJB agreed to extend the
maturity date of the promissory note issued to AJB in May 2022 to
Jan. 15, 2024, and with all accrued and unpaid interest and
principal to be due at maturity. Additionally, effective March 13,
2023, the Company and Efrat Investments, LLC entered into an
agreement whereby, among other things, Efrat agreed to extend the
maturity date of the promissory note issued to Efrat in April 2022
to Jan. 15, 2024, and with all accrued and unpaid interest and
principal to be due at maturity. In each case, in connection with
the accommodations made by the lenders the Company agreed to amend
the exercise price of the warrants previously issued to AJB and
Efrat to $0.50 per share and also agreed to issue to each of AJB
and Efrat a new "prefunded" warrant exercisable to purchase shares
of Company common stock subject in each case to certain ownership
limitations and other terms and conditions of the warrants.
About Crypto Company
Malibu, CA-based The Crypto Company -- www.thecryptocompany.com --
is in engaged in the business of providing consulting services and
education for distributed ledger technologies, for the building of
technological infrastructure, and enterprise blockchain technology
solutions.
Crypto Company reported a net loss of $785,630 for the 12 months
ended Dec. 31, 2021, compared to a net loss of $2.82 million for
the 12 months ended Dec. 31, 2020. As of Sept. 30, 2022, the
Company had $2.49 million in total assets, $4.85 million in total
liabilities, and a total stockholders' deficit of $2.36 million.
CUSTOM ALLOY: Cash Collateral Hearing Adjourned to March 27
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey authorized
Custom Alloy Corporation and CAC Michigan, LLC to use the cash
collateral of CIBC Bank USA on an interim basis, in accordance with
the budget.
The Debtors' authorization -- and CIBC's consent -- to the use of
cash collateral will terminate, at CIBC's election and without
further notice or Court order, upon the earlier of: (i) 11:59 pm on
March 25, 2023; or (ii) the occurrence of an Event of Default; or
(iii) three business days after CIBC has provided written notice to
the Debtors of the occurrence of an Event of Default.
This is the Court's Eighteenth Emergency Order on the Debtor's
access to cash collateral. Its prior order provided that the
Debtors' authorization -- and CIBC's consent -- to the use of cash
collateral was to terminate, at CIBC's election and without further
notice or Court order, upon the earlier of: (i) 11:59 pm on March
18, 2023; or (ii) the occurrence of an Event of Default; or (iii)
three business days after CIBC has provided written notice to the
Debtors of the occurrence of an Event of Default.
The Court will hold another hearing Monday, March 27, on the
Debtors' continued cash collateral access. The hearing was
originally set for March 23 but "due to an unforeseen and
unavoidable scheduling conflict, the Court [was] unavailable to
hear matters in this case as scheduled" and all matters scheduled
for Thursday were adjourned to Monday.
Custom and CIBC entered into secured financing arrangements
pursuant to a Loan and Security Agreement dated as of March 4,
2010. CAC Michigan guaranteed the amounts owed by Custom under the
Prepetition Loan Agreement.
As of the Petition Date, the outstanding aggregate principal amount
of the obligations owing by the Debtors to CIBC under the
Prepetition Documents, exclusive of all accrued interest, fees,
costs, expenses, charges, and other Obligations (including legal
fees and expenses) is not less than $21.9 million.
As adequate protection, CIBC is granted a replacement lien under 11
U.S.C. section 361(2) on all of the Debtors' assets arising after
the Petition Date in an amount equal to the aggregate diminution in
value (if any) of the Prepetition Collateral resulting from the
sale, lease, or use by Debtors of its Prepetition Collateral, or
the imposition of the automatic stay pursuant to Section 362. The
Replacement Lien granted (i) will be deemed automatically valid and
perfected without any further notice or act by any party and (ii)
will remain in full force and effect notwithstanding any subsequent
conversion or dismissal of either Case.
To the extent the adequate protection provided proves insufficient
to protect CIBC's interest in and to cash collateral, CIBC will
have a super priority administrative expense claim, pursuant to 11
U.S.C. section 507(b), senior to any and all claims against the
Debtors section 507(a), whether in this proceeding or in any
superseding proceeding, subject to payments due under 28 U.S.C.
section 1930(a)(6).
Each of these events constitutes an "Event of Default":
a. Either Debtor fails to perform any of its obligations with
respect to use of cash collateral in accordance with the terms of
the Order;
b. Either Case is converted to a case under chapter 7 of the
Bankruptcy Code; or
c. A trustee is appointed or elected in either of the Cases,
or an examiner with expanded power to operate either of the
Debtor's business is appointed in any of the Debtor's respective
Case.
The Debtor projects $888,362 in total cash receipts and $1,076,585
in total cash disbursements for the week ended March 25.
About Custom Alloy Corporation
Custom Alloy Corporation is a manufacturer of specialty metals for
seamless and welded pipe fittings & forgings, predominantly for
customers requiring time-critical maintenance or repair.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Case No. 22-18143) on October 13,
2022. In the petition signed by Adam M. Ambielli, its CEO and
president, the Debtor disclosed up to $50 million in assets and up
to $100 million in liabilities.
Judge Michael B. Kaplan oversees the case.
Jonathan I. Rabinowitz, Esq., at Rabinowitz, Lubetkin & Tully, LLC,
is the Debtor's counsel.
An official committee of unsecured creditors has retained Fox
Rothschild LLP as counsel.
CWI CHEROKEE: Seeks Cash Collateral Access
------------------------------------------
CWI Cherokee LF, LLC asks the U.S. Bankruptcy Court for the
Northern District of Georgia, Atlanta Division, for authority to
use the income collected from the operation of a landfill located
at 1750 Cane Creek Road, Cherokee, Alabama 35616, and related
business, which may be claimed as cash collateral by Regions Bank.
The Debtor requires the use of cash collateral to meet current
ongoing operating expenses.
Regions Bank acts as trustee of the $14,100,000 Solid Waste
Disposal Revenue Bonds (Cherokee Industrial Landfill Project)
Series 2020-A and $4,530,000 Taxable Solid Waste Disposal Revenue
Bonds, Series 2020-B.
To maintain its ongoing business, the Debtor is required to pay
haulers, who may refuse to collect and haul waste if they are not
paid timely. Further, the Debtor has non-insider employees whose
continued labor is essential to the Debtor's operations and
necessary to preserve the estate.
The Debtor requests entry of a final order allowing the use of cash
collateral to preserve the Property and its estate pending the
confirmation of a Plan of Reorganization.
A copy of the Debtor's motion and budget is available at
https://bit.ly/3YZVH9l from PacerMonitor.com.
The Debtor projects total cash expenses, on a monthly basis, as
follows:
$344,084 for March 2023;
$317,699 for April 2023;
$511,450 for May 2023;
$511,450 for June 2023;
$551,950 for July 2023;
$539,950 for August 2023; and
$549,950 for September 2023.
About CWI Cherokee LF
CWI Cherokee LF, LLC is an Atlanta-based company that provides
waste treatment and disposal services.
CWI Cherokee LF filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No.
23-52262) on March 7, 2023, with $10 million to $50 million in both
assets and liabilities.
John A. Christy, Esq., at Schreeder, Wheeler & Flint, LLP
represents the Debtor as counsel.
DAKTRONICS INC: Signs Standstill Agreement With Alta Fox
--------------------------------------------------------
Daktronics, Inc. disclosed in a Form 8-K filed with the Securities
and Exchange Commission it entered into a Standstill and Voting
Agreement with Alta Fox Capital Management, LLC (the "Investor")
and Connor Haley, founder and managing partner of Alta Fox, in
connection with ongoing negotiations between the Company and the
Investor Parties regarding a potential financing transaction.
With respect to each annual or special meeting of the Company's
shareholders during the term of the Agreement, each Investor Party
has agreed to vote the shares of the Company's common stock, no par
value then held by it in accordance with the recommendations of the
Company's Board of Directors on director election proposals and any
other proposals submitted by the Company or a shareholder, except
that the Investor Parties may vote in their discretion on
Extraordinary Transactions (as defined in the Agreement) and, with
respect to any proposal (other than as related to the election,
removal or replacement of any director), in accordance with
Institutional Shareholder Services, Inc. and Glass Lewis & Co. if
such proxy advisor firms recommend differently from the Board.
The Investor Parties have also agreed to certain customary
standstill provisions prohibiting them from, among other things,
(i) making certain announcements regarding the Company's
transactions, (ii) soliciting proxies, (iii) selling securities of
the Company to any third party with a known history of activism or
known plans to engage in activism, (iv) taking actions to change or
influence the Board, Company management or the direction of certain
Company matters, and (v) exercising certain shareholder rights.
The Agreement will terminate on the one-year anniversary of the
date of the Agreement, subject to an automatic extension until the
day following the conclusion of the Company's 2024 Annual Meeting
of Shareholders if the Company and the Investor sign and execute
definitive financing documents.
About Daktronics
Headquartered in Brookings, SD, Daktronics, Inc. and its
subsidiaries design and manufacture electronic scoreboards,
programmable display systems and large screen video displays for
sporting, commercial and transportation applications. The Company
serves its customers by providing high quality standard display
products as well as custom-designed and integrated systems. The
Company offers a complete line of products, from small scoreboards
and electronic displays to large multimillion-dollar video display
systems as well as related control, timing, and sound systems.
In its Quarterly Report for the period ended Jan. 28, 2023,
Daktronics said, "Although supply chain disruptions have started to
ease and we expect our inventory levels and working capital levels
to decline, we cannot be certain we will not experience future
disruptions or need additional liquidity to fund inventory levels,
operations, and capital expenditures. Therefore, we plan to obtain
additional liquidity to meet our obligations as they come due in
the 12 months following the date of this Report, and we cannot be
assured that such liquidity will be available or the form of such
liquidity, such as equity raises or debt financing. These
conditions raise substantial doubt about our ability to continue as
a going concern."
DANNY & CORIE: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------
The U.S. Trustee for Region 7 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Danny & Corie Enterprises, Inc.
About Danny & Corie Enterprises
Danny & Corie Enterprises, Inc. is a residential and commercial
security company with systems and active monitoring, automation
networking and access control.
Danny & Corie Enterprises sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Texas Case No. 23-30487) on Feb.
10, 2023. In the petition signed by John Daniel Cannon, president,
the Debtor disclosed up to $50,000 in assets and up to $500,000 in
liabilities.
Judge Jeffrey P. Norman oversees the case.
The Debtor tapped Margaret M. McClure, Esq., a practicing attorney
in Houston, Texas, as its bankruptcy counsel and Linda J. Thomas at
James R. Thomas, CPA Services, Inc. as tax preparer.
DIEBOLD NIXDORF: S&P Downgrades ICR to 'CCC', On Watch Negative
---------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Diebold
Nixdorf Inc. to 'CCC' from 'CCC+', its issue-level rating on its
existing and extended term loans and secured notes to 'CCC' from
'CCC+', its issue-level rating on its unsecured and second-lien
debt to 'CC' from 'CCC-', and its issue-level rating on its
superpriority term loan to 'B-' from 'B' and placed all of the
ratings on CreditWatch with negative implications.
The CreditWatch placement reflects the uncertainty around the
company's ability to address its upcoming 2024 debt maturities, the
sustainability of its capital structure over the longer term, and
our belief that a debt restructuring is likely. S&P expects to
resolve the CreditWatch when it has sufficient information to
assess Diebold's credit profile, including the potential for a
successful refinancing.
Diebold's recent 8-K filing suggests that it will be more
challenging for it to execute a turnaround under its current
capital structure. The company projects that it will not generate
sufficient cash from its operations to meet its obligations as they
become due over the next 12 months. Diebold must also raise equity
capital to pay any outstanding principal amount on its 8.50% senior
notes due 2024 in excess of $20 million. These conditions raise
substantial doubts about its ability to continue as a going
concern. While the company's backlog remained strong at about
$1.478 billion as of February 2023, it has faced heightened
liquidity pressures due to its increased cash usage to achieve its
demand forecast, the slower-than-expected conversion of its
inventory into revenue, its significant payments to its suppliers,
and the reduced borrowing base availability under its asset-based
lending (ABL) facility. These factors have led to a steep decline
in its liquidity, which dipped to approximately $186 million by the
end of February 2023 from $345 million as of the end of December
2022. While the company has secured $55 million of
first-in-last-out (FILO) tranche due June 4, 2023 to the ABL
facility, continued challenging market conditions, uncertain
timeline for business recovery, as well as its continued cash flow
pressures, lead us to believe it will face additional operating
difficulties, which could render it unable to meet the maturity of
its 2024 senior notes.
As of March 16, 2023, the company has $72.1 million in aggregate
principal amount of its 2024 senior notes outstanding. Under the
terms of the agreements governing the superpriority facility, the
new term loans, and the new 2025 notes, Diebold must issue equity
to repurchase or repay in full the remaining excess stub notes
prior to their maturity date if less than $52.1 million in
aggregate principal amount of the 2024 senior notes are not validly
tendered and accepted in the public exchange offer. The company's
failure to raise sufficient equity capital will constitute an event
of default under the current credit agreement. Even if no excess
stub notes exist after the completion of the public exchange
offering, which closes on March 24, 2023, the company may not have
the liquidity to repay the outstanding amount.
The negative CreditWatch reflects the uncertainty around the
company's ability to address its upcoming debt maturities in 2024,
the sustainability of its capital structure over the longer term,
and our belief that a debt restructuring is likely. S&P expects to
resolve the CreditWatch when it has sufficient information to
assess Diebold's credit profile, including the potential for a
successful refinancing.
ESG credit indicators: E-2, S-3, G-2
S&P said, "Social factors are a modestly negative consideration in
our credit rating analysis because we expect the role of physical
cash as a means of exchange to decline over time. Access to other
methods of payments, such as wire transfers and mobile-to-mobile
payments, is rising and we expect the need for ATM hardware will
decline as the use of alternative payments expands."
DIOCESE OF NORWICH: Plan Must Help Abuse Victims, Says Judge
------------------------------------------------------------
Brian Steele of Law360 reports that the Norwich Roman Catholic
Diocese's Chapter 11 plan must provide nonmonetary "redress to some
egregious claims" from more than 100 people who allege they were
sexually abused within church and school programs as children, a
Connecticut bankruptcy judge told attorneys during a virtual status
conference on Tuesday, March 14, 2023.
As reported in the TCR, the Debtor and its unsecured creditors
committee have filed competing plans in the case. The committee
representing abuse victims has proposed a bankruptcy exit plan that
could pay as much as $90 million of cash and insurance payouts to
resolve child sex abuse claims. The Diocese proposed its own
reorganization plan in January 2023 that calls for paying $29
million to settle about 142 clergy sexual abuse claims.
About The Norwich Roman Catholic
Diocesan Corporation
The Norwich Roman Catholic Diocesan Corporation is a nonprofit
corporation that gives endowments to parishes, schools, and other
organizations in the Diocese of Norwich, a Latin Church
ecclesiastical territory or diocese of the Catholic Church in
Connecticut and a small part of New York.
The Norwich Roman Catholic Diocesan Corporation sought Chapter 11
protection (Bankr. D. Conn. 21-20687) on July 15, 2021. The Debtor
estimated $10 million to $50 million in assets against liabilities
of more than $50 million. Judge James J. Tancredi oversees the
case.
The Debtor tapped Ice Miller, LLP as bankruptcy counsel and
Robinson & Cole, LLP as Connecticut counsel. Epiq Corporate
Restructuring, LLC is the claims and noticing agent.
EDGEWATER CONSTRUCTION: Case Summary & 20 Top Unsecured Creditors
-----------------------------------------------------------------
Debtor: Edgewater Construction Group, Inc.
6962 SW 47th Street
#6962
Miami, FL 33155
Business Description: The Debtor provides general contractor
services and has been in business since
February 1999.
Chapter 11 Petition Date: March 22, 2023
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 23-12217
Judge: Hon. Laurel M. Isicoff
Debtor's Counsel: Jacqueline Calderin, Esq.
AGENTIS PLLC
55 Alhambra Plaza, Suite 800
Miami, FL 33134
Tel: 305-722-2002
Email: jc@agentislaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ulysses Vazquez, II as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/AUE7E7Y/Edgewater_Construction_Group_Inc__flsbke-23-12217__0001.0.pdf?mcid=tGE4TAMA
ELANCO ANIMAL: Moody's Cuts CFR to Ba3 & Sr. Secured Debt to Ba2
----------------------------------------------------------------
Moody's Investors Service downgraded Elanco Animal Health
Incorporated's Corporate Family Rating to Ba3 from Ba2 and
Probability of Default Rating to Ba3-PD from Ba2-PD. At the same
time, Moody's downgraded the senior secured bank credit facilities'
ratings to Ba2 from Ba1, and unsecured ratings to B2 from B1.
Moody's also downgraded the Speculative Grade Liquidity Rating to
SGL-2 from SGL-1. The outlook is stable.
The ratings downgrade primarily reflects Elanco's operational
underperformance relative to Moody's expectations, driving slower
deleveraging and weaker credit metrics than Moody's previously
expected. On Moody's adjusted basis, debt to EBITDA was 5.8x as of
December 31, 2022, and Moody's expects that leverage will increase
to over 6x in FY2023 on continued earnings declines. To that end,
Moody's expects that Elanco will continue to be negatively impacted
by competitive animal health products and macroeconomic headwinds
in 2023. That said, Moody's notes the earnings upside and potential
deleveraging from Elanco's innovation portfolio that will ramp up
over the next 2-3 years with five potential "blockbusters" (defined
as peak revenues of over $100 million). Moody's notes that Elanco's
new product pipeline will need to take market share from
competitive products already on the market with established quality
track records. As such there is uncertainty around Elanco's ability
to meet its targets ($600 to $700 million of innovation revenue by
2025).
Governance risk considerations are material to the rating action.
Elanco has yet to establish a track record for deleveraging since
becoming an independent company in 2018. This risk factor is driven
by its historical penchant for debt-funded acquisitions,
operational misses to budget, and an innovation portfolio that has
lagged industry peers.
Downgrades:
Issuer: Elanco Animal Health Incorporated
Corporate Family Rating, Downgraded to Ba3 from Ba2
Probability of Default Rating, Downgraded to Ba3-PD from Ba2-PD
Speculative Grade Liquidity Rating, Downgraded to SGL-2 from
SGL-1
Senior Secured Bank Credit Facilities, Downgraded to Ba2 (LGD3)
from Ba1 (LGD3)
Senior Unsecured Notes, Downgraded to B2 (LGD6) from B1 (LGD5)
Outlook Actions:
Issuer: Elanco Animal Health Incorporated
Outlook, Remains Stable
RATINGS RATIONALE
Elanco's Ba3 Corporate Family Rating reflects its high financial
leverage, with Moody's adjusted debt to EBITDA at 5.8x as of
December 31, 2022. Moody's expects that Elanco's leverage will
remain high through at least 2023, a few years after the
debt-funded acquisitions of Bayer's animal health business and
KindredBio (closed in 2020 and 2021, respectively). The credit
profile broadly reflects Elanco's weak track record of deleveraging
since the company spun-off from Eli Lilly and Company (A2/Positive)
in 2018. Finally, the rating reflects Elanco's trailing growth
profile, partially driven by its new product pipeline that has
lagged competitors to date in business segments such as
parasiticides and dermatology.
The rating is supported by Elanco's size and scale with revenue of
more than $4.4 billion, making it one of the largest animal health
companies globally. Once integration costs related to the Bayer
acquisition fully wind down by 2024, Moody's expects Elanco's free
cash flow to materially improve. Finally, the rating incorporates
Moody's favorable view of the animal health end-market, which
Moody's believes has lower business risk than other healthcare
sectors with good long-term growth prospects.
Elanco's ESG credit impact score is highly negative (CIS-4,
previously CIS-3). The score reflects highly negative exposure to
governance risks (G-4, previously G-3) driven by Elanco's
inconsistent management credibility and track record, with material
debt-funded acquisitions and underperformance to Moody's
projections. The score also reflects moderately negative exposure
to social risks (S-3). Social risk considerations are driven by
responsible production, incorporating the risk of regulation to
curb the use of Elanco's antibiotic products in animal protein
production globally.
The SGL-2 Speculative Grade Liquidity Rating reflects Moody's
expectation that free cash flow will be positive in 2023
notwithstanding continued earnings headwinds and rising interest
expense on Elanco's unhedged floating rate debt (currently
approximately 32% of the debt capital structure). Elanco reported
$345 million of cash at December 31, 2022, and an undrawn $750
million secured revolver that expires in 2025. Elanco has $344
million of notes due in August 2023. While management has publicly
stated its intentions to refinance this 2023 maturity, Elanco could
choose to utilize a portion of its undrawn revolver and/or cash
balance, which would reduce its sources of liquidity. Elanco's
revolver has financial maintenance covenants. These include a
maximum net debt/EBITDA ratio of 7.71x and a minimum interest
coverage ratio of 2.0x, using pro forma EBITDA, and Moody's expects
ample cushion.
The outlook is stable. Moody's expects Elanco's credit metrics will
improve to be consistent with the rating level by the end of 2024.
While Moody's expects that earnings will decline and leverage will
rise over the next 12 months, Moody's also believes that the
company's earnings will benefit from its new product pipeline in
2024 and that the company will generate higher free cash flow that
can be used repay debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade include stable top-line
growth and margin expansion. Specifically, debt/EBITDA sustained
below 4.5x could lead to an upgrade.
Factors that could lead to a downgrade include performance
headwinds that extend beyond 2023. If Moody's expects debt/EBITDA
to be sustained above 5.5x, the ratings could be downgraded.
Headquartered in Greenfield, Indiana, Elanco Animal Health Inc. is
a global manufacturer of animal health products. The company
develops, manufactures and markets products for a variety of
companion and food animals. Elanco LTM revenues exceeded $4.4
billion as of December 31, 2022.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
EMERALD ELECTRICAL: Court OKs Cash Collateral Access Thru March 30
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia,
Gainesville Division, authorized Emerald Electrical Consultants LLC
to use cash collateral on an interim basis in accordance with the
budget, through the date of the final hearing set for March 30,
2023, at 10:30 a.m.
Emerald Electrical and its affiliates are borrowers on certain
loans with First US Bank, which asserts security interests in
certain of the Debtor's personal property. The revenue from the
Debtor's business may constitute cash collateral.
As adequate protection, the Lender and any other secured creditor
will continue to hold liens as set forth in the First Interim
Order.
As further adequate protection, and as a further condition of the
continued use of cash collateral, the Debtor will pay to the Lender
a monthly adequate protection payment in an amount equal to the
monthly principal and interest due under the various loans made by
the Lender to the Debtor, which total amount will be provided by
the Lender to the Debtor on or before the first day of each
calendar month. Adequate protection payments will be made on or
before the sixth day of each consecutive month thereafter during
the Interim Period. Subsequent adequate protection payments will be
made on or before the sixth day of each consecutive month
thereafter during the Fourth Interim Period.
To the extent the Debtor has not already done so, it must provide
the Lender with access to the vehicles, equipment, and other
property which constitute the Lender's collateral at a time and
place convenient to the Lender to allow the Lender to inspect the
collateral.
A copy of the order is available at https://bit.ly/3nbTOJq from
PacerMonitor.com.
About Emerald Electrical Consultants LLC
Emerald Electrical Consultants LLC specializes in substation
construction, related technical services, and consulting across the
United States, with a focused presence in the southeastern and
central regions of the country. The Debtor sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No.
22-20913) on September 15, 2022. In the petition signed by Lindy
Truitt, president and CEO, the Debtor disclosed up to $10 million
in both assets and liabilities.
Judge James R. Sacca oversees the case.
Benjamin Keck, Esq., at Keck Legal, LLC, is the Debtor's counsel.
EMPIRE SPORTS: Engages Negotiations with StubHub; Amends Plan
-------------------------------------------------------------
Empire Sports & Entertainment, Inc., submitted a First Plan of
Reorganization under Subchapter V dated March 16, 2023.
The purpose of this amended Plan is twofold: first, to disclose the
existence of a dispute that has arisen since the filing of this
case between the Debtor and StubHub, Inc., and second, to provide
proper notice of the Plan to WebBank and StubHub.
This Plan does not change the treatment of any class of creditors.
The Debtor continued to operate its business successfully after the
filing of this case. Indeed, the Debtor's net income far exceeded
its projections for the fourth quarter of 2022, and the Debtor has
sufficient cash to pay all anticipated administrative claims as of
the Effective Date.
In late November 2022, a dispute arose between the Debtor and
StubHub, Inc. The dispute concerns the use of a feature known as
the "Sub Tool" offered by StubHub to ticket buyers when a ticket
seller is unable to deliver the offered tickets. The Sub Tool
guarantees buyers that they will receive comparable tickets even if
the original seller defaults. StubHub's User Agreement then
provides that the original seller will be charged for the
replacement tickets.
Between mid-September and mid-November 2022, the Debtor, as a
buyer, purchased tickets from third party sellers who defaulted,
and the Debtor was then offered replacement tickets through the Sub
Tool which were offered by the Debtor, as a seller. The Debtor
selected its own tickets in approximately 70 such transactions,
most of which occurred post-petition. StubHub then alleged that the
replacement tickets offered by the Debtor were overpriced or
fraudulent, and StubHub suspended the Debtor's accounts and refused
to pay the Debtor for the replacement tickets or refund the
Debtor's original purchase price. The Debtor denies that any
replacement tickets were overpriced or fraudulent and alleges that
StubHub owes the Debtor approximately $110,000.00 in total, mostly
from these Sub Tool transactions. StubHub alleges that the Debtor
owes it approximately $250,000.00 related to the Sub Tool
transactions.
The Debtor believes that StubHub can't have it both ways, i.e.,
StubHub either needs to pay the Debtor for the replacement tickets
or refund the amount the Debtor paid to a third party for tickets
that were never delivered. At the time of filing of this Plan,
StubHub has been notified of the Debtor's Chapter 11 case, and
StubHub has not asserted any claim, either pre-petition or
post-petition, against the Debtor. The parties have engaged in
settlement negotiations, and the Debtor is hopeful that the matter
will be resolved without litigation.
StubHub was added to this case as a creditor holding a disputed
claim on February 22, 2023. In the event StubHub asserts a claim or
files a request for payment of an administrative expense claim, the
Debtor will object, and the claims between the parties will need to
be litigated. In the event StubHub is successful is asserting a
large claim against the Debtor, which the Debtor believes is
unlikely, such a claim, and the related litigation costs, would
change the Debtor's liquidation analysis, cash flow projections
and/or projected effective date cash on hand. In that case, the
Debtor would have to withdraw this Plan and file an amended plan,
or, if the Plan has already been confirmed, seek modification under
section 1193(b) or (c) of the Code.
This Plan of Reorganization proposes to pay creditors of the Debtor
from cash flow from future income.
Non-priority unsecured creditors holding allowed claims will
receive distributions which the Debtor has valued at 23 cents on
the dollar. This Plan also provides for the payment in full of all
administrative and priority claims.
Like in the prior iteration of the Plan, holders of allowed non
priority unsecured claims in Class 3 will receive an aggregate
amount equal to 23% of their claims. Payments will be made
quarterly over a five-year period, commencing on the first day of
the first calendar quarter following the Effective Date.
Payments to be made under this Plan will be made from the funds of
the Debtor existing on the effective date, as well as funds
generated subsequent to the effective date from the Debtor's
operations. Funds may also be available from the Debtor's pursuit
of any avoidance actions available to it under Chapter 5 of the
Bankruptcy Code, should the Debtor choose to pursue any such
claims. The Debtor does not believe there are any such avoidance
actions and therefore does not anticipate any revenue from those
sources.
A full-text copy of the First Amended Plan dated March 16, 2023 is
available at https://bit.ly/42zEC9e from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Myron N. Terlecky, Esq.
John W. Kennedy, Esq.
Strip, Hoppers, Leithart, McGrath & Terlecky Co., LPA
575 South Third Street
Columbus, OH 43215-5759
Telephone: (614) 228-6345
Facsimile: (614) 228-6369
Email: mnt@columbuslawyer.net
jwk@columbuslawyer.net
About Empire Sports & Entertainment
Empire Sports & Entertainment, Inc. is a full-service event
management and production company specializing in corporate events,
sporting events, meetings and conferences, hospitality services,
and non-profit events.
Empire Sports & Entertainment sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Ohio Case No. 22-52666) on
Sept. 12, 2022, with up to $500,000 in assets and up to $10 million
in liabilities. Alexander M. Schaffe, president of Empire Sports &
Entertainment, signed the petition.
Judge Mina Nami Khorrami oversees the case.
Strip, Hoppers, Leithart, McGrath & Terlecky Co., LPA serves as the
Debtor's counsel.
FARMERS COOPERATIVE: Court OKs Cash Collateral Access Thru May 16
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Missouri
authorized Farmers Cooperative Association #301 to use cash
collateral on a final basis for payment of post-petition expenses
only, through May 16, 2023.
The Debtor's only secured creditor is First State Community Bank.
As of the Petition Date, the Debtor was indebted to the Lender
under these promissory notes:
a. Promissory Note dated February 1, 2016 in the principal
amount of $475,000 plus interest and other charges from Borrower
payable to First State Community Bank designated by Loan Number
33045795. The approximate outstanding balance of the Term Note is
$322,808; and
b. Promissory Note with an approximate outstanding balance of
$200,741 plus interest and other charges from Borrower payable to
First State Community Bank designated by Loan Number 33081389. The
LOC Note has matured.
The approximate total Pre-Petition Indebtedness on the Petition
Date was $544,840.
The Court said the term of the Interim Order will remain in full
force and effect.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3LDzafy from PacerMonitor.com.
The Debtor projects $15,768 in total operating expenses for the
months of March and April 2023.
About Farmers Cooperative Association #301
Farmers Cooperative Association #301 is a local feed cooperative
that offers its customers full lines of feed, minerals, lime, and
fertilizers. The Debtor sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D. Mo. Case No. 22-43908) on
December 16, 2022. In the petition signed by Bill Manion,
president, the Debtor disclosed up to $10 million in assets and up
to $1 million in liabilities.
Judge Bonnie L. Clair oversees the case.
Spencer Desai, Esq., at the Desai Law Firm, is the Debtor's legal
counsel.
FIRST REPUBLIC: Fitch Cuts IDR to 'B', Still on Watch Negative
--------------------------------------------------------------
Fitch Ratings has downgraded First Republic Bank's (FRC) Long-Term
Issuer Default Rating (IDR) to 'B' from 'BB'. The Rating Watch
Negative is maintained on FRC's ratings. The Viability Rating (VR)
was downgraded to 'b' from 'bb'. This follows Fitch's recent action
"Fitch Downgrades First Republic to 'BB'; Places Ratings on
Negative Watch" published on fitchratings.com on March 14.
KEY RATING DRIVERS
The downgrade reflects the current financial profile and challenges
FRC faces from both a funding and earnings perspective. The bank's
funding mix has materially altered over the last two weeks as
withdrawn deposits have been replaced with costly wholesale
borrowings, primarily from the Fed Discount Window. On March 16 the
bank announced that it had received $30 billion in deposits from a
consortium of 11 of the largest U.S. banks. Those deposits carry an
initial term of 120 days at market rates. While this injection
created necessary headroom from a liquidity perspective, the bank's
new funding profile is relatively costly and is viewed as the
primary ratings constraint.
Fitch acknowledges that FRC has publicly indicated that it intends
to reduce wholesale borrowings and is evaluating the composition
and size of its balance sheet. Presently, Fitch estimates that, due
to the higher cost of funds, FRC is currently operating at a net
loss that is not sustainable over the longer term absent a balance
sheet restructuring. Furthermore, to the extent that FRC is
required to repay the $30 billion at the end of its term, it will
have to raise liquidity by selling assets. This is complicated by
the fact that, similar to other U.S. banks, the fair market value
of securities and loans are below their book value and a sale of
assets would likely require a significant recapitalization. FRC's
balance sheet is concentrated in relatively long duration municipal
securities as well as residential mortgage loans. As of 4Q22, FRC's
securities and loans carried unrealized losses totaling 16.3% and
13.3%, respectively, relative to amortized cost.
FRC successfully completed a common equity raise in 1Q23, before
the funding and liquidity pressures mounted. This resulted in a
pro-forma CET 1 ratio of 9.43% using 4Q22 risk-weighted assets.
This capital position provides the bank with some buffer to
withstand losses over the near-to-medium term absent any
significant losses from asset liquidations.
Since the rating action last week, Fitch believes FRC's liquidity
position has improved. Specifically, deposit flows have shown
improvement for FRC in recent days and following receipt of the
deposit package, the bank currently has adequate liquidity to
provide good coverage of remaining uninsured deposits (not counting
the recent $30 billion package).
From a credit risk standpoint, Fitch still views FRC's asset
quality as pristine. The majority of FRC's loans are super-prime
residential mortgages that have to-date benefitted from FRC's
conservative underwriting standards that have driven some of the
lowest credit loss track records in the industry.
The Viability Rating has been assigned below the implied Viability
Rating of 'bb-' due to the following adjustment reason:
Funding and liquidity are viewed as the 'Weakest link', reflecting
FRC's structurally weaker funding profile and heavy reliance on
wholesale funding following recent deposit attrition.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
The Rating Watch Negative indicates that there is a heightened
probability of further ratings downgrades for FRC.
Fitch will use the Watch period to gather further information on
FRC's deposit flows, funding plans and the resulting impact on the
Outlook for earnings and capital. Further downgrades are possible
to the extent that FRC's capital position is eroded such that the
CET 1 ratio falls below 7%. FRC's ratings will also be downgraded
if it experiences further meaningful funding pressures in the form
of deposit outflows.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
Fitch could remove FRC's ratings from Rating Watch Negative if it
believes the earnings, funding and liquidity profiles are
supportive of the current rating.
Over the longer term, Fitch could upgrade the ratings if FRC
manages to reorganize its balance sheet by paying down wholesale
funding to more manageable levels such that the outlook for
earnings and capital supports a higher rating.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
FRC's 'B' Short-Term IDR is in line with the 'B' Long-term IDR
under the mapping in the Rating Correspondence Table within Fitch's
criteria.
FRC's Long-Term deposits of 'BB' are rated three notches higher
than its Long-Term IDR and senior unsecured debt of 'B', which is a
departure from our baseline notching of one given the low level of
the IDR. U.S. uninsured deposits benefit from depositor preference
in the event of resolution, providing superior recovery prospects.
Fitch also believes the recovery prospects for uninsured deposits
have improved following recent failures of other U.S. banks that
have been designated as systemic risks.
FRC's short-term deposits are rated 'B' in accordance with the
Rating Correspondence Table in Fitch's criteria and based on FRC's
Long-Term Deposit Rating.
FRC's senior unsecured debt rating is equalized with its Long-Term
IDR in accordance with Fitch's criteria.
The subordinated debt rating of 'CCC+' is notched two levels below
the VR of 'b' for loss severity. These ratings are in accordance
with Fitch's criteria and assessment of the instruments'
non-performance and loss severity risk profiles.
FRC's 'CCC' preferred stock rating is notched three levels below
its 'b' VR, two times for loss severity and once for
non-performance.
FRC has a Government Support Rating (GSR) of 'ns'. In Fitch's view,
the probability of government support is very low. Accordingly, the
IDRs do not incorporate any support.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
All debt level ratings have also been placed on Negative Watch.
FRC's Long and Short-Term deposit ratings are sensitive to changes
in FRC's Long-Term IDR.
The senior unsecured debt rating is sensitive to changes in FRC's
Long-Term IDR.
FRC's subordinated debt and preferred stock ratings are sensitive
to changes in FRC's VR.
FRC's GSR is 'ns' and there is limited likelihood that these
ratings will change over the foreseeable future.
VR ADJUSTMENTS
The Business Profile has been assigned below the implied score due
to the following reason:
Historical and Future Developments
The Asset Quality score has been assigned below the implied score
due to the following reason:
Concentrations
The Earnings and Profitability score has been assigned below the
implied score due to the following reason(s):
Historical and Future Developments
The Capitalization & Leverage score has been assigned below the
implied score due to the following reason:
Historical and Future Developments
Funding & Liquidity score has been assigned below the implied score
due to the following reason:
Non-Deposit Funding
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Prior
----------- ------ -----
First Republic
Bank LT IDR B Downgrade BB
ST IDR B Rating Watch Maintained B
Viability b Downgrade bb
Government Support ns Affirmed ns
Subordinated LT CCC+ Downgrade B+
preferred LT CCC Downgrade B-
long-term
deposits LT BB Downgrade BB+
short-term
deposits ST B Rating Watch Maintained B
FTE NETWORKS: Board Cancels 4.2M Shares Issued to TTP8
------------------------------------------------------
The board of directors of FTE Networks, Inc. cancelled 4,193,684
shares previously issued to TTP8, LLC on Dec. 13, 2019 in exchange
for the surrender and cancellation of four promissory notes issued
or guaranteed by the Company after recently obtaining documentary
and other evidence that TTP8 -- despite express representations
that it was the holder of the Promissory Notes -- never acquired
legal and beneficial right, title and interest to the Promissory
Notes. As resolved by the Board, the Company said it will take any
and all further action under applicable law (see, e.g., Nevada
statute NRS 78.211) that it deems necessary and appropriate to
rectify this unlawful share issuance.
About FTE Networks
Formerly known as Beacon Enterprise Solutions Group, FTE Networks,
Inc. -- http://www.ftenet.com-- through its subsidiary US Home
Rentals LLC, owns, operates and invests in affordable rental
housing in tier 3 and 4 markets. Single family home rentals (SFR)
is a large, growing and attractive market. Nationally, home
rentals are growing faster than home ownership.
FTE Networks reported a net loss of $15.44 million for the year
ended Dec. 31, 2019, compared to a net loss of $46.59 million for
the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had
$235.43 million in total assets, $160.81 million in total
liabilities, and $74.63 million in total stockholders' equity.
FULLER AND FULLER: Commences Subchapter V Bankruptcy
----------------------------------------------------
Fuller and Fuller Enterprises LLC filed for chapter 11 protection
in the District of South Carolina. The Debtor elected on its
voluntary petition to proceed under Subchapter V of chapter 11 of
the Bankruptcy Code.
The Debtor disclosed $2,496,000 in assets against total debt of
$989,851 in its schedules. Its assets are comprised of real
properties: 310 Lily St., Greenville SC 29617, valued at $310,000,
18 Freestone St., Greenville SC 29605, valued at $191,000, and 106
Daisy Drive, Greenville SC 29605, valued at $172,000.
The petition states that funds will be available to unsecured
creditors.
A telephonic meeting of creditors under 11 U.S.C. Section 341(a) is
slated for April 7, 2023 at 9:30 a.m
About Fuller and Fuller Enterprises
Fuller and Fuller Enterprises LLC is primarily engaged in renting
and leasing real estate properties.
Fuller and Fuller Enterprises LLC filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D.S.C.
Case No. 23-00640) on March 6, 2023. In the petition filed by
Keith Eric Fuller, as owner, the Debtor reported assets between $1
million and $10 million and liabilities between $500,000 and $1
million.
The Debtor is represented by:
Jason M Ward, Esq.
JASON WARD LAW, LLC
311 Pettigru St
Greenville, SC 29601
Tel: 864-239-0007
Fax: 864-239-0343
Email: Jason@WardLawSC.com
FUSE LLC: Main Street Marks $1.8M Loan at 16% Off
-------------------------------------------------
Main Street Capital Corporation has marked its $1,810,000 loan
extended to Fuse LLC to market at $1,512000 or 84% 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 Fuse LLC.
The loan accrues interest at a rate of 12% per annum. The loan
matures on June 28, 2024.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
Fuse, LLC does business as Fuse and FM networks. It is a cable
networks operator, providing a mixture of original and acquired
English language entertainment, music and lifestyle content
targeted at Latinos.
FXI HOLDINGS: Proposed Debt Exchange No Impact on Moody's Caa2 CFR
------------------------------------------------------------------
Moody's Investors Service says FXI Holdings, Inc.'s proposed
exchange of existing senior 7.875% secured notes due 2024 into new
12.25% senior secured notes due 2026 reduces the risk of default
and a debt restructuring over the next 12-18 months but will put
pressure on free cash flow due to the step-up in interest expense.
The proposed transaction has no immediate effect on FXI's Caa2
Corporate Family Rating or negative outlook because completion of
the exchange offer is not assured.
Moody's does not anticipate upgrading the CFR if the transaction
closes with high noteholder participation because of the material
uncertainty affecting FXI's end markets, the company's high
leverage, and Moody's projection that the company will need to grow
earnings meaningfully to generate sustainably positive free cash
flow with the higher interest burden. Moody's nevertheless
anticipates moving the outlook to stable because the transaction
would largely address the 2024 maturity. The Caa2 rating on any
unexchanged senior secured notes due 2024 is likely to be
downgraded by multiple notches if collateral is released due to the
consent solicitation that will effectively subordinate the notes to
the large amount of senior secured notes. If all of the 2024 notes
are exchanged, the instrument rating will be withdrawn.
Moody's expects the transaction will increase interest by
approximately $14 to $18 million depending on the level of
exchanging note holders. Free cash flow is expected to remain under
pressure as FXI continues to face material volume declines that are
impacting the mattress and furniture industry and elevated input
costs. Moody's projects free cash flow will be positive in 2023 due
to a reduction in inventories but be up to $15 million negative in
2024 despite expected EBITDA margin improvement during the year as
FXI's volumes begin to stabilize and recent pricing and cost saving
initiatives offset the impact of inflationary pressures on input
costs. The company has adequate liquidity due to available capacity
on the undrawn $235 million asset-backed loan facility, which
Moody's sees as ample to fund seasonal working capital outlays and
large semiannual interest rate payments. Balance sheet cash is
currently minimal and the company will likely be reliant on the ABL
to fund cash needs.
Moody's believes the proposed transaction provides flexibility and
time to navigate the challenges brought about by the adverse
current market conditions and execute its strategies to improve
operating performance and cash flow generation.
The exchange offer that was presented to lenders remains in initial
stages and Moody's views and rating actions may change if the terms
of the transaction change. FXI is proposing to exchange each $1,000
of 2024 note principal at par for a $60 cash payment and $940 of
new 12.25% senior secured notes due 2026. The company also plans a
consent solicitation to remove most covenant and default
protections and release the collateral on the existing 2024 notes.
The company's private equity owners expect to inject $50 million of
equity to fund the cash payment to noteholders as well as the $40
per note consent solicitation fee. The equity contribution is
credit positive because it demonstrates equity holder support and
will fund modest debt reduction.
RATINGS RATIONALE
FXI's Caa2 CFR reflects the company's unsustainably high leverage,
weak free cash flow, and declining profitability that increases the
likelihood of a distressed exchange or other default. Moody's sees
liquidity as adequate to address cash needs over the next year
mainly due to ample external capacity on the revolver but internal
cash and cash generation is minimal. FXI operates in cyclical
automotive, mattress, and furniture markets, and profitability is
sensitive to downturns in the economic cycle as consumers reduce
spending on discretionary goods. Leverage is very high (6.5x
Moody's adjusted debt-to-EBITDA for the last twelve months ending
October 3, 2022) as a result of the large debt funded acquisition
of Innocor Inc. in 2020 and recent earnings pressure. Moody's
projects debt-to-EBITDA leverage will increase further to above
7.0x over the next year. Aggressive financial policy and strategies
employed by FXI's private equity ownership creates substantial
negative governance risk. Positive factors include the company's
large scale, strong market position in the U.S. foam manufacturing
industry and good end market diversity through its retail bedding,
OEM bedding and furniture, transportation and medical & technical
segments. FXI partially mitigates earnings volatility associated
with chemical prices with its 'pass-through' contracts.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The negative outlook reflects the potential that weakening demand
and profitability could further increase leverage and weaken
operating cash flow and liquidity. Ongoing challenges in the
bedding and furniture market, and moderating but high input costs
may put incremental pressure on demand and earnings. Moody's will
consider changing the outlook to stable if the proposed exchange
offer is completed.
An upgrade would require improvement to operating performance
including consistent positive free cash flow generation, organic
revenue and margin accretion and a reduction of very high financial
leverage. The company would also need to proactively address
upcoming maturities and at a manageable interest cost to be
considered for an upgrade.
The ratings could be downgraded if end market demand weakens,
earnings decline, or liquidity weakens, which could further
increase the likelihood of a default. A decline in recovery
expectations could also lead to a downgrade.
Headquartered in Radnor, Pennsylvania, FXI is a North American
comfort technologies provider serving multiple end-markets at
scale. End-markets and applications include bedding, furniture,
comfort and acoustic applications in transportation, surgical
applicators, and filtration and industrial acoustic management. One
Rock Capital Partners LLC acquired FXI for approximately $700
million in 2017 and the company acquired Innocor Inc. for roughly
$950 million in February 2020. Following the merger, One Rock owns
approximately 74% and Bain owns approximately 26% of the company.
Revenue was approximately $1.55 billion for the twelve months
ending October 2, 2022.
GARUDA HOTELS: Wins Interim Cash Collateral Access Thru May 25
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of New York
authorized Garuda Hotels, Inc. and Welcome Motels II, Inc. to use
cash collateral on an interim basis through May 25, 2023, in
accordance with the budget, with a 10% variance, and provide
adequate protection.
Absent further Court order or written consent of RSS Comm 201-LC15
Y GHI LLC, no payments of cash collateral will be made to insiders
or affiliates including a salary to Jay Bramhandkar, on and after
August 1, 2022.
The Debtors acknowledge RSS holds a duly perfected senior security
interest in all of their personal property, including the proceeds
thereof, by virtue of a Mortgage Note in the original principal
amount of $7,970,000, secured by, among other things, liens on the
Debtors' real and personal property pursuant to a Loan Agreement,
Mortgage and Assignment of Rents, each dated February 28, 2014, and
UCC-1 Financing Statements filed in connection therewith.
The Court said that, in addition to the existing rights and
interests of RSS and for the purpose of adequately protecting RSS
from diminution in value of the Collateral, RSS is granted
replacement liens in the cash collateral, to the extent the liens
were valid, perfected and enforceable as of the Petition Date and
in the continuing order of priority of the Pre-Petition Liens
without determination as to the nature, extent and validity of said
pre-petition liens and claims, and solely to the extent Collateral
Diminution occurs during the Bankruptcy Cases.
The replacement liens are subject to: (i) any United States Trustee
fees incurred by the Debtors pursuant to 28 U.S.C. Section 1930 and
interest thereon pursuant to 31 U.S.C. Section 3717; (ii) the
payment of any claim of any subsequently appointed Chapter 7
Trustee to the extent of $10,000; and (iii) estate causes of action
and the proceeds of any recoveries of estate causes of action under
Chapter 5 of the Bankruptcy Code. No portion of the cash collateral
may be used to challenge, attack or otherwise seek to avoid RSS's
liens under chapter 5 of the Bankruptcy Code or applicable
non-bankruptcy law.
As additional adequate protection, the Debtors will pay to RSS
monthly payments of interest-only, at the contract (non-default)
rate of interest (per diem of $1,056), as set forth in the RSS Loan
Documents.
To the extent the Replacement Liens fail to adequately protected
RSS for the diminution in the cash collateral, RSS reserves all
rights to request allowance of a superpriority administrative
expense claim to the extent provided in 11 U.S.C. section 507(b),
subject only to the Carve-Outs.
The Replacement Liens and security interests granted are
automatically deemed perfected upon entry of the Order without the
necessity of RSS having to take possession, file financing
statements, mortgages or other typical security documents.
The Debtors' authorization to use cash collateral will immediately
terminate without further Court Order on the earlier of: (a) May
25, at 5 p.m. EST; (b) the entry of and order granting any party
relief from the automatic stay with respect to any property of the
Debtors in which RSS claims a lien or security interest, whether
pursuant to this Order or otherwise; (c) the entry of an order
dismissing the Bankruptcy Cases or converting the proceedings to
cases under Chapter 7 of the Bankruptcy Code; (d) the entry of an
order confirming a plan or plans of reorganization; or (e) the
entry of an order by which the Order is reversed, revoked, stayed,
rescinded, modified or amended without the consent of RSS thereto.
A further hearing on the matter is scheduled for May 25 at 11:30
a.m.
A copy of the order is available at https://bit.ly/3yQepWl from
PacerMonitor.com.
About Garuda Hotels, Inc.
Garuda Hotels, Inc. is the operator of a Country Inn and Suites
Hotel and owns the real property upon which the hotel is located at
110 Danby Road, Ithaca, NY.
Welcome Motels II, Inc. is the operator of an Econolodge Hotel and
owns the real property upon which the hotel is located at 2303
Triphammer Road, Ithaca, NY.
Garuda Hotels, Inc. and Welcome Motels II, Inc. sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D.N.Y. Case
Nos. 22-30296 and 22-30296) on May 13, 2022.
In the petitions signed by Jay Bramhandkar, their president, each
of the Debtors disclosed up to $10 million in both assets and
liabilities.
Judge Wendy A. Kinsella oversees the cases.
Erica Aisner, Esq., at Kirby Aisner & Curley LLP is the Debtors'
counsel.
GCI LLC: S&P Raises Senior Unsecured Debt Rating to 'B+'
--------------------------------------------------------
S&P Global Ratings today raised its issue-level rating on GCI LLC's
senior unsecured debt to 'B+' from 'B' and revised the recovery
rating to '4' from '5'. The '4' recovery rating indicates its
expectation of average (30%-50%) recovery for lenders in the event
of a payment default.
The revision of S&P's recovery rating reflects the company's
pay-down of senior secured bank debt over the last 12 months and
its expectation of continued debt repayment over the intermediate
term. All other ratings on GCI, including the 'B+' issuer credit
rating, are unaffected.
RECOVERY ANALYSIS
Key analytical factors:
-- S&P's simulated default scenario envisions a sharp decline in
GCI's revenue and EBITDA due to lower oil prices, which contribute
to a steep recession in Alaska, combined with increased competition
in the wireless segment that leads to pricing pressure and
continued subscriber losses.
-- S&P values the company on a going-concern basis using a 5.5x
multiple of its projected emergence EBITDA, comparable with the
multiples we use for its peers in the telecom industry.
Although parent Liberty Broadband Corp. holds a substantial equity
investment in Charter Communications, S&P does not include this in
its default valuation, because the assets are not pledged to GCI.
Simulated default assumptions:
-- Simulated year of default: 2027
-- EBITDA at emergence: $180 million
-- EBITDA multiple: 5.5x
Simplified waterfall:
-- Gross recovery value: $990 million
-- Net enterprise value (after 5% administrative costs): $940
million
-- Collateral value available to secured creditors: $940 million
-- Senior secured debt: $734 million
--Recovery expectations: 90%-100% (rounded estimate: 95%)
-- Total value available to unsecured claims: $205 million
-- Senior unsecured debt claims: $643 million
--Recovery expectations: 30%-50% (rounded estimate: 30%)
ESG credit indicators: E-2, S-2, G-2
GLOBAL MIXED: Seeks to Use $16,000 of Cash Collateral
-----------------------------------------------------
Global Mixed Martial Arts Academy, LLC asks the U.S. Bankruptcy
Court for the Northern District of Florida, Gainesville Division,
for authority to use $16,000 of cash collateral conditioned on the
provision of adequate protection.
The U.S. Small Business Administration holds a first priority
perfected lien on all of the Debtor's cash collateral.
On February 28, 2023, the Court entered an order granting the
Debtor's motion to use cash collateral on an interim basis and
continuing the hearing on the Motion to March 21.
The Debtor had been unable to find the attorney who would represent
the SBA in this matter prior to the initial hearing. On March 6,
counsel to the Debtor was provided with contact information for the
attorney who had been assigned to the case, Edmund Tom, and sent
Mr. Tom an email providing him with a copy of the Order authorizing
use of cash collateral and also the notice of the continued
hearing.
On March 17, Mr. Tom called the Debtor's counsel regarding the
request. The Debtor's counsel advised Mr. Tom the Debtor needed an
additional $1,500, for a total of $16,500 for operations for the
next 30-day period. Mr. Tom stated this would be acceptable.
The Debtor has since revised this projection and requests the use
of an additional $1,000, or a total of $16,000 for the next 30
days. The Debtor had to hire an electrician to perform some
unexpected repairs.
A copy of the motion is available at https://bit.ly/3TuYzdb from
PacerMonitor.com.
About Global Mixed Martial Arts Academy, LLC
Global Mixed Martial Arts Academy, LLC provides training services
in specialized areas of martial arts. The primary source of revenue
is from memberships fees. The Debtor sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Fla. Case No.
23-10029) on February 21, 2023. In the petition signed by Jason R.
Dodd, its president, the Debtor disclosed up to $50,000 in assets
and up to $500,000 in liabilities.
Judge Karen K. Specie oversees the case.
Lisa C. Cohen, Esq., at Ruff & Cohen, P.A., represents the Debtor
as legal counsel.
GRADE A HOME: Starts Subchapter V Case to Stop Foreclosure
----------------------------------------------------------
Grade A Home LLC filed for chapter 11 protection in the Southern
District of Texas. The Debtor elected on its voluntary petition to
proceed under Subchapter V of chapter 11 of the Bankruptcy Code.
The Debtor owns and manages two residential properties in the Braes
Bayou
neighborhood of Houston, Texas. Both of the Properties are subject
to residential lease agreements and are generating rental income.
The financial distress of Grade A Home was precipitated by
unanticipated repairs
and vacancies. Grade A Home was successfully closed on the sale of
one of its Properties but unable to sell the remaining two
Properties as the Properties were undergoing renovations and
repairs. As a result of the vacancies and repair costs, the Debtor
defaulted under its obligations to its secured lender, Toorak
Capital Partners, LLC who posted the Properties for a March
foreclosure date.
According to court filings, Grade A Home 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 teleconference meeting of creditors under 11 U.S.C. Section
341(a)is slated for April 11, 2023 at 9:00 a.m. at the Office of
U.S. Trustee in Houston, Texas.
About Grade A Home
Grade A Home LLC sought protection under Subchapter V of Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-30798) on
March 6, 2023. In the petition signed by Muhammad Amir Sharif,
member, the Debtor disclosed up to $10 million in both assets and
liabilities.
Melissa A Haselden has been appointed as Subchapter V trustee.
Suan Tran Adams, Esq., at Tran Singh, LLP, represents the Debtor.
GRADE A HOME: Wins Cash Collateral Access Thru July 31
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Grade A Home, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 15% variance, through July 31, 2023.
The Debtor requires the use of the cash collateral of Toorak
Capital Partners, LLC to continue its ordinary course business
operations and maintain the value of its bankruptcy estate.
As adequate protection, Toorak is granted valid and perfected
additional and replacement security interests in, and liens upon
the Debtor's assets.
To the extent of the aggregate Diminution of Value, if any, of its
interest in the cash collateral, Toorak is granted, in addition to
claims under 11 U.S.C. section 503, an allowed superpriority
administrative expense claim pursuant to 11 U.S.C. section 507(b).
The Adequate Protection Liens are subject and subordinate to a
carve-out of funds for all fees required to be paid to: (i) the
Clerk of the Bankruptcy Court, (ii) the Office of the United States
Trustee pursuant to 28 U.S.C. section 1930(a), if any, (iii) all
reasonable fees and expenses incurred by a trustee, if any, under
11 U.S.C. section 726(b) in an amount not exceeding $15,000, and
(iv) all fees and expenses of the Subchapter V Trustee approved by
the Court, to the extent such fees and expenses are provided for in
the Budget or any subsequent budgets and allowed by Order of the
Bankruptcy Court.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3Z8FMFY from PacerMonitor.com.
The Debtor projects total reorganizational expenses, on a monthly
basis, as follows:
$4,500 for March 2023;
$4,500 for April 2023;
$4,500 for May 2023;
$4,500 for June 2023; and
$4,500 for July 2023.
About Grade A Home LLC
Grade A Home LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-30798) on March 6,
2023. In the petition signed by Muhammad Amir Sharif, member, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Eduardo V. Rodriguez oversees the case.
Suan Tran Adams, Esq., at Tran Singh, LLP, represents the Debtor as
legal counsel.
GREEN ROADS: CBD Producer Files for Chapter 11
----------------------------------------------
Green Roads Inc. filed for chapter 11 protection in the Southern
District of Florida.
Green Roads is an award-winning company that produces high-quality
wellness products using hemp-derived cannabidiol ("CBD") and other
beneficial cannabinoids. Through premium CBD oils, edibles,
softgels, capsules, topicals, coffee, and more, the Debtor seeks to
help every person find the healthiest version of themselves through
the power of plants. The Debtor is unique in that it is one of a
very small number of CBD brands that produce its own product in its
own cGMP and FDA-certified facilities.
The Debtor's headquarters are located at 601 Fairway Drive,
Deerfield Beach, Florida 33441. It leases this facility. The
Debtor manufactures its products in leased facilities located at
3345 NW 74th Avenue, Miami, Florida 33122.
As of this filing, the Debtor's products are sold in thousands of
retail locations and online at greenroads.com, with more than
30,000 five-star product reviews. The Debtor engages in extensive
lab testing for safety and quality. As a result, in addition to
its e-commerce platform, the Debtor’s web site maintains
information for the general public about the importance of lab
testing for safety and quality of CBD and how to select the right
product.
For the Debtor's most recent fiscal year, which ended on November
30, 2022, the Debtor's annual revenue on a cash basis was
$15,814,263. Approximately 55.6% of the Debtor's revenue was
derived from e-commerce sales, and approximately 44.4% was derived
from wholesale transactions on a business-to-business basis.
Notwithstanding such sales, the Debtor experienced net losses
totaling about $57.2 million, comprised of approximately $45
million in a write-off of intangible assets and approximately $12.2
million of operating losses.
Based on the Debtor's books and records, the Debtor estimates that
its total liabilities to unsecured creditors is about $5.3 million,
except for and not including disputed litigation claims.
The book value of the Debtor's current and fixed assets totals
about $6.055 million. This does not include intangible assets.
Events Leading to Chapter 11 Filing
The Debtor or predecessor entities was formed in 2013 by Laura
Fuentes and Arby Barroso. By 2021 the Debtor was the largest
privately-owned CBD company in the United States.
On June 17, 2021, The Valens Co., a Canadian company, acquired the
Debtor in a transaction with an up-front value of $40 million,
including $25.4 million in common shares of Valens and up to $14.6
million in cash, plus up to an additional $20 million in earnout
payments if certain goals were met following the closing of the
transaction. Cash payments did not meet the maximum amounts
provided for due to the Debtor's financial performance. There is
pending litigation over whether Ms. Fuentes and other founders of
the Debtor or its predecessors are entitled to the additional
earnout payments.
Valens, in turn, is a subsidiary of SNDL, Inc., a Canadian company
and the ultimate, indirect parent of the Debtor.
The Debtor's financial performance has not lived up to what was
expected at the time of the transaction with Valens. The Debtor
experiences operating losses on an annual basis, and Valens or SNDL
have had to fund some obligations of the Debtor to maintain
business operations. This includes, most recently, funding payroll
shortly before the Petition Date.
The Debtor's losses are driven by two factors. The first is
increasing competition in the CBD industry. The second is supply
chain and other stressors due to Covid-19, including that many
small retailers closed down, thereby limiting the Debtor's
distribution network. Some of this can be rectified through
operational changes, including reductions in force.
The Debtor will, at or near the Petition Date, implement
operational changes, including reductions in force, with annualized
financial benefit totaling approximately $2.3 million.
However, even with these near-term changes, the Debtor's income
statement does not support its balance sheet, and the Debtor's
Parent Entities, are unwilling to continue to fund the Debtor's
operations without a structured exit from the transaction.
Consequently, the Debtor has developed a chapter 11 exit strategy
premised on the following:
* DIP Financing: An affiliate of the Parent Entities (the
"Lender") will provide the Debtor with post-petition financing as
described more fully below (the "DIP Facility"). The DIP Facility
will be used to finance operations and a sale process (the "Sale
Process") subject to requirements and case milestones required by
the Lender. These requirements mandate a Sale Process.
* Sale Process: Pre-petition, the Debtor engaged in marketing
and identified 5 parties who may be potential purchasers of assets
but does not have an offer in hand at this point in time.
Post-petition, the Debtor intends to run a sale process that is
designed to maximize value to creditors. Based on DIP Financing
requirements, the Debtor anticipates the following timeline with
respect to the Sale Process:
-- File Bid Procedures Motion: Within seven of the Petition
Date Date of Entry of Bid Procedures Order Within 35 calendar days
of the Petition Date
-- Marketing Period: Commences Upon entry of the Bid
Procedures Order
-- Marketing Period: Ends On the ninetieth (90th) calendar
day after entry of the Bid Procedures Order
-- Auction Held: Within 7 calendar days after the conclusion
of the marketing period
-- Sale Hearing: Within 7 calendar days of the auction
* Liquidating Plan: Consequently, the Debtor presently expects
to file a liquidating plan to distribute proceeds of the Debtor's
assets in accordance with the requirements of the Bankruptcy Code.
While the Debtor may file a liquidating plan prior to conclusion of
the Sale Process, confirmation likely cannot occur until conclusion
of a sale.
According to court filings, Green Roads Inc. estimates between $1
million and $10 million in debt owed to 1 to 49 creditors. The
petition states that funds will be available to unsecured
creditors.
A telephonic meeting of creditors under 11 U.S.C. Section 341(a) is
slated for April 3, 2023 at 3:00 p.m.
About Green Roads
Green Roads Inc. is a privately-owned CBD company that supplies
natural CBD infused products.
Green Roads Inc. filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-11738) on March
6, 2023. In the petition filed by Julie Pilch, as interim chief
executive officer, the Debtor reported assets and liabilities
between $1 million and $10 million each.
The case is overseen by Honorable Bankruptcy Judge Scott M.
Grossman.
The Debtor is represented by:
Jonathan H Kaskel, Esq.
1 Alhambra Plaza
601 Fairway Drive
Deerfield Beach, FL 33441
Tel: (305) 670-4843
Email: jonanthan.kaskel@dentons.com
HALL CATTLE: Wins Interim OK to Use Cash Collateral
---------------------------------------------------
Hall Cattle Feeders, LLC sought and obtained interim authority from
the U.S. Bankruptcy Court for the Northern District of Texas to use
cash collateral and provide adequate protection.
The Debtor requires the use of cash collateral to pay operating
expenses as set forth in the budget. The Debtor says it was without
enough funds to be able to operate for 30 or more days until a
final hearing on the Motion can be held. The Debtor requires money
to meet its payroll on and pay for other indispensable purposes.
The Debtor's payroll was due to be paid on March 20, 2023,
amounting to $69,600, with IRS required matching or other
obligation of the Debtor related to payroll.
Failure timely to pay such items will require the Debtor to close
down entirely all of its operations, which will result in
irreparable injury to the Debtor and its chances for an effective
reorganization. The total amount required for these emergencies is
not less than $233,986.
The Debtor seeks to use the cash collateral deposited at Happy
State Bank in its operating account, or upon opening of the DIP
account, and accounts receivable generated by the business, all of
which are the proceeds of CFC's collateral for the credit line.
Prior to the commencement of the case, the Debtor, along with
co-debtors Dakota and Taylor Hall, entered into multiple loans with
Capital Farm Credit, which including one real estate Note in 2019;
and one line of credit in October of 2022, for up to $5 million, of
which $4.8 million was authorized and deposited prepetition.
As of March 14, 2023, the total principal indebtedness owing by the
Debtor to all creditors was approximately $7.415 million, together
with interest, costs and attorney fees.
On March 21, 2023, the Court held a hearing on the matter and ruled
that the Debtor may use cash collateral in accordance with the
budget, with a 2% variance, through April 5, 2023. The Debtor is
directed to make adequate protection payments to Capital Farm
Credit during this interim period in the amount set forth in the
Budget.
In addition to the Adequate Protection Payment and as further
adequate protection of Capital Farm Credit's interest in the cash
collateral in accordance with 11 U.S.C. sections 361, 364(c)(2),
364(e) and 363(e) and applicable law, Capital Farm Credit is
granted a replacement like kind lien and security interest in the
Debtor's postpetition accounts receivable generated by the Debtor's
operations in an amount equal to the amount of cash collateral used
in accordance with 11 U.S.C. section 361(2) in the same priority
and in the same nature, extent, and validity as such liens, if any,
existed pre-petition.
In addition, as further adequate protection of Capital farm
Credit's interest, upon the receipt of payments from customers for
care and feeding of the their cattle, the Debtor will remit such
amounts to Capital farm Credit within 24 hours of receipt of the
funds.
A further hearing on the matter is set for April 12 at 1:30 p.m.
A copy of the motion is available at https://bit.ly/3ZWGOpL from
PacerMonitor.com.
A copy of the order is available at https://bit.ly/42Jy743 from
PacerMonitor.com.
About Hall Cattle Feeders LLC
Hall Cattle Feeders LLC primarily operates in the cattle feedlots
business. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-20039) on March 14,
2023. In the petition signed by Dakota Hall, managing member, the
Debtor disclosed up to $50 million in assets and up to $10 million
in liabilities.
Van W. Northern, Esq., at Northern Legal, PC, represents the Debtor
as legal counsel.
HDIP INC: Unsecureds to be Paid in Full in Subchapter V Plan
------------------------------------------------------------
HDIP, Inc., filed with the U.S. Bankruptcy Court for the Middle
District of Florida an Amended Plan of Reorganization for Small
Business Under Subchapter V dated March 16, 2023.
The Debtor is a foreign corporation authorized to transact business
in Florida. The Debtor was incorporated in Oregon on November 14,
2011 however, it did not begin doing business in its current form
until August 2012.
Ned Matteson is the Debtor's President and Secretary, a member of
the board of directors, and the majority shareholder of the Debtor.
Pursuant to a revocable, non-exclusive, and limited at will license
from Mr. Matteson, the Debtor currently manufactures concrete
products including concrete stains, concrete sealers, concrete
armor, F1 sealers, surface cleaners, PH pencils, concrete
hardeners, polish protectors, power strippers, vertical strippers,
and polishable coating systems, which it sells through a network of
distributors throughout the United States and abroad.
After evaluating alternatives, the Debtor determined that a
Subchapter V chapter 11 filing would provide a venue in which to
effectively address its current debts and best serve the interests
of its creditors, customers, and employees. Prior to the Petition
Date, Chad Eaton and Michael Eaton (the "Eatons") filed a five
count complaint against HDIP and Mr. Matteson in the Circuit Court
of the State of Oregon for the County of Deschutes, styled Chad
Eaton and Michael Eaton v. Ned Matteson and HDIP, Inc., Case No.
20CV06601 (the "Oregon State Action").
The Debtor's cash on hand, coupled with the Secured Claim Waiver,
demonstrates that the Debtor will be able to pay the scheduled and
filed administrative, priority tax, secured, and unsecured claims
under $2,500. The Debtor's collection of accounts receivable and
sale of inventory, coupled with Mr. Matteson's guaranty of the
allowed Class 3 unsecured Claim, demonstrates that the Debtor will
be able to pay the allowed unsecured claim of the Eatons.
This Plan of Reorganization proposes to pay creditors of the Debtor
as follows: (i) payment of all allowed administrative and priority
tax claims within 120 days of the Effective Date; (ii) payment of
all allowed non-tax priority claims, if any, within 30 days of the
Effective Date; (iii) a waiver by Mr. Matteson of his right to a
distribution on account of his secured claim (the "Secured Claim
Waiver"); (iv) payment in full of allowed Class 4 unsecured claims
under $2,500 within 30 days of the Effective Date; (v) payment in
full of the Eatons' allowed $115,000 claim pursuant to the
Settlement Agreement; (vi) assumption and assignment by Mr.
Matteson of the lease obligations; and (vii) cancelation of all
equity interests in the Debtor and issuance of 100% of new equity
in the Reorganized Debtor to Mr. Matteson.
Class 3 consists of all non-priority unsecured claims allowed under
§ 502 of the Bankruptcy Code in the amount of $2,500 or less. The
Debtor shall pay the holders of allowed unsecured claims in the
amount of $2,500 or less in full within 30 days of the Effective
Date. There are three filed Class 3 claims: FPL in the amount of
$443.83, the Internal Revenue Service in the amount of $149.55, and
Cellco Partnership d/b/a Verizon Wireless in the amount of
$2,347.89. Class 3 is Unimpaired and is not entitled to vote to
accept or reject the Plan.
Class 4 consists of the unsecured claim of Michael and Chad Eaton,
which shall be allowed in the amount of $115,000 pursuant to the
Settlement Agreement. The Eatons shall have an allowed Class 4
Unsecured Claim in the amount of $115,000 which shall be paid as
follows: (a) the sum of $15,000 (the "Initial Installment") shall
be paid within 3 days after the later of the entry of a final order
approving the Settlement Agreement and a final order confirming the
Plan; and (b) the $100,000 balance shall be paid in 8 equal monthly
installments in the amount of $11,111.11 and one final installment
in the amount of $11,111.12, commencing 30 days after the Initial
Installment and continuing on the same day each month thereafter.
Class 4 is Impaired by the Plan.
Class 5 consists of Equity Interests. All equity interests in the
Debtor shall be cancelled on the Effective Date, and 100% of the
equity interests in the Reorganized Debtor shall be issued to Mr.
Matteson in consideration for the Secured Claim Waiver. Consistent
with the cancellation of the Eatons' interests in the Debtor as of
the Effective Date, the Eatons shall execute a 1377 election, and
such other documents requested by the Debtor or Mr. Matteson.
Payments required under the Plan will be funded from (i) existing
cash on hand on the Effective Date, (ii) collection of accounts
receivable, (iii) the sale of inventory, (iv) the liquidation of
other assets, and (v) contributions by Mr. Matteson, if necessary
and in accordance with the Settlement Agreement.
A full-text copy of the Amended Plan dated March 16, 2023 is
available at https://bit.ly/3TyX25Q from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Amy Denton Mayer, Esq.
Stichter Riedel Blain & Postler, P.A.
110 East Madison Street, Suite 200
Tampa, FL 33602
Phone: (813) 229-0144
Email: amayer@srbp.com
About HDIP Inc.
HDIP, Inc. currently manufactures concrete products including
concrete stains, concrete sealers, concrete armor, F1 sealers,
surface cleaners, PH pencils, concrete hardeners, polish
protectors, power strippers, vertical strippers, and polishable
coating systems, which it sells through a network of distributors
throughout the United States and abroad.
The Debtor sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-03610) on Sept. 2,
2022, with up to $500,000 in both assets and liabilities.
Judge Roberta A. Colton oversees the case.
Amy Denton Mayer, Esq., at Stichter Riedel Blain & Postler, P.A.
and Kerkering Barberio & Co. serve as the Debtor's legal counsel
and accountant, respectively.
HISTORIA INSPIRED: Seeks Cash Collateral Access
-----------------------------------------------
Historia Inspired LLC asks the U.S. Bankruptcy Court for the
Western District of Pennsylvania for authority to use cash
collateral.
There are four UCC Financing Statements filed with the State of
Pennsylvania with respect to the assets of the Debtor that have not
been terminated.
The four recorded UCC Financing Statements with respect to the
Debtor's assets are:
a) File Number 2021061502131 filed on June 15, 2021 by Vox
Funding, LLC. The Debtor believes that the underlying debt of Vox
Funding, LLC was paid in full prior to the Chapter 11 case filing
but that the UCC Financing Statement has not been terminated or
marked satisfied by the creditor.
b) File Number 2021061502236 filed on June 15, 2021 by Vox
Funding, LLC. The Debtor believes that the underlying debt of Vox
Funding, LLC was paid in full prior to the Chapter 11 case filing
but that the UCC Financing Statement has not been terminated or
marked satisfied by the creditor.
c) File Number 2022050901689 filed on May 9, 2022 by CHTD
Company. The Debtor's counsel believes that CHTD Company is an
agent for one of the Debtor's creditors but no actual creditor is
listed on the UCC Financing Statement and it is impossible to
determine which creditor this UCC Financing Statement refers to.
e) File Number 20221201069604 filed on December 1, 2022 by
Corporation Service Company, as Representative. The Debtor's
counsel believes Corporation Service Company is an agent for one of
the Debtor's creditors but no actual creditor is listed on the UCC
Financing Statement and it is impossible to determine which
creditor this UCC Financing Statement refers to.
The Debtor also requests that the Court conduct an expedited
hearing as it will be unable to operate their business without the
use of cash collateral.
About Historia Inspired LLC
Historia Inspired LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. Pa. Case No. 23-10126) on March
16, 2023. In the petition signed by Ronald Mattocks, as member, the
Debtor disclosed up to $50,000 in assets and up to $500,000 in
liabilities.
Christopher M. Frye, Esq., at Steidl & Steinberg, P.C., represents
the Debtor as legal counsel.
HOUGHTON MIFFLIN: Fitch Affirms LongTerm IDR at 'B', Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed Houghton Mifflin Harcourt Company's
Long-Term Issuer Default Rating (IDR) at 'B' and first lien credit
facilities at 'B+'/'RR3'. Fitch has also assigned Harbor Holding
Corp. a 'B' Long-Term IDR. The Rating Outlook is Stable.
On Jan. 10, 2023, Houghton Mifflin Harcourt announced it had
entered into a definitive agreement to acquire NWEA, a U.S.
not-for-profit provider of interim and summative student
assessments and professional learning and school improvement
services. Houghton Mifflin Harcourt has not disclosed any terms,
including the purchase price or financing sources, and is expected
to do so after receiving required regulatory approvals (expected
within 90 days of the transaction's announcement). The transaction
is expected to close during 1H23.
Fitch views the proposed NWEA acquisition positively as it will
expand Houghton Mifflin Harcourt's assessment product set, while
offering significant operating benefits. However, because the
proposed acquisition's funding sources have not been finalized and
it has not yet received regulatory approval, Fitch excludes NWEA
from its assumptions and this current rating discussion. Fitch
expects to revisit Houghton Mifflin Harcourt's rating once all NWEA
transaction terms have been finalized, primarily funding sources,
and the transaction receives required regulatory approval.
KEY RATING DRIVERS
Veritas Capital Acquisition: On April 7, 2022, the private equity
firm Veritas Capital completed its acquisition of Houghton Mifflin
Harcourt for total consideration of $3.2 billion, or 14x
Fitch-calculated adjusted LTM ended March 31, 2022 EBITDA of $229
million (Fitch's EBITDA is after pre-publication costs). The
transaction was financed with a $1.870 billion of debt and $1.250
billion in sponsor equity. Simultaneous with the closing, HMHC
entered into a new $250 million first lien revolving credit
facility ($0 outstanding at Sept. 30, 2022.)
Elevated Leverage: As a result of the acquisition, Fitch downgraded
Houghton Mifflin Harcourt's Long-Term IDR to 'B' from 'B+' due to
the substantial increase in Fitch-calculated FFO adjusted leverage
to 6.9x from 1.4x. Prior to its acquisition, Houghton Mifflin
Harcourt made debt prepayment an important part of its capital
allocation strategy, allocating FCF and asset sale net proceeds,
primarily from its Books & Media segment for $349 million in 2021,
to debt prepayment.
Fitch does not believe debt prepayment will remain a priority at
Houghton Mifflin Harcourt under new ownership. While
Fitch-calculated leverage is expected to decline over the rating
horizon, the decline will be driven by EBITDA improvement including
the benefit of expected standalone cost savings, a significant
portion of which have already been realized. While Fitch believes
future expected savings are largely attainable, its rating case
assumes a blend of expense realization success for each category,
generating an aggregate realization of approximately 89% of the
mid-point of expected cost savings. Neither Fitch nor the company
included any revenue synergies in their calculations.
Coronavirus Impact and Post-Pandemic Outlook: The pandemic's effect
on state budgets was muted by several rounds of direct and indirect
federal stimulus injections, with more than $235 billion directly
allocated to education during 2020 and 2021. The American Rescue
Plan (ARP) provides $350 billion of direct aid to both state and
local governments, including $130 billion for K-12 schools, easing
the burden on both state and local governments. Fitch notes that
during prior periods of economic stress, K-12 adoptions were rarely
cancelled or even delayed (if they were delayed, it was only for
one year).
State governments typically fund approximately 45% of local K-12
education content purchases and depend on sales and/or income tax
for revenue. While local governments were less affected by the
pandemic's economic dislocation as they derive varying portions of
their revenues from property taxes, they were responsible for
funding school safety measures, including establishing and
maintaining remote learning infrastructure.
Midcycle Adoption Calendar: K-12 educational spending is primarily
funded by state and local governments. The current adoption
calendar is more in line with a midcycle adoption level over the
next few years. 2018 was a cyclical trough for K-12 adoptions in
the U.S., leading to a material reduction in earnings for that
period, 2019 marked the start of a stronger adoption calendar.
Digital Transition: Houghton Mifflin Harcourt is experiencing
increased customer usage of its digital core curriculum platform as
teachers and students pivot to virtual learning as a result of the
pandemic, which accelerated K-12 education's pre-existing trend of
digitization. Digital currently makes up 41% of Houghton Mifflin
Harcourt's billings on an LTM basis and has increased recurring
revenues due to the one-time, specific usage of that content and
required annual repurchases.
The unprecedented and widespread school shutdowns underscore the
importance of K-12 digital learning and are likely to drive
improved device-to-student ratios and accelerate the shift to
digital-based learning. An accelerated transition to digital, or a
"digital first" approach by schools and districts, could foster
improved gross margins as the reliance on annual production and
distribution of printed materials decreases. The shift to digital
has increased the number per student to a one-to-one ratio while
simultaneously increasing recurring revenue streams. Fitch notes
that a shifting emphasis on digital products was a part of Houghton
Mifflin Harcourt's strategy prior to the onset of the pandemic.
Competitive Market: Houghton Mifflin Harcourt competes with various
other publishers across the K-12 education core instruction market,
which the company estimates to total approximately $10 billion, and
offers a broad portfolio of core, supplemental, intervention and
services instructional material. The company, together with Savvas
Learning and McGraw-Hill, are the largest core curriculum
providers, and Fitch believes all three collectively hold more than
80% of the core market. Market share can fluctuate in any given
adoption cycle as publishers trade territory. Operational missteps,
such as failure to gain state approval, can leave publishers open
to losses in market share in any given adoption cycle.
Fitch notes Houghton Mifflin Harcourt has made several positive
changes to its credit profile, most notably the switch to an
incremental content investment policy that reduces volatility in
FCF generation.
DERIVATION SUMMARY
Houghton Mifflin Harcourt is well positioned in the domestic K-12
core education and supplemental learning markets and is one of the
top three K-12 instructional material market publishers. Houghton
Mifflin Harcourt has completed re-investment in its core
instructional educational material following a period of
operational weakness that has resulted in improved market share, as
evidenced by recent state adoptions. Fitch expects K-12 education
publishers to benefit from the adoption market in 2024-2026,
including opportunities in Florida, California and Texas, which
represent the largest adoption states and drive a significant
portion of the adoption cycle.
McGraw-Hill Education, Inc. (MHE; B+/Stable), Houghton Mifflin
Harcourt's closest Fitch-rated peer has greater scale and
marketplace positioning. Additionally, MHE has enhanced revenue
diversity, owing to MHE's focus on both the K-12 and higher
education markets compared to Houghton Mifflin Harcourt's focus on
the K-12 market.
KEY ASSUMPTIONS
The Fitch Rating Case Incorporates the Following Assumptions:
- For 2022 low single digit revenue declines driven primarily by a
change in literacy content requirements, and the company is in the
process of updating its literacy content offering. Thereafter,
revenues grow by mid-single digits driven by upcoming adoptions,
continued growth in supplemental revenues and successful
implementation of new literacy content.
- EBITDA margins are expected to continue to improve over the
rating horizon due to the top line improvements and the realization
of expected standalone cost savings (Fitch expects Houghton Mifflin
Harcourt will realize 89% of the mid-point of its total expected
cost savings). Fitch also includes the continued roll-out of
Houghton Mifflin Harcourt's incremental content investment policy
and digital conversion strategy resulting in an improved cost
structure (versus printed services) and better EBITDA margins over
the long term.
- Mid-single digit annual capital intensity percentage.
- Annual tuck-in acquisitions.
- Slight growth in changes in deferred revenues per year to reflect
a more stable digital adoption and cost structure.
- No additional debt prepayments beyond required amortization.
KEY RECOVERY RATING ASSUMPTIONS
The recovery analysis assumes Houghton Mifflin Harcourt would be
reorganized as a going-concern in bankruptcy rather than
liquidated.
Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
Houghton Mifflin Harcourt's recovery analysis assumes significant
K-12 adoptions delays followed by market share loss, driven by an
inability to win enough upcoming adoptions, pressuring margins. The
post-reorganization GC EBITDA of $180 million is based on Fitch's
estimate of Houghton Mifflin Harcourt's average EBITDA over a
normal cycle as adjusted for post-acquisition synergies and the
ongoing digital transformation that offers an improved margin
(versus its printed business), which have permanently reset the
company's cost structure.
The enterprise value (EV) multiple of 6.0x incorporates the
following information:
- Median multiple for TMT companies: The median TMT multiple of
reorganization EV/forward EBITDA was 6.0x for the 60 cases for
which there was adequate information to make an estimate. Most
(62%) were in the 4.0x-7.0x range. However, 17 companies were
reorganized at multiples of 7.1x or higher, and six below 4.0x. The
broadcasting and media sector median multiple was 6.2x, compared
with 5.3x and 5.2x for small samples of Technology and Telecom
cases, respectively;
- 2012 Bankruptcy: Following the global financial crisis and
economic downturn in 2008, Houghton Mifflin Harcourt began to
experience operational performance weakness. The company
experienced substantial revenue declines in 2011, largely due to
recession-driven decreases in adoption, open territory and
supplemental spending. Significant supplemental purchase deferrals
in key adoption states coupled with purchase cancellations led to
material reductions in the overall size of the key K-12 market. A
lack of federal stimulus support caused the debtors' financial
outlook to become increasingly negative.
The company filed for Chapter 11 Bankruptcy on May 21, 2012 and
eventually emerging at a 4.9x multiple. Fitch's GC multiple
estimate of 6.0x is influenced by Fitch's belief that Houghton
Mifflin Harcourt has made significant strides in reducing
cyclicality in its business model though its transition to a more
digital model and reduced volatility in plate capex spend;
- Veritas Capital acquired Houghton Mifflin Harcourt in 2022 for
total consideration of $3.2 billion, or 14x Fitch-calculated
adjusted LTM ended March 31, 2022 EBITDA of $229 million. Fitch's
EBITDA is after pre-publication costs.
- Peer Multiples: The closest Fitch-rated peer to Houghton Mifflin
Harcourt is McGraw-Hill, which incorporates a multiple of 7.0x into
its recovery. Fitch believes McGraw-Hill benefits from higher
revenue diversity and greater scale, warranting the higher
multiple.
Fitch assumes a full draw Houghton Mifflin Harcourt's $250 million
asset-backed revolving credit facility as well as $1.480 billion in
first lien term loans and $390 million in second lien term loans.
Fitch does not rate the second lien debt. Assuming $180 million in
recovery EBITDA and a 6.0x emergence multiple leads to a recovery
of 'RR3' on the first lien debt. Applying standard notching
criteria to the 'B' LT IDR leads to a 'B+' first lien rating. Fitch
does not rate the second lien facility.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch-calculated FFO total leverage below 5.5x with the
expectation it can be sustained at that level through cyclical
adoption troughs.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Fitch-calculated FFO total leverage exceeds 7.0x without a
commitment to reduce leverage within 18-24 months;
- Sustained negative FCF with the expectation of negative cash flow
into cyclical industry improvement.
LIQUIDITY AND DEBT STRUCTURE
Houghton Mifflin Harcourt's liquidity is adequate, with $270
million in cash and full availability under its $250 million
revolver, which matures in April 2027. Expect for $15 million of
annual bank amortization, the company's remaining maturities occur
in April 2029 when it's $1.48 billion first lien secured term loan
matures and April 2030 when its $390 million second lien secured
term loan matures. Fitch-calculated pro forma FFO adjusted leverage
was 6.6x at Sept. 30, 2022, down from 6.9x at the Veritas
acquisition's closing. Pro forma adjustments are the add back of
annualized realized cost savings and one-time acquisition-related
expenses.
ISSUER PROFILE
Houghton Mifflin Harcourt is a leading global provider of K-12 core
curriculum, supplemental and intervention solutions and
professional learning services. The company serves more than 50
million students and three million educators in 150 countries.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Harbor Holding
Corp. LT IDR B New Rating
Houghton Mifflin
Harcourt Company LT IDR B Affirmed B
senior secured LT B+ Affirmed RR3 B+
IBIO INC: Has No Cash Deposits at Silicon Valley Bank
-----------------------------------------------------
iBio, Inc. informed investors that it does not hold cash deposits
or investment securities at Silicon Valley Bank.
About iBio Inc.
iBio, Inc. -- http://www.ibioinc.com-- develops next-generation
biopharmaceuticals using computational biology and 3D-modeling of
subdominant and conformational epitopes, prospectively enabling the
discovery of new antibody treatments for hard-to-target cancers and
other diseases.
iBio reported a net loss attributable to the Company of $50.30
million for the year ended June 30, 2022, a net loss attributable
to the Company of $23.21 million for the year ended June 30, 2021,
a net loss attributable to the company of $16.44 million for the
year ended June 30, 2020, and a net loss attributable to the
Company of $17.59 million for the year ended June 30, 2019. As of
Dec. 31, 2022, the Company had $51.80 million in total assets,
$32.98 million in total liabilities, and $18.82 million in total
stockholders' equity.
Holmdel, New Jersey-based CohnReznick LLP, the Company's auditor
since 2010, issued a "going concern" qualification in its report
dated Oct. 11, 2022, citing that the Company has suffered recurring
losses from operations and negative cash flows from operating
activities for the years ended June 30, 2022 and 2021 and has an
accumulated deficit as of June 30, 2022. These matters, among
others, raise substantial doubt about its ability to continue as a
going concern.
IMMANUEL SOBRIETY: Court OKs Interim Cash Collateral Access
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Riverside Division, authorized Immanuel Sobriety Inc. to use cash
collateral on an interim basis in accordance with the budget.
As previously reported by the Troubled Company Reporter, the Debtor
requires the use of cash collateral to continue its business
operations, including payroll for its employees, and avoid
irreparable harm to the Debtor's business and ability to
reorganize.
In response to the Debtor's substantial cash flow issues, the
Debtor entered into accounts receivable financing agreements
(merchant loans) in order to pay its expenses and keep its doors
open. The Debtor entered into merchant agreements with four
merchant lenders and received cash advances totaling approximately
$270,000. While the Debtor was able to service the merchant loans
for a period of time, it eventually was unable to sustain the loan
payments. The Debtor realized its current financial state was not
sustainable, including, but not limited to its inability to
simultaneously maintain its current payroll expenses, monthly lease
payments and service the merchant loans.
As adequate protection, the Debtor proposed that secured creditors
are granted replacement liens, to the extent of any diminution of
cash collateral arising from the use of cash collateral by the
Debtor, upon all post-petition assets of the Debtor's bankruptcy
estate, to the same extent, validity and priority of the secured
creditors' pre-petition liens and security interests in the
Debtor's assets. The replacement liens are deemed duly perfected
and recorded under all applicable laws without the need for any
notice or filings.
A final hearing on the matter is set for April 11, 2023, at 1:30
p.m.
About Immanuel Sobriety Inc.
Immanuel Sobriety Inc. provides drug and alcohol rehabilitation
programs and treatment services. The Debtor sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No.
23-10806) on March 2, 2023. In the petition signed by Elizabeth
Reid, chief executive officer, the Debtor disclosed up to $500,000
in assets and up to $1 million in liabilities.
Judge Wayne Johnson oversees the case.
The Law Office of Crystle J. Lindsey represents the Debtor as legal
counsel.
INDEPENDENT PET: Main Street Marks $18.4M Loan at 59% Off
---------------------------------------------------------
Main Street Capital Corporation has marked its $18,428,000 loan
extended to Independent Pet Partners Intermediate Holdings, LLC to
market at $7,633,000 or 41% 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 to Independent Pet
Partners Intermediate Holdings, LLC. The loan accrues interest at a
rate of 6% (6% Payment In Kind) per annum. The loan matures on
November 20, 2023.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
Independent Pet Partners (IPP) is a digital, retail, educational
and services platform for holistic pet wellness comprised of two
independent brands: Chuck & Don's and Kriser's Natural Pet.
INGRAM MICRO: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has assigned its 'BB-' Long-Term Issuer Default
Rating (IDR) to Ingram Micro Holding Corporation (IMHC) and
affirmed Ingram Micro, Inc.'s (IMI) IDR at 'BB-'. Fitch is
assigning the rating to IMHC because this entity is the parent of
IMI and is the financial statement filer effective as of YE 2022.
IMHC and IMI are collectively referred to as Ingram.
Fitch has also affirmed the 'BB+'/'RR1' ratings on Ingram's
outstanding $3.5 billion asset-based loan (ABL) revolving credit
facility (RCF), and the 'BB+'/'RR2' issue ratings on Ingram's $2
billion term loan B and $2 billion senior secured notes.
Fitch has withdrawn the issue rating on Ingram's previously
outstanding $500 million ABL term loan, which was repaid in April
2022.
KEY RATING DRIVERS
Market Leadership and Scale: Ingram is the second largest global
technology distributor, offering customers and suppliers a global
footprint that optimizes logistics and enables suppliers to reach
fragmented demand. With revenues in excess of $50 billion and
operations in 61 countries, Ingram leverages its global footprint
to optimize logistics and meet demand where it exists for over 160
thousand customers. The company's market position is underpinned by
its scale, broad product portfolio with over 1,500 vendor partners,
and extensive distribution footprint.
Fitch believes the company is well positioned to adapt to the
changing technology environment, owing in-part to its Advanced
Solutions and Cloud businesses. Ingram's Advanced Solutions
business has eight Centers of Excellence, which focus on critical
and emerging technologies such as cyber security and data centers,
and is staffed with 1,000 engineers. Ingram's cloud business, while
still a small proportion of revenue, bolsters the company's ability
to adapt as technology moves to "as a service" offerings.
Financial Flexibility: Ingram possesses strong financial
flexibility, supported by its counter-cyclical FCF profile. During
periods of expansion the company invests in working capital,
resulting in cash outflows; however, this dynamic reverses during
contractionary periods meaning that sales declines typically result
in cash inflows. As a result, the company naturally de-leverages
during periods of revenue declines, though Fitch notes that there
can be a lag due to inventory building on the balance sheet and
accounts receivables extending, both of which have the potential to
cause write-downs in periods of economic contractions. Ingram has
substantial liquidity owing primarily to its $1.3 billion cash
balance and undrawn $3.5 billion ABL facility as of Dec. 31, 2022.
Elevated Leverage: Ingram's EBITDA leverage of 4.2x at year-end
2022 is elevated relative to its public peer group, but is
consistent with the rating category. Fitch expects leverage to
generally remain in the low-4x area over the next few years given
our view that EBITDA growth will be limited during this time frame.
Ingram's ownership by private equity sponsor, Platinum Equity
Partners, and its lack of a stated leverage target are constraints
to the rating given the possibility that shareholder distributions
will be prioritized over debt reduction. Although Ingram announced
that it filed for an IPO in September 2022 that Fitch believes
could result in a relinquishing of some control by Platinum and
potentially result in a more defined financial policy, it is not
clear when or if the IPO will be completed.
Challenging Industry Dynamics: The IT distribution business is
relatively consolidated with Ingram and TD Synnex representing a
significant share of the total market. Despite this, the industry
is both competitive and low-margin due to vibrant competition
between IT distributors, and the significant leverage that IT
vendors have over distributors. Certain large vendors account for a
meaningful proportion of Ingram's consolidated sales, which enables
them to influence Ingram's margins due to their substantial size.
Notably, Ingram's EBITDA margins have historically been below
2.5%.
Ingram's operating profits are subject to deterioration during
periods of stress due to declining revenues as well as the
potential for inventory write-downs associated with product
obsolescence, though FCF generally increases due to working capital
inflows. In contrast, FCF tends to be weak or negative during
periods of growth due to the substantial working capital
investments needed to fund inventory and receivables. Nevertheless,
Ingram has a solid track record of profitable growth.
Rating Linkage: There is a parent subsidiary relationship between
IMHC and IMI. Fitch determines IMHC's standalone credit profile
(SCP) based on consolidated metrics and considers IMI's SCP
stronger than IMHC. As such, Fitch has followed the stronger
subsidiary path. Legal ring fencing is open given the limited
limitations on flows between the entities. Access and control is
also open given IMHC's 100% ownership interest in IMI. Due to the
aforementioned rating linkages, Fitch rates both entities on a
consolidated credit profile with the same IDRs.
DERIVATION SUMMARY
Ingram's ratings reflect the company's defensible market position
and strong financial flexibility, which are balanced against credit
metrics that are weaker than investment-grade peers. The company
competes directly with TD SYNNEX (BBB-/Stable) as well as regional
players such as ScanSource, Inc. and ALSO Holding, which are not
rated by Fitch. Ingram also competes to a lesser extent with Arrow
Electronics (BBB-/Stable), Avnet, Inc. (BBB-/Stable)., and CDW Inc.
(BBB-/Stable).
Ingram is the second largest IT wholesale distributor, and is
moderately smaller than TD Synnex. TD Synnex has lower leverage
than Ingram (2.3x compared to 4.2x leverage at Dec. 31, 2022) and a
defined financial policy targeting leverage of 2.5x. Ingram has no
stated leverage target and is owned by a private equity sponsor,
which makes it difficult to assess the company's tolerance for
leverage over time. The rating variance between TD Synnex and
Ingram primarily reflects Ingram's higher leverage and uncommitted
financial policies. In terms of profitability, TD Synnex's 2022
EBITDA margin of around 3% is close to 50bps bps higher than
Ingram's. However, Ingram's return on capital employed is
moderately better than TD Synnex's.
Avnet and Arrow are primarily semiconductor and component wholesale
distributors and therefore do not generally compete with Ingram,
though there is some overlap in certain areas. CDW is both a
distributor and a value-added reseller (VAR), and relies on
wholesale distributors for certain products. These peers have lower
leverage than Ingram and stated leverage targets below 3.0x. In
addition, their EBITDA margins exceed that of Ingram.
KEY ASSUMPTIONS
- Muted revenue growth in 2023 due to no revenues from CLS during
the year compared to ~1 quarter of revenues in 2022, with growth
accelerating to 3% in 2024;
- Gross margin throughout the forecast slightly higher than that of
2022 margin (excel CLS), with modest growth through the forecast
period driven by a mix shift towards higher margin Advanced
Solutions and Cloud sales;
- Operating expenses generally in the 4.6% of sales area, which is
consistent with Fitch's expectation of adjusted operating expenses
excluding those associated with the CLS business;
- Assumed interest rates of 5.4% in 2023 and 5.25% in 2024;
- Cash taxes assumed at 24%;
- No M&A or shareholder distributions assumed, while debt repayment
is limited to mandatory debt amortization until 2026;
- Leverage in the low 4x area in 2023 and 2024.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- EBITDA Leverage sustained below 4.0x;
- Introduction of a formal financial policy with an explicit
leverage target consistent with a higher rating;
- Debt/ FCF sustained below 7.5x;
- (CFO-Capex)/Debt sustained above 10%
- FCF margins averaging near 1% through a cycle.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- EBITDA Leverage sustained above 4.5x;
- Debt/FCF sustained above 8.5x;
- Net Debt/(CFO-Capex) sustained below 20%;
- Sustained cash burn through a cycle.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity and Financial Flexibility: Ingram's liquidity is
ample for the rating category. As of Dec. 31, 2022, liquidity is
supported by $1.3 billion of cash and full availability under the
$3.5 billion ABL RCF. Fitch notes that Ingram typically maintains
well over $10 billion in aggregate A/R and inventory balances,
suggesting that the borrowing base provides for significant
overcollateralization and full availability on the ABL facility.
Fitch believes liquidity is further enhanced by the company's
counter-cyclical working capital profile that results in improved
FCF during a downturn, providing elevated liquidity support during
adverse macro environments. The company may also access additional
sources of liquidity, not counted in Fitch's calculation of
liquidity, including A/R factoring facilities and $1.1 billion of
credit lines that are primarily uncommitted. The company's
diversified sources of liquidity provide significant operating
flexibility with no need to access capital markets in the next 24
months.
ISSUER PROFILE
Ingram is the second largest global wholesale distributor of
Information Technology (IT) products. The company primarily
distributes IT hardware (servers, storage, PCs) as well as software
and services to VARs who then in-turn sell to end-customers. In
addition, Ingram Micro provides various fee-for-service IT and
logistics services. Ingram distributes products from 1,500+ vendors
to over 160,000 customers worldwide.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Ingram Micro
Holding
Corporation LT IDR BB- New Rating
Ingram Micro Inc. LT IDR BB- Affirmed BB-
senior secured LT BB+ Affirmed RR1 BB+
senior secured LT WD Withdrawn BB+
senior secured LT BB+ Affirmed RR2 BB+
INTERMEDIA HOLDINGS: Main Street Marks $20M Loan at 23% Off
-----------------------------------------------------------
Main Street Capital Corporation has marked its $20,467,000 loan
extended to Intermedia Holdings, Inc to market at $15,811,000 or
77% 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 to Intermedia
Holdings, Inc. The loan accrues interest at a rate of 10.38% (L+6%)
per annum. The loan matures on July 19, 2025.
Main Street classified the loan as a non-accrual and non-income
producing investment.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
Intermedia Holdings, Inc. operates as a holding company. The
Company, through its subsidiaries, provides cloud business
applications. Intermedia Holdings offers a cloud application that
integrates email, voice, backup and file sharing, identity and
access management, instant messaging, and other mobility
solutions.
ISAGENIX INTERNATIONAL: Main Street Marks $5M Loan at 70% Off
-------------------------------------------------------------
Main Street Capital Corporation has marked its $5,053,000 loan
extended to Isagenix International LLC to market at $1,537,000 or
30% 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 to Isagenix
International LLC. The loan accrues interest at a rate of 9.93%
(L+7.75%) per annum. The loan matures on June 14, 2025.
Main Street classified the Loan as a non-accrual and non-income
producing investment.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
Isagenix International LLC is a privately held multi-level
marketing company that sells dietary supplements and personal care
products. The company, based in Gilbert, Arizona, was founded in
2002 by John Anderson, Jim Cover, and Kathy Cover.
IVANTI SOFTWARE: Fitch Alters Outlook on B LongTerm IDR to Negative
-------------------------------------------------------------------
Fitch Ratings has affirmed Ivanti Software, Inc.'s Long-Term Issuer
Default Rating (IDR) at 'B'. The Rating Outlook has been revised to
Negative from Stable. Fitch has also affirmed Ivanti's $175 million
secured revolver and the $2.2 billion first lien term loan at
'BB-'/'RR2' and the $545 million second lien term loan at
'CCC+'/'RR6'. Fitch has also assigned an IDR of 'B' to Icon
Software Holdings, Inc. Ivanti Software, Inc. is the issuer of
debt.
The Negative Outlook reflects operating performance that faced
headwinds from competition and elevated employee attrition rate
during 1H22. In addition, unfavorable forex also contributed to
slower than expected revenue growth. Fitch believes recent
operating metrics suggest improving performance. Nevertheless,
credit protection metrics remains weaker than previously
projected.
KEY RATING DRIVERS
Recurring and Diversified Revenues: On a pro forma basis, the
company has a strong base of recurring revenues, representing
approximately 80% of total revenues with net retention rates near
100%. While strong, Fitch recognizes this as being weaker than
other enterprise software peers reflective of lower switching cost.
The company has over 40,000 customers and no meaningful end-market
concentration. Fitch believes the company's continued transition
towards a subscription-based model is a credit positive, as
recurring revenue and retention rates provide more visibility and
consistency regarding the company's future revenue and cash flow
streams.
Secular Tailwinds Across Business Segments: The proliferation of
"Bring Your Own Devices (BYOD)" combined with the demand for remote
working meaningfully increased cyber security concerns. The digital
transformation of customers' technology infrastructure has created
strong demand across each of Ivanti's product offerings. Fitch
expects these industry trends to support Ivanti's near- to
medium-term growth in the mid-single-digits.
Highly Fragmented and Competitive Marketplace: Ivanti operates in
highly fragmented markets across each of its products. As a result,
Fitch expects Ivanti will continue to be exposed to intense
competition, including from large players like Microsoft, Citrix,
and VMWare, that also offer solutions in this market and has the
ability to bundle and up-sell their customers at very competitive
price points. In the IT Service Management (ITSM) segment, Ivanti
competes with peers such as ServiceNow in the enterprise segment
which has strong cloud-native offerings.
Forex Exposure: Approximately 44% of Ivanti's revenue is derived
from non-U.S. dollars. This exposes the company to forex
fluctuations as demonstrated in 2022. While the company has the
ability to adjust local currency pricing in response to forex
fluctuations while maintaining competitiveness, short-term impact
in a rapidly changing forex environment should be expected. As
portion of Ivanti's cost structure is also in local currencies,
natural hedging exists to mitigate the forex impact.
Strong FCF Characteristics: In response to weaker-than-forecasted
revenue in 2022, Ivanti has initiated business optimization efforts
to improve operational efficiencies and reduce run rate by $68
million of which, 68% was executed as of 3Q22. Fitch expects these
initiates to translate to fitch-defined EBITDA margins approaching
40% range starting in 2024, in line with Ivanti's at-scale software
peers. Fitch expects the company to generate FCF margins in the
teens from fiscal 2024 onwards upon the completion of the
operational optimization.
Leverage to Remain Elevated: Fitch expects gross leverage to remain
above 7x in 2023 and below 7x in 2024, which is in line with
Ivanti's peers in the 'B' rating category. Fitch expects leverage
to remain above 6.0x over the rating horizon as the company makes
ongoing investments in technologies and products to keep pace with
the fast-moving industry, limiting its ability to delever primarily
from EBITDA growth. Private equity ownership will also limit
deleveraging as sponsors look to optimize ROE through acquisitions
and shareholder returns.
DERIVATION SUMMARY
Ivanti primarily operate in three end-markets, namely unified
endpoint management (UEM), Cyber Security, and IT Service
Management (ITSM). The broader market for endpoint security and
remote working has been growing, supported by the proliferation of
access points into secured networks, greater awareness around
security breaches and the increasing complexity of IT networks and
applications.
Ivanti is solidly positioned in the enterprise IT security and
service market among its peers given its sizeable base of recurring
revenues, strong profitability and FCF margins. However, factors
including employee attrition, competition, and forex have impeded
revenue growth during 2022. While Ivanti's revenue and EBITDA have
under-performed Fitch's previous expectations, its EBITDA margins
and FCF margins are in line with industry peers. The ratings and
outlook reflect Fitch's expectation that despite strong secular
demand for UEM and endpoint security, Ivanti's growth could be
tempered by the highly competitive landscape in its end-markets,
especially against larger software peers who also offer a
comprehensive solution.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
- Organic revenue growth in the low- to mid-single-digit range over
the rating horizon, reflecting the mix in revenues shifting from
perpetual license to subscription revenues as well as the unwinding
of the pandemic revenue benefits;
- EBITDA margins are expected to reach 40%, reflecting the full
impact of the planned cost savings;
- Normalized FCF margins in the low- to mid-teens.
KEY RECOVERY RATING ASSUMPTIONS
- The recovery analysis assumes that Ivanti would be reorganized as
a going-concern in bankruptcy rather than liquidated;
- Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
- In estimating a distressed EV for Ivanti, Fitch assumes elevated
customer churn contributing to lower revenue scale in a distressed
scenario to result in approximately 15% revenue decline leading to
a GC EBITDA that is approximately 11% lower relative to 2022 pro
forma adjusted EBTIDA. As Ivanti business model depends on the
ability to provide robust IT security, customer churn could rise in
times of distress;
- Fitch applies a 6.5x multiple to arrive at an adjusted EV of
$1.72 billion;
- The multiple is higher than the median Telecom, Media and
Technology EV multiple but is in line with the Fitch employed
multiple for other 'B'-rated software companies. In the 21st
edition of Fitch's Bankruptcy Enterprise Values and Creditor
Recoveries case studies, Fitch noted nine past reorganizations in
the Technology sector with recovery multiples ranging from 2.6x to
10.8x. Of these companies, only three were in the Software sector:
Allen Systems Group, Inc.; Avaya, Inc.; and Aspect Software Parent,
Inc., which received recovery multiples of 8.4x and 5.5x,
respectively. The 6.5x multiple is supported by Ivanti's scale,
strong margins, highly recurring revenues and strong FCF profile;
- Fitch assumes a fully drawn revolver in its recovery analysis
since credit revolvers are tapped as companies are under distress.
Fitch assumes a fully drawn on Ivanti's $175 million revolver;
- Fitch estimates strong recovery prospects for the first lien
credit facilities and rates them 'BB-'/'RR2', or two notches above
Ivanti's 'B' IDR. Fitch estimates limited recovery prospects for
the second lien term loan and rates it 'CCC+'/'RR6', two notches
below Ivanti's IDR.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Expectation of gross leverage (total debt with equity
credit/operating EBITDA) sustaining below 5.5x;
- Cash flow leverage, defined as (CFO-capex)/total debt, sustained
above 8.0%;
- EBITDA interest coverage sustaining above 3.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Expectation of gross leverage (total debt with equity
credit/operating EBITDA) sustaining above 7.0x;
- Cash flow leverage, defined as (CFO-capex)/total debt, sustained
below 5.0%;
- EBITDA interest coverage sustained below 1.5x.
Ratings could be stabilized with successful execution of
operational optimization leading to credit metrics improving to
levels that are consistent with the 'B' rating level.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: The company's liquidity is projected to be
adequate, supported by its FCF generation and a $175 million RCF
($166 million available), and readily available cash and cash
equivalent. Fitch forecasts Ivanti's FCF margins to approach 5% in
2023 and 10% in 2024 supported by EBITDA margins in the high-30%
range. Fitch assumes Ivanti will repay its $9 million outstanding
revolver balance during 2023.
Debt Structure: Ivanti's debt structure is comprised of a $175
million revolving credit facility ($9 million outstanding), first
lien term loan debt of $2.2 billion, and a second lien $545 million
term loan. The revolver, first lien term loan, second lien term
loan have maturities of 2025, 2027, and 2028, respectively. The
company has a favorable maturity schedule, with no major payments
due until maturity of each respective term loan.
ISSUER PROFILE
Ivanti Inc. is a provider of mid-market focused, enterprise-grade
intelligent IT management solutions, specifically Zero Trust
Security, Unified Endpoint Management (UEM), and Enterprise Service
Management (ESM) solutions.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3 - ESG issues are credit
neutral or have only a minimal credit impact on the entity, either
due to their nature or the way in which they are being managed by
the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Ivanti Software,
Inc. LT IDR B Affirmed B
senior secured LT BB- Affirmed RR2 BB-
Senior Secured
2nd Lien LT CCC+ Affirmed RR6 CCC+
Icon Software
Holdings, Inc. LT IDR B New Rating
JOERNS HEALTHCARE: Main Street Says Steep Discount for $4M Loan
---------------------------------------------------------------
Main Street Capital Corporation has marked its $4,034,000 loan
extended to Joerns Healthcare, LLC to market at $504,000 or 12% 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 to Joerns
Healthcare, LLC. The loan accrues interest at a rate of 19.75%
(19.75% Payment In Kind) per annum. The loan matures on August 21,
2024.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
Joerns Healthcare, LLC provides healthcare equipment and services.
The Company offers bed frames, respiratory, mattresses, lifts, and
durable medical equipment.
KCW GROUP: Case Summary & 10 Unsecured Creditors
------------------------------------------------
Debtor: KCW Group, LLC
aka The Gallery Houston
6303 Beverly Hills St
Houston TX 77057
Business Description: The Gallery is a French Mediterranean-
style event venue in Houston, Texas.
Chapter 11 Petition Date: March 22, 2023
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 23-30988
Debtor's Counsel: Julie M. Koenig, Esq.
COOPER & SCULLY, P.C.
815 Walker St.
Suite 1040
Houston, TX 77002
Tel: (713) 236-6800
Email: julie.koenig@cooperscully.com
Total Assets: $6,952,415
Total Liabilities: $2,306,780
The petition was signed by Edward Schulenburg, Jr. as managing
member.
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/GZIXIIQ/KCW_Group_LLC__txsbke-23-30988__0001.0.pdf?mcid=tGE4TAMA
KEY DIGITAL: Files for Chapter 11 Bankruptcy Protection
-------------------------------------------------------
Key Digital Systems Inc. filed for chapter 11 protection in the
Southern District of New York.
Established in 1999, the Debtor designs and engineers intuitive
digital A/V connectivity and control solutions. The Debtor
delivers reliable, super-quality, easily-implemented, versatile,
high-performance products for corporate, education, government,
house-
of-worship, bar and restaurant, digital signage and residential A/V
applications.
The Debtor designs and engineers its products in-house at its
headquarters located at 521 West 3rd Street, Mount Vernon, New York
10553, Westchester County.
Three creditors have asserted liens on certain of the Debtor's
assets in the following order, (i) JPMorgan Chase Bank N.A.; (ii)
the U.S. Small Business Administration; and (iii) Digital Hifi,
Inc.
According to court filings, Key Digital Systems estimates between
$1 million and $10 million in debt owed to 1 to 49 creditors. The
petition states that funds will be available to unsecured
creditors.
A teleconference meeting of creditors under 11 U.S.C. Section
341(a) is slated for April 6, 2023 at 1:00 p.m
About Key Digital Systems
Key Digital Systems Inc. -- http://www.keydigital.org/-- develops
and manufactures digital A/V connectivity and control technology
solutions for commercial and residential application.
Key Digital Systems sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-22176) on March 3,
2023. In the petition signed by Mikhail Tsinberg, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
The case is overseen by Honorable Bankruptcy Judge Sean H Lane.
Dawn Kirby, Esq., at Kirby Aisner & Curley LLP, is the Debtor's
legal counsel.
KREATIIVELY KREATIVE: Files Chapter 11 Bankruptcy Protection
------------------------------------------------------------
Kreatiively Kreative Inc. filed for chapter 11 protection in the
Eastern District of Texas.
The Debtor owns five separate pieces of real property each of which
is located
within the state of Texas. The Properties are either leased out or
in the process of being refurbished for resale.
The Debtor is requesting, pursuant to Rule 1007(c) of the Federal
Rules of
Bankruptcy Procedure, an order extending the time periods for the
filing of schedules, statements and other documents until close of
business on March 28, 2023.
According to court filings, Kreatiively Kreative Inc. 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 telephonic meeting of creditors under 11 U.S.C. Section 341(a) is
slated for March 31, 2023 at 11:30 a.m.
About Kreatiively Kreative Inc.
Kreatiively Kreative Inc. -- https://KREATIVELYKREATIVE -- is
engaged in activities related to real estate.
Kreatiively Kreative Inc. filed a petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 23-40420) on
March 6, 2023. In the petition filed by Johnny Robert, as director,
the Debtor reported assets and liabilities between $1 million and
$10 million.
The Debtor is represented by:
Robert DeMarco, III, Esq.
DeMarco-Mitchell, PLLC
609 S. Goliad St.
Unit 1291
Rockwall, TX 75087
Tel: (972) 578-1400
Email: robert@demarcomitchell.com
LOGIX ACQUISITION: Main Street Marks $19.6M Loan at 18% Off
-----------------------------------------------------------
Main Street Capital Corporation has marked its $19,662,000 loan
extended to Logix Acquisition Company, LLC to market at $16,221,000
or 82% 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 to Logix Acquisition
Company, LLC. The loan accrues interest at a rate of 10.13%
(L+5.75%) per annum. The loan matures December 24, 2024.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
Logix Acquisition Company, LLC is a competitive Local Exchange
Carrier.
LONGRUN PBC: Seeks to Hire Verdolino & Lowey as Accountant
----------------------------------------------------------
Longrun, P.B.C. seeks approval from the U.S. Bankruptcy Court for
the District of Massachusetts to employ Verdolino & Lowey, P.C.
The Debtor requires an accountant to prepare and file the necessary
returns and provide consulting services in connection with the
preparation of projections for its Chapter 11 plan.
Verdolino & Lowey will be paid at these rates:
Craig R. Jalbert $525 per hour
Other Professionals $175 to $525 per hour
Craig Jalbert, a partner at Verdolino & Lowey, disclosed in a court
filing that his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Craig R. Jalbert
Verdolino & Lowey, P.C.
124 Washington Street
Foxboro, MA 02035
Tel: 508-543-1720
Fax: 508-543-4114
Email: cjalbert@vlpc.com
About Longrun P.B.C.
LongRun P.B.C., doing business as LongRun LLC and Keto & Co., make
low carb food for keto dieters, diabetics, and anyone trying to eat
healthier. It is based in Belmont, Mass.
LongRun P.B.C. filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No.
23-10140) on Feb. 1, 2023, with $1 million and $10 million in both
assets and liabilities. Richard Tieken, president and chief
executive officer of LongRun P.B.C., signed the petition.
Judge Christopher J. Panos oversees the case.
The Debtor tapped Steven Weiss, Esq., at Shatz, Schwartz and
Fentin, P.C. as legal counsel and Verdolino & Lowey, P.C. as
accountant.
LOYALTY VENTURES: $30MM DIP Loan from LoyaltyOne Has Interim OK
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Loyalty Ventures Inc. and its
affiliated debtors to continue using cash collateral and obtain
postpetition financing, on an interim basis.
The Debtor is permitted to obtain senior secured postpetition
financing on a superpriority basis under an intercompany credit
facility comprised of new money delayed-draw term loans in an
aggregate principal amount not to exceed $30 million, of which (a)
up to $15 million will be available from and after entry of the
Interim Order and (b) the remainder will be available from and
after entry of the Final Order pursuant to the terms and conditions
of the Interim Order, the Final Order and the Senior Secured
Superpriority Debtor in Possession Credit Facility Term Sheet by
and among Loyalty Ventures Inc., as borrower, all other Debtors, as
guarantors, and LoyaltyOne, Co., as lender.
The Debtors have an immediate and critical need to obtain the
financing pursuant to the DIP Facility and to continue to use the
Prepetition Collateral (including Cash Collateral) in order to,
among other things, (i) pay the fees, costs and expenses incurred
in connection with the Chapter 11 Cases, including funding and
implementing a chapter 11 plan, (ii) fund any obligations
benefitting from the Carve-Out, (iii) permit the orderly
continuation of their corporate operations in the ordinary course,
(iv) make payroll and (v) satisfy general corporate needs.
The DIP Obligations will be repaid in full on the earlier to occur
of:
(i) the occurrence of any Event of Default that is continuing,
has not been cured or waived in writing by the DIP Lender (and, to
the extent any CCAA DIP Loans are outstanding at such time, Bank of
Montreal), and where the DIP Lender has notified the Borrower in
writing that the DIP Obligations have been accelerated; and
(ii) five business days after the trust established pursuant to
the Combined Disclosure Statement and Plan confirmed pursuant to
the Confirmation Order has recovered net proceeds sufficient to
satisfy the DIP Obligations in full, unless otherwise agreed by the
Borrower, the DIP Lender, the Consenting Lenders and, to the extent
any CCAA DIP Loans are outstanding at such time, Bank of Montreal,
in each case, acting reasonably. The Maturity Date may be extended
at the request of the Borrower and with the prior written consent
of the DIP Lender for such period and on such terms and conditions
as the Borrower and the DIP Lender may agree.
These events constitute an "Event of Default":
(i) Failure by the Borrower to be in compliance in all
material respects with provisions of this Term Sheet or any DIP
Order;
(ii) The filing of any application by the Borrower (other than
any application for financing provided by a third party that seeks
authority to pay all of the DIP Obligations in full in cash upon
the closing of such financing) for the approval of (or an order is
entered by the Bankruptcy Court approving) any claim arising under
Bankruptcy Code section 507(b) or any other provision of the
Bankruptcy Code or any security, mortgage, collateral interest or
other lien in its Chapter 11 Case, in each case, which is pari
passu with or senior to the DIP Liens, excluding the Carve-Out,
liens arising under the DIP Orders and/or pari passu or senior
liens expressly contemplated by the DIP Orders;
(iii) The Borrower files a pleading in any court seeking or
supporting an order to revoke, reverse, stay, vacate, amend,
supplement or otherwise modify this Term Sheet or any DIP Order, or
to disallow any DIP Obligations, in whole or in part, in each case,
without the consent of Bank of Montreal (in its capacity as the
lender under the CCAA DIP Loans);
(iv) The appointment in the Borrower's Chapter 11 Case of a
trustee, receiver, examiner, or responsible officer with enlarged
powers relating to the operation of the business of the Borrower
(powers beyond those set forth in Bankruptcy Code sections
1106(a)(3) and (a)(4));
(v) The granting of relief from the automatic stay by the
Bankruptcy Court to any other creditor or party in interest in the
Borrower's Chapter 11 Case with respect to any portion of the DIP
Collateral with an aggregate value of at least $5 million;
(vi) The conversion of the Borrower's Chapter 11 Case into a
case pursuant to chapter 7 of the Bankruptcy Code;
(vii) The termination of the Borrower's exclusive right to
propose a plan under chapter 11 of the Bankruptcy Code;
(viii) Dismissal of the Chapter 11 Case;
(ix) Subject to applicable grace and/or cure periods, failure
to pay principal, interest or other DIP Obligations in full when
due, including without limitation, on the Maturity Date; or
(x) The acceleration of the CCAA DIP Loans after the
occurrence and during the continuance of an "Event of Default" (as
defined in the CCAA DIP Loan Term Sheet) under the CCAA DIP Term
Sheet.
Pursuant to a Credit Agreement dated as of November 3, 2021 with
Loyalty Ventures Inc. and certain of its subsidiaries, as
borrowers, certain other subsidiaries of LVI, as guarantors, and
Bank of America, N.A., as administrative agent and the lenders
party thereto from time to time, the Prepetition Lenders provided
secured financing to LVI and LVI Lux Holdings S.a r.l. The
Prepetition Credit Facilities consist of: (i) a $175 million term A
loan facility; (ii) a $500 million term B loan facility; and (iii)
a revolving credit facility in the maximum principal amount of $150
million.
As of the Petition Date, pursuant to the Prepetition Credit
Documents, LVI and Debtor LVI Lux Holdings S.a r.l. were indebted
to the Prepetition Secured Parties for loans in the aggregate
principal amount of not less than $656.375 million outstanding
under the Prepetition Credit Facilities and letters of credit
issued and outstanding in the amounts of $200,000, EUR7,500,000,
and C$100,000 and, together with accrued and unpaid interest, any
fees, expenses and disbursements.
As adequate protection, the Prepetition Secured Parties are granted
valid, binding, continuing, enforceable, fully-perfected,
nonavoidable, first-priority senior, additional and replacement
security interests in and liens on (i) the Prepetition Collateral
and (ii) all of the Debtors' other now-owned and hereafter-acquired
real and personal property.
As further adequate protection, the Prepetition Secured Parties,
are granted superpriority administrative expense claims in each of
the Chapter 11 Cases ahead of and senior to any and all other
administrative expense claims in such Chapter 11 Cases to the
extent of any Diminution in Value, junior only to the Carve Out.
Subject to the Carve Out, the Adequate Protection Superpriority
Claims will not be junior or pari passu to any claims and will have
priority over all administrative expense claims and other claims
against each of the Debtors.
A final hearing on the matter is available at April 4, 2023 at 10
a.m.
A copy of the order is available at https://bit.ly/3FIOfsn from
PacerMonitor.com
About Loyalty Ventures Inc.
Headquartered in Dallas, Texas, Loyalty Ventures Inc. is a provider
of tech-enabled, data-driven consumer loyalty solutions and reward
programs. Loyalty Ventures and its debtor-affiliates sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
S.D. Tex. Lead Case No. 23-90111) on March 10, 2023.
As of Sept. 30, 2022, the Company had $1,591,218,000 in total
assets against $1,980,850,000 in total liabilities. In the
petition signed by John J. Chesnut, chief financial officer, LVI
disclosed up to $10 million in assets and up to $1 billion in
liabilities.
Judge Christopher Lopez oversees the case.
The Debtors have hired Akin Gump Strauss Hauer & Feld LLP and
Jackson Walker LLP as U.S. co-counsel; Cassels Brock & Blackwell
LLP, as Canadian legal counsel to LoyaltyOne; PJT Partners LP as
the Debtors' investment banker; Alvarez & Marsal North America,
LLC, as the Debtors' restructuring advisor; and Alvarez & Marsal
Canada ULC, as Canadian financial and restructuring advisor to
LoyaltyOne. Kroll Restructuring Administration LLC serves as
claims, noticing and solicitation agent.
Bank of America, N.A., serves as administrative agent and
collateral agent under a 2021 Credit Agreement that consisted of a
$175 million term A loan facility; a $500 million term B loan
facility; and a $150 million revolving credit facility. Haynes and
Boone LLP serves as counsel for the Administrative Agent, and FTI
Consulting, Inc., serves as its financial advisor.
An Ad Hoc Group of Term B Loan Lenders retained Gibson Dunn &
Crutcher LLP as counsel and Piper Sandler & Co as investment
banker.
LOYALTY VENTURES: Seeks Chapter 11 Bankruptcy Protection
--------------------------------------------------------
ABF Journal reports that Loyalty Ventures Loyalty Ventures and
certain of its subsidiaries filed voluntary petitions for relief
under chapter 11 of title 11 of the United States Code in the
United States Bankruptcy Court for the Southern District of Texas.
In addition, earlier March 13, 2023, LoyaltyOne, a subsidiary of
the company, sought protection under the companies' Creditors
Arrangement Act (CCAA) in the Ontario Superior Court of Justice.
In connection with the CCAA proceedings, LoyaltyOne filed motions
seeking Canadian Court approval under the CCAA of a sale and
investment solicitation process (SISP). Under the SISP, if
approved, interested parties would be invited to participate in a
sale process in accordance with the SISP procedures. Bank of
Montreal entered into a purchase agreement with LoyaltyOne pursuant
to which BMO will acquire LoyaltyOne's AIR MILES Reward Program
(AIR MILES) business. The consummation of the sale transaction is
conditioned upon LoyaltyOne not receiving a more favorable offer
from another party in accordance with the SISP, and other customary
closing conditions.
The company believes that BMO's acquisition of AIR MILES would
secure the program and better position AIR MILES to continue
delivering its loyalty program to approximately 10 million Canadian
collectors.
In connection with the chapter 11 cases, the company has filed
customary motions authorizing it to proceed with its operations in
the ordinary course. Subject to approval of the Canadian Court,
LoyaltyOne, as borrower, will enter into a debtor-in-possession
facility with BMO, as lender, pursuant to which the lender will
make available to LoyaltyOne a non-revolving secured credit
facility in the amount of $70 million. Subject to the approval of
the bankruptcy court and the Canadian Court, the company, as
borrower, and LoyaltyOne, as lender, will enter into an
intercompany DIP facility. The company currently expects that the
intercompany DIP facility will provide sufficient liquidity to meet
its financial obligations during the duration of the chapter 11
cases.
The decision to file for chapter 11 was made after a careful
evaluation of the company's financial situation and a determination
that it is in the best interests of the company and its
stakeholders.
About Loyalty Ventures
Headquartered in Dallas, Texas, Loyalty Ventures Inc. is a provider
of tech-enabled, data-driven consumer loyalty solutions and reward
programs. Loyalty Ventures is the ultimate parent of 45
subsidiaries located worldwide that collectively own and operate
(i) BrandLoyalty, a European-based business that provides loyalty
campaigns to high-frequency retailers and grocers, and (ii) AIR
MILES, Canada's most recognized consumer loyalty program.
Loyalty Ventures and its affiliates sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No.
23-90111) on March 10, 2023.
As of Sept. 30, 2022, the Company had $1,591,218,000 in total
assets against $1,980,850,000 in total liabilities. In the
petition signed by John J. Chesnut, chief financial officer, LVI
disclosed up to $10 million in assets and up to $1 billion in
liabilities.
Judge Christopher Lopez oversees the case.
The Debtors have hired Akin Gump Strauss Hauer & Feld LLP and
Jackson Walker LLP as U.S. co-counsel; Cassels Brock & Blackwell
LLP, as Canadian legal counsel to LoyaltyOne; PJT Partners LP as
the Debtors' investment banker; Alvarez & Marsal North America,
LLC, as the Debtors' restructuring advisor; and Alvarez & Marsal
Canada ULC, as Canadian financial and restructuring advisor to
LoyaltyOne. Kroll Restructuring Administration LLC serves as
claims, noticing and solicitation agent.
Bank of America, N.A., serves as administrative agent and
collateral agent under a 2021 Credit Agreement that consisted of a
$175 million term A loan facility; a $500 million term B loan
facility; and a $150 million revolving credit facility. Haynes and
Boone LLP serves as counsel for the Administrative Agent, and FTI
Consulting, Inc., serves as its financial advisor.
An Ad Hoc Group of Term B Loan Lenders retained Gibson Dunn &
Crutcher LLP as counsel and Piper Sandler & Co as investment
banker.
LUMEN TECHNOLOGIES: S&P Downgrades ICR to 'B', Outlook Negative
---------------------------------------------------------------
S&P Global Ratings lowered the issuer credit rating on U.S.-based
telecommunications provider Lumen Technologies Inc. to 'B' from
'B+'. In addition, S&P lowered the issue-level ratings on Lumen's
senior secured debt, Level 3's senior secured debt, and Qwest
Corp.'s senior unsecured debt to 'BB-' from 'BB' and the
issue-level rating on the unsecured debt at Qwest Capital Funding
Inc. and Level 3 to 'B' from 'B+'.
S&P said, "We assigned a 'BB-' issue-level rating on the new Level
3 notes. The '1' recovery rating indicates our expectation for very
high (90%-100%; rounded estimate: 95%) recovery in the event of
payment default.
"We also lowered the issue-level rating on the Lumen senior
unsecured debt to 'B-' from 'B' and placed the rating on
CreditWatch with negative implications because of the potential for
a lower recovery rating. A downgrade, if any, will not exceed one
notch and will likely depend on the results of the tender."
The downgrade reflects uncertainty regarding management's strategy
to improve operating and financial performance. Lumen's new
management team plans to invest $435 million-$600 million in 2023
to reposition the business for growth with greater focus on
customer experience, simplification, and innovation. However, S&P
believes it may take longer than expected to execute on its
strategy and convert investments into improving top-line trends.
This would delay a turnaround and lower the probability of success,
especially if secular pressures accelerate. In particular, the
enterprise segment is in secular decline and customers are
increasingly moving to lower-priced technology solutions. Lumen
continues to experience mid-single-digit percent revenue declines,
which could accelerate as management more aggressively transitions
its customers to these products and services, especially given its
exposure to legacy products. A recession could also exacerbate weak
top-line trends if customers reduce their information technology
(IT) spending.
In the mass markets segment (20% of revenue), Lumen intends to be
more disciplined with its fiber-to-the-home (FTTH) deployments,
choosing to focus on markets where it can achieve good returns on
investment. That said, the company well behind its peers in
deploying FTTH and was impacted by labor shortages in 2022. And,
Lumen is building out fiber to only 500,000 homes this year (2% of
homes passed), significantly lower than its previous plan of 1.5
million-2 million homes per year. While management wants to be more
targeted with its fiber deployments in markets where it can achieve
better return profiles, not building fiber extends the time that
its broadband business is exposed to share losses to cable and
fixed wireless access.
The debt exchange will only be modestly deleveraging, although
higher interest expense could hurt FOCF. Lumen is offering to issue
$1.1 billion of 10.5% senior secured notes due 2030 at Level 3 in
exchange for the following senior unsecured debt at Lumen:
-- 5.625% senior notes due in 2025
-- 7.2% senior notes due in 2025
-- 5.125% senior notes due in 2026
-- 6.875% debentures due in 2028
-- 5.375% senior notes due in 2029
-- 4.5% senior notes due in 2029
-- 7.6% senior notes due in 2039
-- 7.65% senior notes due in 2042
S&P Global Ratings views the exchange as modestly credit positive
since it will help address near-term maturities although leverage
improvement is limited at about 0.1x but could be somewhat higher,
depending on the participation of longer-date maturities. This is
partly offset by modestly higher interest expense that Lumen will
have to pay on the new notes.
S&P said, "We expect leverage to increase and cash flow to remain
weak over the next couple of years. Our base-case forecast assumes
EBITDA declines about 15%-17% in 2023 primarily due to investments
and dis-synergies from recent asset sales, leading to S&P Global
Ratings-adjusted debt to EBITDA rising to the high-4x area and
approaching 5x in 2024. Further, we expect cash flow metrics to be
weak over this period with a FOCF deficit in 2023 and FOCF to debt
of less than 2% in 2024. That said, if the company executes its
strategy and as investment activity winds down, we would expect
FOCF to debt to rise above 2% in 2025 with further improvement
thereafter.
"We placed the issue-level rating on Lumen's senior unsecured debt
on CreditWatch with negative implications. Despite the potential
reduction in unsecured debt at Lumen, as part of our recovery
analysis we are allocating more of our estimated emergence value to
Level 3 given its larger and increasing EBITDA contribution. The
reduction in value available to the Lumen unsecured debt reflects a
shift in value attribution from Qwest and Lumen to Level 3.
Residual equity value in Qwest is the primary source of recovery at
the parent after accounting for the approximate gross enterprise
value we attribute to Lumen's direct operating subsidiaries and the
remaining Embarq assets. We plan to resolve the CreditWatch once
the exchange is complete. Similarly, the recovery and issue-level
ratings on the Level 3 secured and unsecured debt are not affected
by the transaction."
The negative outlook reflects the potential for a lower rating
given the uncertainty around Lumen's strategy, its longer-term
trajectory, and ability to generate meaningful FOCF.
S&P could lower the rating if:
-- S&P believes the company's strategy is unlikely to stabilize
earnings because either the decline in the legacy businesses
accelerates or growth initiatives fail to take hold.
-- FOCF to debt is not on a trajectory to improve above 2%.
S&P could revise the outlook to stable if the company:
-- Executes its strategy, which would entail improving top-line
trends in its business and mass market segments.
-- Is on a path to increasing FOCF to debt to above 2% on a
sustained basis.
ESG credit indicators: E-2, S-2, G-2
M & T REAL ESTATE: SkyBeam Says Pro Se Petition Filed in Bad Faith
------------------------------------------------------------------
M & T Real Estate Group II Inc. filed for chapter 11 protection in
the Northern District of Georgia. The Debtor elected on its
voluntary petition to proceed under Subchapter V of chapter 11 of
the Bankruptcy Code.
The Debtor owns the property at 955 Commercial St. NE, Conyers, GA
30012.
The Debtor, a corporation incorporated under the laws of the State
of Georgia filed a pro se skeletal bankruptcy petition in an
attempt to stop the foreclosure set for March 7, 2023. A
corporation must retain Counsel to file for bankruptcy relief and
as such the within filing is void and / or voidable.
The secured creditor, SkyBeam Capital REIT, LLC, has filed a motion
to validate foreclosure sale or in the alternative motion for in
rem relief and related papers with the Court seeking an order to
validate the foreclosure sale or modify the automatic stay on the
Debtor's real property.
At the time the foreclosure sale occurred the balance on SkyBeam's
mortgage was $726,250.00, and an approximate pay off in the amount
of $801,238.20. SkyBeam shows the value of the real estate at
$501,500. The subject property sold back to the lender on March 7,
2023.
According to SkyBeam, the Debtor filed a skeletal petition in a bad
faith attempt to stop the pending foreclosure.
According to court filings, M & T Real Estate Group II Inc.
estimates between $1 million and $10 million in debt owed to 1 to
49 creditors. The petition states that funds will be available to
unsecured creditors.
A telephonic meeting of creditors under 11 U.S.C. Section 341(a) is
slated for April 3, 2023 at 10:00 a.m.
About M & T Real Estate Group II
M & T Real Estate Group II Inc., doing business as We Work For U Ga
Conference Center, is a Single Asset Real Estate (as defined in 11
U.S.C. Sec. 101(51B)).
All Florida Safety Institute filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga.
Case No. 23-52191) on March 6, 2023. In the petition filed by
Adrian Tisdale, as POA, the Debtor reported assets and liabilities
between $1 million and $10 million.
Todd E. Hennings has been appointed as Subchapter V trustee.
MANZELLA PROPERTIES: Has Deal on Cash Collateral Access
-------------------------------------------------------
Manzella Properties, LLC asks the U.S. Bankruptcy Court for the
Central District of California, Santa Ana Division, for entry of an
order approving the proposed cash collateral stipulation between
its trustee, Karen Sue Naylor, and Citizens Business Bank.
Prior to the Petition Date, the Debtor executed and delivered,
among other documents, a series of promissory notes and/or
guarantees in favor of the Lender, simultaneously granting to the
Lender first and second priority security interests in the Property
pursuant to duly recorded deeds of trust. The approximate
outstanding balance owed by the Debtor to the Lender in the
aggregate is not less than $4.150 million.
The Property at 101 East Imperial Highway, Brea, California, is
also encumbered by a secured property tax lien in favor of the
County of Orange, representing unpaid taxes for the 2020, 2021, and
2022 roll years.
The Property is improved with a single-tenant freestanding
restaurant building with a gross leasable area of 11,514 square
feet and a 2,614 square foot exterior patio dining area on a
0.38-acre site. The Debtor lets the Property to a related party,
South County Concepts, Inc., pursuant to the terms of a written
lease with a 15-year term commencing March 1, 2017. The Lender has
an interest in the income generated by the Property, including but
not limited to the rents tendered by South County to the Debtor.
Subsequent to the Trustee's appointment, the Debtor transferred to
the Trustee on behalf of the Estate all funds on hand in the
Debtor's operating account, in the sum of $56,795, inclusive of the
January 2023 rent tendered by South County. These funds are the
cash collateral of the Lender, and have been deposited by the
Trustee into a segregated account for the Lender's benefit pending
negotiation of a cash collateral agreement.
To date, the Trustee has expended, with the Lender's consent, the
sum of $640 in payment of the Trustee's bond in the case, and $250
to the Office of the United States Trustee in satisfaction of the
Debtor's quarterly fees owed to the OUST for the period ended
December 31, 2022. The Trustee has also tendered the aggregate sum
of $30,146 to the Lender, representing payments required by 11
U.S.C. Section 362(d)(3) in this single real estate case for the
month of February 2023 and March 2023.
The Trustee currently holds the sum of $60,359 in the segregated
cash collateral account The Lender consents to the Trustee's use of
cash collateral from the Effective Date for a period of 180 days
after the Effective Date for the purpose of remitting payments
specified in the Budget.
The Lender consents to the Trustee's use of cash collateral from
the Effective Date for a period of 180 days after the Effective
Date for the purpose of remitting the payments specified in the
Budget. Should the Trustee discover additional expenses that must
be satisfied to ensure the maintenance and safe operation of the
Property pending confirmation of a plan or sale of the Property,
the Trustee will request Lender's consent to the payment of same.
A copy of the stipulation and the Debtor's budget is available at
https://bit.ly/3JVpL0D from PacerMonitor.com.
A hearing on the matter is set for May 3, 2023 at 1:30 p.m.
The Debtor projects total expenses, on a monthly basis, as
follows:
$35,840 for March 2023;
$30,578 for April 2023;
$30,839 for May 2023; and
$30,328 for June 2023.
About Manzella Properties
Manzella Properties, LLC, a company in Brea, Calif., filed its
voluntary petition for Chapter 11 protection (Bankr. C.D. Calif.
Case No. 22-11915) on Nov. 9, 2022, with $10 million to $50 million
in assets and $1 million to $10 million in liabilities. Joseph
Manzella signed the petition as the authorized person.
Judge Scott C. Clarkson oversees the case.
Fennemore Wendel and Sonoran Capital Advisors serve as the Debtor's
legal counsel and financial advisor, respectively.
On Jan. 20, 2023, Karen Sue Naylor was appointed as trustee in the
Debtor's Chapter 11 case. Ringstad & Sanders, LLP and Malcolm
Cisneros, A Law Corporation serve as her bankruptcy counsel and
special counsel, respectively.
MARSHALL SPIEGEL: Adelman's Interim Fee Application Granted in Part
-------------------------------------------------------------------
Bankruptcy Judge Timothy A. Barnes for the Northern District of
Illinois allows in part the interim compensation and reimbursement
of expenses of the law firm of Adelman & Gettleman, Ltd., counsel
to the Official Committee of Unsecured Creditors of Marshall
Spiegel.
Marshall Spiegel, Matthew Spiegel and 1116-22 Greenleaf Building,
LLC filed objections to the Fee Application. However, the Court
finds that Matthew Spiegel and Greenleaf lacked standing to file
their respective objections to the Fee Application. Because the
Application only sought relief from the Debtor, the Court finds and
concludes that Matthew and Greenleaf lacked a pecuniary interest in
the outcome of the decision.
The Application is seeking compensation for the period of Jan. 1,
2022, to and including July 31, 2022, on an interim basis in the
amount of $213,680 in fees and reimbursement of expenses in the
amount of $1,247.
The Court has independently identified 17 time entries in which
legal research was conducted by Adelman at the partner rate of $525
per hour. A total of 16.7 hours were spent on legal research for a
total amount of $8,768 of requested fees. The Application states
that whenever possible, legal research was performed by staff with
lower hourly rates. A firm's staffing limitations cannot become an
inappropriate burden on the Debtor's estate and the Applicant has
not provided an explanation as to why a senior partner's time or
rate was appropriate for legal research.
As such, the Court concludes that the research performed by Adelman
should have been completed by an associate with a lower rate or
billed by himself at a lower rate. Accordingly, the Court reduces
the billing rate from $525/hour (Adelman's rate) to $315/hour (the
rate billed by the Applicant for associate involvement). The Court
will therefore reduce the allowed fees by $ 3,507 (the net total
reduction of the time affected time entries to the lower rate).
A full-text copy of the Findings of Fact, Conclusions of Law and
Order dated March 17, 2023 is available at
https://tinyurl.com/4wh5ud8v from Leagle.com.
About Marshall Spiegel
Marshall Spiegel sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ill. Case No. 20-21625) on Dec. 16,
2020. The Debtor is represented by David Lloyd, Esq.
The U.S. Trustee for Region 11 on March 3 appointed an official
committee to represent unsecured creditors in the Chapter 11 case
of Marshall Spiegel.
MH CORBIN: Main Street Marks $6.1M Loan at 26% Off
--------------------------------------------------
Main Street Capital Corporation has marked its $6,156,000 loan
extended to MH Corbin Holding LLC to market at $4,548,000 or 74% 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 to MH Corbin Holding
LLC. The loan accrues interest at a rate of 13% per annum. The loan
was scheduled to mature December 31, 2022.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
M. H. Corbin Holding LLC operates as a holding company. The
Company, through its subsidiaries, provides weather sensors,
highway advisory radio, traffic analysis, roadside controller,
distance measuring, and software products, as well as offers queue
detection and weather warning services.
MIRACLE CENTER: Court OKs Deal on Cash Collateral Access
--------------------------------------------------------
Miracle Center Church of Ventura County, Inc. First Christian
Church of Ventura County, sought and obtained entry of an order
from the U.S. Bankruptcy Court for the Central District of
California, Northern Division, authorizing the use of cash
collateral on an interim basis in accordance with its agreement
with the U.S. Small Business Administration.
First Christian asserts a first priority security interest in the
Debtor's property arising from a transaction on March 25, 2016,
whereby the Debtor purchased the Property from First Christian. A
promissory note and grant deed were executed between the Debtor and
First Christian regarding the secured debt.
The SBA asserts a security interest in all tangible and intangible
personal property as evidenced by a Security Agreement executed on
July 25, 2020 and a validly filed UCC-1 Financing Statement, filed
on August 4, 2020 as Filing Number U20008484133. This Security
Agreement arises from a U.S. Small Business Administration Note
between the Debtor and the SBA on July 25, 2020.
The parties agreed that the Debtor may continue to use cash
collateral until May 31, 202 for the payment of ordinary and
necessary expenses. The Debtor may pay expenses related to the cash
collateral amounts in accordance with the budget, with a 15%
variance.
As adequate protection, the Debtor will continue to make monthly
payments of $25,663 to First Christian until further Court order,
or entry of an Order Confirming the Debtor's Plan of
Reorganization, whichever occurs earlier.
As adequate protection, the Debtor will continue to make monthly
payments of $291 to the SBA until further Court order or entry of
an Order Confirming the Debtor's Plan of Reorganization, whichever
occurs earlier.
The Debtor agrees to maintain insurance on the cash collateral as
required under the U.S. Trustee guidelines for Chapter 11
bankruptcy cases.
The Stipulation will remain in effect until May 31, 2023, or until
the Parties enter into a further Stipulation or a consensual
Chapter 11 Plan, or until the case is converted or dismissed,
whichever first occurs.
A copy of the stipulation is available at https://bit.ly/40mcwwv
from PacerMonitor.com.
A copy of the order is available at https://bit.ly/3nbgp8W from
PacerMonitor.com.
About Miracle Center Church of Ventura County, Inc.
Miracle Center Church of Ventura County, Inc. is a tax-exempt
religious organization. The Debtor sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-10664)
on August 29, 2022. In the petition signed by Alonzo McCowan, its
CEO and president, the Debtor disclosed $3,472,792 in assets and
$3,387,733 in liabilities.
Judge Ronald A. Clifford III oversees the case.
John K. Rounds, Esq., at Rounds & Sutter LLP is the Debtor's
counsel.
MIRAGE INTERNATIONAL: Court OKs Cash Collateral Access Thru May 19
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Oklahoma
authorized Mirage International, Inc. to use cash collateral on an
interim basis.
The Court said the cash collateral may only be used to fund the
types and corresponding amounts of itemized expenditures contained
in the submitted budget and only to the extent needed to prevent
immediate and irreparable harm; provided, however, the Debtor may
use Cash Collateral in excess of the amount designated for a
particular line-item so long as the percentage of deviation of each
line item during any rolling four-week period does not exceed 10%
in aggregate.
The Oklahoma Tax Commission and Internal Revenue Service are
entitled to a validly perfected first priority lien on and security
interests in the Debtor's post-petition Collateral subject to
existing valid, perfected and superior liens in the Collateral held
by other creditors, if any. The post-petition security interests
and liens granted will be valid, perfected and enforceable and will
be deemed effective and automatically perfected as of the Petition
Date without the necessity of the Secured Creditors taking any
further action.
In the event of, and only in the case of Diminution of Value of the
Secured Creditors' interests in the Collateral, the Secured
Creditors will be entitled to a superpriority claim that shall have
priority in the Debtor's bankruptcy case over all priority claims
and unsecured claims against the Debtor and its estate. This
super-priority claim will be subject and subordinate only to the
Carve-Out and not to any other unsecured claim (having
administrative priority or otherwise).
The Carve-Out will include any feed and expenses incurred by the
Debtor's professionals and the Subchapter V Trustee and approved by
the Court up to $25,000.
The Order will be in effect through May 19, 2023, or until a final
order is entered, whichever occurs first. The Debtor will make
post-petition monthly payments to OTC in the amount of $800, and
monthly payments to the IRS $793 for the next 60 days from the date
of the entry of the Order or until a final order is entered,
whichever occurs first.
The final hearing on the matter is set for May 11 at 10 a.m.
A copy of the order is available at https://bit.ly/3LKdWgh from
PacerMonitor.com.
About Mirage International, Inc.
Mirage International, Inc. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. W.D. Okla. Case No. 23-10499) on
March 6, 2023. In the petition signed by Charles Michael Laws,
president, the Debtor disclosed up to $100,000 in assets and up to
$1 million in liabilities.
Judge Janice D. Loyd oversees the case.
Gary D. Hammond, Esq., at Hammond Law Firm, represents the Debtor
as legal counsel.
MOUNTAIN EXPRESS: Court OKs Interim Cash Collateral Access
----------------------------------------------------------
Mountain Express Oil Company and affiliates sought and obtained
entry of an order from the U.S. Bankruptcy Court for the Southern
District of Texas, Houston Division, authorizing the use of cash
collateral on an interim basis.
The Court said cash collateral will be only used for the purposes
permitted under the Budget, including to provide the Debtors'
working capital needs and for general corporate purposes; and make
the payments or fund amounts otherwise permitted in the Interim
Order and the Budget. The disbursements by the Debtors for "Total
Operating Disbursements" on an aggregate basis during the Interim
Budget Period may deviate up to 15% from the amounts specified in
the Budget.
The Debtors have an immediate and critical need to use the cash
collateral, in order to permit, among other things, maintenance of
the Debtors' assets.
Debtor Mountain Express Oil Company is the borrower under a First
Amended and Restated Credit Agreement dated as of March 12, 2020
among MEX, the Prepetition Guarantors, certain Lenders, and First
Horizon Bank with respect to a secured term loan and revolving
credit facility. The Prepetition Credit Agreement provided for
loans to the Prepetition Borrower of up to $205 million in
aggregate principal amount. As of the Petition Date, the aggregate
amount outstanding under the Loan Facility is approximately $176.5
million consisting of:
-- $148.3 million in outstanding principal due under the
Prepetition Term Loan Facility;
-- $28.2 million in outstanding principal due under the
Prepetition Revolving A Facility; and
-- no amounts in outstanding principal due under the
Prepetition Revolving B Facility.
Each of the foregoing amounts is exclusive of accrued interest,
fees, costs and charges.
MEX and certain of the Prepetition Secured Parties were parties to
a hedge agreement to hedge interest rate exposure applicable to a
portion of the principal amount borrowed under the term loan
facility of the Prepetition Loan Agreement. The hedge agreement was
terminated as of March 8, 2023, yielding a hedge termination
payment for MEX's benefit in the approximate amount of $6.648
million.
As adequate protection, the Prepetition Secured Parties are granted
allowed superpriority administrative expense claims, to the extent
provided by 11 U.S.C. sections 503(b) and 507(b), in the Chapter 11
Cases and any successor case.
The Prepetition Secured Parties are also granted a continuing
security interest in and lien on all collateral of the Debtors of
the same type and nature that exists as of the Petition Date and an
additional and replacement security interest in and lien on all
property and assets of the Debtors' estates to the extent that such
property and assets can be pledged by the Debtors.
A further hearing on the matter is set for March 27, 2023, at 12
p.m.
A copy of the motion is available at https://bit.ly/3JUEKsz from
PacerMonitor.com.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3TueYif from PacerMonitor.com.
The Debtor projects $2.36 million in total operating receipts and
$6.018 million in total operating costs.
About Mountain Express Oil Company
Mountain Express Oil Company and its affiliates operate in the fuel
distribution and retail convenience industry. As one of the
largest fuel distributors in the American South, MEX and its
affiliates serve 828 fueling centers and 27 travel centers across
27 states.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90147) on March
18, 2023. In the petition signed by Michael Healy, as chief
restructuring officer, the Debtor disclosed up to $500 million in
assets and liabilities.
Judge David R. Jones oversees the case.
Pachulski Stang Ziehl & Jones LLP represents the Debtor as legal
counsel. The Debtors also tapped FTI Consulting, Inc. as financial
advisor, Raymond James Financial, Inc. as investment banker, and
Kurtzman Carson Consultants LLC as claims, noticing, and
solicitation agent and administrative advisor.
NATIVE ENGINEERS: Seeks Cash Collateral Access Thru May 20
----------------------------------------------------------
Native Engineers, LLC asks the U.S. Bankruptcy Court for the
Eastern District of Louisiana for authority to use cash collateral
through May 20, 2023, in accordance with its agreement with
B1BANK.
The Debtor requests authority to continue using cash collateral on
the same terms and conditions as the February 15, 2013 cash
collateral order, except that adequate protection payments to
B1BANK would be due not later than the sixth day of each month.
On November 29, 2023, the Court authorized the Debtor's use of cash
collateral in which B1BANK asserts a security interest. The Court
further extended the Debtor's use of cash collateral by order dated
February 15, except that adequate protection payments to B1BANK
would be due not later than the sixth day of each month.
A copy of the Debtor's motion and budget is available at
https://bit.ly/3TufYCR from PacerMonitor.com.
The Debtor projects total payments, on a weekly basis, as follows:
$4,453 for the week ending March 25, 2023;
$4,453 for the week ending April 1, 2023;
$4,453 for the week ending April 8, 2023;
$4,453 for the week ending April 15, 2023;
$4,453 for the week ending April 22, 2023; and
$4,453 for the week ending April 29, 2023.
About Native Engineers
Native Engineers, LLC -- https://nativeengineers.com/-- provides
engineering, construction management, and program management
services. The company is based in Mandeville, La.
Native Engineers filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. Case No.
22-11316) on Oct. 28, 2022, with $1 million to $10 million in both
assets and liabilities. Greta M. Brouphy has been appointed as
Subchapter V trustee.
Judge Meredith S. Grabill oversees the case.
The Debtor is represented by Ryan James Richmond, Esq., at
Sternberg, Naccari & White, LLC.
NBG ACQUISITION: Main Street Marks $3.8M Loan at 77% Off
--------------------------------------------------------
Main Street Capital Corporation has marked its $3,849,000 loan
extended to NBG Acquisition Inc to market at $1,251,000 or 33% 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 to NBG Acquisition
Inc. The loan accrues interest at a rate of 9.67% (L+5.50%) per
annum. The loan matures on April 26, 2024.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
NBG Acquisition Inc. was formed by private equity firm Sycamore
Partners to facilitate its acquisition of NB Holdings Corporation,
the indirect parent of NBG Home.
NEPHROS INC: Incurs $7.1 Million Net Loss in 2022
-------------------------------------------------
Nephros, Inc. announced financial results for the fourth quarter
and fiscal year ended Dec. 31, 2022.
Fourth Quarter Ended Dec. 31, 2022 – Consolidated
* Net revenue from continuing operations was $2.6 million,
compared to $2.7 million in the fourth quarter of 2021, down 6%
* Net loss from continuing operations was ($0.7 million),
approximately equal to the same period in 2021
* Adjusted EBITDA from continuing operations was ($0.5 million),
compared to ($0.1 million) in the fourth quarter of 2021
Nephros reported a net loss of $7.11 million on $9.97 million of
total net revenues for the 12 months ended Dec. 31, 2022, compared
to a net loss of $3.87 million on $10.22 million of total net
revenues for the 12 months ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $11 million in total assets,
$2.12 million in total liabilities, and $8.88 million in total
stockholders' equity.
"2022 was a year of refocusing and rebuilding for Nephros," said
Andy Astor, president and chief executive officer. "After a
challenging first half of the year, we established a target of cash
flow breakeven ("CFBE") by mid-year 2023, coupled with significant
revenue growth by that same time. We have made good progress on
both fronts."
"In our efforts to achieve CFBE, we took multiple actions,
including broad headcount and expense reductions, the disposition
of our Pathogen Detection Systems ("PDS") business segment, and two
price increases during the year, which were intended to return us
to target gross margins of 55-60%. I am pleased to report that our
fourth-quarter gross margins were 59%. Additionally, our net cash
usage for the first half of the year was $2.8 million, compared to
$0.5 million in the second half of the year, an 80% improvement."
Mr. Astor continued, "In an effort to set the company up for future
revenue growth, we took several actions, including a restructuring
of our sales organization, the doubling of our sales team, and the
relaunch of our commercial filtration business, which included a
rebrand of our commercial filter products from Aether to Nephros.
Of further note, we established a strategic partnership with
Donastar Enterprises, LLC as the exclusive master distributor of
our commercial filters in the food & beverage and hospitality
markets."
Nephros anticipates further cost reductions in the second quarter
of this year, due to the planned cessation of operations by its
majority-owned subsidiary, Specialty Renal Products, Inc. In
February 2023, SRP management unsuccessfully concluded its efforts
to identify a strategic partner to support a commercial launch of
SRP's second-generation HDF product. SRP's capital resources are
nearly exhausted and it has been unable to procure additional
financing. Accordingly, the SRP board of directors recently
resolved, subject to approval of SRP's stockholders, to wind down
SRP's operations and liquidate its remaining assets. Nephros
expects to re-evaluate opportunities for HDF in the future but has
no immediate plans to do so.
A full-text copy of the press release is available for free at:
https://www.sec.gov/Archives/edgar/data/1196298/000149315223007004/ex99-1.htm
About Nephros
South Orange, New Jersey-based Nephros, Inc. -- www.nephros.com --
provides innovative water filtration products and services, along
with water-quality education, as part of an integrated approach to
water safety.
Nephros reported a net loss of $3.87 million for the year ended
Dec. 31, 2021, a net loss of $4.53 million for the year ended Dec.
31, 2020, a net loss of $3.18 million for the year ended Dec. 31,
2019, and a net loss of $3.32 million for the year ended Dec. 31,
2018. As of Sept. 30, 2022, the Company had $11.33 million in
total assets, $1.75 million in total liabilities, and $9.58 million
in total stockholders' equity.
NEXREV LLC: Main Street Marks $11.4M Loan at 26% Off
----------------------------------------------------
Main Street Capital Corporation has marked its $11,465,000 loan
extended to NexRev LLC to market at $8,477,000 or 74% 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 to NexRev LLC. The
loan accrues interest at a rate of 11% per annum. The loan matures
on February 28, 2025.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
NexRev develops manufactures and fabricates energy and facility
management products and self-performs integration of HVAC,
Electrical, Building Management Systems and Test and Balance
services, directly to national account clients. NexRev's customers
span a variety of end markets, including multi-site retailers,
theaters, restaurants, commercial, and industrial facilities.
NexRev's DrivePak(TM), Freedom EMS, Proactive Portfolio Management,
and HVAC Replacement solutions enable clients to reduce both their
capital and operational spend with performance guarantees.
NEXTSPORT INC: Has Cash Collateral Access Thru June 30
------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
authorized Nextsport, Inc. to continue using cash collateral
pursuant to the budget through June 30, 2023.
A continued hearing on the Debtor's request is set for June 14,
2022, at 10:30 a.m.
As previously reported by the Troubled Company Reporter, these
entities assert an interest in the Debtor's cash collateral:
-- JAS Forwarding Netherlands,
-- JAS Forwarding UK,
-- Tigers International Solutions PTY LTD. AU,
-- Tigers International Logistics BV, and
-- Tigers Global Logistics Limited UK
A copy of the order is available at https://bit.ly/3luX9D3 from
PacerMonitor.com.
About Nextsport, Inc.
Nextsport, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. N.D. Cal. Case No. 22-40569) on June 13,
2022. In the petition signed by David Lee, its chief executive
officer, the Debtor disclosed $13,381,220 in assets and $10,668,143
in liabilities.
Judge William J. Lafferty oversees the case.
Eric A. Nyberg, Esq., at Kornfeld, Nyberg, Bendes, Kuhner and
Little PC is the Debtor's counsel.
NGL & EROSION: Court OKs Interim Cash Collateral Access
-------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia,
Gainesville Division, authorized NGL & Erosion Control Group, LLC
to use cash collateral on an interim basis in accordance with the
budget.
The Debtor requires the use of cash collateral to fund critical
operations.
The Debtor asserts that it is indebted to Synovus Bank f/k/a AFB&T
in the approximate amount of $23,815, pursuant to a renewal
promissory note dated December 6, 2019. The Note is secured by a
security interest in, among other assets, inventory, equipment,
accounts, instruments, intangibles, deposit accounts, and
government payments, the proceeds of which constitute "Cash
Collateral."
The Debtor asserts Synovus' security interest is perfected by a
duly recorded UCC-1 financing statement at 038-2014-010533, Coweta
County Records, and continuation statement at 038-2019-016033,
Coweta County Records.
The Debtor asserts that certain entities have uncancelled UCC-1
financing statements against the Debtor or AMJ Contacting, LLC,
including Westwood Funding Solutions, LLC, Green Capital Fundings,
LLC, Liquidibee, LLC, Mobilization Funding, LLC, and the Small
Business Administration. The Debtor believes the Junior Potential
Lenders have been paid or hold claims that are unenforceable
against the Debtor. However, if the claims of the Junior Potential
Lenders are valid and enforceable against the Debtor, the Junior
Potential Lenders may have an interest in the cash collateral.
As partial adequate protection of its interests in any cash
collateral expended by the Debtor, Synovus is granted a valid and
properly perfected replacement lien, subject to prior perfected
security interests and liens, pursuant to 11 U.S.C. section 361(2)
on all property acquired by Debtor after the Petition Date that is
the same or similar nature, kind, or character as the collateral.
As partial adequate protection of their potential interests in any
cash collateral expended by the Debtor, the Junior Potential
Lenders are granted an Adequate Protection Lien, subordinate to
Synovus, on all property acquired by the Debtor after the Petition
Date, except that no replacement lien will attach to the proceeds
of any Chapter 5 Actions. The Adequate Protection Lien will be
deemed automatically valid and perfected upon entry of the Order.
A final hearing on the matter is set for March 30, 2023, at 10:30
a.m.
A copy of the order is available at https://bit.ly/3mW3Myu from
PacerMonitor.com.
About NGL & Erosion Control Group, LLC
NGL & Erosion Control Group, LLC provides services to buildings and
dwellings. The Debtor sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-20266) on March
6, 2023. In the petition signed by James Scott, managing member,
the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge James R. Sacca oversees the case.
G. Frank Nason, IV, Esq., at Lamberth, Cifelli, Ellis & Nason,
P.A., represents the Debtor as legal counsel.
NGL & EROSION: Files Subchapter V Case
--------------------------------------
NGL & Erosion Control Group, LLC, sought Chapter 11 protection.
The Debtor has elected to proceed under Subchapter V of the
Bankruptcy Code.
Formed in 2014, the Debtor operates a fleet of mowers, dirt movers,
tractors, and related equipment and provides landscaping services
to municipalities. The Debtor is headquartered at 624 Atlanta
Highway, Winder, Barrow County, Georgia 30680.
The Debtor's landscaping equipment was financed primarily through
John Deere Financial. The Debtor's sole member is James Scott. In
2018, Scott agreed to form a limited liability company with Amin
Porbunderwala and Abdul Malik Sawja through which to operate the
Business. AMJ Contracting, LLC, was formed in November of 2018.
AMJ commenced operating the Business under the d/b/a NGL & Erosion
Control Group.
AMJ assumed and continued to pay Debtor's equipment debts to John
Deere and others. Johns Deere filed UCC-1 financing statements
identifying AMJ and Debtor as parties. Unfortunately, in order to
address cash needs, AMJ entered into high interest rate loans,
including merchant cash advances ("MCAs") from, among other, Green
Capital Fundings, LLC and Westwood Funding Solutions, LLC.
In June 2020, AMJ obtained an EIDL loan from the Small Business
Administration (the "SBA") in the approximate amount of $80,000.
SBA recorded a UCC-1 financing statement at file 038-2020-015397.
The SBA's UCC-1 identified AMJ as the debtor and covered inventory,
equipment, accounts, instruments, intangibles, deposit accounts,
and government payments.
In 2021, the Business faltered under AMJ. AMJ lost a contract for
work with the State of Tennessee, which resulted in a default under
a bond with Fair American Insurance and Reinsurance. Porbunderwala
filed Chapter 7 bankruptcy on September 25, 2021. AMJ ultimately
dissolved. Debtor assumed operation of the Business and paid down
significant amounts of the AMJ debt, including MCA debt. Green
filed an amended UCC-1 identifying Debtor as the debtor party.
The Debtor also entered into high interest rate loans with MCAs.
The Debtor has paid the high interest and MCA loans that Debtor
owed Green1, Liquidibee, LLC, Mobilization Funding, LLC, and
others. However, the payment of such loans drained Debtor's cash,
which resulted in installment payment defaults to John Deere and
others.
The Debtor's Business is cash flow positive, and the receivables
generated from municipalities are collectible. Debtor filed a
Chapter 11 case to restructure its debts.
About NGL & Erosion Control Group
NGL & Erosion Control Group, LLC, provides services to buildings
and dwellings.
NGL & Erosion sought protection under Subchapter V of Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-20266) on
March 6, 2023. In the petition signed by James Scott, managing
member, the Debtor disclosed up to $10 million in both assets and
liabilities.
The case is overseen by Honorable Bankruptcy Judge James R Sacca.
G. Frank Nason, IV, Esq., at Lamberth, Cifelli, Ellis & Nason,
P.A., is the Debtor's legal counsel.
NORMANDIE LOFTS: Wins Cash Collateral Access Thru March 31
----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
San Fernando Valley Division, authorized Normandie Lofts Ktown, LLC
to use cash collateral on a final basis in accordance with the
budget.
The Debtor requires the use of cash collateral to assure continued
business operations.
Impact Mortgage is an assignee of Rose Community Capital, LLC.
Based upon a Loan Agreement dated as of February 5, 2021, Rose
Community made a loan to the Debtor in the original principal
amount of $7.550 million to finance 50 affordable apartment units
located at 167 Normandie Avenue, Los Angeles, California 90004, and
known as "Normandie Lofts". As of the Petition Date, the Debtor
owed the Lender in the non-contingent liquidated amount of $8.350
million inclusive of principal, accrued and unpaid interest at the
base and post-default rates set forth in the Loan Documents.
As of the Petition Date, the Prepetition Obligations were secured
by liens and security interests encumbering substantially all of
the Debtor's assets.
The Court said the Debtor may use cash collateral from the Petition
Date through and including the earlier to occur of (i) March 31,
2023, or such later period as may be agreed to in writing by the
Lender pursuant to an extension of the Approved Budget which shall
be filed by the Debtor with the Court, or (ii) the occurrence of an
Event of Default.
As adequate protection, the Lender is granted valid, binding, and
enforceable postpetition liens on and security interests in the
Prepetition Collateral, all postpetition assets of the Debtor's
estate of the same nature and/or type as the assets that comprise
the Prepetition Collateral.
The Lender is also granted a postpetition claim against the
Debtor's estate, which will be granted an allowed administrative
expense of the Debtor's estate.
These events constitute an "Event of Default":
(a) The Debtor breaches any representation, warranty, or
covenant contained in the Loan Agreements, other than those
relating to the Debtor's financial condition or the commencement of
the Bankruptcy Case, resulting from the imposition of the automatic
stay of Bankruptcy Code section 362(a) or the operation of any
provision of the Bankruptcy Code.
(b) The Court enters an order granting relief from the
automatic stay to a third party with respect to the Real Property
or any other material assets of the Debtor's estate.
(c) The Court enters an order authorizing or compelling the
Debtor's rejection of executory contracts and/or unexpired leases,
with respect to material assets of the Debtor's estate.
(d) The Debtor ceases operations of its present business or
takes any material action for the purpose of effecting the
foregoing, except as contemplated by the sale of the Real Property
and/or the Approved Budget.
(e) The Bankruptcy Case is dismissed or converted to a case
under chapter 7 of the Bankruptcy Code pursuant to an order of the
Court the effect of which has not been stayed.
(f) The Order is reversed, vacated, stayed, amended,
supplemented or otherwise modified in a manner which shall, in the
Lender's sole opinion, materially and adversely affects the rights
of the Lender Parties or will materially and adversely affect the
priority of any or all of the Obligations and/or the Adequate
Protection Lien.
A copy of the order is available at https://bit.ly/3LD3uHf from
PacerMonitor.com.
About Normandie Lofts KTown
Normandie Lofts KTown LLC owns the "Normandie Lofts," which are
affordable apartment units located at 167 Normandie Avenue, Los
Angeles, California 90004.
Normandie Lofts KTown LLC filed a petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-10125) on
Jan. 30, 2023. The Debtor is a Single Asset Real Estate (as
defined in 11 U.S.C. Section 101(51B)).
In the petition filed by Edward Lorin, as manager, the Debtor
reported assets between $1 million and $10 million and liabilities
between $10 million and $50 million.
The case is overseen by the Honorable Bankruptcy Judge Martin R.
Barash.
The Debtor is represented by Leslie A Cohen, Esq., at Leslie Cohen
Law PC.
NORTH SHORE MANOR: Court OKs Cash Collateral Access Thru April 25
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado authorized
North Shore Manor, Inc. to use cash collateral on an interim basis
in accordance with the budget for the time period from March 16,
2023, through a final hearing of the use of cash collateral.
The final hearing is set for April 25 at 2:30 p.m.
The Debtor asserts that an immediate need exists for it to use cash
collateral to continue its operations, acquire goods and services,
and pay other necessary and ordinary business expenses.
The Debtor is indebted to Wapello Holdings II, LLC pursuant to the
promissory note dated June 24, 2021, in the original principal
amount of $500,000.
Wapello II asserts it has first priority security interests in and
liens upon the Debtor's personal property including, without
limitation, deposit accounts, inventory and accounts receivable.
As adequate protection, Wapello II is granted replacement security
interests in, and liens on, all post-Petition Date acquired
property of the Debtor and the Debtor's bankruptcy estate. The
amount of each of the Replacement Liens shall be up to the amount
of any diminution of Wapello II's collateral position. The priority
of the Replacement Liens will be in the same priority as Wapello
II's pre-petition interests, liens and security interests in
similar property.
Any Replacement Lien granted will be effective and perfected upon
the date of entry of the Interim Order without necessity for the
execution or recordation of filings of deeds of trust, mortgages,
security agreements, control agreements, pledge agreements,
financing statements or similar documents, or the possession or
control by Wapello II of, or over, any property subject to the
Replacement Liens.
To the extent the Replacement Liens prove inadequate to protect
Wapello II from a demonstrated diminution in value of collateral
position, Wapello II is granted an administrative expense claim
under 11 U.S.C. section 503(b) with priority in payment under 11
U.S.C. section 507(b) and only to the amount of any diminution of
Wapello II's collateral position.
The Order will expire and the Debtor's right to use cash collateral
will terminate, unless extended by further Court order and by
express written consent of Wapello II, 30 days after (i) expiration
of the Interim Period (unless a final order enters); (iii) the
failure of the Debtor to comply with any provision of this Order,
including without limitation exceeding the variance; (iv) the entry
of an order authorizing, or there will occur, a conversion or
dismissal of the case under 11 U.S.C. section 1112; (v) the entry
of an order appointing a trustee, or appointing an examiner with
powers exceeding those set forth in 11 U.S.C. section 1106(b); (vi)
the closing of a sale of all or a substantial portion of the assets
of the Debtor; (vii) the cessation of day-to-day operations of the
Debtor; (viii) any loss of accreditation or licensing of the Debtor
that would impede or impair the Debtor's ability to operate as a
going concern; (ix) appointment of a receiver under applicable
non-bankruptcy law; and (x) any material provision of the Order for
any reason ceases to be enforceable, valid, or binding upon the
Debtor.
A copy of the Debtor's motion and budget is available at
https://bit.ly/3TyHq2r from PacerMonitor.com.
About North Shore Manor, Inc.
North Shore Manor, Inc. operates skilled nursing facilities. North
Shore Manor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Colo. Case No. 23-10809) on March 6,
2023. In the petition signed by Robert D. Church, Jr., its interim
chief executive officer, the Debtor disclosed up to $10 million in
both assets and liabilities.
Judge Joseph G. Rosania, Jr. oversees the case.
Aaron A. Garber, Esq., at Wadsworth Garber Warnder Conrardy, P.C.,
represents the Debtor as legal counsel.
ONASSET INTELLIGENCE: Main Street Marks $2.1M Loan at 41% Off
-------------------------------------------------------------
Main Street Capital Corporation has marked its $2,116,000 loan
extended to OnAsset Intelligence, Inc. at $1,249,000 or 59% 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 to OnAsset
Intelligence, Inc. The loan accrues interest at a rate of 12% (12%
Payment In Kind) per annum. The loan matures on December 31, 2023.
Main Street classified the Loan as a non-accrual and non-income
producing investment.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
OnAsset Intelligence, Inc. provides real time shipment tracking
solutions.
ONASSET INTELLIGENCE: Main Street Marks $4.4M Loan at 41% Off
-------------------------------------------------------------
Main Street Capital Corporation has marked its $4,415,000 loan
extended to OnAsset Intelligence, Inc. at $2,606,000 or 59% 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 to OnAsset
Intelligence, Inc. The loan accrues interest at a rate of 12% (12%
Payment In Kind) per annum. The loan matures on December 31, 2023.
Main Street classified the Loan as a non-accrual and non-income
producing investment.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
OnAsset Intelligence, Inc. provides real time shipment tracking
solutions.
ONASSET INTELLIGENCE: Main Street Marks $964,000 Loan at 41% Off
----------------------------------------------------------------
Main Street Capital Corporation has marked its $964,000 loan
extended to OnAsset Intelligence, Inc. at $569,000 or 59% 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 to OnAsset
Intelligence, Inc. The loan accrues interest at a rate of 12% (12%
Payment In Kind) per annum. The loan matures on December 31, 2023.
Main Street classified the Loan as a non-accrual and non-income
producing investment.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
OnAsset Intelligence, Inc. provides real time shipment tracking
solutions.
ONASSET INTELLIGENCE: Main Street Marks $983,000 Loan at 41% Off
----------------------------------------------------------------
Main Street Capital Corporation has marked its $983,000 loan
extended to OnAsset Intelligence, Inc. at $580,000 or 59% 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 to OnAsset
Intelligence, Inc. The loan accrues interest at a rate of 12% (12%
Payment In Kind) per annum. The loan matures on December 31, 2023.
Main Street classified the Loan as a non-accrual and non-income
producing investment.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
OnAsset Intelligence, Inc. provides real time shipment tracking
solutions.
ONE ALLIANCE: A.M. Best Puts 'B' Fin. Strength Rating on Review
---------------------------------------------------------------
AM Best has placed under review with negative implications the
Financial Strength Rating of B (Fair) and the Long-Term Issuer
Credit Rating of "bb+" (Fair) of One Alliance Insurance Corporation
(One Alliance) (San Juan, Puerto Rico).
The Credit Rating (ratings) have been placed under review with
negative implications due to uncertainty surrounding One Alliance's
balance sheet strength and capital management strategies. In
addition, there is significant uncertainty regarding the
reinsurance program placement and its impact to the balance sheet
strength assessment. Given the small size of the company's surplus
level, any fluctuation in capital may materially affect
risk-adjusted capitalization. The ratings will remain under review
until AM Best can fully analyze the impact of these actions.
ORDER OF UNITED: A.M. Best Cuts Issuer Credit Rating to 'b'
-----------------------------------------------------------
AM Best has downgraded the Financial Strength Rating to C++
(Marginal) from B (Fair) and the Long-Term Issuer Credit Rating to
"b" (Marginal) from "bb" (Fair) of The Order of United Commercial
Travelers of America (UCT) (Columbus, OH). The outlook of these
Credit Ratings (ratings) has been revised to negative from stable.
Concurrently, AM Best has withdrawn these ratings as the company
has requested to no longer participate in AM Best's interactive
rating process.
The ratings reflect UCT's balance sheet strength, which AM Best
assesses as weak, as well as its weak operating performance,
limited business profile and marginal enterprise risk management
(ERM).
The rating downgrades reflect significant reserve increases on the
year-end 2022 statutory financial statement, as well as trending
operating losses and declining net premium written since 2017. The
company is expected to hold an even smaller level of overall
absolute capital, which together with its limited financial
flexibility and lack of diversification, will magnify the impact of
unfavorable operating trends on its risk-adjusted capitalization.
AM Best notes that there has been an ongoing trend of marginal ERM
practices, which have been a contributing rating factor. Further,
the company maintains modest market positions in a highly
competitive accident and health segment in which many of its
competitors enjoy significant scale advantages, which limits UCT's
business profile.
The negative outlooks reflect AM Best's expectation that the
company's balance sheet and operating performance assessments could
weaken further over the intermediate term.
OSPEMIFENE ROYALTY: Main Street Writes Off $4.4M Loan
-----------------------------------------------------
Main Street Capital Corporation has marked its $4,489,000 loan
extended to Ospemifene Royalty Sub LLC to market at $103,000 or 2%
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 to Ospemifene
Royalty Sub LLC. The loan accrues interest at a rate of 11.50% per
annum. The loan matures on November 15, 2026.
Main Street classified the Loan as a non-accrual and non-income
producing investment.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
Ospemifene Royalty Sub LLC (QuatRx) is an estrogen-deficiency drug
manufacturer and distributor.
PACIFIC BEND: Court OKs Cash Collateral Access Thru April 30
------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Riverside Division, authorized Pacific Bend, Inc. to use cash
collateral on an interim basis in accordance with the budget, with
a 10% variance, through April 30, 2023.
As previously reported by the Troubled Company Reporter, prior to
the bankruptcy filing, the Debtor and Performance Steel, Inc.
entered into a Letter of Intent for Performance Steel's purchase of
50% of the Company's stock. During the due diligence period, and in
good faith, the Debtor made payments on the Performance Steel
indebtedness per Performance Steel's requests. During that time,
however, Jim Russell, an owner of Performance Steel, made demands
and exerted managerial control over the Debtor -- to the Debtor's
detriment -- before actually acquiring its stock. By the time the
LOI expired, the relationship soured, and the Debtor decided not to
proceed with the proposed sale to Performance Steel.
In response, Performance Steel declared an "Event of Default" on
the grounds it deemed Debtor was unable to pay its indebtedness and
directed Debtor's customers to pay Performance Steel directly as a
secured creditor on the Debtor's account receivables.
Performance Steel asserts a secured claim against the Debtor in the
amount of $6.268 million. Performance Steel filed a UCC Financing
Statement with the Secretary of State for the State of California
on October 20, 2022.
On June 29, 2021, the Debtor obtained a loan from Midfirst Bank.
Midfirst filed a UCC Financing Statement with the Secretary of
State for the State of California on June 29, 2021. As of the
Petition date, the amount due to Midfirst for the loan was
approximately $751,561.
Big Dog Properties, LLC asserts a secured claim against the Debtor
in the amount of $8.7 million. According to the Debtor, Big Dog is
associated with Performance Steel and shares the same counsel. Big
Dog may also claim an interest in the Debtor's machinery and/or
cash collateral. Big Dog recorded a First Deed of Trust and
Security Agreement in the County of Riverside on or about July 20,
2022.
The Debtor's unsecured claims total approximately $1.640 million.
The Debtors' debts (both secured and unsecured) total approximately
$17.360 million, while its assets total approximately $25.670
million.
As adequate protection, Mid-First Bank and Performance Steel are
granted replacement liens on, and security interests in, all assets
of the bankruptcy estate of the Debtor including, but not limited
to, post-petition assets acquired by the Debtor, with the same
extent, validity, and priority (if any) as the pre-petition liens
of the secured creditors on pre-petition collateral.
Pursuant to the Court Order, the Debtor is allowed to make
additional monthly payments to Performance Steel in the amount of
$67,738 per month on account of the accounts receivable.
A further hearing on the matter is set for April 11 at 1:30 p.m.
A copy of the motion is available at https://bit.ly/3Z5EJXd from
PacerMonitor.com.
About Pacific Bend, Inc.
Pacific Bend, Inc. manufactures pallet racking. The Debtor sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D.
Cal. Case No. 23-10761) on February 28, 2023. In the petition
signed by Darlene Barios, the Debtor's CEO, the Debtor disclosed up
to $50 million in both assets and liabilities. Barios is also the
Debtor's president, officer, director, and shareholder.
Judge Wayne Johnson oversees the case.
Vanessa M. Haberbush, Esq., at Haberbush, LLP, represents the
Debtor as legal counsel.
PANDORA SERVICING: Trial in Bluegreen's Lawsuit Continued to May 8
------------------------------------------------------------------
District Judge Robert N. Scola, Jr. for the Southern District of
Florida grants in part Bluegreen Vacations Corporation and
Bluegreen Vacations Unlimited, Inc.'s expedited motion for pretrial
conference or, in the alternative, to continue trial filed in the
case captioned as Bluegreen Vacations Unlimited, Inc. and Bluegreen
Vacations Corporation, Plaintiffs, v. Timeshare Lawyers P.A., and
others, Defendants, Civil Action No. 20-24681-Civ-Scola, (S.D.
Fla.).
In the motion, Bluegreen informs the Court that on Jan. 11, 2023,
an entity known as Pandora Servicing, LLC filed Chapter 11
bankruptcy, triggering the automatic stay imposed against creditors
immediately after a bankruptcy case is filed. Pandora Servicing is
not a party to the instant dispute. However, in the motion,
Bluegreen expresses serious concern that Pandora Servicing may be
so closely related to the Defendant Pandora Marketing, LLC.
The Marketing Defendants -- Pandora Marketing, LLC, Rick Folk, and
William Wilson -- responded in opposition to Bluegreen's requested
relief, essentially representing that, because Pandora Servicing is
not a party to this case, there is no issue with continuing as
before.
Trial in this matter is currently scheduled for the two-week trial
period beginning on April 10, 2023, and if it is not continued and
the automatic stay is indeed extended to the Marketing Defendants,
the parties and Court will likely have spent significant resources
unnecessarily. In addition, pending in the Bankruptcy Case is a
motion to dismiss the bankruptcy proceedings that is scheduled for
a hearing on April 20, 2023, which might also resolve any potential
issue relating to an extension of the automatic stay. Thus, the
Court concludes that trial in this case should be continued for at
least an initial, brief period while the status of the Bankruptcy
Case is settled.
Accordingly, in the interests of economy of time and effort for
itself, for counsel, and for the litigants, the Court orders that:
(1) Trial is continued to the two-week trial period beginning on
May 8, 2023. Calendar call will be held at 9:00 a.m. on the
preceding Tuesday, May 2, 2023, at the Wilkie D. Ferguson, Jr.
United States Courthouse, 400 N. Miami Avenue, Courtroom 12-3,
Miami, Florida.
(2) To the extent Bluegreen deems it necessary to seek relief
itself in the Bankruptcy Court to determine the applicability of
the automatic stay to the Marketing Defendants, the Court strongly
encourages it to do so.
(3) The parties will file joint status reports advising the
Court of any significant developments in the bankruptcy proceedings
impacting the Marketing Defendants.
(4) By May 8, 2023, the Court will determine whether it is
necessary to continue trial for an initial period or whether trial
should move forward as to all, or only some, of the Defendants.
A full-text copy of the Order dated March 17, 2023 is available at
https://tinyurl.com/2p9v66ja from Leagle.com.
About Pandora Servicing LLC
Pandora Servicing LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-10051) on Jan. 11,
2023. William Wilson, co-trustee of the Collaborative
Administrative Trust, signed the petition. At the time of the
filing, the Debtor disclosed estimated assets ranging between $0 to
$50,000 and estimated liabilities ranging between $1 million to $10
million.
Judge Scott C. Clarkson oversees the case.
The Debtor is represented by Michael Jay Berger, Esq. at the Law
Offices of Michael Jay Berger.
QUEST PATENT: Signs Series of Agreements With QPRC Finance
----------------------------------------------------------
Quest Patent Research Corporation and its newly formed wholly-owned
subsidiary, Harbor Island Dynamic LLC, disclosed in a Form 8-K
filed with the Securities and Exchange Commission they entered into
a series of agreements, all dated March 12, 2023, with QPRC Finance
III LLC ("QF3"), a non-affiliated party, including a prepaid
forward purchase agreement, a security agreement, a patent security
agreement pursuant to which, at the closing held contemporaneously
with the execution of the agreements:
(i) Pursuant to the Purchase Agreement, QF3 agreed to make
available to the Company a financing facility of: (a) up to
$4,000,000 for operating expenses; (b) $3,300,000 to fund the cash
portion of the purchase price of a patent portfolio Harbor is to
purchase from Tower Semiconductor Ltd.; and (c) up to an additional
$25,000,000 for the acquisition of mutually agreed patent rights
that the Company would intend to monetize. In return, the Company
transferred to QF3 a right to receive a portion of net proceeds
generated from the monetization of those patents, including the
patent portfolio being acquired from Tower.
(ii) Pursuant to the Security Agreement, the Company's
obligations under the Purchase Agreement with QF3 are secured by:
(a) the value of anything received from the monetization of the
intellectual property rights covered by the Security Agreement; (b)
the patents (as defined in the Security Agreement); (c) all general
intangibles now or hereafter arising from or related to the
foregoing (a) and (b); and (d) proceeds (including, without
limitation, cash proceeds and insurance proceeds) and products of
the foregoing (a)-(c).
(iii) Pursuant to the Patent Security Agreement, the Company and
Harbor granted QF3 a first priority continuing security interest in
and lien upon Collateral covered by the Security Agreement. The
Patent Security Agreement is the instrument that is filed with the
United States Patent and Trademark Office and other government
agencies to perfect QF3's security interest in the Collateral.
The Company intends to use $3,300,000 of proceeds from the QF3
financing as the cash portion of the purchase price of a ten-patent
portfolio from Tower Semiconductor Ltd.; pursuant to an agreement
under which Harbor retains a negotiated return on an amount equal
to the cash purchase price plus any costs and fees incurred by
Tower, after which Tower is entitled to a portion of net proceeds,
as defined in the agreement, realized, if any. QF3 has wired the
funds to the Company, subject to obtaining the execution by
Intelligent Partners LLC of the intercreditor agreement describe
below prior to March 17, 2023 (or such later date as may be
acceptable to QF3). Upon receipt of the intercreditor agreement,
the Company will acquire the HID Portfolio from Tower. If the
intercreditor agreement is not signed the funds will be returned to
QF3.
QF3 Purchase Agreement
Pursuant to the Purchase Agreement, QF3 agreed to make available to
the Company a financing facility of: (a) up to $4,000,000 for
operating expenses; (b) $3,300,000 to fund the cash payment portion
of the purchase of a patent portfolio from Tower Semiconductor
Ltd.; and (c) up to an additional $25,000,000 for the acquisition
of mutually agreed additional patent rights that the Company would
intend to monetize. In return, the Company transferred to QF3 the
right to receive a portion of net proceeds generated from the
monetization of those patents. After QF3 has received a negotiated
rate of return, the Company and QF3 shall share net proceeds
equally until QF3 shall have achieved its Investment Return (as
defined therein). Thereafter, the Company shall retain 100% of all
net proceeds. Except in an Event of Default, as defined therein,
all payments by the Company to QF3 pursuant to the Purchase
Agreement are non-recourse and shall be paid only if and after net
proceeds from monetization of the patent rights owned or acquired
by the Company are received, or to be received.
Events of Default include any breach of the Investment Documents,
including non-payment, material misrepresentation, security
interest compromise, criminal indictment or felony conviction of
one of the Company's officers or directors, the Company's current
chief executive no longer serving as our chief executive or as a
director, the occurrence of any Event of Default under the
Restructure Agreement with Intelligent Partners, LLC, as defined
therein, and our insolvency. In addition to all rights and
remedies available under law and the Investment Documents, upon and
Event of Default, QF3 may: (i) declare the Investment Return
immediately due and payable, (ii) except in the event of our
insolvency, declare an amount equal to the aggregate amount of the
capital provided pursuant to the Purchase Agreement, plus a late
charge, immediately due and payable, or (iii) cease making capital
available to the Company.
Under the agreement, QF3 may terminate capital advances other than
in an Event of Default by giving written notice to the Company in
which case QF3's interest in Net Proceeds shall be an amount equal
to the greater of (i) the capital advanced to us plus interest at
the prime rate, on the one hand, and (ii) Net Proceeds received by
QF3 prior to the date of such termination.
Grant of Security Interests
Pursuant to the Security Agreement and Patent Security Agreement,
payment of our obligations under the Purchase Agreement with QF3
are secured by (a) ) the value of anything received from the
monetization of the intellectual property rights covered by the
Security Agreement; (b) the patents (as defined in the Security
Agreement); (c) all general intangibles now or hereafter arising
from or related to the foregoing (a) and (b); and (d) proceeds
(including, without limitation, cash proceeds and insurance
proceeds) and products of the foregoing (a)-(c).
Intercreditor Agreement
In connection with the agreements with QF3, the Company, Harbor,
Quest Licensing Corporation, Quest NetTech Corporation, Mariner IC
Inc., Semcon IP Inc., IC Kinetics Inc., CXT Systems Inc., M-Red
Inc., and Audio Messaging Inc. are to enter into an intercreditor
agreement with QF3 and Intelligent Partners, LLC which provides for
the priority of QF3 in the collateral under the Investment
Documents. As of March 16, 2023, the intercreditor agreement has
not been executed by Intelligent Partners, LLC. If the
intercreditor agreement is not signed the funds will be returned to
QF3.
About Quest Patent
Rye, New York-based Quest Patent Research Corporation --
http://www.qprc.com-- is an intellectual property asset management
company. The Company's principal operations include the
development, acquisition, licensing and enforcement of intellectual
property rights that are either owned or controlled by the Company
or one of its wholly owned subsidiaries. The Company currently
owns, controls or manages eleven intellectual property portfolios,
which principally consist of patent rights.
Quest Patent reported a net loss of $4.15 million for the year
ended Dec. 31, 2021, compared to a net loss of $1.31 million for
the year ended Dec. 31, 2020. As of Sept. 30, 2022, the Company
had $1.63 million in total assets, $9.75 million in total
liabilities, and a total stockholders' deficit of $8.11 million.
In its Quarterly Report filed on November 14, 2022, Quest Patent
stated, "We have an accumulated deficit of approximately
$25,715,000 and negative working capital of approximately
$9,105,000 as of September 30, 2022. Because of our continuing
losses, our working capital deficiency, the uncertainty of future
revenue, our obligations to QFL, Intelligent Partners, our low
stock price and the absence of a trading market in our common
stock, our ability to raise funds in equity market or from
lenders is severely impaired. These conditions, together with the
effects of the COVID-19 pandemic and the steps taken by the states
to slow the spread of the virus and its effect on our business as
well as any adverse consequences which would result from our
failure to remain listed on the OTCQB, raise substantial doubt as
to our ability to continue as a going concern."
RAINMAKER HEALTH: Court OKs Cash Collateral Access Thru April 19
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division, authorized Rainmaker Health Solutions, Inc.,
d/b/a Pearl Vision, to use the cash collateral of The Huntington
National Bank and, to the extent necessary, Leaf Capital Funding,
LLC, on an interim basis through April 19, 2023.
The Debtor requires the use of cash collateral to successfully
reorganize.
The Debtor is permitted to use cash collateral to pay:
(a) amounts expressly authorized by the Court, including
payments to the United States Trustee for quarterly fees;
(b) the current and necessary expenses set forth in the
budget; and
(c) the additional amounts as may be expressly approved in
writing by Creditor within 48 hours of the Debtor's request.
As previously reported by the Troubled Company Reporter, as of the
Petition Date, the Debtor has $19,762 of cash in deposit accounts
and is owed $17,414 in accounts receivable. The Debtor's other
personal property -- consisting of inventory, office furniture,
fixtures and optical equipment -- is valued at $131,495. The
Debtor's earnings going forward may arguably be subject to
creditors' alleged liens, and to the extent the future earnings may
be deemed to be cash collateral, the Debtor seeks authority to use
same.
On May 29 and June 1, 2020, Huntington filed a UCC Statement
against the Debtor's assets on account of a U.S. Small Business
Administration loan. On June 5, 2022, Huntington filed another UCC
Statement against the Debtor's assets.
The Debtor owes Huntington $528,107. However, according to the
Debtor, Huntington does not have a deposit control agreement with
the Debtor or the Debtor's bank, and therefore its lien on the
Debtor's deposit accounts is unenforceable. The Debtor believes the
property against which Huntington holds a valid lien consists of
$17,414 in accounts receivable; and other personal property valued
at $131,495, for a total aggregate value of $148,909 of personal
property that is subject to Huntington's liens.
On March 25, 2022, a UCC Statement was filed by Leaf Capital
against "Topcon Healthcare Optical Equipment in addition, the
collateral also shall include all parts, accessories, accessions
and attachments thereto, and all repayments, substitutions and
exchanges (including trade-ins)."
The Debtor owes Leaf Capital $40,390. The Debtor believes the
property against which Leaf Capital holds a valid lien on the
equipment valued at $41,635; and, arguably, perhaps also on the
proceeds therefrom.
The Court said Huntington and Leaf Capital will have a perfected
post-petition lien against cash collateral to the same extent and
with the same validity and priority as the pre-petition lien,
without the need to file or execute any documents as may otherwise
be required under applicable non-bankruptcy law.
The Debtor must maintain insurance coverage for its property in
accordance with the obligations under the loan and security
documents with Secured Creditors.
A continued preliminary hearing on this matter will be held on
April 19, 2023, at 10:30 a.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/42sPbLi from PacerMonitor.com.
The Debtor projects total operating expenses, on a monthly basis,
as follows:
$36,232 for February 2023;
$37,233 for March 2023;
$36,533 for April 2023;
$29,233 for May 2023;
$29,733 for June 2023; and
$30,233 for July 2023.
About Rainmaker Health Solutions, Inc.
Rainmaker Health Solutions, Inc. operates a Pearle Vision franchise
located at 11024 W. Colonial Drive, Ocoee, FL 34761, providing
services ranging from comprehensive eye care to fitting
prescription eyeglasses, sunglasses, and contact lenses.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00447) on February 6,
2023. In the petition signed by Kim Dawson, president, the Debtor
disclosed up to $500,000 in assets and up to $1 million in
liabilities.
Judge Tiffany P. Geyer oversees the case.
Jeffrey S. Ainsworth, Esq., at BransonLaw, PLLC, represents the
Debtor as legal counsel.
RC HOME: Court OKs Cash Collateral Access Thru April 14
-------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Miami Division, authorized RC Home Showcase, Inc. to use cash
collateral on an interim basis in accordance with the budget
through April 14, 2023.
The Debtor is directed to pay Manuhen Enterprises, LLC an adequate
protection payment in the amount of $4,000 per month, with the
first payment due on April 3, 2023, and with each additional
payment due on the first day of every month thereafter, pending
further Court order.
The Debtor will make available to Manuhen its entire business
premises located at 12900 NW 38 Ave, Opa Locka, FL 33054 for
inspection on March 28, 2023 at 3 p.m.
Manuhen will further be entitled to a perfected post-petition lien
against cash collateral to the same extent and with the same
validity and priority as its prepetition lien, without the need to
file or execute any document as may otherwise be required under
applicable nonbankruptcy law. In addition, the Debtor will maintain
insurance coverage for its property in accordance with the
obligations under the loan and security documents with Manuhen.
A final hearing on the matter is set for April 12 at 9:30 a.m.
A copy of the court's order is available at https://bit.ly/3nfSl5a
from PacerMonitor.com.
About RC Home Showcase, Inc.
RC Home Showcase, Inc. is in the glass product manufacturing
business. RC designs and manufactures windows, sliding glass
doors, glass railings and curtain wall.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-19571) on December
15, 2022. In the petition signed by Eusebio Paredes, president, the
Debtor disclosed up to $50,000 in assets and up to $10 million in
liabilities.
Judge Laurel M. Isicoff oversees the case.
Chad Van Horn, Esq., at Van Horn Law Group, P.A., represents the
Debtor as legal counsel.
RECONDITION PROS PENN: Starts Subchapter V Bankruptcy Case
----------------------------------------------------------
Recondition Pros Penn LLC filed for chapter 11 protection in the
Eastern District of Pennsylvania. The Debtor elected on its
voluntary petition to proceed under Subchapter V of chapter 11 of
the Bankruptcy Code.
The Debtor owns and operates a collision repair company in
Pennsylvania from its leased premises located at 2700 Castor
Avenue, Philadelphia, PA 19134 as well as providing mobile services
to its customers.
The Debtor is solely owned by Reconditions Pros, LLC (the "Parent
Company"), an Indiana limited liability corporation which operates
as a collision repair company in Indiana.
The Debtor was formed in 2021 for the purpose of providing its
services in Pennsylvania.
The Debtor has no employees, but rather, utilizes independent
contractors to perform all of Debtor's operational functions. The
Debtor and Parent Company operate pursuant to an arrangement
whereby Parent Company utilizes a payroll provider service that
pays all Debtor's independent contractors (as well as its own
independent contractors) pursuant to the terms of a service
agreement.
According to court filings, Recondition Pros Penn estimates between
$50,000 and $100,000 in debt owed to 1 to 49 creditors. The
petition states that funds will not be available to unsecured
creditors.
A telephonic meeting of creditors under 11 U.S.C. Section 341(a) is
slated for April 17, 2023 at 2:00 p.m
About Recondition Pros Penn
Recondition Pros Penn LLC -- https://reconditionpros.com/ -- is a
high-volume Collision Repair Company that offers auto glass repair
and replacement, paintless dent repair, and wheel repair services.
Recondition Pros Penn sought protection for relief under Subchapter
V of Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No.
23-10639) on March 3, 2023, with $100,001 to $500,000 in assets and
$50,001 to $100,000 in liabilities.
Judge Patricia M Mayer presides over the case.
Lara Shipkovitz Martin, Esq., at Bernstein Burkley, PC, is the
Debtor's counsel.
REINZ WISCONSIN GASKET: Cook May Pursue Appointment of Receiver
---------------------------------------------------------------
In the case styled In Re Reinz Wisconsin Gasket, LLC, a cancelled
Delaware limited liability company, C.A. No. 2022-0859-MTZ, (Del.
Ch.), the Delaware Court of Chancery authorizes the Petitioner
Linda A. Cook to apply for the appoint a receiver for the canceled
entity Reinz Wisconsin Gasket, LLC.
The Petitioner here, Linda A. Cook, is a plaintiff in a federal
action in which she and her husband sued many companies for damages
flowing from her husband's exposure to asbestos, including the
gasket manufacturer Reinz Wisconsin Gasket, LLC. While that case
was pending, the Petitioner's husband died, and the RWG dissolved
and filed its certificate of cancellation.
The Petitioner turned to this Court to appoint a receiver to
determine if RWG holds any insurance policies or other assets that
could satisfy a damages award in the Massachusetts Action, find
RWG's dissolution was improper, and void the certificate of
cancellation. In the Petition, Count I seeks nullification of RWG's
certificate of cancellation because the Company failed to comply
with of Delaware's Limited Liability Company Act when dissolving --
"the dissolution and filing of the certificate of cancellation were
undertaken in a bad faith attempt to avoid known claims [against
the Company] that were the subject of pending litigation" and Count
II seeks appointment of a receiver under because RWG did "not
complete its winding up process in accordance with applicable law."
In 2006, Dana Corp. and RWG filed for Chapter 11 bankruptcy and in
2007, the bankruptcy court confirmed the Third Amended Joint Plan
of Reorganization of Dana Corp. and its subsidiaries, including
RWG. Under the Reorganization Plan, RWG transferred its operating
assets and real estate to another Dana Corp. subsidiary. The
bankruptcy court recognized RWG as solvent even after it
transferred its operating assets and real estate, pointing to
insurance policies as assets.
Thus, the Court concludes that "the Petitioner has demonstrated a
reasonable likelihood that RWG had prepaid insurance when it filed
its notice of cancellation, as identified in its bankruptcy filings
and the bankruptcy court's explanation that the Company was solvent
because it held those policies. While this prepaid insurance was
inapplicable to third-party asbestos personal injury actions like
Petitioner's, it is still an asset that RWG would have had to set
aside for other claimants and creditors under Section 18-804, such
that immediate cancellation would have violated the LLC Act."
The Court concludes that the Petitioner has demonstrated good cause
to appoint a receiver because it is reasonably likely RWG violated
the LLC Act by filing its notice of dissolution and cancellation
while failing to set aside its assets to provide for the pending
lawsuits to which it was a party. However, the Court declines to
outright appoint or rule out the Petitioner's chosen receiver.
Instead, the Court asks the parties submit three possible receivers
for the Court to select. The receiver is tasked with drafting a
report determining whether RWG had assets when it dissolved.
Meanwhile, the Court defers its decision on whether to nullify the
Company's certificate of cancellation until the receiver submits a
report -- at that point the Court will consider whether the report,
together with the material provided at trial, demonstrates by a
preponderance of the evidence that RWG had assets that it failed to
set aside for pending claims.
A full-text copy of the Memorandum Opinion dated March 20, 2023 is
available at https://tinyurl.com/yeeppkxu from Leagle.com.
RESEARCH NOW: Main Street Marks $19.9M Loan at 24% Off
------------------------------------------------------
Main Street Capital Corporation has marked its $19,966,000 loan
extended to Research Now Group, Inc. and Survey Sampling
International, LLC to market at $15,116,000 or 76% 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 to Research Now
Group, Inc. and Survey Sampling International, LLC. The loan
accrues interest at a rate of 8.84% (L+5.50) per annum. The loan
matures on November 15, 2026.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
Research Now Group Inc. provides online and mobile survey-data
collection, processing, and reporting. The company was acquired by
Court Square Capital Partners through a leveraged buyout
transaction.
REVERSE MORTGAGE: Unsecureds Get 2.7% to 6.1% in Liquidating Plan
-----------------------------------------------------------------
Reverse Mortgage Investment Trust, Inc. ("RMIT") and its affiliates
submitted an Amended Disclosure Statement for the Joint Chapter 11
Plan of Liquidation dated March 20, 2023.
The Plan is currently supported by the Debtors, the Committee, BNGL
Holdings, Nomura, and Credit Suisse.
Through these Chapter 11 Cases, the Debtors seek to maximize the
value of their estates through a liquidation, confirm and make
distributions through a plan of distribution, and wind down any
remaining affairs.
Class 4 consists of Barclays Warehouse Repo Facility Claims. Each
Holder of an Allowed Barclays Warehouse Repo Facility Claim shall
receive, solely to the extent that such Claim is Secured, at the
option of the Debtors: (1) payment in full in Cash of the Secured
portion of its Allowed Barclays Warehouse Repo Facility Claim; (2)
delivery of collateral securing any Secured portion of such Claim
and payment of any interest required under section 506(b) of the
Bankruptcy Code; or (3) such other treatment that renders its
Allowed Barclays Warehouse Repo Facility Claim Unimpaired in
accordance with section 1124 of the Bankruptcy Code agreed upon by
the Debtors and the Holder of the Barclays Warehouse Repo Facility
Claim. The amount of claim in this Class total $223,321,850.
Class 5 consists of the CS Claims. Each Holder of a CS Claim shall
receive, solely to the extent that such Claim is secured by
collateral or property pursuant to and in connection with the CS
Repos: (1) payment in Cash of the proceeds of the CS Liquidation to
the extent of the CS Liquidation; (2) delivery of collateral,
including risk retention bonds, securing any Secured portion of
such Claim and payment of any interest required under section
506(b) of the Bankruptcy Code; or (3) such other treatment that
renders its Allowed CS Claim Unimpaired in accordance with section
1124 of the Bankruptcy Code agreed upon by the Debtors and the
Holder of the CS Claim. On account of the CS Unsecured Claim, each
Holder of a CS Unsecured Claim shall receive, in full and final
satisfaction of such Claims, up to the Allowed amount of such CS
Unsecured Claim that is not Secured, its Pro Rata share of the GUC
Reserve, subject to the CS Stipulation.
Class 9 consists of General Unsecured Claims. Each Holder of an
Allowed General Unsecured Claim shall receive, in full and final
satisfaction of such General Unsecured Claim, up to the Allowed
amount of such General Unsecured Claim, its Pro Rata share of the
GUC Reserve. The allowed unsecured claims total $213.9 million to
$226.6 million. This Class will receive a distribution of 2.7-6.1%
of their allowed claims.
The Wind Down Debtors will fund distributions under the Plan with
(a) Cash in the Plan Reserve Account, (b) Cash in the Wind-Down
Account, and any other revenues and proceeds of all assets of the
Debtors, including proceeds from all Causes of Action, including
those not settled, released, discharged, enjoined, or exculpated
under the Plan or otherwise on or prior to the Effective Date.
Proceeds of all assets except for (a) DIP Funds; (b) funds with
respect to any of the Debtors' private label securitization
accounts that pass through the Debtors' bank accounts; (c) any
proceeds from reimbursed expenses or other pass-through funds,
whether received prior to or after February 11, 2023, that the
Debtors are required to provide to any third parties pursuant to
any order of the Court or other agreement between the Debtors and
such parties shall be held in the Plan Reserve Account until
distribution according to the terms of the Plan and the
Confirmation Order; and (d) the Restricted Cash Collateral and
Restricted Cash Accounts.
The GUC Reserve will be funded (a) on the Effective Date, with
fifty percent of the Unencumbered Asset Proceeds and, (b) after the
final decree is entered closing these Chapter 11 Cases, or at any
earlier date, at the discretion of the Wind-Down Debtor or Plan
Administrator, fifty percent of the Wind-Down Account.
A full-text copy of the Amended Disclosure Statement dated March
20, 2023 is available at https://bit.ly/40oCOxS from
PacerMonitor.com at no charge.
About Reverse Mortgage Investment Trust
Reverse Mortgage Investment Trust Inc. is an originator and
servicer of reverse mortgage loans.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-11225) on November
30, 2022.
In the petition signed by Craig Corn, chief executive officer, the
Debtors disclosed up to $50 billion in both assets and
liabilities.
Judge Mary F. Walrath oversees the case.
The Debtors tapped Sidley Austin LLP as general bankruptcy counsel,
Benesch, Friedlander, Coplan, and Aronoff LLO as local bankruptcy
counsel, FTI Consulting Inc. as financial advisor, and Kroll
Restructuring Administration LLC as noticing and claims agent.
Leadenhall Capital Partners LLP, as agent to the postpetition
secured lenders, is advised by Latham & Watkins LLP and Young,
Conaway Stargatt & Taylor LLP, as counsel; BRG, as financial
advisor; and Moelis as investment banker.
Texas Capital Bank has retained Paul, Weiss, Rifkind, Wharton &
Garrison LLP as counsel.
Longbridge Financial, LLC has retained Weil, Gotshal & Manges LLP,
Lowenstein Sandler LLP, and Richards, Layton & Finger as counsel;
and Houlihan Lokey, Inc., as financial advisor.
RIGHT CHOICE: Court OKs Interim Cash Collateral Access
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Fort Lauderdale Division, authorized Right Choice Vending/Coffee,
LLC to use cash collateral on an interim basis in accordance with
the budget, with a 20% variance, through March 31, 2023.
The Court said the Debtor is not authorized to use cash collateral
to make adequate protection payments to Spartan Business Solutions,
LLC d/b/a Spartan Capital, Unique Funding Solutions LLC and Fox
Capital Group, Inc. d/b/a Fox Business Funding. However, the Debtor
is authorized to amend the Budget to increase the line items for
rent from $15,000 to $36,000.
As previously reported by the Troubled Company Reporter, on April
28, 2022, Spartan Business Solutions, LLC d/b/a Spartan Capital,
and the Debtor entered into the Standard Merchant Cash Advance
Agreement for the purchase of the Debtor's (and other non-debtor
entities) $195,000 worth of receivables.
On May 19, 2022, Spartan Capital and the Debtor (and other
non-debtor entities) entered into the Standard Merchant Cash
Advance Agreement for the purchase of the Debtor's (and other
non-debtor entities) $195,000 worth of receivables.
On June 3, 2022, Spartan Capital and the Debtor (and other
non-debtor entities) entered into the Standard Merchant Cash
Advance Agreement for the purchase of the Debtor's (and other
non-debtor entities) $195,000 worth of receivables.
According to the Debtor's records, approximately $102,000 remains
due and owing to Spartan Capital.
On June 30, 2022, Unique Funding Solutions LLC and the Debtor (and
other non-debtor entities) entered into the Standard Merchant Cash
Advance Agreement for the purchase of the Debtor's (and other
non-debtor entities) $469,000 worth of receivables.
According to the Debtor's records, approximately $227,000 remains
due and owing to Unique Funding.
On August 5, 2022, Fox Capital Group, Inc. d/b/a Fox Business
Funding and the Debtor (and other non-debtor entities) entered into
the Future Receivables Sale and Purchase Agreement for the purchase
of the Debtor's (and other non-debtor entities) $125,000 worth of
receivables.
According to the Debtor's records, approximately $63,000 remains
due and owing to Fox Capital.
A further hearing on the matter is set for March 29, 2023 at 2
p.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3Z2kGZD from PacerMonitor.com.
The Debtor projects $1.8 million in total revenue and $1.640
million in total expenses for the period from February 19, 2023
through April 3, 2023.
About Right Choice Vending/Coffee, LLC
Right Choice Vending/Coffee, LLC operates a vending machine
business with machines located throughout the State of Florida.
Right Choice Vending/Coffee is in the business of providing drinks,
snacks and food to various businesses, industries, schools,
universities, hospital systems and governmental agencies. This is
accomplished by providing and servicing vending machines, micro
self-service markets, various coffee makers and direct delivery of
products to its clients.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-11331) on February
19, 2023. In the petition signed by Nicholas Depasquale, the Debtor
disclosed up to $50,000 in both assets and liabilities.
Judge Scott M. Grossman oversees the case.
Mark S. Roher, Esq., at the Law Office of Mark S. Roher, P.A.,
represents the Debtor as legal counsel.
SCRATCH SERVICE: Continued Operations to Fund Plan
--------------------------------------------------
Scratch Service Corp. filed with the U.S. Bankruptcy Court for the
Eastern District of New York a Disclosure Statement for Small
Business Plan of Reorganization dated March 20, 2023.
The Debtor is a taxi medallion corporation.
The circumstances leading to Debtor's filing under Chapter 11 were
as follows: due to the proliferation of Uber and other mobile ride
applications, resulting in the car drivers and owners' inability to
generate income sufficient to make loan payments on the medallion
loans. The medallions have consequently suffered a catastrophic
decline in value causing the inability to refinance and restructure
the loans. In order to reach a settlement with the medallion
lender, address any deficiency, and claim other unsecured debts and
the resulting cancellation of debt tax liability, the Debtor sought
Chapter 11 bankruptcy protection on July 27, 2021.
The Plan contemplates the reorganization of the Debtor's debts over
the course of a 5-year period in accordance with the proposed
treatment of each class.
Class 1 consists of the Secured claim of New York State Department
of Taxation and Finance. This claim will be paid in full within 60
months by equal installment payments of $508.15, commencing on the
effective date.
The Class 2 is comprised of the claim of Pentagon Federal Credit
Union, as successor merger to Progressive Credit Union (the "PFCU")
filed in the Debtor's case. According to the proof of claim filed
by Pentagon Federal Credit Union in the Debtor's cases, the
principal balance owed by Scratch Service Corp. - $1,623,419.73,
the principal balance owed by Scratch Service Corp. and Tahitian
Taxi Inc. - $1,460,697.47. The total amount owed by the Debtor
including Attorney's fees in the amount of $15,448.12 -
$3,099,565.32.
The claim will receive the following treatment: (i) the downpayment
in the amount of $10,000.00 will be paid to PFCU by the Debtor on
the effective date of the plan; (ii) the monthly payments of
$600.00 per medallion will be paid within 60 months, commencing on
the effective date of the plan. The Debtor intends to retain the
NYC Taxi Medallions.
Equity interest holder Mitchell Cohen shall retain his interest.
The Plan will be funded from funds accumulated in the Debtor in
Possession bank accounts from the date of the petition and from
income received from the continuing the reorganized business
operations of the Debtor.
A full-text copy of the Disclosure Statement dated March 20, 2023
is available at https://bit.ly/40ttqJr from PacerMonitor.com at no
charge.
Attorney for the Debtor:
Alla Kachan, Esq.
Law Offices of Alla Kachan, P.C.
2799 Coney Island Avenue, Suite 202
Brooklyn, NY 11235
Tel: (718) 513-3145
Fax: (347) 342-3156
Email: alla@kachanlaw.com
About Scratch Service Corp.
Scratch Service Corp., a Sunnyside, N.Y.-based company that
provides taxi and limousine services, filed its voluntary petition
for Chapter 11 protection (Bankr. E.D.N.Y. Case No. 21-41892) on
July 27, 2021, listing $403,093 in assets and $1,614,996 in
liabilities. Mitchell Cohen, president of Scratch Service Corp.,
signed the petition.
Judge Nancy Hershey Lord oversees the case.
Alla Kachan, Esq., at the Law Offices of Alla Kachan, P.C., and
Wisdom Professional Services Inc. serve as the Debtor's legal
counsel and accountant, respectively.
SHERLOCK STORAGE: Gets OK to Hire Victory Real Estate as Broker
---------------------------------------------------------------
Sherlock Storage, LLC received approval from the U.S. Bankruptcy
Court for the District of Montana to employ Victory Real Estate,
LLC.
The Debtor requires a real estate agent to list, advertise and sell
its real property located at 2603 Industry St., Missoula, Mont.,
and its warehouse units, Suites F1 and F2.
The firm will get a 6 percent commission from the sale and a 6
percent commission from the total lease payments for the warehouse
units.
Christopher Jones, owner of Victory Real Estate, 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:
Christopher Jones
Victory Real Estate, LLC
1817 South Ave W.
Missoula, MT 59801
Tel: (406) 360-0763
Email: chrisvictoryre@gmail.com
About Sherlock Storage
Sherlock Storage, LLC sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Mont. Case No. 22-90150) on Oct.
4, 2022, with $1 million to $10 million in both assets and
liabilities. Judge Benjamin P. Hursh oversees the case.
Gary S. Deschenes, Esq., at Deschenes & Associates Law Offices and
Cappis Consulting & Tax, LLC serve as the Debtor's legal counsel
and accountant, respectively.
SKYBLUEOCEAN LTD: Bids for 50% Stake in Sino Jet Due April 10
-------------------------------------------------------------
The assets of Skyblueocean Ltd. are offered for sale with a bid
deadline of April 10, 2023, at 5:00 p.m. P.D.T. The assets consist
of a 50% shareholder interest in Sino Jet Holding Ltd., a Cayman
Islands company. The value of these shares is unknown. If you
which to receive additional information, contact Deborah Burger at
dburger@stapletoninc.com.
SOLER & SOLER: Files Emergency Bid to Use Cash Collateral
---------------------------------------------------------
Soler & Soler Hauling, Inc. asks the U.S. Bankruptcy Court for the
Southern District of Florida, Miami Division, for authority to use
cash collateral and provide adequate protection.
The Debtor requires the use of the cash collateral for the
continued operation of its business in the ordinary course.
The Debtor's primary assets consist of a food trailer,
transportation equipment, industrial fans, and various commercial
vehicles, which are leased. The Debtor also had three bank accounts
on the Petition Date, with a total balance of $98,736.
The Debtor is indebted to FFE Services LLC, FC Marketplace, LLC and
the U.S. Small Business Administration.
As adequate protection to FFE Services, FC Marketplace, and the
SBA, the Debtor proposes a third priority post-petition lien on all
cash generated by the Debtor's services post-petition and a third
priority replacement lien on all assets of the Debtor to the extent
it has a lien on cash collateral.
A copy of the motion is available at https://bit.ly/3mYyJSI from
PacerMonitor.com.
Soler & Soler Hauling, Inc.
Soler & Soler Hauling, Inc. is a family-owned cargo hauling company
that operates interstate in 48 states. Cargo hauled by the company
includes fresh produce, general freight, metal sheet, building
materials, grain feed hay, coal, meat, refrigerated food,
beverages, and paper products.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-11917) on March 10,
2023. In the petition signedby Edisley Soler Negrin, its president,
the Debtor disclosed $1,187,949 in assets and $5,946,472 in
liabilities.
Judge Laurel M. Isicoff oversees the case.
Timothy S. Kingcade, Esq., at Kingcade, Garcia, and McMaken, P.A.,
represents the Debtor as legal counsel.
SORRENTO THERAPEUTICS: Appointment of Equity Committee Sought
-------------------------------------------------------------
Eagle Rock Capital Management and several other investors seek the
appointment of an official committee that will represent public
equity security holders in the Chapter 11 cases of Sorrento
Therapeutics, Inc. and Scintilla Pharmaceuticals, Inc.
The investors asked the U.S. Bankruptcy Court for the Southern
District of Texas to direct the U.S. Trustee for Region 7 to
appoint an equity committee, saying both companies were solvent at
the time they filed for Chapter 11 protection.
"By their own representations, the [companies'] assets far exceed
their liabilities by at least $700 million," said Shari Heyen,
Esq., one of the attorneys at Greenberg Traurig, LLP representing
the investors.
Ms. Heyen said the companies' bankruptcy filing was driven as a
response to the $175 million litigation judgment entered in
December last year in favor of creditors, NantCell, Inc. and
Immunotherapy NANTibody, LLC, and not because the companies are
insolvent.
"These cases were commenced to counteract the short-term liquidity
issues caused by the Nant judgment," the attorney said.
Ms. Heyen said the appointment of an equity committee is also
necessary in light of the allegations asserted against officers and
directors of the companies involving insider transactions,
impermissible overseas transfers and financial mismanagement that
occurred during the two years leading up to the petition date.
Ms. Heyen can be reached at:
Shari L. Heyen, Esq.
Greenberg Traurig, LLP
1000 Louisiana Street, Suite 6700
Houston, TX 77002
Telephone: (713) 374-3500
Facsimile: (713) 374-3505
Email: Shari.Heyen@gtlaw.com
HeyenS@gtlaw.com
About Sorrento Therapeutics
Sorrento Therapeutics, Inc. -- http://www.sorrentotherapeutics.com/
-- is a clinical and commercial stage biopharmaceutical company
developing new therapies to treat cancer, pain (non-opioid
treatments), autoimmune disease and COVID-19. Sorrento's
multimodal, multipronged approach to fighting cancer is made
possible by its extensive immuno-oncology platforms, including key
assets such as next-generation tyrosine kinase inhibitors ("TKIs"),
fully human antibodies ("G-MAB(TM) library"), immuno-cellular
therapies ("DAR-T(TM)"), antibody-drug conjugates ("ADCs"), and
oncolytic virus ("Seprehvec(TM)"). Sorrento is also developing
potential antiviral therapies and vaccines against coronaviruses,
including STI-1558, COVISHIELD(TM) and COVIDROPS(TM), COVI-MSCTM;
and diagnostic test solutions, including COVIMARK(TM).
Sorrento Therapeutics, Inc., and Scintilla Pharmaceuticals, Inc.,
sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No.
23-90085) on Feb. 13, 2023. Sorrento disclosed assets in excess of
$1 billion and liabilities of about $235 million as of Feb. 10,
2023.
Judge David R. Jones oversees the cases.
Jackson Walker LLP and Latham & Watkins LLP are serving as legal
counsel to Sorrento. M3 Partners is serving as restructuring
advisor. Stretto Inc. is the claims agent.
On Feb. 28, 2023, the U.S. Trustee for Region 7 appointed an
official committee to represent unsecured creditors in the Debtors'
Chapter 11 cases. The committee is represented by the law firms of
Norton Rose Fulbright US, LLP and Milbank, LLP.
SOURCEWATER INC: Files Emergency Bid to Use Cash Collateral
-----------------------------------------------------------
Sourcewater, Inc., d/b/a Sourcenergy, asks the U.S. Bankruptcy
Court for the Southern District of Texas in Houston for authority
to use cash collateral in accordance with the budget, with a 5%
variance.
The Debtor needs access to cash collateral immediately to continue
its business operations toward the ultimate goal of a successful
Chapter 11 reorganization.
In anticipation of the filing of a Chapter 11 bankruptcy petition,
the Debtor's counsel performed a search for UCC-1 filings for the
Debtor to confirm the secured creditor pool and determine whether a
Motion to Utilize Cash Collateral was necessary in the bankruptcy
case.
There is one UCC-1 filing in Texas. The SBA UCC collateralizes the
Debtor's cash for the Small Business Administration. The Debtor is
also aware of two UCC-1 filings in Delaware: (1) a financing
statement filed by Energy Debt Holdings LLC; and (2) a financing
statement filed by Joshua Adler, the Debtor's principal. The SBA's
interests are senior to those of Energy Debt Holdings LLC and
Joshua A. Adler.
EDH's attempts to enforce its maturity default caused the
bankruptcy filing. Mr. Adler is the Debtor's principal and founder.
His security interest is subordinate to that of EDH and the SBA.
The Debtor developed a 30-Day Projection and Budget, which is
representative of ongoing operations for the business. The Debtor
expects to disburse $17,194 over the course of the budget. The
Debtor expects to generate an estimated $11,174 during this same
period.
About Sourcewater, Inc.
Sourcewater, Inc. gathers, analyzes and visualizes surface and
subsurface energy and water activity. The Debtor sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S. D. Tex.
Case No.23-30960) on March 17, 2023. In the petition signed by
Joshua A. Adler, as chief executive officer, the Debtor disclosed
up to $1 million in assets and up to $10 million in liabilities.
Jarrod B. Martin, Esq., at Chamberlain, Hrdlicka, White, Williams,
& Aughtry, P.C., represents the Debtor as legal counsel.
STANADYNE LLC: Wins Interim Cash Collateral Access
--------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Stanadyne LLC and its debtor-affiliates to use cash collateral on
an interim basis in accordance with the First Interim Order as
modified by the Second Interim Order.
As previously reported by the Troubled Company Reporter, the
Debtors require the use of cash collateral to permit the orderly
continuation of business operations.
On May 2, 2017, the Debtors entered into a financing agreement,
under which Cerberus Business Finance, LLC served as collateral
agent and administrative agent for the lenders. The Financing
Agreement originally provided for a $15 million revolving credit
facility, and a $75 million term loan facility. The Prepetition
Credit Facility had a maturity of five years. The Financing
Agreement was subsequently amended to increase the Revolving Credit
Facility to $25 million and the Term Loan Facility to $255 million.
As of the Petition Date, the total amount due under the Financing
Agreement was approximately $273 million.
The Court ruled that the second interim budget setting forth a
budget through and including April 2, 2023, will, upon entry of the
Order, become the "Approved Budget" and the period covered will
constitute the "Budget Period."
The "Lender Professional Fees" will be increased from $900,000 to
$1.350 million for the Budget Period.
The Debtors agree not to seek payment of Professional Fees for the
period between the Petition Date and April 2, 2023, that are in
excess of amounts included in the Approved Budget, other than fees
and expenses incurred, after consultation with Cerberus, to address
unanticipated circumstances.
The Cash Collateral Termination Date will be the earlier of: (i)
April 2, 2023, which date may be extended with the express written
consent of Cerberus -- which consent may be granted via electronic
mail -- and (ii) the occurrence of a Termination Event.
The final hearing on the matter is set for March 28 at 1 p.m.
A copy of the order is available at https://bit.ly/3mXuLd1 from
PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3yVSBZw from
PacerMonitor.com.
Stanadyne projects total disbursements, on a weekly basis, as
follows:
$2,220,056 for the week ending March 26, 2023; and
$3,960,761 for the week ending April 2, 2023.
About Stanadyne LLC
Stanadyne LLC is a global automotive technology offering
engine-based fuel and air management systems. Stanadyne is a
developer and manufacturer of fuel pumps and fuel injectors for
diesel and gasoline engines.
Stanadyne and its affiliates sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10207) on
February 16, 2023. In the petition signed by John Pinson, chief
executive officer, the Debtor disclosed up to $500 million in both
assets and liabilities.
Judge John T. Dorsey oversees the case.
The Debtor tapped Young Conaway Stargatt & Taylor, LLP and Hughes
Hubbard and Reed LLP as co-general bankruptcy counsel, Kroll, LLC
as financial advisor, and Kurtzman Carson Consultants LLC as
claims, noticing, and balloting agent and administrative advisor.
TESORINA LLC: Files Emergency Bid to Use Cash Collateral
--------------------------------------------------------
Tesorina, LLC asks the U.S. Bankruptcy Court for the Northern
District of New York for authority to use cash collateral on an
emergency basis. The Debtor requires the use of cash collateral to
continue its operations while it reorganizes.
The Debtor's annual income increased from approximately $280,000 in
2019 to $387,000 in 2021. In mid-2022, the Debtor's income began to
decrease while expenses increased and the Debtor had difficulty
paying the ongoing expenses of the business.
As a result of these difficulties, the Debtor, like many small
businesses in distress, turned to alternative financing
arrangements, many of which had exorbitant repayment terms and,
while providing short term relief, were unsustainable from a
business perspective.
The Debtor's lending arrangements are:
(i) A loan from M&T Bank in March 2017, originally for
$25,000. The debt to M&T Bank is secured by all assets of the
Debtor. The current amount owed is approximately $25,283;
(ii) An Economic Injury Disaster Loan (EIDL) from the U.S.
Small Business Administration in the amount of $80,000 on or about
July 10, 2020. The current amount owed is approximately $85,586;
(iii) A Rapid Finance Agreement dated July 6, 2022 with Small
Business Financial Solutions, LLC was a Merchant Cash Advance in
which Debtor purportedly pledged $18,200 of future receivables, and
a remittance of 5% or $69 daily from applicable accounts receivable
in repayment of the loan;
(iv) A Shopify Capital Agreement (undated, but from
approximately August 2, 2022) with Shopify Capital Inc. was a
Merchant Cash Advance in which the Debtor purportedly pledged
$32,770 of future receivables, and a remittance of 17% daily from
applicable accounts receivable in repayment of the loan;
(v) A Forward Financing Agreement dated September 26, 2022
with Forward Financing LLC was a Merchant Cash Advance in which the
Debtor purportedly pledged $32,660 of future receivables, and a
remittance of 15% or $204 daily from applicable accounts receivable
in repayment of the loan;
(vi) A Flexibility Capital Agreement dated December 30, 2022
with Flexibility Capital Inc. was a Merchant Cash Advance in which
the Debtor purportedly pledged $11,520 of future receivables, and a
remittance of 9% or $110 daily from applicable accounts receivable
in repayment of the loan.
The only Uniform Commercial Code Financing Statements on file with
the State of New York are as follows:
(i) M&T Bank filed on March 23, 2017 and renewed on September
24, 2021 is secured by all the Debtor's assets; and
(ii) US Small Business Administration filed on July 10, 2020 is
secured by all the Debtor's personal property.
The Debtor is not admitting that any of the creditors hold valid,
perfected or enforceable pre-petition liens and security interests
in nor ownership interests to any of the Debtor's property, and
Debtor does not waive the right to contest the validity, perfection
or enforceability of their liens and security interests in and to
any such property. While the MCA agreements listed above appear to
refer to the transaction as the sale of receivables, the Debtor
does not concede that they were sales as a matter of law, and
reserves its rights with respect to future positions.
As of the Petition Date, the Debtor estimates that its cash balance
is approximately $3,456. The Debtor has no accounts receivable and
has inventory with a cost value of approximately $37,000.
In addition to the indebtedness, the Debtor has amounts of wages
owed to three employees in the amount of $682. The Debtor also has
unsecured debt to vendors, credit cards and loans of $59,037.
To provide the Creditors with adequate protection on account of the
use and disposition of the cash collateral, the Debtor proposes to
provide the Creditors with a replacement lien upon the same assets
in which the Creditors maintained a security interest prior to the
filing, including accounts receivable, and the proceeds thereof,
with the same validity, priority, and extent as existed prior to
the petition date to secure any diminution in the value of its
collateral from continued operations.
A copy of the motion is available at https://bit.ly/3JV9Jov from
PacerMonitor.com.
About Tesorina, LLC
Tesorina, LLC operates a clothing boutique selling women's clothing
and accessories on line and at a storefront at 17 Chenango St,
Binghamton, NY 13901.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D.N.Y. Case No. 23-60174-6) on March 17,
2023. In the petition signed by Desiree McCormick, its owner, the
Debtor disclosed up to $50,000 in assets and up to $10 million in
liabilities.
Peter A. Orville, Esq., at Orville & McDonald Law, P.C., represents
the Debtor as legal counsel.
TOP SPORTS: Seeks to Hire Lane Law Firm as Bankruptcy Counsel
-------------------------------------------------------------
Top Sports Production, LLC seeks approval from the U.S. Bankruptcy
Court for the Northern District of Texas to hire The Lane Law Firm,
PLLC as its counsel.
The Debtor requires legal counsel to:
a. assist, advise and represent the Debtor relative to the
administration of its Chapter 11 case;
b. assist, advise and represent the Debtor in analyzing its
assets and liabilities, investigating the extent and validity of
lien and claims, and participating in and reviewing any proposed
asset sales or dispositions;
c. attend meetings and negotiate with representatives of
secured creditors;
d. assist the Debtor in the preparation, analysis and
negotiation of any plan of reorganization and disclosure
statement;
e. take all necessary action to protect and preserve the
interests of the Debtor;
f. appear, as appropriate, before the bankruptcy court and
other courts; and
g. perform all other necessary legal services.
The firm will be paid at these rates:
Robert C. Lane, Partner $550 per hour
Joshua Gordon, Partner $500 per hour
Associate Attorneys $375 to $425 per hour
Paralegals/Legal Assistants $150 to $190 per hour
In addition, the firm will seek reimbursement for expenses
incurred.
The firm received a retainer in the amount of $20,000 from the
Debtor.
Robert Lane, Esq., a partner at The Lane Law Firm, 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:
Robert C. Lane, Esq.
Joshua D. Gordon, Esq.
The Lane Law Firm, PLLC
6200 Savoy, Suite 1150
Houston, TX 77036
Telephone: (713) 595-8200
Facsimile: (713) 595-8201
Email: notifications@lanelaw.com
Joshua.gordon@lanelaw.com
About Top Sports Production
Top Sports Production, LLC is a privately held company in the
sports advertising business. Th company is based in Mansfield,
Texas.
Top Sports Production filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Case No.
23-40708) on March 13, 2023, with $35,552 in assets and $3,862,449
in liabilities. Adrian Allsman, manager, signed the petition.
Judge Mark X. Mullin oversees the case.
Robert C. Lane, Esq., at the Lane Law Firm represents the Debtor as
counsel.
TRANSIT PHYSICAL: Seeks Cash Collateral Access
----------------------------------------------
Transit Physical Therapy PC, d/b/a Transit Physical Therapy, asks
the U.S. Bankruptcy Court for the Central District of California,
Riverside Division, for authority to use cash collateral to operate
its business.
Since inception in 2018, the Debtor's patient volume has increased
rapidly and consistently. Over the past year, this expansion, and
the expenses associated with it, have caused the Debtor to seek out
additional financing. Unfortunately, the Debtor entered into
financing agreements that imposed extraordinarily harsh terms,
charging as much 400% annual interest and as much as $5,000 per day
in service payments. Without bankruptcy protection the Debtor was
very few days away from insolvency.
Notwithstanding the foregoing, the Debtor's business model is
proven, and is sound. The Debtor is ready to reorganize its debts
to pay creditors. The Debtor expects patient volume to continue to
grow.
The Debtor's assets total $2.7 million, with cash and receivables
equaling $2.5 million.
Six creditors have a blanket security interest that generally
covers "all of Debtor's assets" or other clearly stated language
that gives that creditor a security interest in Debtor's cash,
accounts, or accounts receivable:
1. The senior secured creditor is U.S. Small Business
Administration, secured by a UCC-1 Financing Statement filed on
April 7, 2020 as Filing Number 20-7772039118. The balance of the
loan on the Petition Date is approximately $500,000.
2. The second secured creditor is U.S. Small Business
Administration, secured by a UCC-1 Financing Statement filed on
December 6, 2021 as Filing Number U210107885327. The collateral for
the loan is all assets and proceeds therefrom. The balance of the
loan on the Petition Date is approximately $2.066 million.
3. The third secured creditor is Banker's Healthcare Group,
secured by a UCC-1 Financing Statement filed on July 21, 2022 as
Filing Number U220212234829. The collateral for the loan is all
assets and proceeds therefrom. The balance of the loan on the
Petition Date is approximately $99,955.
4. The fourth secured creditor is Itria Ventures LLC, secured
by a UCC-1 Financing Statement filed on November 23, 2022 as Filing
Number U220246326936. The collateral for the loan is all assets and
proceeds therefrom. The balance of the loan on the Petition Date is
approximately $400,000.
5. The fifth secured creditor is Seamless Capital Group, LLC,
secured by a UCC-1 Financing Statement filed on February 21, 2023
as Filing Number U230012279933. The collateral for the loan is all
assets and proceeds therefrom. The balance of the loan on the
Petition Date is approximately $392,088.
6. The sixth secured creditor is Everest Business Funding
secured by a UCC-1 Financing Statement filed on March 15, 2023 as
Filing Number U230017915727. The collateral for the loan is all
assets and proceeds therefrom. The balance of the loan on the
Petition Date is approximately $350,000.
The Debtor is willing to offer adequate protection in the form of
replacement liens in the same priority and validity as the secured
creditors held pre-petition. In addition, the Debtor is willing to
offer adequate protection in the form of periodic cash payments to
the secured creditor in an amount deemed necessary.
A copy of the motion is available at https://bit.ly/3TuFs2U from
PacerMonitor.com.
About Transit Physical Therapy PC
Transit Physical Therapy PC offers personal rehabilitation services
including physical therapy, occupational therapy, and speech and
language pathology.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-11057) on March 20,
2023. In the petition signed by Mitree Michael Piromgraipakd, its
president, the Debtor disclosed $2,700,328 in assets and $4,147,237
in liabilities.
Judge Scott H. Yun oversees the case.
Todd Turoci, Esq., at the Turoci Firm, represents the Debtor as
legal counsel.
TSS ACQUISITION: Creditors to Get Proceeds From Liquidation
-----------------------------------------------------------
TSS Acquisition Company filed with the U.S. Bankruptcy Court for
the Southern District of Ohio a Plan of Liquidation dated March 19,
2023.
The Debtor specialized in implementing cutting edge technologies
into any manufacturing operation and delivered turn-key robotic
cells and custom automation system to meet its customers' stringent
requirements.
The Debtor entity was formed in November of 2018 and at the end of
2018, the Debtor acquired the assets of TSS Technologies, Inc.
("TSS Tech") via an Article 9 sale. TSS Tech was a third generation
business that provided total automation solutions from material
handling and assembly to web handling and vision inspection.
Most of the Debtor's physical assets are in the process of being
liquidated. This Plan provides for the orderly liquidation of the
remaining assets of the estate over time, and for the proceeds to
be allocated in accordance with the terms of this Plan and
distributed to holders of Allowed Claims. One the Effective Date,
all the Debtor's assets will be vested in the Liquidating Debtor.
The Liquidating Debtor will, among other things, liquidate the
assets, resolve any Disputed Claims, prosecute any Causes of
Action, except for Avoidance Actions against insiders, and make
distributions under the Plan. With respect to Avoidance Actions
against insiders, Matthew Schaeffer, the current Subchapter V
Trustee, will be vested with the authority to prosecute these
Avoidance Actions, if any. The Liquidating Debtor will be dissolved
as soon as practicable after the final distribution is made
pursuant to the Plan.
In order to foster three separate sales of assets from the West
Chester, Ohio location of the Debtor, the Debtor, Resilience (as
the first-position lien holder) and the Debtor's landlord at the
West Chester, Ohio location (Denali Ohio Global Industrial, LLC)
negotiated resolution of concerns over the lease and use of the
premises in West Chester, Ohio, which resulted in the entry of the
Agreed Order Approving Adequate Protection of Interests of Landlord
in 8800 Global Way Premises (the "Denali Agreed Order"), which was
entered on March 13, 2023.
In accordance with the Denali Agreed Order, the Debtor made payment
in the amount of $109,484.19 relating to unpaid post-petition rents
through April 9, 2023, the parties agreed upon an exit date from
the facility as of April 9, 2023, and Resilience agreed to provide
a carve out to the landlord in the amount of $53,301.23, in
exchange for waivers from the landlord as otherwise identified in
the Denali Agreed Order. The Denali Agreed Order resolved disputes
as to the amounts to be paid to the landlord for post-petition
rents and expenses and permitted the Debtor to limit exposure for
administrative expenses for continuing use of the premises through
the first nine days of April, 2023.
Based upon the claims scheduled without dispute and the claims
filed by creditors in this case, the unsecured claims total
approximately $9 Million, the priority claims total approximately
$625,000 (which does not include the approximately $600,000 in
uncollected sales tax relating to the Carlsbad, California
operations, but which does include amounts by creditors that do not
appear to have any basis for claiming priority), the secured claims
total approximately $13 Million, and the total of untimely filed
claims is $477,092.73.
In addition to the assets identified with specificity in this
Article 1.05 of the Plan, there remain other assets including,
without limitation, income from operations and potential insurance
refunds and potential claims under the Debtor's Director's and
Officer's liability policy. The remaining potential Chapter 5
claims, collections of accounts receivable, the potential value
from the Insurance Policy, and the potential insurance refunds and
potential claims under the Debtor's Director's and Officer's
liability policy is referred as the "Recoveries."
This Plan provides for the orderly liquidation of the remaining
assets of the estate over time, and for the proceeds to be
allocated in accordance with the terms of the Plan and distributed
to holders of Allowed Claims.
This Plan provides for full payment of allowed administrative
expenses and allowed priority claims. Holders of Allowed Unsecured
Claims are expected to receive a percentage distribution of their
Allowed Claim which percentage amount will depend on the amount of
Allowed Claims in Class 4 and the extent of Recoveries actually
obtained.
Class 4 consists of General Unsecured Claims. Allowed Claims in
Class 4 will be paid pro-rata from the Fund established with the
Recoveries, after and subject to the payment of Allowed
Administrative Expenses and Allowed Priority Tax Claims, and
payments to all other Classes but pro-rata with the Unsecured
portions of those Allowed Claims as provided in the Class
treatments disclosed above. No interest shall accrue on any Claims
in this Class. This Class is impaired.
Class 5 consists of all Equity Interests of the Debtor. The Holder
of Class 5 Equity Interests shall not be entitled to distributions
of any kind on account of such Equity Interests, but will retain
ownership of the Debtor and have authority to dissolve the Debtor
upon completion of all payments under the Plan.
On the Effective Date, automatically and without further action,
all remaining assets of the Debtor, whether allocated to Fund or
otherwise, shall vest in the Liquidating Debtor for the sole and
express purpose of making distributions to holders of Allowed
Claims pursuant to the terms and conditions of the Plan. The
Liquidating Debtor, pursuant to section 1123(b)(3)(B) of the
Bankruptcy Code, shall be deemed the successor in interest to the
Debtor and be appointed the representative of the Estate for and
have all the duties, powers, standing and authority necessary to
implement the Plan and to administer the assets of the Estate for
the benefit of holders of Allowed Claims.
Upon or as soon as practicable after the Effective Date, the
Liquidating Debtor shall establish the Fund. The establishment of
the Fund shall be approved in connection with the entry of the
Confirmation Order by the Bankruptcy Court. On the Effective Date,
the Debtor shall be deemed to have transferred, conveyed and
assigned all assets to the Fund within the Liquidating Debtor. The
Liquidating Debtor shall be deemed a successor in interest to and
shall be appointed representative of the estate of the Debtor
within the meaning of Section 1123(b)(3)(B) of the Bankruptcy
Code.
A full-text copy of the Liquidating Plan dated March 19, 2023 is
available at https://bit.ly/3LNWgAb from PacerMonitor.com at no
charge.
About TSS Acquisition Company
TSS Acquisition Company is a manufacturing company with locations
in West Chester, Ohio, and in Carlsbad and Oakland, Calif.
TSS Acquisition sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Ohio Case No. 22-12154) on Dec. 19,
2022. In the petition signed by its chief restructuring officer,
Sumner M. Saeks, the Debtor disclosed up to $10 million in assets
and up to $50 million in liabilities.
Judge Beth A. Buchanan oversees the case.
Patricia J. Friesinger, Esq., at Coolidge Wall Co., L.P.A., is the
Debtor's legal counsel.
TUTOR PERINI: S&P Downgrades ICR to 'B-', Outlook Negative
----------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Tutor Perini
Corp. to 'B-' from 'B+'. The outlook on the rating is negative.
S&P said, "We lowered our issue-level rating on the company's term
loan to 'B+' from 'BB', the recovery rating remains unchanged. At
the same time, we lowered our rating on its senior secured notes to
'CCC' from 'B-', the recovery rating remains unchanged.
"The negative outlook reflects our view that Tutor Perini faces
near-term refinancing risk."
The downgrade takes into account Tutor Perini's weaker than
previously expected operating performance and heightened
refinancing risk.
Tutor Perini Corp.'s operating performance in 2022 was weaker than
expected mainly due to adverse judgments or decisions, significant
settlements, and changes in estimates for project charges. As a
result, adjusted EBITDA margins declined from 8.0% in 2021 to
negative 3.1% in 2022 and S&P Global Ratings-adjusted debt to
EBITDA increased to negative 8.9x versus 2.9x in 2021. Revenue in
2023 should benefit from Tutor Perini's existing backlog of $7.9
billion as of Dec. 31, 2022. However, this will be offset by
certain large civil projects completing or nearing completion in
2023. S&P said, "Although, the $1.2 trillion Infrastructure
Investment and Jobs Act could benefit Tutor Perini by funding new
and existing infrastructure projects, we believe there are
uncertainties around the timing and magnitude of new projects the
company expects to win this year due to budgetary constraints for
certain customers and/or lower bids from competitors. Additionally,
we expect negotiation of settlements and implementation of new
strategic initiatives will improve its S&P Global Ratings-adjusted
EBITDA margin to about 5% in 2023. But given its multiyear
contracts, we believe the pace of recovery in operating performance
will be slow. We forecast S&P Global Ratings-adjusted debt to
EBITDA will be about 5x in 2023."
In addition, the company's term loan and revolving credit facility
currently mature on August 2027 and August 2025, respectively. Both
facilities can spring if Tutor Perini's $500 million unsecured
notes due in May 2027 remain outstanding as of Jan. 30, 2025. In
S&P's view, this heightens the company's refinancing risk and could
pressure liquidity.
S&P expects Tutor Perini to generate continued good free operating
cash flow (FOCF) in 2023, driven by solid collection activity and
reduced capital spending.
Its improvements in contract terms regarding the timing of cash
collections could lead to a better working capital management in
2023 and following years. Additionally, S&P expects capital
expenditure (capex) will be lower than 2022 levels in the $40
million-$50 million range leading to FOCF-to-adjusted-debt ratio
above 20% in 2023.
In S&P's view, Tutor Perini has a good market position in the
highly competitive and cyclical engineering and construction (E&C)
sector.
The company is one of the largest engineering and construction
firms in the U.S. Tutor Perini had a considerable backlog of $7.9
billion as of Dec. 31, 2022, in its civil, building, and specialty
contractor segments, which provides some revenue visibility because
cancellation rates have historically been low. However, S&P thinks
its exposure to cyclicality of E&C end markets heightens the risk
for potential swings in earnings and cash flow, and possible
charges for cost overruns on fixed-price contracts.
The negative outlook on Tutor reflects the refinancing risk if the
company's $500 million senior unsecured notes remain outstanding on
Jan. 30, 2025, which would spring the maturities for its term loan
and revolver to that date.
S&P said, "We could lower our rating during the next 12 months if
we come to believe the company is likely to default within the next
12 months, without an unforeseen positive development. This could
occur if liquidity weakens materially or the company pursues a
subpar debt exchange.
"We could raise our ratings on Tutor Perini by one notch if the
company successfully repays or refinances its outstanding unsecured
notes under the terms outlined.
"In addition, we would expect to see a successful execution of
projects in the backlog, absent significant project losses leading
to an adjusted debt-to-EBITDA metric below 6.5x."
ESG credit indicators: E-2, S-2, G-2
URBAN COMMONS: Asset Sale & Litigation Proceeds to Fund Plan
------------------------------------------------------------
Urban Commons 2 West LLC, and its Debtor Affiliates filed with the
U.S. Bankruptcy Court for the Southern District of New York a
Disclosure Statement describing Chapter 11 Plan dated March 20,
2023.
On January 1, 2000, Millennium BPC Development, LLC, as tenant,
entered into a ground lease (the "Ground Lease") with Battery Park
City Authority (the "BPCA"), as the landlord, to develop a
mixed-use condominium building in Battery Park City known as the
Millennium Point Condominium (the "Condominium"), located at 2 West
Street, New York, New York 10004 (the "Property").
On September 20, 2018, the Debtors acquired from the Predecessors,
the Hotel Interests for the purchase price of $147 million, secured
by a purchase mortgage from BPC Lender, LLC in the amount of $96
million, with the remaining balance paid in cash by the Debtors
through a capital raise with their various investors. Upon
acquisition, the Debtors' first order of business was to try and
rebrand the Hotel from the Wagner to an internationally recognized
brand.
On or about November 2, 2022, BPC Lender filed an action in N.Y.
State Supreme Court to foreclose its interest as mortgagee in the
Property owned by the Debtors. After the State Court's decision and
order denying the Debtors' motion for a Yellowstone injunction, and
the Debtors' failure to comply under the 1st Dept's decision, the
Debtors ultimately filed the Chapter 11 Cases in an attempt to
preserve the value of their interests in the Hotel Lease
Interests.
The Plan provides a means by which the Debtors' main assets will be
liquidated through the Sale. The Plan further provides that the
proceeds of such liquidation, together with the Debtors' Cash and
Causes of Action, will be distributed under Chapter 11 of the
Bankruptcy Code, and sets forth the treatment of all Claims
against, and interests in, the Debtors.
The Plan provides for the appointment of a Plan Administrator who
will monetize the Debtors' assets and make Distributions to Holders
of Allowed Claims as provided in the Plan.
The Plan provides for payments on Allowed Claims in accordance with
the priorities for claims as set forth under the Bankruptcy Code.
The Plan will primarily be funded with the Debtors' Cash and sale
of the Hotel Interest. The Plan may also be funded with Litigation
Proceeds, if any, and the net proceeds from the liquidation of any
other assets of the Debtors.
Class 1 consists of the Allowed Secured Claims of BPC Lender, LLC,
in the current estimated outstanding amount of $110,000,000. The
holder of the Allowed Class 1 Claims shall receive (a) all net Cash
proceeds from the Sale after payment of (i) the Administrative
Claims of BPC DIP Lender, LLC, (ii) all Allowed Cure Claims and
(iii) the Broker Fee plus (b) 50% of the Litigation Proceeds up to
100% of their Allowed Class 1 Claim. The balance of the Class 1
Creditor's Claims shall be deemed Class 2 Claims for voting, but
not distribution purposes. Class 1 is impaired under the Plan.
Class 2 consists of the holders of General Unsecured Claims in the
estimated amount of $4,750,000. Holders of Claims Class 2 that are
Allowed as defined in the Plan will receive, in full and final
satisfaction, compromise, settlement and release of the Allowed
General Unsecured Claims, a Pro Rata Distribution from (a) 50% of
the Litigation Proceeds and (b) Available Cash remaining after
payment of Allowed Administrative Claims, Allowed Secured Claims,
Allowed Priority Tax Claims, U.S. Trustee Fees, Allowed Other
Priority Claims and Post Effective Date Administrative Claims up to
100% of their Allowed Claims in one or more Distributions as
determined by the Plan Administrator on a date(s) to be determined
by the Plan Administrator in full and final satisfaction of all
Class 2 Claims. Class 2 is impaired under the Plan.
Class 3 consists of the holders of Interests. Holders of Class 3
Interests shall receive a distribution of any Available Cash after
the payment of all unclassified and classified Claims and Post
Effective Date Administrative Claims in full, with interest at the
Federal judgment rate. It is uncertain whether Holders of Class 3
Claims will receive a distribution under the Plan. Class 3 is
impaired under the Plan.
The Plan will primarily be funded with the net sale proceeds of the
Hotel Interests, the Debtors' cash on hand, the Administrative and
Unsecured Carveouts and Litigation Proceeds, if any, together with
the net proceeds from the liquidation and/or turnover of any other
assets of the Debtors. Distributions shall be made by the Plan
Administrator.
Pursuant to Bid Procedures Order, the Debtors have obtained
authority from the Bankruptcy Court to sell the Hotel Interests at
the Auction.
A full-text copy of the Disclosure Statement dated March 20, 2023
is available at https://bit.ly/3niQDQw from PacerMonitor.com at no
charge.
About Urban Commons 2 West
Urban Commons 2 West, LLC, a company in Corona Del Mar, Calif., and
its affiliates, filed voluntary petitions for Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 22-11509) on Nov. 15, 2022. At the
time of the filing, Urban Commons 2 West listed as much as $100
million to $500 million in both assets and liabilities.
Judge Philip Bentley oversees the cases.
Davidoff Hutcher & Citron, LLP and Getzler Henrich & Associates,
LLC serve as the Debtor's legal counsel and restructuring advisor,
respectively. Mark Podgainy, a partner at Getzler, is the Debtor's
chief restructuring officer.
US TELEPACIFIC: Main Street Marks $18.3M Loan at 63% Off
--------------------------------------------------------
Main Street Capital Corporation has marked its $18,352,000 loan
extended to US TelePacific Corp to market at $6,859,000 or 37% 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 to US TelePacific
Corp. The loan accrues interest at a rate of 11.57% (SF+1.25%,
7.25% Payment In Kind) per annum. The loan matures on May 2, 2026.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
US TelePacific Corp., doing business as TPx Communications,
provides communications and managed services.
UTILIMAN UTILITY: Seeks Cash Collateral Access
----------------------------------------------
Utiliman Utility Contractors LLC asks the U.S. Bankruptcy Court for
the Northern District of Georgia, Rome Division, for authority to
use cash collateral pay the operating expenses of the Business in
accordance with the budget, with a 15% variance.
Corporation Service Company, as representative, asserts liens upon
the Debtor's assets as more particularly described in the UCC
Financing Statement number 038-2022-016950 filed on May 11, 2022,
in the records of the Superior Court of Coweta County, Georgia,
securing an asserted outstanding indebtedness in the unknown
amount, but which is estimated to be approximately $8,000.
Vader Servicing, LLC may assert liens upon the Debtor's assets as
more particularly described in the Financing Statement.
Riviera Finance of Texas, Inc. has filed an UCC Financing Statement
number 038-2021-098909 filed on December 30, 2021, in the records
of the Superior Court of Coweta County, Georgia. The underlying
debt evidenced by the financing statement has been satisfied.
However, the Debtor will serve Riviera with notice of the Motion.
As adequate protection, the lenders will be granted replacement
liens to the extent that Debtor's use of cash collateral results in
a decrease in value of their interest in the property.
A hearing on the matter is set for April 5 at 9:25 a.m.
A copy of the Debtor's motion and budget is available at
https://bit.ly/3yQeGIN from PacerMonitor.com.
The Debtor projects $7,663 in total expenses for one month.
About Utiliman Utility Contractors LLC
Utiliman Utility Contractors LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-40378) on
March 14, 2023. In the petition signed by David Turner, sole
member, the Debtor disclosed up to $50,000 in assets and up to $1
million in liabilities.
Thomas T. McClendon, Esq., at Jones & Walden, LLC, represents the
Debtor as legal counsel.
VIDA CAPITAL: Main Street Marks $15.4M Loan at 22% Off
------------------------------------------------------
Main Street Capital Corporation has marked its $15,448,000 loan
extended to Vida Capital, Inc to market at $12,049,000 or 78% 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 to Vida Capital,
Inc. The loan accrues interest at a rate of 10.38% (L+6%) per
annum. The loan matures on October 1, 2026.
Main Street is a principal investment firm primarily focused on
providing customized debt and equity financing to lower middle
market companies and debt capital to middle market companies.
Vida Capital is an alternative asset management company.
VILLAGE CENTER: Seeks Cash Collateral Access
--------------------------------------------
The Village Center Group, LP asks the U.S. Bankruptcy Court for the
District of Massachusetts for authority to use the cash collateral
of secured creditor Michael Italiaander.
Italiaander is the holder of a note made by the Debtor, with the
principal amount of $872,804. The note is secured by a mortgage on
the property. Italiaander has not yet filed a Proof of Claim in
this case but according to their Opposition to Motion to Amend the
Voluntary Petition, the current amount owed on the note is
$1,115,007.
The Debtor believes it is obligated to the Massachusetts Department
of Revenue but is unsure of the amount owed and is waiting for a
Proof of Claim to be filed. The Debtor is obligated to the Internal
Revenue Service in the approximate amount of $24,340.
The Debtor is currently operating under limited staffing, and at
this time has no employees, a General Partner is currently handling
all aspects of running the business. The Debtor is still recovering
from the economic difficulties arising from COVID-19 and the
current inflation has increased operating expenses.
Since the voluntary petition was filed, the Debtor has received
$12,365 in rental income and paid $14,040 in expenses.
The Debtor asserts that any cash collateral it used will be used
solely to maintain operations and keep the Property maintained,
thus reducing the chance of any possible diminution in value of the
Property. However, the Debtor also proposes to grant Italiaander
the following as adequate protection:
a. The Debtor will make monthly adequate protection payments
to Italiaander in the amount of $5,091.
b. The Debtor will remain within its Budget, within an overall
margin of 10%.
The Debtor believes this proposal more than adequately protects
Italiaander.
A copy of the motion is https://bit.ly/3mUiCWg from
PacerMonitor.com.
The Village Center Group, Limited Partnership
West Yarmouth, Mass.-based Village Center Group filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
D. Mass. Case No. 23-10193) on Feb. 23, 2023, with $500,000 to $1
million in assets and $1 million to $10 million in liabilities.
Brian S. Braginton-Smith, a partner at Village Center Group, signed
the petition.
The Village Center Group, Limited Partnership is a single asset
real estate as defined in 11 U.S.C. Section 101(51B).
Judge Christopher J. Panos oversees the case.
The Law Office of Peter M. Daigle represents the Debtor as
counsel.
VYANT BIO: Closes San Diego Facility
------------------------------------
Vyant Bio, Inc.'s subsidiary, StemoniX, Inc., terminated its
January 2022, lease agreement with Nancy Ridge Technology Center,
L.P. for the lease of approximately 5,000 rentable square feet of
laboratory and office space for an original term of approximately
five years. The San Diego Lease was guaranteed by the Company. The
effective date of the termination is March 31, 2023. The landlord
is retaining approximately two months rent ($45,000) as an early
termination fee.
On March 7, 2023, the Company sold its equipment in its San Diego
laboratory to a third party and received $200,000 in consideration
for such sale.
About Vyant Bio
Headquartered in Cherry Hill, New Jersey, Vyant Bio, Inc. (formerly
known as Cancer Genetics, Inc.) is an innovative biotechnology
company reinventing drug discovery for complex neurodevelopmental
and neurodegenerative disorders. Its central nervous system drug
discovery platform combines human-derived organoid models of brain
disease, scaled biology, and machine learning.
Vyant Bio reported a net loss of $40.86 million for the year ended
Dec. 31, 2021, a net loss of $8.65 million for the year ended Dec.
31, 2020, a net loss of $6.71 million for the year ended Dec. 31,
2019, and a net loss of $20.37 million for the year ended Dec. 31,
2018. As of Sept. 30, 2022, the Company had $23.04 million in
total assets, $9.20 million in total liabilities, and $13.84
million in total stockholders' equity.
WBS CAPITAL: Case Summary & Six Unsecured Creditors
---------------------------------------------------
Debtor: WBS Capital Inc.
13620 38th Avenue
Flushing, NY 11354
Business Description: WBS Capital Inc. is the fee simple owner
of a property located at 1405 - 1447 Saint
Paul Street, Rochester, NY 14621 valued at
$35 million.
Chapter 11 Petition Date: March 22, 2023
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 23-40939
Judge: Hon. Elizabeth S. Stong
Debtor's Counsel: Scott S. Markowitz, Esq.
TARTER KRINSKY & DROGIN LLP
1350 Broadway
11th Floor
New York, NY 10018
Tel: (212) 216-8000
Email: smarkowitz@tarterkrinsky.com
Total Assets: $37,002,023
Total Liabilities: $11,259,653
The petition was signed by Xiaomei Lu as president.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/RDQPK2A/WBS_Capital_Inc__nyebke-23-40939__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's Six Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Loung Construction Inc. Trade $825,554
391 Washington St
Suite 800
Buffalo, NY 14203
2. Rochester Gas & Electric Utilities $313,579
180 South Clinton Avenue
Rochester, NY 14604
3. Frontier Communications Trade $36,930
5050 Kingsley Drive
Cincinnati, OH 45227
4. CH3 Partner LLC Trade $15,000
148-26 10th Ave
Whitestone, NY 11357
5. Kevin Kerveng Tung, P.C. Professional $14,320
136-20 38th Avenue Fees
Suite 3D
Flushing, NY 11354
6. W.K. Law, CPA, P.C. Professional $6,850
51 Seitz Dr Fees
Bethpage, NY 11714
WEWORK INC: Delays Filing of Annual Report
------------------------------------------
WeWork Inc. has filed a Notification of Late Filing on Form 12b-25
with the Securities and Exchange Commission with respect to its
Annual Report on Form 10-K as of and for the year ended Dec. 31,
2022. The Company has determined that it is unable to file its
Form 10-K within the prescribed time period without unreasonable
effort or expense.
The Company expects to file its Annual Report on Form 10-K on or
before Friday, March 31, 2023, which is within the 15-calendar day
extension provided by Rule 12b-25.
As described in more detail in its Current Report on Form 8-K filed
with the SEC on March 17, 2023, the Company and certain of its
subsidiaries have entered into a transaction support agreement and
other related agreements with certain of the Company's investors
and creditors to restructure its debt and raise additional capital
through various transactions. The Company said the negotiations
with respect to the Transactions have involved significant
resources and have been a priority for management, thereby
diverting significant management time and internal resources from
the Company's processes to review and complete its financial
statements and related disclosures in a manner that would permit a
timely filing of the Form 10-K.
About WeWork
New York, NY-based WeWork Inc. (NYSE: WE) -- wework.com -- 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.
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.
YAK ACCESS: Moody's Lowers PDR to D-PD on Debt Restructuring
------------------------------------------------------------
Moody's Investors Service has downgraded Yak Access, LLC's
Probability of Default Rating to D-PD from C-PD reflecting the
company's completed debt restructuring. Yak's Ca Corporate Family
Rating, Ca first-lien term loan and revolver ratings and C
second-lien term loan rating as well as its negative outlook remain
unchanged. Subsequent to the action, Moody's will withdraw all of
Yak' ratings.
Governance is a key driver for the rating action, given Yak's high
financial leverage that resulted in a debt restructuring.
Downgrades:
Issuer: Yak Access, LLC
Probability of Default Rating, Downgraded to D-PD from C-PD
Outlook Actions:
Issuer: Yak Access, LLC
Outlook, Remains Negative
RATINGS RATIONALE
Yak has completed the debt restructuring as proposed under the
restructuring support agreement ("RSA"). The debt restructuring is
considered an event of default under Moody's definition. Term loan
lenders received a combination of new loans maturing in 2028 and
newly issued non-common equity instruments. Yak has eliminated over
$500 million of debt, which was originally set to mature between
July 2023 and July 2024, and received a liquidity infusion of $121
million and a new secured $75 million revolving credit facility.
Yak's operating performance deteriorated over the past few years
due to weakness in the midstream pipeline sector which led to lower
mat utilization from project delays and reduced new project
opportunities, along with lower margins on mat sales and fewer new
mat leases.
Subsequent to the actions, Moody's will withdraw all of Yak's
ratings given the completed debt restructuring.
Yak Access, LLC, headquartered in East Columbia, Mississippi, is a
specialty equipment leasing and logistics company focused on
temporary access solutions to remote construction sites mostly
serving energy infrastructure repair and development work in North
America.
The principal methodology used in this rating was Construction
published in September 2021.
[] BOOK REVIEW: Hospitals, Health and People
--------------------------------------------
Author: Albert W. Snoke, M.D.
Publisher: Beard Books
Softcover: 232 pages
List Price: $34.95
Order your personal copy today at
http://www.beardbooks.com/beardbooks/hospitals_health_and_people.html
Hospitals, Health and People is an interesting and very readable
account of the career of a hospital administrator and physician
from the 1930's through the 1980's, the formative years of today's
health care system. Although much has changed in hospital
administration and health care since the book was first published
in 1987, Dr. Snoke's discussion of the evolution of the modern
hospital provides a unique and very valuable perspective for
readers who wish to better understand the forces at work in our
current health care system.
The first half of Hospitals, Health and People is devoted to the
functional parts of the hospital system, as observed by Dr. Snoke
between the late 1930's through 1969, when he served first as
assistant director of the Strong Memorial Hospital in Rochester,
New York, and then as the director of the Grace-New Haven Hospital
in Connecticut. In these first chapters, Dr. Snoke examines the
evolution and institutionalization of a number of aspects of the
hospital system, including the financial and community
responsibilities of the hospital administrator, education and
training in hospital administration, the role of the governing
board of a hospital, the dynamics between the hospital
administrator and the medical staff, and the unique role of the
teaching hospital.
The importance of Hospitals, Health and People for today's readers
is due in large part to the author's pivotal role in creating the
modern-day hospital. Dr. Snoke and others in similar positions
played a large part in advocating or forcing change in our hospital
system, particularly in recognizing the importance of the nursing
profession and the contributions of non-physician professionals,
such as psychologists, hearing and speech specialists, and social
workers, to the overall care of the patient. Throughout the first
chapters, there are also many observations on the factors that are
contributing to today's cost of care. Malpractice is just one
example. According to Dr. Snoke, "malpractice premiums were
negligible in the 1950's and 1960's. In 1970, Yale-New Haven's
annual malpractice premiums had mounted to about $150,000." By the
time of the first publication of the book, the hospital's premiums
were costing about $10 million a year.
In the second half of Hospitals, Health and People, Dr. Snoke
addresses the national health care system as we've come to know it,
including insurance and cost containment; the role of the
government in health care; health care for the elderly; home health
care; and the changing role of ethics in health care. It is
particularly interesting to note the role that Senator Wilbur Mills
from Arkansas played in the allocation of costs of hospital-based
specialty components under Part B rather than Part A of the
Medicare bill. Dr. Snoke comments: "This was considered a great
victory by the hospital-based specialists. I was disappointed
because I knew it would cause confusion in working relationships
between hospitals and specialists and among patients covered by
Medicare. I was also concerned about potential cost increases. My
fears were realized. Not only have health costs increased in
certain areas more than anticipated, but confusion is rampant among
the elderly patients and their families, as well as in hospital
business offices and among physicians' secretaries." This aspect of
Medicare caused such confusion that Congress amended Medicare in
1967 to provide that the professional components of radiological
and pathological in-hospital services be reimbursed as if they were
hospital services under Part A rather than part of the co-payment
provisions of Part B.
At the start of his book, Dr. Snoke refers to a small statue,
Discharged Cured, which was given to him in the late 1940's by a
fellow physician, Dr. Jack Masur. Dr. Snoke explains the
significance the statue held for him throughout his professional
career by quoting from an article by Dr. Masur: "The whole question
of the responsibility of the physician, of the hospital, of the
health agency, brings vividly to mind a small statue which I saw a
great many years ago.it is a pathetic little figure of a man, coat
collar turned up and shoulders hunched against the chill winds,
clutching his belongings in a paper bag-shaking, tremulous,
discouraged. He's clearly unfit for work-no employer would dare to
take a chance on hiring him. You know that he will need much more
help before he can face the world with shoulders back and
confidence in himself. The statuette epitomizes the task of medical
rehabilitation: to bridge the gap between the sick and a job."
It is clear that Dr. Snoke devoted his life to exactly that
purpose. Although there is much to criticize in our current
healthcare system, the wellness concept that we expect and accept
today as part of our medical care was almost nonexistent when Dr.
Snoke began his career in the 1930's. Throughout his 50 years in
hospital administration, Dr. Snoke frequently had to focus on the
big picture and the bottom line. He never forgot the importance of
Discharged Cured, however, and his book provides us with a great
appreciation of how compassionate administrators such as Dr. Snoke
have contributed to the state of patient care today. Albert Waldo
Snoke was director of the Grace-New Haven Hospital in New Haven,
Connecticut from 1946 until 1969. In New Haven, Dr. Snoke also
taught hospital administration at Yale University and oversaw the
development of the Yale-New Haven Hospital, serving as its
executive director from 1965-1968. From 1969-1973, Dr. Snoke worked
in Illinois as coordinator of health services in the Office of the
Governor and later as acting executive director of the Illinois
Comprehensive State Health Planning Agency. Dr. Snoke died in April
1988.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
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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
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2023. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
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