/raid1/www/Hosts/bankrupt/TCR_Public/230421.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, April 21, 2023, Vol. 27, No. 110
Headlines
14 EAST 52ND STREET: Voluntary Chapter 11 Case Summary
34 SUMNER: Court OKs Interim Cash Collateral Access
634 WILSON AVE: Files for Chapter 11 to Recover Brooklyn Properties
772 & 720 HOLDING: Court OKs Continued Cash Collateral Access
ADVANCED PAIN: Taps Offit Kurman as Legal Counsel
ALPINE 4 HOLDINGS: Director Resigns Over Serious Concerns
AMERIMARK INTERACTIVE:Seeks Ch. 11 Bankruptcy, Wants to Sell Itself
ANTHYMTV CO: Bankruptcy Case Stays in South Carolina
AULT ALLIANCE: Errors Found in Financial Statements
AULT ALLIANCE: Widens Net Loss to $189.8 Million Net Loss in 2022
AVIENT CORP: S&P Alters Outlook to Stable, Affirms 'BB' ICR
BERTUCCI'S RESTAURANTS: Wins Cash Collateral Access Thru June 15
BEVERLY COMMUNITY: Case Summary & 30 Largest Unsecured Creditors
BLUE LIGHTNING: Seeks Cash Collateral Access
BLUE STAR: Widens Net Loss of $13.2 Million in 2022
BOUQUET RESTAURANT: Case Summary & 20 Largest Unsecured Creditors
CAMECO TECHNOLOGIES: Seeks Cash Collateral Access
CANOPY GROWTH: To Refinance C$100 Million of Notes Due 2023
CENGAGE LEARNING: Moody's Hikes CFR to B2, Outlook Remains Stable
CINEWORLD GROUP: Sees Bankruptcy Exit in the Middle of 2023
CLARIOS GLOBAL: Moody's Rates New $1BB Sr. Secured Term Loan 'B1'
CLARIOS GLOBAL: S&P Rates New $1BB Senior Secured Term Loan B 'B+'
COLUMBIA ASTHMA: PCO Submits First Interim Report
CONUMA RESOURCES: S&P Upgrades ICR to 'CCC+' Outlook Stable
CRAFTSMAN ROOFING: Files Emergency Bid to Use Cash Collateral
CROCKETT COGENERATION: Moody's Withdraws B3 Rating on Sec. Notes
CSC HOLDINGS: Moody's Gives B1 Rating on $1BB Sr. Guaranteed Notes
CTI BIOPHARMA: Stonepine Capital Entities Report 5.3% Equity Stake
DAVID'S BRIDAL: Seeks $85MM DIP Loan from Bank of America
DECISION POINTE: Taps Allen Vellone Wolf Helfrich as Counsel
DIOCESE OF ALBANY: Taps Blank Rome as Special Insurance Counsel
DOW RUMMEL: Fitch Affirms BB Issuer Default Rating, Outlook Stable
ENDO INT'L: Court Okays $27-Mil. Novavax Contract Fight Settlement
FREE FLOW: Swings to $2.76 Million Net Loss in 2022
GARDNER AGENCY: Wins Cash Collateral Access on Final Basis
GAUCHO GROUP: Widens Net Loss to $21.8 Million in 2022
GB SCIENCES: Zach Swarts Quits as CFO; Interim Replacement Named
GIRARDI & KEESE: Trustees Defend Embattled Legal Lenders Deal
GROM SOCIAL: Falls Short of Nasdaq Bid Price Requirement
GROM SOCIAL: Incurs $16.8 Million Net Loss in 2022
HIDDEN ACRES: PCO Kim Marheine Submits Report
HIGHWATER GROUP: Taps Michael Jay Berger as Bankruptcy Counsel
HMH CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors
IMAGEFIRST HOLDINGS: S&P Rates New $100MM First-Lien Term Loan 'B'
INMET MINING LLC: Former Blackjewel Mines Back in Chapter 11
INMET MINING: Court OKs $11.2MM DIP Loan from Black Mountain
INMET MINING: U.S. Trustee Appoints Creditors' Committee
JONES DESLAURIERS: Incremental Notes No Impact on Moody's B3 CFR
JUST BELIEVE: Court OKs Cash Collateral Access on Final Basis
KALERA INC: Gets Nasdaq Delisting Notice Amid Chapter 11 Woes
KOHL'S CORP: Moody's Cuts CFR to Ba2 & Alters Outlook to Negative
LOYALTY VENTURES: Seeks to Hire Friedman as Litigation Counsel
LOYALTY VENTURES: Taps Alvarez & Marsal as Financial Advisor
LOYALTY VENTURES: Taps Jackson Walker as Local Counsel
LSF11 TRINITY: S&P Assigns 'B' ICR on Acquisition by Lone Star
LTR INTERMEDIATE: Moody's Alters Outlook on 'B3' CFR to Negative
MAGNOLIA MANOR-IV: Taps Law Office of Nima Taherian as Counsel
MARCH ON HOSPITALITY: Has Cash Collateral Access on Final Basis
MARCH ON HOSPITALITY: May Use $2,450 to Pay Simmons
MARISCOS LOS: David Sousa Named Subchapter V Trustee
MERIDIAN RESTAURANTS: Closes 27 Burger King Locations
MERIDIEN ENERGY: Case Summary & 20 Largest Unsecured Creditors
MISS BRENDA: Taps Bush Kornfeld as Bankruptcy Counsel
MOBIQUITY TECHNOLOGIES: 2 Investors Convert $265,563 Debt to Equity
MUSIC GETAWAYS: Court OKs Interim Cash Collateral Access
NATIONAL CINEMEDIA: Wins Interim Cash Collateral Access
NEW BEGINNING: U.S. Trustee Unable to Appoint Committee
NEW YORK INN: Court OKs Interim Cash Collateral Access
NGL ENERGY: S&P Ups ICR to 'B-' On Improved Leverage and Liquidity
NORTH SHORE MANOR: No Patient Care Concern, 1st PCO Report Says
OFFICE INTERIORS: Seeks Cash Collateral Access
ONE IMPORTERS: Court OKs Interim Cash Collateral Access
PACKABLE HOLDINGS: Deadline to File Claims Set for May 15
PARAMOUNT RESTYLING: Court OKs Deal on Cash Collateral Access
PHUNWARE INC: Falls Short of Nasdaq Bid Price Requirement
PRECISION FORGING: Court OKs Interim Cash Collateral Access
PRECISION FORGING: Starts Subchapter V Bankruptcy Case
RANDAZZO'S CLAM: Taps Vincent Lentini as Bankruptcy Attorney
RECEPTION MEZZANINE: Fitch Affirms B+ LongTerm IDR, Outlook Stable
RESHAPE LIFESCIENCES: Incurs $46.2 Million Net Loss in 2022
ROMANS HOUSE: Court OKs Appointment of New Bankruptcy Trustee
S&S SENIOR HOUSING: Files for Chapter 11 Bankruptcy
SAM'S PLACE: Case Summary & 20 Largest Unsecured Creditors
SILICON VALLEY BANK: Collapse Not Caused by Bank Rule Rollbacks
SKILLZ INC: S&P Downgrades ICR to 'SD' on Distressed Exchange
SKINNY & CO: Court OKs Cash Collateral Access Thru May 8
SORRENTO THERAPEUTICS: Two New Equity Committee Members Appointed
SOUTHERN HOSPITALITY: Case Summary & 20 Top Unsecured Creditors
ST. CHARLES MEMORY: Court OKs Interim Cash Collateral Access
SVB FINANCIAL: Taps Centerview Partners as Investment Banker
SVB FINANCIAL: Taps Kroll as Administrative Advisor
SVB FINANCIAL: Taps Sullivan & Cromwell as Legal Counsel
SVB FINANCIAL: Taps William Kosturos of Alvarez & Marsal as CRO
SWURVE MEDIA: Taps Buddy D. Ford P.A. as Legal Counsel
TALEN ENERGY: Moody's Assigns B1 CFR, Outlook Stable
TALEN ENERGY: S&P Assigns 'B+' Long-Term ICR, Outlook Stable
TOPBUILD CORP: Moody's Affirms 'Ba1' CFR, Outlook Remains Stable
VIRGIN ORBIT: Seeks Rapid Asset Sale Hoping to Exit Ch.11 in May
WERNER CO: Creditors Tap Paul Weiss Prior to 2024 Debt Deadline
WESTERN URANIUM: Incurs $714K Net Loss in 2022
*********
14 EAST 52ND STREET: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: 14 East 52nd Street Devco LLC
9322 3rd Ave
Brooklyn, NY 11209-6802
Business Description: The Debtor was organized in connection with
the intended acquisition of real property
located at 14 East 52nd Street, New York.
Chapter 11 Petition Date: April 20, 2023
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 23-41364
Judge: Hon. Elizabeth S. Stong
Debtor's Counsel: Kevin J. Nash, Esq.
GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP
125 Park Ave Fl 12
New York, NY 10017-5690
Tel: (212) 221-5700
Email: knash@gwfglaw.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Tim Ziss as manager.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/IZEAE5I/14_East_52nd_Street_Devco_LLC__nyebke-23-41364__0001.0.pdf?mcid=tGE4TAMA
34 SUMNER: Court OKs Interim Cash Collateral Access
---------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts,
Western Division, authorized 34 Sumber Realty LLC to use cash
collateral on an interim basis in accordance with the budget.
As previously reported by the Troubled Company Reporter, the Debtor
is attempting to operate its businesses and manage its affairs and
properties, although its efforts are being thwarted by the first
mortgagee on its properties, Mooring NC IV, LLC.
The first mortgage on the Debtor's property located in 34 Sumner
Avenue, Springfield, Massachusetts -- save perhaps one condominium
and certain parking places -- was originally held by Security
Mutual Insurance Company of New York, and was transferred to
Mooring in May or June 2022.
Security Mutual took possession of the 34 Sumner Avenue Property
approximately three years ago, and Mooring has continued to possess
the property, receiving rents.
There is a second mortgage held by Belvidere Capital LLC.
The Debtor says it needs to use the cash collateral assets
generated by the rentals to continue paying condominium fees,
utilities, insurance, real estate taxes, maintenance, and related
items. The Debtor proposes to retain any balance in its
debtor-in-possession account.
These creditors assert security interests in the Debtors'
properties:
-- Mooring NC IV, LLC with a principal place of business at
100 Court street, P.O. Box 1625, Binghamton, New York, 13902.
Mooring claims a first mortgage on the real properties of the
Debtor, securing a loan of approximately $3,500,000; this loan was
a refinance of the original mortgage obligation incurred in the
purchase of the Debtor's real properties.
-- Belvidere Capital, LLC, 396 Andover Street, Lowell, MA
01852, claims a second mortgage on the real properties of the
Debtor, securing a loan of approximately $3,000,000. The Debtor did
not receive the benefits of this loan, but rather an affiliate of
the Debtor did.
As adequate protection to the Secured Creditors for the Debtor's
use of assets in which the Secured Creditors claim a security
interest, to the extent that the Debtor's use of cash collateral
results in a decrease in the value of the Secured Creditors'
interest in their collateral, the Secured Creditors are granted
replacement liens and security interests in all assets of the
Debtor in which the Secured Creditors possess a security interest
as of the Petition Date, to the same extent, validity, priority and
enforceability of their perfected security interests that they
would have had in the absence of the bankruptcy filing.
A further hearing on the matter is set for May 9, 2023 at 2 p.m.
A copy of the order is available at https://bit.ly/3GNnu6Q from
PacerMonitor.com.
About 34 Sumner Realty LLC
34 Sumner Realty LLC owns various condominium units, garage units,
retail unit, and storage unit, at 34 Sumner Avenue, Springfield,
MA, with an aggregate value of $4 million.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 23-30073) on March 2,
2023. In the petition signed by Louis Masaschi, as manager, the
Debtor disclosed $4,000,000 in assets and $7,000,000 in debts.
Judge Elizabeth D. Katz oversees the case.
The Law Offices of Louis S. Robin serves as counsel to the Debtor.
634 WILSON AVE: Files for Chapter 11 to Recover Brooklyn Properties
-------------------------------------------------------------------
634 Wilson Ave LLC and its affiliates, including Himrod St LLC,
filed for chapter 11 protection in the Eastern District of New
York.
Each of the Debtors is a "single asset real estate" debtor as that
term is defined in Section 101(51B) of the Bankruptcy Code. Each
of the properties are three-story, six-unit multi-family properties
in Brooklyn, New York, except for debtor 867-871 Knickerbocker LLP
which owns two such buildings, for a total of 12 units.
The Debtors are currently not in possession of their assets or
management of their affairs as debtors in possession as the result
of the appointment of State Court Receivers by the New York State
Supreme Court and the Federal District Court for the Eastern
District of New York in connection with pending mortgage
foreclosure proceedings against the real property owned by each
Debtor. However, the Debtors anticipate prompt turnover of the
assets of the estates pursuant to Section 543 of the Bankruptcy
Code.
A telephonic meeting of creditors under 11 U.S.C. Section 341(a) is
slated for May 8, 2023 at 1:00 p.m. at the Office of U.S. Trustee.
About 634 Wilson Ave LLC
634 Wilson Ave LLC, et al., own multi-family properties in
Brooklyn, New York,
634 Wilson Ave LLC, along with affiliates 221 Himrod ST LLC,
867-871 Knickerbocker LLC, 299 Throop Ave LLC, 1427 43 ST LLC,
sought Chapter 11 protection (Bankr. E.D.N.Y. Lead Case No.
23-41156) on April 4, 2023. In the petition filed by Zalmen
Wagschal, as sole member, the Debtor reported assets and
liabilities between $1 million and $10 million each.
The Honorable Bankruptcy Judge Jil Mazer-Marino handles the cases.
The Debtors are represented by:
Erica Feynman Aisner, Esq.
Kirby Aisner & Curley LLP
221 Himrod Street
Brooklyn, NY 11237
Email: jcurley@kacllp.com
772 & 720 HOLDING: Court OKs Continued Cash Collateral Access
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York
authorized 772 & 720 Holding LLC to continue using cash collateral
on an interim basis in accordance with its agreement with Fairview
Investment Fund V, LPC, through May 31, 2023.
As previously reported by the Troubled Company Reporter, Fairview
holds valid, binding, and perfected liens on and security interests
in all of the Collateral.
Fairview asserted that as of September 9, 2022, the indebtedness
owed under the Loan Documents was $10.347 million, consisting of
principal in the amount $7.286 million, and accrued regular and
default interest totaling $3.061 million, and per diem interest was
continuing to accrue in the amount of $2,834 for each day
thereafter.
The Court said the terms of the Interim Order, including the
recitals, will remain in full force and effect except as modified
by the Fourth Interim Order.
The Debtor is permitted to use cash collateral in accordance with
the budget, with a 10%.
The final hearing on the matter is set for May 10, 2023 at 11:30
a.m.
A copy of the order is available at https://bit.ly/3KEOLt5 from
PacerMonitor.com.
About 772 & 720 Holding
772 & 720 Holding LLC is a Single Asset Real Estate (as defined in
11 U.S.C. Sec. 101(51B)).
772 & 720 Holding LLC filed a petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-42435) on Sept.
30, 2022. In the petition filed by Bao Zhi Liu, as managing member,
the Debtor reported between $10 million and $50 million in both
assets and liabilities.
Judge Jil Mazer-Marino oversees the case.
The Debtor is represented by Kirby Aisner & Curley, LLP.
ADVANCED PAIN: Taps Offit Kurman as Legal Counsel
-------------------------------------------------
Advanced Pain Medicine Institute, P.C. seeks approval from the U.S.
Bankruptcy Court for the District of Maryland to employ Offit
Kurman, P.A. as its legal counsel.
The Debtor requires legal counsel to:
a. provide advice with respect to the Debtor's powers and duties
in the operation of its business and the management of its
properties pursuant to the Bankruptcy Code;
b. prepare legal papers;
c. represent the Debtor in lawsuits to which it is or may be a
party;
d. negotiate, prepare, file and seek confirmation of a Chapter
11 plan of reorganization;
e. represent the Debtor at all hearings, meetings of creditors
and other proceedings; and
f. perform all other legal services at the Debtor's request,
which include legal representation with respect to litigation,
securities, transactional, tax and other matters.
The firm will be paid at these rates:
Attorneys $250 to $710 per hour
Paralegals $75 to $300 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received an advance retainer in the amount of $25,000.
Stephen Metz, Esq., a partner at Offit Kurman, 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:
Stephen A. Metz, Esq.
Offit Kurman, P.A.
7501 Wisconsin Avenue, Suite 1000W
Bethesda, MD 20814
Tel: (240) 507-1723
Fax: (240) 507-1735
Email: smetz@offitkurman.com
About Advanced Pain Medicine Institute
Chevy Chase, Md.-based Advanced Pain Medicine Institute, P.C. filed
its voluntary petition for Chapter 11 protection (Bankr. D. Md.
Case No. 23-12359) on April 5, 2023, with $100,000 to $500,000 in
assets and $1 million to $10 million in liabilities. Reza Ghorbani,
authorized representative, signed the petition.
Judge Lori S. Simpson oversees the case.
Offit Kurman, P.A. serves as the Debtor's legal counsel.
ALPINE 4 HOLDINGS: Director Resigns Over Serious Concerns
---------------------------------------------------------
Mr. Charles W. Winters II resigned as a director of Alpine 4
Holdings, Inc., effective as of April 10, 2023. In his resignation
letter, Mr. Winters stated that he had serious concerns regarding
the operations, policies, and practices of the Company. The
Company disputes the claims made by Mr. Winters in his Resignation
Letter, including his characterizations of the Company, the Board,
the CEO, and other Company management.
According to the Company, Mr. Winters' criticisms expressed in the
Resignation Letter are ones he first voiced as early as 13 months
ago, beginning around the time his position as a sales executive
with the Company was terminated for cause, and also after the
Company Board adopted a rotating chairmanship that meant Mr.
Winters would at present no longer be chairman. When Mr. Winters'
claims were originally raised, Company CEO Kent Wilson directed
that an independent outside investigation be instituted, and
thereafter the well-regarded independent investigatory law firm
Littler Mendelson, P.C. was engaged to investigate Mr. Winters'
claims and to review the appropriateness of his termination for
cause from his sales position. In addition, the Board convened two
special committees of independent dis-interested board members, one
to review claims in which the Company and its auditor agreed that
good governance required further investigation into the possible
validity of the claims, and one to review evidence of concerning
conduct by Mr. Winters that appeared to violate the fiduciary duty
that Mr. Winters owed to the Company and its Board.
The Littler and the Special Committees' investigatory efforts
arrived at the conclusions that Mr. Winters' claims of problems in
the operations, policies, and practices of the Company were
unfounded, that the termination of his employment with the Company
as a sales executive was justified, and that he had engaged in
conduct that violated his fiduciary duty to the Company and the
Board, and moreover that there is evidence that these violations of
fiduciary duty were committed in bad faith. Copies of various
reports generated during these investigations were shared with Mr.
Winters, including an executive summary of the Littler report.
These efforts of investigation and review culminated in a Special
Committee of the Board resolution, dated September 8th, 2022,
sanctioning Mr. Winters. Quoting from that resolution in relevant
part:
WHEREAS the Special Committee finds that the evidence presented
in the reports are persuasive that Director Winters' conduct was
actionable as violations under the Company and Board rules and
policies for comportment of employees and Board members; and
WHEREAS the Special Committee finds that the evidence presented
in the reports are persuasive that Director Winters' and his
counsel's allegations of Company and Board malfeasance are without
merit, and moreover were alleged by Director Winters in bad faith;
and
WHEREAS Director Winters' conduct in violation of Company and
Board policies and in breach of his fiduciary duties has
unfoundedly jeopardized the Company's position with its outside
auditors, threatened to cause missed SEC filing deadlines, unduly
risked exposure to (i) unfounded shareholder lawsuits, (ii)
liability for unfair labor practices, and (iii) unwarranted stock
price decline, and to date has cost the Company over $100,000 in
expenses and many hours of diverted Company management and Board
attention;
NOW, THEREFORE, BE IT RESOLVED, that based on these recitals,
the Special Committee of the Board of Directors proclaims that it
strongly disapproves of the aforementioned conduct of Director
Winters, and in response to his conduct that violated policies
stated in the Company's Corporate Governance and Code of Business
Conduct guidelines and the Employee Handbook, that violated the
terms of the Founding Director Agreement signed by Director
Winters, and that breached the duties of care, loyalty, and good
faith that a Director owes to the Company and to the Board, the
Special Committee hereby CENSURES Director Charles Winters, and
admonishes him to cease and desist conduct that violates his
fiduciary obligations as a Board member; and
IT IS RESOLVED FURTHER that the Special Committee, in its power
to invoke penalties, does hereby exclude Director Winters from all
Board committee and representative assignments, from serving as an
officer of the Board, and from any official travel on Board
business; and
IT IS RESOLVED FURTHER that the Special Committee calls on
Director Winters to engage in discussions regarding terms of his
resignation from the Board, and in that matter, the Special
Committee hereby authorizes Company management to negotiate with
Director Winters on the Board's behalf;
In consequence of this sanctioning by the Board, as of the date of
his resignation, Mr. Winters did not hold any position on any
committees of the Board. Also, in consequence of this sanctioning,
Mr. Winters was not nominated to the slate of board
members proposed for shareholder approval at the annual
shareholders meeting.
Negotiations regarding Mr. Winters' possible early departure from
the Board commenced soon after adoption of the resolution by the
Special Committee. However, the Company would not accede to Mr.
Winters' monetary demands, and would not accede even when made
aware a resignation letter that the Company must publish would be
forthcoming otherwise, culminating in negotiations breaking off on
April 10th, 2023, and that same day Mr. Winters submitted his
Resignation Letter.
About Alpine 4
Alpine 4 Holdings, Inc (formerly Alpine 4 Technologies, Ltd) is a
publicly traded conglomerate that is acquiring businesses that fit
into its disruptive DSF business model of drivers, stabilizers, and
facilitators.
Alpine 4 reported a net loss of $19.48 million in 2021 (as
restated), a net loss of $7.65 million in 2020 (as restated), a net
loss of $3.13 million in 2019, and a net loss of $7.91 million in
2018.
In its Quarterly Report for the period ended June 30, 2022, the
Company said, "Based on management's plans to improve cash flows,
as disclosed above management believes the Company has sufficient
working capital to satisfy the Company's estimated liquidity needs
for the next 12 months. Because of the above factors, the Company
believes that this alleviates the substantial doubt in connection
with the Company's ability to continue as a going concern.
However, there is no assurance that management’s plans will be
successful due to the current economic climate in the United States
and globally."
AMERIMARK INTERACTIVE:Seeks Ch. 11 Bankruptcy, Wants to Sell Itself
-------------------------------------------------------------------
Steven Church of Bloomberg News reports that AmeriMark Interactive
LLC, a retailer that sells discount home and health care goods to
what it calls the mature market, filed for bankruptcy with plans to
try to sell itself.
The company listed debt of as much as $500 million and assets worth
$50,000 or less in a Chapter 11 petition filed early Tuesday, April
11, 2023, morning. Chapter 11 of the bankruptcy code allows
companies to halt debt payments while they reorganize their
operations and balance sheets.
About AmeriMark Interactive
AmeriMark Interactive, LLC and affiliates are a direct marketer of
women's apparel, shoes, name-brand cosmetics, fragrances, jewelry,
watches, accessories, and other related products.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10438) on April
11, 2023. In the petition signed by Stuart Noyes, chief
restructuring officer, the Debtor disclosed up to $50,000 in assets
and up to $500 million in liabilities.
Judge Thomas M. Horan oversees the case.
The Debtors tapped McDonald Hopkins LLC as general bankruptcy
counsel, Morris, Nichols, Arsht and Tunnell LLP as co-counsel,
Riveron Management Services, LLC as CRO services provider,
Consensus Advisory Services LLC and Consensus Securities LLC as
financial advisor and investment banker, and Stretto as notice,
claims and balloting agent.
ANTHYMTV CO: Bankruptcy Case Stays in South Carolina
----------------------------------------------------
Alleged creditors of AnthymTV Co. filed an involuntary Chapter 11
case in South Carolina for AnthymTV in February 2023. AnthymTV Co.
filed a petition under Chapter 11, Subchapter V of the Bankruptcy
Code in Massachusetts in March, and said that, as a result, an
order for relief does not need to be entered in the involuntary
case and the involuntary petition should be dismissed.
In an order dated March 31, 2023, the United States Bankruptcy
Court for the District of South Carolina has determined pursuant to
Bankruptcy Rule 1014(b) that this case should proceed in South
Carolina.
Accordingly, the U.S. Bankruptcy Court for the District of
Massachusetts ordered that venue of the case is transferred to
South Carolina, and the case in Massachusetts is dismissed.
The Debtor is a corporation formed and existing under the laws of
the State of Delaware since January of 2019 and is in the business
of (i) operating a streaming platform through an application for
connected TV devices; (ii) producing original entertainment media,
primarily geared toward reality television capturing the work of
first responders such as paramedics and law enforcement; and (iii)
providing managed services on behalf of other publishers and
content creators.
At the hearing in South Carolina bankruptcy court, the Debtor
appeared through its Chief Executive Officer, Nicholas Cartier, and
the Petitioners appeared through their representative, W. Reid
Sanders Jr.
Cartier, who currently serves as Debtor's Chief Executive Officer
and has done so since the company's inception, is the holder of 81%
of Debtor’s outstanding equity shares. Sanders, one of the
Petitioners, owns approximately 18% of the Debtor's equity shares,
with the remaining 1% being held by a third party.
Sanders served as Debtor's Chief Financial Officer from April 2020
until Nov. 9, 2022, when he resigned as a result of a deteriorating
working relationship with Cartier.
In January of 2021, Debtor moved its operations and took steps to
legitimize its operations in South Carolina and establish its
headquarters in Charleston, South Carolina.
At the hearing, Cartier testified on Debtor's behalf that the
bankruptcy case should proceed in Massachusetts due to its
proximity to "vibrant media markets" in Boston and New York, which
would maximize the value of the assets, all of which are now
located in Massachusetts. Sanders testified that the Noteholders
considered Debtor’s principal place of business to be Charleston,
South Carolina, a few of the Noteholders reside or have second
homes in South Carolina, and the majority of the Noteholders live
in close proximity to South Carolina. Accordingly, the Noteholders
believed Debtor's bankruptcy case should proceed in South
Carolina.
"After operating a business in South Carolina for over two years,
Debtor should not be surprised that it would be required to pursue
bankruptcy relief in South Carolina. The mere location of Debtor's
servers in Massachusetts, coupled with its eve of bankruptcy
(nearly simultaneous) registration to do business in Massachusetts,
do not establish a sufficient nexus to that state to justify
deference to Debtor's choice of forum when the overwhelming weight
of the evidence indicates that Debtor's principal place of business
was in South Carolina up until the Involuntary Case was filed.
While Cartier testified that he intended to relocate the Debtor's
operations to Massachusetts after Sanders' resignation on Nov. 10,
2022, the evidence did not corroborate this testimony," South
Carolina Bankruptcy Judge Elisabetta G. M. Gasparini noted in her
ruling.
About AnthymTV Co.
AnthymTV Co. was subject to an involuntary Chapter 11 petition
filed by alleged creditors Reid Sanders, Sr., W. Reid Sanders Jr.,
Doug Edwards, and Michael O’ Keefe on Feb. 15, 2023 (Bankr.
S.D.S.C. Case No. 223-00438).
AnthymTV Co. filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Mass. Case No. 23-10324) on March 3,
2023, with $500,001 to $1 million in both assets and liabilities.
Stephen S. Gray has been appointed as Subchapter V trustee.
Andrea M. O'Connor, Esq., at Fitzgerald Law, P.C. and Haynsworth
Sinkler Boyd, P.A. serve as the Debtor's bankruptcy counsel and
special counsel, respectively.
AULT ALLIANCE: Errors Found in Financial Statements
---------------------------------------------------
The management of Ault Alliance, Inc. concluded that the Company's
previously issued financial statements for the year ended Dec. 31,
2021, as well as for the interim periods included in that fiscal
year, should no longer be relied upon because of errors in
classification with respect to changes in fair value of financial
instruments issued by a related party. The changes in fair value
were erroneously recorded in other comprehensive income (loss) and
should have been classified within the statement of operations.
Additionally, the Company's earnings and press releases and similar
communications should no longer be relied upon to the extent that
they relate to the Company's financial statements for the Restated
Periods. The errors described above resulted in the restatement of
the Company's financial statements for the Restated Periods.
The restated financial statements for the year ended Dec. 31, 2021
included in the Amended Form 10-K, as well as for the interim
periods included in that fiscal year, differ from the amounts
reported in the original filings, but there was no impact to
assets, liabilities, total equity, total comprehensive loss or cash
flows. The Restated Financial Statements reflect conclusions that
management formed related to the previously disclosed Securities
and Exchange Commission investigation.
The previously reported amounts have been corrected for the
Restated Periods. No correction was needed for the consolidated
balance sheet as of Dec. 31, 2021. The correction to the
consolidated statements of operations and comprehensive loss for
the year ended Dec. 31, 2021 resulted in an increase to other
income and a decrease to other comprehensive income of $0.9
million. Net loss improved from $24.2 million to $23.3 million.
Further, the correction to the consolidated statements of
operations and comprehensive loss for the year ended Dec. 31, 2020
resulted in an increase to other income and a decrease to other
comprehensive income of $3.3 million. Net loss improved from $32.7
million to $29.3 million.
Due to the restatement, the Company's management and Audit
Committee reevaluated its Controls and Procedures in the original
filings and concluded that the Company's disclosure controls and
procedures and internal control over financial reporting were not
properly designed to analyze financial instruments for proper
classification in the consolidated financial statements. The
Company has been actively engaged in developing a remediation plan
to address the identified ineffective controls that existed during
the Restated Periods. Implementation of the remediation plan is in
process.
About Ault Alliance Inc.
Ault Alliance, Inc. (formerly, BitNile Holdings, Inc.) is a
diversified holding company pursuing growth by acquiring
undervalued businesses and disruptive technologies with a global
impact. Through its wholly and majority-owned subsidiaries and
strategic investments, Ault Alliance owns and operates a data
center at which it mines Bitcoin and provides mission-critical
products that support a diverse range of industries, including oil
exploration, crane services, defense/aerospace, industrial,
automotive, medical/biopharma, consumer electronics, hotel
operations and textiles. In addition, Ault Alliance extends credit
to select entrepreneurial businesses through a licensed lending
subsidiary. Ault Alliance's headquarters are located at 11411
Southern Highlands Parkway, Suite 240, Las Vegas, NV 89141;
www.Ault.com.
Ault Alliance reported a net loss of $189.83 million for the year
ended Dec. 31, 2022, compared to a net loss of $23.04 million for
the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had
$561.51 million in total assets, $219.53 million in total
liabilities, $117.99 million in redeemable noncontrolling interests
in equity of subsidiaries, and $223.99 million in total
stockholders' equity.
New York, New York-based Marcum LLP, the Company's auditor since
2016, issued a "going concern" qualification in its report dated
April 17, 2023, citing that the Company has a working capital
deficiency, has incurred net losses and needs to raise additional
funds to meet its obligations and sustain its operations. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
AULT ALLIANCE: Widens Net Loss to $189.8 Million Net Loss in 2022
-----------------------------------------------------------------
Ault Alliance, Inc. has filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$189.83 million on $134.33 million of total revenue for the year
ended Dec. 31, 2022, compared to a net loss of $23.04 million on
$52.40 million of total revenue for the year ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $561.51 million in total
assets, $219.53 million in total liabilities, $117.99 million in
redeemable noncontrolling interests in equity of subsidiaries, and
$223.99 million in total stockholders' equity.
New York, New York-based Marcum LLP, the Company's auditor since
2016, issued a "going concern" qualification in its report dated
April 17, 2023, citing that the Company has a working capital
deficiency, has incurred net losses and needs to raise additional
funds to meet its obligations and sustain its operations. These
conditions raise substantial doubt about the Company's 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/896493/000121465923005525/p41123010k.htm
About Ault Alliance Inc.
Ault Alliance, Inc. (formerly, BitNile Holdings, Inc.) is a
diversified holding company pursuing growth by acquiring
undervalued businesses and disruptive technologies with a global
impact. Through its wholly and majority-owned subsidiaries and
strategic investments, Ault Alliance owns and operates a data
center at which it mines Bitcoin and provides mission-critical
products that support a diverse range of industries, including oil
exploration, crane services, defense/aerospace, industrial,
automotive, medical/biopharma, consumer electronics, hotel
operations and textiles. In addition, Ault Alliance extends credit
to select entrepreneurial businesses through a licensed lending
subsidiary. Ault Alliance's headquarters are located at 11411
Southern Highlands Parkway, Suite 240, Las Vegas, NV 89141;
www.Ault.com.
AVIENT CORP: S&P Alters Outlook to Stable, Affirms 'BB' ICR
-----------------------------------------------------------
S&P Global Ratings affirmed its 'BB' rating on Avient Corp. and
revised the outlook to stable from negative.
S&P said, "The stable outlook reflects our view that, despite our
expectation for a slight deterioration in pro forma credit metrics
in 2023, free cash flow generation and management's financial
policy will continue to support weighted-average funds from
operations (FFO) to debt of 20%-30%.
"Avient's ability to pass through price increases has supported
earnings, despite declining demand and rising raw material, energy,
and wage costs. Volumes fell year-over-year (in the
mid-single-digit percent area) in both of the company's segments,
with demand pressure becoming most acute in the second half of
2022, as customers reduced inventories amid a more uncertain
macroeconomic environment. As of the second quarter of 2023, we
believe destocking has largely run its course. However, we expect
demand pressures will remain, particularly in the consumer
discretionary, building and construction, and industrial end
markets. Despite our outlook for slowing GDP growth in both North
America and Europe, earnings should benefit both from China's
reopening (Asia represents about 18% of Avient's total sales) and
raw material cost deflation. Raw material, wage, and energy
inflation reduced EBITDA by a cumulative $300 million in 2022.
However, Avient's pricing outpaced inflation throughout the year,
with price/mix providing a $368 million tailwind to EBITDA. In the
past few quarters, raw material inflation has begun to ease, with
management stating that it has seen deflation in certain raws in
recent months (about 40% of the company's raw materials are
hydrocarbon-based). We expect the company will maintain pricing
power as cost pressures ease, which could provide upside to margins
and credit metrics if raw material costs decline faster than
anticipated.
"Avient's financial policies, including recent debt repayment,
should remain supportive of FFO to debt in the 20%-30% range. The
company's $1.4 billion acquisition of Koninklijke DSM N.V.'s
(Dyneema) protective materials business was primarily debt-funded
and initially led to a deterioration in credit metrics below our
20% FFO to debt threshold on a pro forma basis. Since the
completion of the acquisition, Avient has used proceeds from the
sale of its distribution segment, along with free cash flow, to
repay both its $600 million 2023 note maturity and $350 million of
term loan borrowings. Avient now has no maturities until 2025, when
its $650 million unsecured notes come due. Additionally, management
has refrained from substantial share repurchases, completing $4
million in 2021 and $36 million in 2022. This resulted in S&P
Global Ratings-adjusted FFO to debt ending 2022 at about 23% on a
pro forma basis. We forecast a moderate decline in 2023 EBITDA,
primarily due to lower demand, will lead to credit metrics at the
lower end of our expected range, with FFO to debt dropping to about
20%. However, we expect management will maintain prudent financial
policies that prioritize deleveraging in 2023 over debt-funded
acquisitions or share repurchases. We believe the company has
largely completed its portfolio transformation and do not
anticipate any meaningful transactions within the next year. Given
the uncertain demand environment and fewer opportunities for
bolt-on acquisitions, we believe Avient will remain focused on
preserving cash and reducing leverage consistent with its stated
leverage target of less than 3.5x net debt to adjusted EBITDA.
"The Dyneema acquisition and sale of its distribution business will
improve profitability and completes Avient's transition to a
pure-play specialty chemical company. The two transactions in 2022
are the latest in a series of acquisitions and divestitures that
have transformed the company's portfolio over the past decade.
Avient is now a pure-play specialty formulator, with higher
exposure to composites and recession resilient end-markets. In
addition to the transactions completed in 2022, Avient acquired
Fiber-Line in 2019, purchased Clariant AG's Masterbatch business in
2020, and sold its lower-margin Performance Products and Solutions
(PP&S) segment in 2019. Pro forma for the transactions, all of
Avient's earnings now come from higher-margin specialty
applications, and we expect S&P Global Ratings-adjusted EBITDA
margins should improve to 16%-18% on a pro forma basis from
10%-12%. Historically, its distribution business, with EBITDA
margins of about 6%, had impeded a higher profitability assessment.
The segment did, however, generate steady free cash flow over time,
providing Avient with the capital to fund higher growth
opportunities elsewhere in its portfolio. Although it has higher
capital requirements, we expect the Dyneema acquisition will
improve Avient's overall profitability and replace a substantial
portion of the cash generated by the legacy distribution segment."
Avient's transition has also led to greater earnings contribution
from recession-resilient end markets including consumer, packaging,
and health care (about 52% of total 2022 sales). These only
accounted for 22% of overall revenue before the 2008 recession,
whereas the more volatile transportation, industrial, and
construction end markets accounted for about 60%. About half of
Dyneema's revenue comes from sales into personal protection
applications, in which demand is less cyclical and primarily driven
by government spending. A more stable mix will be key to Avient's
performance in 2023, as it was in 2020, when new vehicle sales
declined substantially and industrial production contracted, while
health care, packaging, and consumer plastics demand remained
robust. The result was a modest revenue contraction (5% decrease)
and marginal increase in EBITDA (both measured on a pro forma
basis).
S&P said, "The stable outlook on Avient reflects the company's
recent debt repayment and our expectation that FFO to debt will
remain between 20%-30% in all forecast years. Despite declining
demand and cost inflation, EBITDA declined only marginally in 2022
(pro forma for the Dyneema acquisition). Sluggish demand in the
first half of 2023 amid ongoing destocking should weaken EBITDA and
credit metrics. However, we believe margins should improve
sequentially as raw material cost inflation abates. Our stable
outlook also reflects our view that management will continue to
prioritize deleveraging over share repurchases and/or acquisitions
in 2023, as they did in the fourth quarter of 2022, and will remain
committed to their maximum net debt to adjusted EBITDA target of
3.5x."
S&P could consider a negative rating action within the next 12
months if:
-- S&P expected pro forma weighted-average FFO to debt to fall
below 20%, with no immediate prospect for recovery. Leverage could
deteriorate below its threshold if revenue growth was 5%-10% below
its base case and margins deteriorated about 200 basis points;
-- S&P's expectations for global economic growth declined, while
cost inflation for the company's raw material inputs remained
persistent, resulting in further margin pressure; or
-- Contrary to our current expectation, Avient pursued more
aggressive financial policies that stretched credit metrics in the
near term, including the pursuit of debt-funded transformative
acquisitions or large shareholder rewards.
S&P could consider a positive rating action within the next 12
months if:
-- Weighted-average FFO to debt improved above 30%, the company
continued to generate substantial free cash flow, and S&P
anticipated management's financial policies would remain supportive
of such metrics; or
-- S&P revised its view of the company's business risk assessment.
Key factors include our view of its profitability and end-market
exposures post-acquisition, management's ability to improve EBITDA
margins toward its long-term 20% target, and execution on
higher-margin growth opportunities.
ESG credit indicators: E-2, S-2, G-2
S&P said, "ESG factors are an overall neutral consideration in our
credit rating analysis of Avient Corp. Although the chemical sector
in general faces scrutiny from regulators and consumers, we believe
the lower asset intensity of Avient's business and its focus on
capturing trends in sustainable plastic solutions, such as
lightweighting, improved recyclability, and increased recycled
content, contributes to a comparatively lower potential for
environmental issues such as health and safety and pollution risks.
About 44% of the company's sales are attributable to consumer and
packaging end markets, where waste and recyclability are key
concerns. However, to address these potential risks, Avient has set
a target of 100% product recyclability as part of its 2030
sustainability goals."
BERTUCCI'S RESTAURANTS: Wins Cash Collateral Access Thru June 15
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division, authorized Bertucci's Restaurants, LLC to use
cash collateral on an interim basis in accordance with the budget
through the date of the final hearing set for June 15, 2023 at 2:30
p.m.
The Debtor is permitted to use cash collateral to pay:
a. amounts expressly authorized by the Court, including
payments to the United States Trustee for quarterly fees; and
b. the current and necessary expenses set forth in the budget,
plus an amount not to exceed 10% for the expenses.
During the interim period, PHL Holdings, LLC and Rewards Network
will each have a perfected post-petition lien against cash
collateral to the same extent and with the same validity and
priority as its respective prepetition lien, without the need to
file or execute any documents as may otherwise be required under
applicable non-bankruptcy law. The replacement liens granted will
secure all obligations owing from the Debtor to PHL and Rewards
Network, as the case may be.
A continued hearing on the matter is set for June 15, 2023 at 2:30
p.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3UKmZ36 from PacerMonitor.com.
The budget provides for total operating disbursements, on a weekly
basis as follows:
$1,904 for the week ending April 23, 2023;
$1,570 for the week ending April 30, 2023;
$2,209 for the week ending May 7, 2023;
$1,315 for the week ending May 14, 2023; and
$2,032 for the week ending May 21, 2023;
About Bertucci's Restaurants, LLC
Bertucci's Restaurants, LLC is a Florida limited liability company
that was formed in May 2018. The Company owns and operates
approximately 47 Italian-themed restaurants under the name
Bertucci's Brick Oven Pizza & Pasta.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-04313) on December 5,
2022. In the petition signed by Jeffrey C. Sirolly, its secretary,
the Debtor disclosed up to $50,000 in assets and up to $100 million
in liabilities.
Judge Grace E. Robson oversees the case.
R. Scott Schuker, Esq., at Shuker and Dorris, P.A., is the Debtor's
legal counsel.
BEVERLY COMMUNITY: Case Summary & 30 Largest Unsecured Creditors
----------------------------------------------------------------
Lead Debtor: Beverly Community Hospital Association
309 West Beverly Blvd.
Montebello CA 90640
Business Description: The Debtors operate general medical and
surgical hospitals.
Chapter 11 Petition Date: April 19, 2023
Court: United States Bankruptcy Court
Central District of California
Three affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Beverly Community Hospital Association 23-12359
Montebello Community Health Services, Inc. 23-12360
Beverly Hospital Foundation 23-12361
Judge: Hon. Sandra R. Klein
Debtors' Counsel: Jennifer Nassiri, Esq.
Alexandria G. Lattner, Esq.
SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
1901 Avenue of the Stars, Suite 1600
Los Angeles, CA 90067-6055
Tel: 310-228-3700
Fax: 310-228-3701
Email: jnassiri@sheppardmullin.com
alattner@sheppardmullin.com
- and -
Justin R. Bernbrock, Esq.
Catherine Jun, Esq.
Robert B. McLellarn, Esq.
SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
321 North Clark Street, 32nd Floor
Chicago, Illinois 60654
Tel: 312-499-6300
Fax: 312-499-6301
Email: jbernbrock@sheppardmullin.com
cjun@sheppardmullin.com
Beverly Community's
Estimated Assets: $1 million to $10 million
Beverly Community's
Estimated Liabilities: $100 million to $500 million
Montebello Community's
Estimated Assets: $10 million to $50 million
Montebello Community's
Estimated Liabilities: $100 million to $500 million
Beverly Hospital's
Estimated Assets: $1 million to $10 million
Beverly Hospital's
Estimated Liabilities: $100 million to $500 million
The petitions were signed by Alice Cheng as chief executive
officer.
Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/PYPEZUA/Beverly_Community_Hospital_Association__cacbke-23-12359__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/L6NGJXI/Montebello_Community_Health_Services__cacbke-23-12360__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/3FG265Y/Beverly_Hospital_Foundation__cacbke-23-12361__0001.0.pdf?mcid=tGE4TAMA
List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. California Department of DSH/QAF Fees $21,887,597
Health Care Services
Thomas Aragun
1501 Capitol Avenue
Suite 4510
Sacramento, CA 95814
Tel: (916) 464-4430
2. Noridian Healthcare Repayment of $3,160,713
Solutions, LLC Medi-cal/
Theresa Pachel Medicaid Claim
900 42nd Street
S Fargo, ND 58103
Tel: (800) 633-4227
Email: JE-ERS@noridian.com
3. Alhambra Hospital Unsecured Debt $3,000,000
Medical Center
Terry Chu
4619 N Rosemead Blvd.
Rosemead, CA 91770
Tel: (626) 570-1606
Email: terrychu@alhambrahospital.com
4. Advantis Medical Staffing Trade $2,213,090
Elayne Goldman
13155 Noel Road
Suite 300
Dallas, TX 75240
Tel: (415) 294-5314
Email: egoldman@advantismed.com
5. Office of Inspector Litigation $1,300,000
General (OIG)
Nicole Caucci
405 South Main Street
Suite 350
Salt Lake City, UT 84111
Tel: (202) 821-8707
6. Shiftwise Trade $1,213,566
Jennifer Folds
200 SW Market Street
Suite 700
Portland, OR 97201
Tel: (402) 717-7794
Email: jennifer.folds@medefis.com
7. Medical Solutions LLC Trade $973,719
Ruben Ramirez
1010 N 102nd St
Suite 300
Omaha NE 68114 United States
Tel: (402) 704-1410
Email: info@medicalsolutions.com
8. Sodexho Inc. & Affiliates Trade $916,310
Luis Luna
9801 Washingtonian Boulevard
Gaithersburg, MD 20878
Tel: (323) 889-2427
Email: lluna@beverly.org
9. Stryker Orthopedics Trade $879,408
Trent Zaks
325 Corporate Drive
Mahwah NJ
07430 United States
Tel: (714) 310-4361
Email: TrentZaks@stryker.com
10. First Financial Trade $616,434
Holdings LLC
Ricardo Oseguera
The City Drive South
Suite 300
Orange, CA 92868
Tel: (714) 646-1656
Email: roseguera@ffequipmentleasing.com
11. Axis Spine LLC Trade $506,696
DD Mate
1812 W Burbank Blvd #5384
Burbank CA 91506
United States
Tel: (323) 333-8341
Email: dmate@axisspineco.com
12. Allied Universal Trade $336,680
Security Services
Moises Rodriguez
161 Washington St Suite 600
Conshohocken PA 19428
United States
Tel: (866) 703-7666
Email: moises.rodriguez@aus.com
13. Medline Industries Inc. Trade $319,834
Brent Fogel
Three Lakes Drive
Northfield, IL 60093
Tel: (800) 388-2147
Email: bfogel@medline.com
14. Boston Scientific Corp Trade $260,853
Kathleen Homsab
300 Boston Scientific
Way Marlborough, MA 01752-1234
Tel: (508) 382-0257
Email: Kathleen.homsab@bsci.com
15. Huntington Technology Trade $249,837
Finance
Brent McQueen
2285 Franklin Road
Bloomfield Hills, MI 48302
Tel: (310) 2516765
Email: brent.a.mcqueen@huntington.com
16. Constellation New Trade $243,168
Energy-Gas
Zachary Kecy
9400 Bunsen Parkway
Suite 100
Louisville KY 40220
United States
Tel: (844) 200-3427
Email: zkecy@spectrum-nrg.com
17. Nixon Peabody LLP Trade $218,231
Jennifer O'Neal
1300 Clinton Square
Rochester NY 14604
United States
Tel: (213) 629-6000
Email: joneal@nixonpeabody.com
18. Stryker Endoscopy Trade $216,084
Joe Gallinatti
5900 Optical Ct,
San Jose, CA 95138
Tel: (269) 385-2600
Email: joe.gallinati@stryker.com
19. Baxter Healthcare Corp Trade $204,835
Yolieth Bazan Matamoros
17511 Armstromg Ave.
Irvine, CA 92614
Email: yolieth_bazan@baxter.com
20. Private Attorney General Act Litigation $150,000
(PAGA)/Phoenix Settlement
Advisors
Jarrod Salinas
1411 North Batavia Street
#105 Orange, CA 92867
Tel: (949) 344-8851
Email: jarrod@phoenixclassaction.com
21. Stryker Instruments Trade $149,155
Donovan Reiley
4100 E. Milham Road
Kalamazoo MI 49001
United States
Tel: (800) 253-3210
Email: donovan.reiley@stryker.com
22. Arthrex, Inc. Trade $147,435
Carla Pitcher
2825 Airview Boulevard
Kalmazoo, MI 49002
Tel: (800) 595-4165
Email: Carla.Pitcher@stryker.com
23. Keenan and Associates Trade $146,992
Raquel Wallace
2355 Crenshaw Blvd
Suite 200
Torrance, CA 90501
Tel: (310) 212-2355
Email: rwallace@keenan.com
24. Abbott Laboratories Inc. Trade $136,881
Nathan Scott
100 Abbot Park Road
Abbot Park, IL 60064
Tel: (800) 227-9902
Email: nathan.scott@abbott.com
25. Medical Information Trade $135,929
Technology, Inc.
Goretti Medieros
7 Blue Hill River Road
Canton MA 02021
Tel: (781) 821-3000
Email: gmedeiros@meditech.com
26. Medstar Anesthesia Services Inc. Trade $126,882
Robert Resnick
9251 Wedgewood St
Temple City CA 91780
United States
Tel: (562) 407-2080
Email: robert.amedinc@gmail.com
27. Cepheid Inc. Trade $106,564
Susan Jose
904 E Caribbean Dr.
Sunnyvale, California 94089
Tel: (209) 674-0298
Email: susan.jose@cepheid.com
28. Philips Healthcare Trade $106,147
Jose Rivera
222 Jacobs Street
Cambridge, MA 02141
Email: jose.rivera@philips.com
29. Cloudwave Trade $100,939
Loraine Sarno
100 Crowley Dr.
Marlborough, MA 01752
Tel: (714) 939-2393
Email: isarno@insightinvestments.com
30. Outset Medical Inc. Trade $98,339
3052 Orchard Drive
San Jose CA 95134
United States
Tel: (512) 287-1189
Email: arabon@outmedical.com
BLUE LIGHTNING: Seeks Cash Collateral Access
--------------------------------------------
Blue Lightning Transportation Solutions, Inc., Truckers Pipeline,
Inc., and Blue Lightning Holdings, Inc. ask the U.S. Bankruptcy
Court for the Northern District of Texas, Fort Worth Division, for
authority to use cash collateral, approve a factoring agreement on
a post-petition basis, and grant liens as provided in the factoring
agreement.
The Debtors require the use of cash collateral to fund the
operation of their businesses.
The Debtors have gross monthly revenue of approximately $610,000.
Due to an aging fleet, the Debtors have been unable to keep all
their rolling stock in service, and the Debtor's secured lender,
Centerstone SBA Lending, Inc., has been unwilling to permit the
Debtors to sell vehicles and reinvest the proceeds in new rolling
stock inventory.
The Debtors' primary indebtedness consists of secured claims
(inclusive of undersecured claims) in the approximate amount of
$5.1 million, and unsecured claims in the amount of approximately
$1.0 million.
The Debtors' monthly cash needs are approximately $595,000.
Before the Petition Date, on June 2, 2017, the Debtors entered into
a factoring and security agreement with Third Coast Commercial
Capital, Inc. Before the Petition Date, the Debtors routinely sold
their accounts receivable from a portion of their trucking services
to Third Coast. Third Coast is unwilling to continue the factoring
arrangement post-petition.
Accordingly, the Debtor has negotiated a post-petition factoring
agreement with RTS Financial Service, Inc. Under the Factoring
Agreement, the purchase price for the Debtors' post-petition
receivables sold to RTS is the face amount of the invoices sold
less a fee of 1.75% percent, subject to increases in the prevailing
prime rate. If the prime rate remains unchanged, RTS will advance
98.25% of the face amount of the invoices. The Factoring Agreement
requires that the Debtors repurchase certain receivables those
invoices are not paid within a certain time or are later disputed
-- both of which are very rare.
The Debtors have not yet identified any other parties which appear
to hold a security interest in the Debtors' post-petition cash
collateral within the meaning of 11 U.S.C. section 363(a). The
Debtors' pre-existing senior secured lenders include Centerstone,
the United States Small Business Association and potentially Global
Merchants Cash, Inc. in addition to Third Coast, but none of the
Debtor's post-petition revenues constitute proceeds, products,
offspring, or profits of the collateral of Third Coast, GM, the
SBA, or Centerstone, and thus any lien of those parties on accounts
created post-petition is cut off pursuant to 11 U.S.C. section
552.
Subject to the Court's approval, the Debtors wish to implement the
Factoring Agreement with RTS on a post-petition basis. If the
Factoring Agreement is approved, the Debtors will sell their
Receivables to RTS and the sale proceeds will continue to be used
to fund the ongoing expenses of the Debtors' bankruptcy estates.
About Blue Lightning Holdings, Inc.
Blue Lightning Holdings, Inc. and its affiliates provide short and
long haul trucking services throughout the continental United
States. They operate approximately 32 trucks and trailers out of a
home office located in Tarrant County, Texas.
Blue Lightning Transportation Solutions, Inc., Truckers Pipeline,
Inc., and Blue Lightning
Holdings, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 23-41064) on April
15, 2023. In the petition signed by Eran Blitzblau, president, the
Debtor disclosed up to $50,000 in assets and up to $10 million in
liabilities.
The Hon. Mark X. Mullin oversees the case.
Howard Marc Spector, Esq., at Spector and Cox PLLC, represents the
Debtor as legal counsel.
BLUE STAR: Widens Net Loss of $13.2 Million in 2022
---------------------------------------------------
Blue Star Foods Corp. has filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$13.19 million on $12.77 million of net revenue for the year ended
Dec. 31, 2022, compared to a net loss of $2.61 million on $9.97
million of net revenue for the year ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $8.68 million in total assets,
$9.92 million in total liabilities, and a total stockholders'
deficit of $1.24 million.
Houston, Texas-based MaloneBailey, LLP, the Company's auditor since
2014, issued a "going concern" qualification in its report dated
April 17, 2023, citing that the Company has suffered recurring
losses from operations 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/0001730773/000149315223012586/form10-k.htm
About Blue Star Foods
Blue Star Foods Corp. is an international sustainable marine
protein company based in Miami, Florida that imports, packages and
sells refrigerated pasteurized crab meat, and other premium seafood
products. The Company's main operating business, John Keeler &
Co., Inc. was incorporated in the State of Florida in May 1995.
The Company's current source of revenue is importing blue and red
swimming crab meat primarily from Indonesia, Philippines and China
and distributing it in the United States and Canada under several
brand names such as Blue Star, Oceanica, Pacifika, Crab & Go, First
Choice, Good Stuff and Coastal Pride Fresh, and steelhead salmon
and rainbow trout fingerlings produced under the brand name Little
Cedar Farms for distribution in Canada.
BOUQUET RESTAURANT: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Bouquet Restaurant, LLC
519 Main St.
Covington, KY 41011
Business Description: The Debtor operates a restaurant in
Covington, KY offering charcuterie, small
plates, entrees, and desserts.
Chapter 11 Petition Date: April 19, 2023
Court: United States Bankruptcy Court
Eastern District of Kentucky
Case No.: 23-20279
Judge: Hon. Tracey N. Wise
Debtor's Counsel: Michael B. Baker, Esq.
THE BAKER FIRM, PLLC
301 W. Pike St.
Covington, KY 41011
Tel: (859) 647-7777
Fax: (859) 657-7124
Email: mbaker@bakerlawky.com
Total Assets: $115,825
Total Liabilities: $1,613,837
The petition was signed by Stephen A. Williams as member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/VGS5PVI/Bouquet_Restaurant_LLC__kyebke-23-20279__0001.0.pdf?mcid=tGE4TAMA
CAMECO TECHNOLOGIES: Seeks Cash Collateral Access
-------------------------------------------------
Cameco Technologies, LLC asks the U.S. Bankruptcy Court for the
District of Minnesota for authority to continue using cash
collateral and provide adequate protection.
A hearing on the matter is set for May 10, 2023 at 10 a.m.
The Debtor's pre-bankruptcy assets consist of accounts receivable,
cash, notes receivable, inventory and some equipment. Four
creditors purport to claim and may allege an interest in cash
collateral:
(1) Vivian Capital Group, LLC, through a loan made in March
2022 with an approximate balance of $109,000;
(2) Fox Capital Group, Inc. advanced funds to the Debtor
through a loan in January 2022, with an approximate balance of
$51,000;
(3) Spark Funding d/b/a Fundamental Capital SPE, LLC made a
loan to the Debtor in February 2022, with an approximate balance of
$41,000; and
(4) Slate Advance advanced funds to the Debtor through a loan
in March 2022, with an approximate balance of $11,000.
In addition, a federal tax lien was filed on October 5, 2022, in
the approximate amount of $41,000.
The Debtor's counsel has conducted a UCC Search, which revealed the
existence of the federal tax lien and the filing of four UCC-1
Financing Statements with the Minnesota Secretary of State.
The Secured Creditors will be adequately protected by the granting
of a post-petition lien with the same status, dignity and priority
as existed in the cash collateral prior to the filing of the
Debtor's petition, by the carrying of insurance for the full
replacement value of the collateral, by continuing to operate and
to generate replacement collateral and by any other form of
protection.
A copy of the motion and the Debtor's budget is available at
https://bit.ly/3ofqrGW from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$25,875 for April 2023;
$27,025 for May 2023;
$27,025 for June 2023;
$27,025 for July 2023; and
$27,025 for August 2023.
About Cameco Technologies, LLC
Cameco Technologies, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Minn. Case No. 22-31938) on
November 23, 2022. In the petition signed by Serge Ngouambe,
president, the Debtor disclosed up to $500,000 in assets and up to
$1 million in liabilities.
Judge Katherine A. Constantine oversees the case.
Steven B. Nosek, Esq., at Steven B. Nosek, P.A., is the Debtor's
counsel.
CANOPY GROWTH: To Refinance C$100 Million of Notes Due 2023
-----------------------------------------------------------
Canopy Growth Corporation announced that it has entered into an
exchange agreement with Greenstar Canada Investment Limited
Partnership, a wholly-owned subsidiary of Constellation Brands,
Inc., in order to extinguish C$100 million (approximately US$73.9
million) aggregate principal amount of the Company's outstanding
4.25% unsecured notes due 2023.
Pursuant to the Exchange Agreement, the Company agreed to acquire
and cancel C$100 million aggregate principal amount of the Existing
Notes held by GCILP in exchange for: (i) a cash payment to GCILP in
the amount of unpaid and accrued interest owing under the Existing
Notes held by GCILP; and (ii) a promissory note issuable to GCILP
in the aggregate principal amount of C$100 million payable on Dec.
31, 2024. The Promissory Note will bear interest at a rate of
4.25% per year, payable on maturity of the Promissory Note.
Further to its press release dated Oct. 25, 2022, Canopy Growth
intends to amend its articles in order to, among other things,
create a new class of non-voting and non-participating exchangeable
shares, which will be convertible into Company common shares.
Following closing of the CBI Transaction and the creation of the
Exchangeable Shares, the Company maintains its intention to
negotiate an exchange with GCILP to purchase for cancellation up to
C$100 million aggregate principal amount of the Promissory Note in
exchange for Exchangeable Shares, subject to the rules and policies
of the Nasdaq and the Toronto Stock Exchange. The repurchase of
the Promissory Note in exchange for Exchangeable Shares would
preserve the Company's cash on hand and reduce the Company's annual
expenses.
The CBI Transaction is considered to be a "related party
transaction" within the meaning of Multilateral Instrument 61-101
– Protection of Minority Security Holders in Special
Transactions. Pursuant to Section 5.5(a) and 5.7(1)(a) of MI
61-101, the Company is exempt from obtaining a formal valuation and
minority approval of the Company's shareholders with respect to the
CBI Transaction as the fair market value of the CBI Transaction is
below 25% of the Company's market capitalization as determined in
accordance with MI 61-101. In addition, the CBI Transaction was
approved by the board of directors of the Company with Ms. Judy A.
Schmeling, a director of CBI, Mr. Garth Hankinson, Chief Financial
Officer and Executive Vice President of CBI, Mr. Robert Hanson,
Executive Vice President and President - Wine & Spirits Division of
CBI and Mr. James Sabia, Executive Vice President and President -
Beer Division of CBI, each having disclosed their interest in the
CBI Transaction by virtue of their positions with CBI and
abstaining from voting thereon. The Company did not file a
material change report 21 days prior to the closing of the CBI
Transaction as the details of the CBI Transaction had not been
finalized at that time. The Company has not received nor has it
requested a valuation of its securities or the subject matter of
the CBI Transaction in the 24 months prior to April 14, 2023.
About Canopy Growth
Canopy Growth Corporation -- www.canopygrowth.com -- is a cannabis
consumer packaged goods company which produces, distributes, and
sells a diverse range of cannabis, hemp, and CPG products.
Canopy reported a net loss of C$320.48 million for the year ended
March 31, 2022, a net loss of C$1.67 billion for the year ended
March 31, 2021, and a net loss of C$1.38 billion for the year ended
March 31, 2020.
* * *
As reported by the TCR on Nov. 17, 2022, S&P Global Ratings lowered
its issuer credit rating on Canopy Growth Corp. (CGC) to 'SD'
(selective default) from 'CC'.
In July 2022, Fitch Ratings downgraded the Long-Term Issuer Default
Ratings (IDR) for Canopy Growth and 11065220 Canada Inc. to 'RD'
from 'C' on the completion of Canopy's exchange offer for a portion
of the convertible notes due July 2023.
CENGAGE LEARNING: Moody's Hikes CFR to B2, Outlook Remains Stable
-----------------------------------------------------------------
Moody's Investors Service upgraded Cengage Learning, Inc.'s
Corporate Family Rating to B2 from B3 and affirmed the B2 senior
secured term loan rating. The outlook remains stable. The rating
actions follow Cengage's plans to refinance its outstanding senior
unsecured notes due 2024 with newly raised preferred equity. The
Caa2 rating on the senior unsecured notes remains unchanged and
will be withdrawn upon the notes' full redemption.
On April 17, Cengage announced [1] it had signed a definitive
agreement with funds managed by affiliates of Apollo Global
Management, Inc. whereby Apollo funds will purchase approximately
$500 million of a new series of convertible preferred stock of
Cengage Group, subject to certain adjustments. Cengage plans to use
the proceeds from the preferred stock issuance, as well as cash on
hand (to the extent necessary), to redeem, repurchase and/or
refinance all of its outstanding senior unsecured notes due 2024
and to pay fees and expenses incurred in connection with the
transaction. The transaction is expected to close by June 30, 2023,
subject to customary closing conditions.
The upgrade of the CFR reflects a material reduction in outstanding
debt following the proposed transaction and Moody's expectation
that Cengage management will remain committed to further delevering
over the next 2-3 years. Governance considerations are key factors
in the upgrade rating actions. Moody's projects that the company's
Debt/EBITDA (Moody's adjusted) will decline to around 4.8x by FYE
3/2024 and 4.2x by FYE 3/2025.
The affirmation of the B2 senior secured loan rating reflects the
loan's seniority in the pro forma capital structure. Pro forma for
the redemption of the senior unsecured notes, the company's senior
secured term loan will represent the preponderance of the company
structure and is rated B2, in line with the CFR.
Upgrades:
Issuer: Cengage Learning, Inc.
Corporate Family Rating, Upgraded to B2 from B3
Probability of Default Rating, Upgraded to B2-PD from B3-PD
Affirmations:
Issuer: Cengage Learning, Inc.
Senior Secured Bank Credit Facility, Affirmed B2 to (LGD4) from
(LGD3)
Outlook Actions:
Issuer: Cengage Learning, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Cengage's B2 CFR reflects the company's high leverage in a highly
cyclical and seasonal business, intense competition and execution
risks associated with ongoing transition to a largely digital
business model. Within its higher education business, the company's
revenue growth continues to be pressured by secular industry
trends, including affordability-driven price compression, continued
competition from open educational resources, rental and used
textbooks and declining enrollment trend (although the most recent
spring enrollment was up).
Nevertheless, Cengage's B2 CFR is supported by its well-established
brand, good market position, long-standing relationships with
education institutions, proprietary content developed through
long-term exclusive relationships with leading authors and broad
range of product offerings in higher education publishing. The
company's good liquidity position is supported by a high cash
balance and Moody's expectation of positive free cash flow over the
next 12-18 months, with Moody's-adjusted FCF/Debt in the mid- to
high-single percentage range. A continued shift to a largely
digital revenue model lays a pathway for a more efficient cost
structure in the longer term, with lower inventory levels and lower
earnings volatility.
Cengage has good liquidity, supported by a sizable $233 million
cash balance as of December 31, 2022 and an undrawn $182 million
ABL revolver maturing in November 2027. Moody's expects that cash
on hand and externally generated cash flow will be sufficient to
fund the company's seasonal cash needs and 1% (or $16.5 million)
annual term loan amortization over the next 12-18 months. Cash flow
needs are highly seasonal with historical working capital swings of
roughly $100-$150 million as most sales occur in Q2 and Q4 driven
by sales of digital product and courseware.
The ABL revolver provides adequate backup for seasonal cash needs.
As of December 31, 2022, the revolver was undrawn and had $123
million of availability, net of $10.2 million of outstanding
letters of credit. Moody's does not expect availability on the
revolver to fall below the lesser of $18.2 million or 10% of the
borrowing base that would trigger the requirement to maintain a
minimum 1.0x fixed charge coverage ratio. If the covenant ratio
were to be tested over the next 12-18 months, Moody's expects that
there will be adequate headroom over the requirement. The term loan
due July 2026 is covenant-lite.
The term loan is secured by a first lien on substantially all
assets, including tangible and intangible assets of the borrower's
U.S. subsidiaries, 100% of the capital stock of U.S. subsidiaries,
65% of the stock of first-tier foreign subsidiaries and a second
lien on the ABL revolver's first lien collateral, principally
certain current assets including receivables and inventory.
Moody's ranks the term loan behind the ABL revolver (unrated) in
Moody's Loss Given Default framework because of the revolver's
first lien on receivables, inventory and related assets with a
second lien on other material assets. Moody's believes the term
loan collateral package is less liquid than collateral for the
revolver.
The stable outlook reflects Moody's expectations for further
Debt/EBITDA improvement through earnings growth, good liquidity,
and creditor-friendly financial strategies emphasizing debt
reduction.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Cengage is able to consistently grow
revenue and demonstrate disciplined financial policy resulting in
debt-to-cash EBITDA (Moody's adjusted) being sustained comfortably
below 4x and is committed to operating at that leverage level. Good
liquidity and free-cash flow-to-debt (Moody's adjusted) sustained
in the high- single-digit percentage range or better, would also be
needed for an upgrade.
Cengage ratings could be downgraded if operating performance
weakens or an aggressive financial policy lead to Debt/EBITDA
sustained above 5x or free cash flow remaining in the low-single
digit percent range.
Headquartered in Boston, Cengage Learning, Inc. is a provider of
learning solutions, software and educational services for the
higher education, research, school, career, professional, and
international markets. Large shareholders currently include Apax
Partners, KKR and Searchlight Capital as well as other creditors
who became shareholders upon exit from the Chapter 11 bankruptcy in
2014. Revenue for the last twelve months ended December 31, 2022
totaled $1.4 billion.
The principal methodology used in these ratings was Media published
in June 2021.
CINEWORLD GROUP: Sees Bankruptcy Exit in the Middle of 2023
-----------------------------------------------------------
Patrick Frater of Variety reports that beleaguered multinational
cinema operator, Cineworld says that it anticipates exiting the
U.S. Chapter 11 bankruptcy system in the first half of 2023.
The company revealed Tuesday that it has now formally filed a plan
of reorganization with the U.S. Bankruptcy Court for the Southern
District of Texas, Houston Division.
Cineworld owns the Regal cinema chain and is the second largest
movie theater operator in the world. Its shares are listed in the
U.K.
In a filing, Cineworld said that its proposal to the court is
"supported by lenders holding and controlling approximately 83% of
the group’s term loans due 2025 and 2026 and revolving credit
facility due 2023 and approximately 69% of the debtors' outstanding
indebtedness under the debtor-in-possession financing facility
[previously agreed with the court]."
About Cineworld Group
London-based Cineworld Group PLC was founded in 1995 and is the
world's second-largest cinema chain. Cineworld operates 751 sites
with 9,000 screens in 10 countries, including the Cineworld and
Picturehouse screens in the UK and Ireland, Yes Planet in Israel,
and Regal Cinemas in the United States.
According to The Guardian, the Griedinger family, including Mooky's
brother and deputy chief executive, Israel, have struggled to
maintain control of the ailing business but have been forced to
reduce their stake from 28% in recent years. Cineworld's top five
investors include the Chinese Jangho Group at 13.8%, Polaris
Capital Management (7.82%), Aberdeen Standard Investments (4.98%)
and Aviva Investors (4.88%).
The London-listed Cineworld, which has run up debt of more than
$4.8 billion after losses soared during the pandemic, is pinning
its hopes on a meatier slate of movies in 2022 to bounce back from
a two-year lull.
Cineworld Group plc and 104 affiliates sought Chapter 11 protection
(Bankr. S.D. Texas Lead Case No. 22-90168) on Sept. 7, 2022,
estimating more than $1 billion in assets and debt. Judge Marvin
Isgur oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP and Jackson Walker, LLP as
bankruptcy counsels; PJT Partners, LP as investment banker;
AlixPartners, LLP as restructuring advisor; and Ernst & Young, LLP
as tax services provider. Kroll Restructuring Administration, LLC
is the claims agent.
The U.S. Trustee for Region 7 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on Sept. 23,
2022. The committee tapped Weil, Gotshal & Manges, LLP and
Pachulski Stang Ziehl & Jones, LLP as legal counsels; FTI
Consulting, Inc., as financial advisor; and Perella Weinberg
Partners, LP as investment banker.
CLARIOS GLOBAL: Moody's Rates New $1BB Sr. Secured Term Loan 'B1'
-----------------------------------------------------------------
Moody's Investors Service assigned B1 ratings to Clarios Global
LP's proposed $1 billion senior secured term loan B and $500
million of senior secured notes. At the same time, Moody's
assigned a B1 to Clarios' recently closed $800 million senior
secured revolving credit facility. All other ratings for Clarios
are unaffected, including the B2 corporate family rating, the B1
ratings on the existing senior secured notes and the Caa1 rating on
the existing senior unsecured notes. The outlook is stable.
Proceeds from these issuances are expected to paydown the existing
USD tranche of the term loan B, resulting in a debt neutral
transaction.
Assignments:
Issuer: Clarios Global LP
Backed Senior Secured Term Loan B, Assigned B1 (LGD3)
Backed Senior Secured Revolving Credit Facility, Assigned B1
(LGD3)
Senior Secured Regular Bond/Debenture, Assigned B1 (LGD3)
RATINGS RATIONALE
Clarios' ratings reflect the company's high leverage. However,
Moody's expects debt-to-EBITDA (inclusive of Moody's standard
adjustments, including over $1.3 billion in accounts receivable
securitization) to fall below 6x by the company's September 2023
fiscal year end. Moody's expects near-term free cash flow-to-debt
to remain in the low-single digit range with a trajectory towards
5% within the next couple of years. The ratings also incorporate
Clarios' strong market share in automotive batteries, near
mid-teens EBITA margin, longstanding customer relationships and
high barriers to entry given the environmental liability risks.
The stable outlook reflects Clarios' position as a leading supplier
of automotive batteries, namely higher priced advanced batteries.
Moody's expects battery volumes to grow in the low-to-mid single
digit range over the next several years. Recovering, but choppy,
new vehicle production and a large, growing used car parc should
provide opportunities to increase margins and cash flow despite
lingering inflationary conditions.
Liquidity is expected to remain adequate through calendar 2023
supported by cash of around $250 million and Moody's expectations
for free cash flow to exceed $250 million. Additional liquidity is
provided by a recently upsized $800 million asset-based revolving
credit facility, expiring March 2028, and the upsized $800 million
cash flow revolving credit facility, also expiring March 2028
(Moody's expects near full availability as of March 31, 2023).
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded with consistent improvement in cash
flow and continued debt reduction resulting in debt-to-EBITDA
falling towards 5.5x. EBITA-to-interest approaching 2.5x would
also support a rating upgrade. Ratings could be downgraded with
expectations for debt-to-EBITDA to approach 8x, EBITA-to-interest
to fall below 1x and the inability to realize benefits from ongoing
cost saving initiatives. An adverse development involving
environmental liabilities or deteriorating liquidity could also
result in a rating downgrade.
The principal methodology used in these ratings was Automotive
Suppliers published in May 2021.
Clarios Global LP is a global supplier of lead-acid automotive
batteries for virtually every type of passenger car, light truck
and utility vehicle. Over 80% of volume is traditional SLI
lead-acid batteries, while roughly 20% is advanced battery
technologies to power start-stop, hybrid and electric vehicles.
Revenue for the twelve months ended December 31, 2022 was
approximately $9.3 billion.
CLARIOS GLOBAL: S&P Rates New $1BB Senior Secured Term Loan B 'B+'
------------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating and '3'
recovery rating to Clarios Global L.P.'s proposed $1 billion senior
secured term loan B due in 2030. The '3' recovery rating indicates
its expectation for meaningful (50%-70%; rounded estimate: 60%)
recovery for the senior secured lenders in the event of a payment
default. S&P also assigned a 'B+' issue-level rating and '3'
recovery rating to Clarios' proposed $500 million senior secured
notes due in 2028. The '3' recovery rating indicates its
expectation for meaningful (50%-70%; rounded estimate: 60%)
recovery. S&P's 'B-' issue-level rating and '6' recovery rating on
the company's senior unsecured debt are unchanged. Clarios plans to
use the proceeds from the new debt to partially refinance its term
loan B due in 2026. Because this is a dollar-for-dollar
refinancing, it will not increase leverage or have a material
impact on credit metrics.
ISSUE RATINGS - RECOVERY ANALYSIS
Key analytical factors
-- S&P's hypothetical default scenario considers a default in 2027
as the company faces issues filing orders and aggressive new and
existing competitors that cause its customers to procure batteries
from other aftermarket suppliers.
-- S&P believes that if Clarios were to default, it would still
have a viable business model because of the continued demand for
its batteries, nationwide network of locations, and strong brand
awareness. It expects Clarios to reorganize and emerge as a smaller
entity while retaining significant value. In addition, S&P would
not expect its foreign operations to be included in any potential
reorganization.
-- S&P said, "We value the company on an enterprise value basis
and estimate an emergence EBITDA of about $1.2 billion. We then
apply a 5.5x EBITDA multiple, half a turn above what we use for
most auto suppliers, to arrive at a gross enterprise value of $6.6
billion at emergence. The higher multiple reflects Clarios'
stronger business risk profile than its peers. In our view, the
company is well positioned to benefit from increasing demand for
electric vehicles, which rely more on advanced batteries with
higher margins."
Simulated default assumptions
-- Simulated year of default: 2027
-- EBITDA at emergence: $1.21 billion
-- EBITDA multiple: 5.5x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $6.3
billion
-- Valuation split (obligors/nonobligors): 84%/16%
-- Priority claims: $857.3 million
-- Value available to first-lien debt claims
(collateral/noncollateral): $5.1 billion
-- Secured first-lien debt claims: $8.2 billion
--Recovery expectations: 50%-70% (rounded estimate: 60%)
-- Total value available to unsecured claims: $353.7 million
-- Senior unsecured debt/pari passu unsecured claims: $1.8
billion/$3.9 billion
--Recovery expectations: 0%-10% (rounded estimate: 5%)
All debt amounts include six months of prepetition interest.
Collateral value equals assets pledged from obligors after priority
claims plus equity pledged from nonobligors after nonobligor debt.
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.
Conventional vehicle batteries are the most recycled consumer
product in the world. Also, Clarios' worker incident and illness
rates in the U.S. are better than industry standards.
Governance is a moderately negative consideration. S&P said, "Our
assessment of Clarios' financial risk profile as highly leveraged
reflects corporate decision-making that prioritizes the interests
of controlling owners, in line with our view of most rated entities
owned by private-equity sponsors. Our assessment also reflects
their generally finite holding periods and a focus on maximizing
shareholder returns."
COLUMBIA ASTHMA: PCO Submits First Interim Report
-------------------------------------------------
Tamar Terzian, the patient care ombudsman, filed with the U.S.
Bankruptcy Court for the Central District of California a first
interim report regarding the health care facility operated by
Columbia Asthma & Allergy Clinic I, PC.
The PCO conducted a visit physically on site. For each location,
PCO discussed with the supervising staff the systems in place and
observed patient care. Overall, the clinics were clean, staffed and
had supplies, including personal protective equipment that the
clinic continue to use post-Covid-19 pandemic, according to the
report which covers the period Feb. 11 to April 11, 2023.
The PCO recommends having a log of all medication stored on site
and a regularly discarding any expired medications. There are no
changes to report currently in terms of the quality of care. The
PCO did not observe operational concerns as contemplated by Section
333(b)(3) with potential patient safety implications.
A copy of the first interim ombudsman report is available for free
at https://bit.ly/3A9kKNe from PacerMonitor.com.
The ombudsman may be reached at:
Tamar Terzian, Esq.
Terzian Law Group
315 W. Arden Avenue Suite 28
Glendale, CA 91203
Phone: 818-242-1100
Email: tamar@terzlaw.com
About Columbia Asthma & Allergy Clinic I
Los Angeles-based Columbia Asthma & Allergy Clinic I, PC provides
customized approaches to treating asthma and allergy.
Columbia Asthma & Allergy Clinic filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. C.D. Calif. Case No.
23-10579) on Feb. 1, 2023, with $370,723 in assets and $6,903,223
in liabilities. Gregory Kent Jones has been appointed as Subchapter
V trustee.
Judge Vincent P. Zurzolo oversees the case.
The Law Offices of Michael Jay Berger is the Debtor's legal
counsel.
The U.S. Trustee for Region 16 appointed Tamar Terzian as patient
care ombudsman in the Debtor's Chapter 11 case.
CONUMA RESOURCES: S&P Upgrades ICR to 'CCC+' Outlook Stable
-----------------------------------------------------------
S&P Global Ratings raised its issuer credit rating (ICR) on Conuma
Resources Ltd. (Conuma) to 'CCC+' from 'CCC'. At the same time, S&P
assigned its final 'CCC+' issue-level and '3' recovery ratings to
the company's new US$250 million senior secured notes due 2028.
S&P upgrades primarily reflects reduced refinancing risk and
improved liquidity following Conuma's recent debt issuance.
Conuma recently issued US$250 million senior secured notes due 2028
that pay a 13.125% coupon. S&P said, "We expect the company will
use proceeds from the debt issuance primarily to repay the balance
outstanding on its US$158 million senior secured notes that were
scheduled to mature in May 2023 and its large employer emergency
financing facility (LEEFF) (about US$57 million). We also expect
Conuma will upsize its revolving credit facility to $27.5 million
from $22.5 million and extend the maturity to 2027."
This refinancing transaction extended the company's funded debt
maturities to 2028, which reduces the likelihood of a distressed
exchange or liquidity crisis in the near term. S&P believes the
refinancing and currently favorable met coal prices have
strengthened Conuma's liquidity position such that the company's
sources of liquidity should cover its uses over at least the next
12 months, even under a moderate stress scenario.
S&P said, "Our rating on Conuma also reflects improved visibility
on the company's long-term production prospects with the completion
of the acquisition of the Quintette mine from Teck Resources Ltd.
on Feb. 16, 2023. The Quintette mine is fully permitted and we
expect it will contribute to additional reserves of about 45 metric
tons (mts) of hard coking coal (HCC) with the potential for a 1.3
mt-2.6 mt per year production capacity. However, the mine was on
care and maintenance for about 20 years and requires considerable
capital investment over the next couple of years to restart.
"We believe Conuma remains vulnerable to favorable met coal prices
and operational improvements to meet its financial obligations.
"We consider Conuma's capital structure unsustainable long term,
stemming primarily from our view of the company's relatively high
operating cost profile and our expectation for met coal prices to
decline over the next few years. We believe Conuma operates in the
lower quartile of the industry cost curve and expect it will likely
remain there over the next few years. In our opinion, Conuma's
mining operations remain vulnerable to operating disruptions,
including labor shortages, as well as inflationary headwinds that
have contributed to the company's unit cash costs increasing faster
than industry peers since 2018. Conuma's unit cash costs (including
freight) increased to about US$180 per mt (/mt) in 2022 from about
US$130/mt in the previous year. We assume Conuma's unit cash
operating costs will reduce gradually over the next couple of years
from initiatives to improve operational efficiency and the
anticipated increase in production this year from Wolverine and
Brule before their mine lives end in 2024 and 2025, respectively.
The modest reduction in operating costs this year, combined with
currently favorable met coal prices, should allow the company to
generate positive FOCF over the next 12 months. In addition,
Quintette is expected to have lower mining ratios compared with
Conuma's current mining operations such as Perry Creek, which
should contribute to lower-cost per-metric-ton production from 2024
onward. Despite these factors, we expect a decline in met coal
prices that outpaces Conuma's per unit cost profile over the next
couple of years. Specifically, we assume met coal prices will
average US$250/mt for the remainder of 2023, US$190/mt in 2024, and
US$160/mt in 2025. Under our assumptions, we consider Conuma's
capital structure as unsuitable long term in large part because we
do not expect the company will generate positive FOCF beyond the
next 12 months."
Conuma likely has low flexibility to delay higher capex over the
next few years.
S&P said, "We expect Conuma will be dependent on production from
the Quintette mine beyond 2023 as the company winds down production
at its Wolverine and Brule mines. We estimate that Conuma's
Quintette mine will contribute about 30% and 45%, respectively, of
its met coal production in 2024 and 2025. As a result, we believe
the company is less able to delay higher capex relating to
Quintette and that potential delays or cost overruns could
contribute to higher-than-anticipated FOCF deficits beyond this
year and exhaust the company's available liquidity. We also believe
that the restarting of Conuma's recently acquired Quintette mine
carries some execution risk given that the mine has been in care
and maintenance since 2000 and because of the current inflationary
environment.
"The stable outlook reflects Conuma's longer dated debt maturity
profile and current favorable met coal prices that should allow the
company to generate positive FOCF over the next 12 months. Still,
we consider Conuma's capital structure to be unsustainable in the
long term based on our view of the company's high operating cost
profile, our expectation for met coal prices to decline to about
$160/mt in 2025, and the elevated capex over the next couple of
years related to the Quintette restart. Under these assumptions, we
estimate Conuma will generate FOCF deficits beyond this year and
for execution risk to be elevated over the next couple of years
relating to the restarting of Quintette.
"We could lower our ratings on Conuma within the next 12 months if
we believe the company is likely to consider a transaction that we
view as tantamount to a default. This could occur if cash flow
prospects or liquidity meaningfully deteriorated, potentially due
to sharply lower-than-anticipated met coal prices, higher operating
costs, or meaningful delays related to restarting Quintette.
"We could upgrade Conuma within the next 12 months if prospects for
the company to generate sustained positive FOCF improve, and its
liquidity position strengthens. This could occur if we raise our
met coal price assumptions, per unit cash costs decline by more
than we anticipate, or the company makes good progress on the work
required to restart Quintette, leading us to believe that cost
overruns or delays are less likely."
ESG credit indicators: E-4, S-3, G-3
CRAFTSMAN ROOFING: Files Emergency Bid to Use Cash Collateral
-------------------------------------------------------------
Craftsman Roofing Services, Inc. asks the U.S. Bankruptcy Court for
the Eastern District of North Carolina, Raleigh Division, for
authority to use cash collateral and provide adequate protection.
The Debtor requires the use of cash collateral to pay its ordinary
operating expenses.
The entities that assert an interest in the cash collateral are
Bankcorp Bank and Fora Financial Business Loans.
The Debtor proposes adequate protection to the Secured Creditors in
the form of replacement liens in after-acquired revenue to the same
extent as they had prior to the bankruptcy.
A copy of the Debtor's motion and budget is available at
https://bit.ly/3GNwtEO from PacerMonitor.com.
The Debtor projects $111,675 in total revenue and $85,325 in total
expenses for one month.
About Craftsman Roofing Services, Inc.
Craftsman Roofing Services, Inc. sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 23-01013) on
April 13, 2023. In the petition signed by Russell Vandiver,
president, the Debtor disclosed up to $10 million in both assets
and liabilities.
Philip M. Sasser, Esq., at Sasser Law Firm, serves as counsel to
the Debtor.
CROCKETT COGENERATION: Moody's Withdraws B3 Rating on Sec. Notes
----------------------------------------------------------------
Moody's Investors Service has withdrawn the B3 rating of Crockett
Cogeneration, LP ("Issuer" or "Project") 5.869% Senior Secured
Global Notes due 2025. At the time of the withdrawal, the rating
outlook was negative.
Withdrawals:
Issuer: Crockett Cogeneration, LP
Senior Secured Global Notes, Withdrawn, previously rated B3
Outlook Actions:
Issuer: Crockett Cogeneration, LP
Outlook, Changed To Rating Withdrawn From Negative
RATIONALE
The withdrawal of the rating and outlook follows the redemption of
all remaining (approximately $32.5 million) outstanding project
notes of the Issuer as of March 27, 2023. The project notes had an
originally scheduled maturity date of March 30, 2025 pursuant to
the project indenture dated March 17, 2005. Crockett facilitated
this early redemption of all remaining project notes utilizing
existing excess cash flow at the Project.
Crockett Cogeneration, LP is a California limited partnership that
owns and operates a 240 MW natural gas-fired electric power and
steam cogeneration facility in Crockett, California. The Project
is wholly owned by Hull Street Energy ("HSE"), which acquired the
ownership of the Project held by BlackRock's Global Energy & Power
Infrastructure Fund I's controlling 91.7% interest in September
2021, and subsequently acquired the remaining 8.27% ownership
previously held by Osaka Gas Company, Ltd in March 2022. Hull
Street Energy is a private equity firm that specializes in
investing in the North American power generation sector, and
targets power companies that will support the low carbon energy
transition.
The principal methodology used in this rating was the Power
Generation Projects Methodology published in January 2022.
CSC HOLDINGS: Moody's Gives B1 Rating on $1BB Sr. Guaranteed Notes
------------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to CSC Holdings,
LLC's 5-year, $1 billion Senior Guaranteed Notes due 2028. The
Company's B2 Corporate Family Rating, B2-PD Probability of Default
Rating, and all instrument ratings including the Senior Secured
Credit Facility and Senior Guaranteed Notes rated B1 and Senior
Unsecured Notes rated Caa1 are unaffected by the proposed
transaction. The stable outlook and SGL-2 speculative grade
liquidity rating are unchanged.
Assignments:
Issuer: CSC Holdings, LLC
Senior Unsecured Regular Bond/Debenture, Assigned B1 (LGD3)
Moody's expects the terms and conditions of the newly issued
obligation to be materially the same as existing obligations of the
same class and will not materially change the proportional mix of
secured and unsecured debt, or the resultant creditor claim
priorities in the capital structure. CSC intends to use the
proceeds (net of fees and expenses) from the financing for general
corporate purposes, which may include the opportunistic refinancing
of certain of the Issuer's existing indebtedness including
outstanding borrowings drawn under its revolving credit facility,
and to finance capital expenditures. Moody's expects the new,
longer-dated notes, to be incrementally more expensive than the
company's current average cost of debt, thus increasing annual
interest expense. Leverage could also increase to the extent funds
are not used for debt repayment.
RATINGS RATIONALE
CSC's credit profile is supported by its large size (near $9.7
billion in revenue) and somewhat diversified footprint. The
business model is profitable, generating steady EBITDA margins near
40% and providing a high degree of visibility given the very
predictable monthly recurring revenue from a diversified and large
base of residential and commercial customers. Broadband demand is a
favorable tailwind and opportunity, with positive and sustained
secular growth. The company also has good liquidity.
The credit profile is constrained by high leverage (approximately
6.7x at the end of 2022, Moody's adjusted gross leverage), and the
current prioritization of capital investments over debt repayment.
Additionally, the video and voice businesses are declining rapidly
under secular pressure, shedding subscribers in the low teens
percent range. Broadband demand and growth, a historical offset
providing top-line support, has also weakened considerably due to
higher competitive intensity. Fixed wireless access and or fiber
providers are now taking share, evident in the decline of data
subscribers in the low single digit percent range. As a result, the
company is deploying an aggressive and capital-intensive multi-year
fiber build, driving capex to near 20% of revenue substantially
constraining free cash flows which could fall to under $100 million
in 2024.
The SGL-2 liquidity rating reflects good liquidity supported by
strong operating cash flow, a large revolving credit facility, and
ample covenant headroom. The company also benefits from a favorable
maturity profile with limited maturities over the next year.
Moody's rates CSC's senior secured bank debt facilities B1 (LGD3),
one notch above the B2 CFR. The secured debt is collateralized by a
stock pledge and is guaranteed by the operating subsidiaries of the
Company. Moody's also rates the senior unsecured guaranteed notes
at CSC B1 (LGD3), as the notes benefit from the same guarantee from
the restricted subsidiaries (as the credit facility creditors) and
Moody's view that the stock pledge for secured lenders provides no
additional lift/benefit as the equity collateral would likely be
worthless in a default scenario. Secured lenders benefit from
junior capital provided by the senior unsecured bonds at CSC (which
are not guaranteed) rated Caa1 (LGD5), two notches below the B2 CFR
given the subordination in the Company's capital structure. The
instrument ratings reflect the probability of default of the
Company, as reflected in the B2-PD Probability of Default Rating,
an average expected family recovery rate of 50% at default given
the mix of secured and unsecured debt in the capital structure, and
the particular instruments' rank in the capital structure.
Moody's maintains a B1 senior secured rating and a Caa1 senior
unsecured rating on certain debt that was originally issued by
Neptune Finco Corp. (Neptune, no outlook), an acquisition vehicle
used by Altice USA, Inc. (CSC's ultimate parent company, unrated)
to acquire the operating subsidiary D/B/A Cablevision. In 2015,
Neptune was merged with and into CSC, which effectively assumed all
of Neptune's obligations; however, Moody's internal databases
continue to reflect Neptune as a debt issuer.
The company's ESG Credit Impact Score is CIS-4, highly negative.
The CIS score primarily reflects the company's highly negative
governance risk driven by financial strategy and risk management
policies, specifically a tolerance for high leverage, dividends and
debt-financed M&A, and highly concentrated ownership. Social risk
is also moderately negative reflecting data privacy risks.
Moody's outlook reflects a baseline expectation for revenue to
decline by low single digit percent over the next 12-18 months,
driving revenue down – approaching $9 billion. Moody's expects
leverage to be sustained in the high 6x range, on debt averaging
near $25 billion. EBITDA margins will fall to at or below 40%,
producing near $3.5 billion in EBITDA. Net of capex (approaching
20% of revenue) and average borrowing costs (rising over 6%), free
cash flows will be $50 - $150 million, covering low single digit
percent of debt. Moody's outlook reflects certain key assumptions
including a decline in broadband, video, and voice subscribers.
Moody's expects liquidity to remain good.
Note: all figures are Moody's adjusted over the next 12-18 months
unless otherwise noted.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
An upgrade is very unlikely at this time given the pressures on the
business. However, Moody's could consider an upgrade if conditions
improved substantially such that:
Leverage (Moody's adjusted Debt/EBITDA) is sustained below 6x,
and
Free cash flow to debt (Moody's adjusted, before dividends) is
sustained above 3%
An upgrade could also be considered on same or better liquidity,
return to revenue and EBITDA growth supported by stable subscriber
base driven by a sustained rise in broadband growth, and or a more
conservative financial policy.
Moody's could consider a downgrade if:
-- Leverage (Moody's adjusted Debt/EBITDA) is sustained above 7x,
or
-- Free cash flow to debt (Moody's adjusted, before dividends) is
sustained below 1%
A downgrade could also be considered if the scale of the company
declined, liquidity deteriorated, there was a material and
unfavorable change in operating performance, or the company adopted
a more aggressive financial policy.
The principal methodology used in this rating was Pay TV published
in October 2021.
Headquartered in Long Island City, New York, CSC Holdings, LLC
passes over 9.5 million passings in 21 states, serving
approximately 4.9 million residential and business customers which
includes a total of about 8.6 million residential subscriptions to
data, video, and voice services. The company is wholly owned by
Altice USA, a public company majority owned and controlled by
Patrick Drahi. Revenues was approximately $9.7 billion in 2022.
In 2020 Altice sold 49.99% of Lightpath Group (Cablevision
Lightpath LLC and its subsidiaries), its fiber enterprise business,
to Morgan Stanley Infrastructure Partners (MSIP) for an enterprise
value of $3.2 billion. Altice retains a 50.01% interest in
Lightpath Group, maintains control of the company, and consolidates
its financial results.
CTI BIOPHARMA: Stonepine Capital Entities Report 5.3% Equity Stake
------------------------------------------------------------------
Stonepine Capital Management, LLC, Stonepine Capital, L.P., and Jon
M. Plexico disclosed in a Schedule 13G filed with the Securities
and Exchange Commission that as of April 4, 2023, they beneficially
own 7,018,046 shares of common stock of CTI Bipharma, Inc.,
representing 5.3 percent of the shares outstanding. The percentage
is based on 131,835,892 shares of Common Stock outstanding as of
Feb. 21, 2023, as reported in the Issuer's Form 10-K filed on March
6, 2023.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/891293/000093583623000361/ctibiocorp13g.htm
About CTI BioPharma
Headquartered in Seattle, Washington, CTI BioPharma Corp. is a
commercial biopharmaceutical company focused on the acquisition,
development and commercialization of novel targeted therapies for
blood-related cancers that offer a unique benefit to patients and
their healthcare providers. CTI has one commercially approved
product, VONJO (pacritinib), which has received accelerated
approval in the United States by the U.S. Food and Drug
Administration for the treatment of adult patients with
intermediate or high-risk primary or secondary (post-polycythemia
vera or post-essential thrombocythemia) myelofibrosis with a
platelet count below 50 x 10 9/L.
CTI Biopharma reported a net loss of $93 million for the year ended
Dec. 31, 2022, compared to a net loss of $97.91 million for the
year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had
$125.92 million in total assets, $143.50 million in total
liabilities, and a total stockholders' deficit of $17.58 million.
Seattle, Washington-based Ernst & Young LLP, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated March 6, 2023, citing that the Company has suffered recurring
losses from operations and has stated that substantial doubt exists
about the Company's ability to continue as a going concern.
DAVID'S BRIDAL: Seeks $85MM DIP Loan from Bank of America
---------------------------------------------------------
David's Bridal, LLC and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of New Jersey for authority to
use cash collateral and obtain postpetition financing.
The Debtors requests authority to enter into the Senior Secured,
Super-Priority Debtor-in-Possession ABL Credit Agreement with Bank
of America, N.A., as Administrative Agent, Collateral Agent, and
L/C Issuer, 1903P Loan Agent, LLC, as FILO Agent, 1903 Partners,
LLC, as FILO Term Loan Lender, and the other lenders thereunder.
Bank of America, N.A. is the Prepetition ABL Agent, 1903P Loan
Agent, LLC is the Prepetition FILO Agent, and 1903P Partners, LLC
is the Prior FILO Term Loan Lender under the prepetition Amended
and Restated ABL Credit Agreement, dated as of November 26, 2019.
The DIP Facility is a senior secured superpriority revolving
facility of up to $85 million in the aggregate principal amount,
consisting of (x) $75 million in revolving commitments and (y) $10
million in "first in, last out," term loan commitments, provided by
the DIP ABL Agent and the DIP FILO Agent, respectively, with up to
$10 million of new money available immediately upon entry of the
Interim Order.
The DIP Facility contains a "creeping" roll-up of Prepetition ABL
Obligations through the entry of the Final Order, at which time all
remaining outstanding Prepetition ABL Obligations will convert to
the DIP Obligations. Additionally, the DIP Facility provides for
the consensual use of the Prepetition Secured Parties' cash
collateral in accordance with the Budget.
The DIP Facility will mature on the earliest to occur of:
(a) August 31, 2023;
(b) the date of termination of all of Commitments;
(c) the date on which the Obligations become due and payable
pursuant to the DIP Credit Agreement, whether by acceleration or
otherwise;
(d) the effective date of a Plan of Reorganization for the
Debtors;
(e) the date of a sale of all or substantially all of the
Debtors' assets under Section 363 of the Bankruptcy Code;
(f) the first business day on which the Interim Order expires
by its terms or is terminated, unless the Final Order has been
entered and become effective prior thereto;
(g) the Final Order is vacated, terminated, rescinded,
revoked, declared null and void or otherwise ceases to be in full
force and effect;
(h) conversion of any of the Chapter 11 Cases to a case under
Chapter 7 of the Bankruptcy Code or any Loan Party will file a
motion or other pleading seeking the conversion of the Chapter 11
Cases to Chapter 7 of the Bankruptcy Code, unless otherwise
consented to in writing by the Administrative Agent and the
Required Lenders; and
(i) dismissal of any of the Chapter 11 Cases, unless otherwise
consented to in writing by the Administrative Agent and the
Required Lenders.
The Debtors intend to use the proceeds of the DIP Facility and cash
collateral to, among other things:
(a) fund operations, including, but not limited to, honoring
customer orders, obligations to employees, and payments to critical
vendors;
(b) fund the ongoing sale process led by Houlihan;
(c) finance interest, fees, expenses, and other costs related
to the DIP Facility;
(d) make payments in respect of the Carve-Out;
(e) satisfy adequate protection obligations; and
(f) make other permissible payments in accordance with the
Budget and the Interim Order.
The Debtors are required to comply with these milestones:
1. On or before two days after the Petition Date, the Debtors
will have obtained the Interim Order.
2. On or before two days after the Petition Date, the Debtors
will have obtained interim orders, in form and substance acceptable
to the DIP Agents, authorizing the Debtors to engage a nationally
recognized retail liquidator that is reasonably acceptable to the
DIP Agent and the Prepetition ABL Agent to conduct the store
closing sales, and use and continue to operate the cash management
system, in each case, on terms and conditions satisfactory to the
DIP Agents;
3. On or before 35 days after the Petition Date, the Debtors
will have obtained the Final Order;
4. On or before 35 days after the Petition Date, the Debtors
will have obtained final orders, in form and substance acceptable
to the DIP Agents, authorizing the Debtors to (i) assume the
Debtors' consulting agreement with a nationally recognized retail
liquidator that is reasonably acceptable to the DIP Agent and the
Prepetition ABL Agent and conduct the store closing sales
contemplated thereunder, and (ii) use and continue to operate the
cash management system, in each case, on terms and conditions
satisfactory to the DIP Agents;
5. On or before June 7, 2023, the Debtors will have
consummated a sale or all or substantially all of the DIP Secondary
Collateral;
6. On or before July 29, 2023, the Debtors will have caused
the DIP Obligations and the Prepetition ABL Obligations to be Paid
in Full.
David's Bridal, LLC, DBI Midco, Inc., Blueprint Registry, LLC, and
David's Bridal Canada Inc., the several lenders party thereto, and
Bank of America, N.A., as agent, are each party to the Amended and
Restated ABL Credit Agreement, dated as of November 26, 2019. The
Prepetition ABL Facility is comprised of a $125 million revolving
loan commitment and a $10 million "first-in-last-out" term loan.
The Prepetition FILO Term Loan is contractually subordinated to the
Prepetition ABL Loans under the Prepetition ABL Credit Agreement.
The Prepetition ABL Facility is guaranteed by each of the Debtors
and is secured by liens on substantially all of the Debtors'
assets. The ABL Facility matures in May 2024 and as of the Petition
Date, approximately $37.7 million was outstanding in Prepetition
ABL Loans, approximately $10.1 million was outstanding under the
Prepetition FILO Term Loan, and approximately $16.9 million in
letters of credit had been issued under the Prepetition ABL
Facility.
The Prepetition Loan Parties, the several lenders party thereto,
and Alter Domus (US) LLC as agent, are each party to the Senior
Superpriority Term Loan Credit Agreement, dated as of April 30,
2021. The Prepetition SS Term Loan Facility is guaranteed by each
of the Debtors and is secured by liens on substantially all of the
Debtors' assets. As of the Petition Date, approximately $91.7
million in aggregate principal amount remained outstanding under
the Prepetition SS Term Loan Facility.
The Prepetition Loan Parties, the several lenders party thereto,
and Cantor Fitzgerald Securities , as agent, are each party to the
Superpriority Term Loan Credit Agreement, dated as of June 19,
2020. The Prepetition Superpriority Term Loan Facility is
guaranteed by each of the Debtors and is secured by liens on
substantially all of the Debtors' assets. As of the Petition Date,
approximately $29.3 million in aggregate principal amount remained
outstanding under the Prepetition Superpriority Term Loan Facility.
The Prepetition Loan Parties, the several lenders party thereto,
and Cantor Fitzgerald as agent, are each party to the First Lien
Term Loan Credit Agreement, dated as of November 26, 2019. The
Prepetition First Lien Term Loan Facility is guaranteed by each of
the Debtors and is secured by liens on substantially all of the
Debtors' assets. As of the Petition Date, approximately $78.2
million in aggregate principal amount remained outstanding under
the Prepetition First Lien Term Loan Facility.
The Prepetition Loan Parties, the several lenders party thereto,
and Cantor Fitzgerald as agent, are each party to the Term Loan
Credit Agreement, dated as of January 18, 2019. The Prepetition
Takeback Term Loan Facility is guaranteed by each of the Debtors
and is secured by liens on substantially all of the Debtors'
assets. As of the Petition Date, approximately $13.8 million in
aggregate principal amount remained outstanding under the
Prepetition Takeback Term Loan Facility.
The Debtors propose to provide the Prepetition Secured Parties with
a variety of adequate protection to protect against, and to the
extent of, any postpetition diminution in value of the Prepetition
Collateral, including the cash collateral, resulting from the use,
sale, or lease of the Prepetition Collateral by the Debtors and the
imposition of the automatic stay, including Adequate Protection
Liens, Adequate Protection Superpriority Claims, and Adequate
Protection Payments.
A copy of the motion is available at https://bit.ly/41syKgO from
PacerMonitor.com.
About David's Bridal
David's Bridal, based in Conshohocken, Pa., and its affiliated
entities are international bridal and special occasion retailers.
They sell a broad assortment of bridal gowns, bridesmaid dresses,
special occasion dresses and accessories. As of April 17, 2023,
David's Bridal operates 294 stores across the United States,
Canada, and United Kingdom and franchise eight stores in Mexico.
David's Bridal, LLC, f/k/a David's Bridal, Inc., and five
affiliates sought Chapter 11 bankruptcy protection (Bankr. D.N.J.
Case No. 23-13131) on April 16, 2023. The Hon. Christine M.
Gravelle presides over the Debtors' cases.
Joshua A. Sussberg, P.C., Christopher T. Greco, P.C., Rachael M.
Bentley, Esq., and Alexandra Schwarzman, P.C., at Kirkland & Ellis
LLP; and Michael D. Sirota, Esq., Felice R. Yudkin, Esq., and
Rebecca W. Hollander, Esq., at Cole Schotz P.C., serve as counsel
to the Debtors.
The Debtors' financial advisor is Berkeley Research Group, LLC;
investment banker is Houlihan Lokey Capital, Inc.; liquidation
consultant is Gordon Brothers Retail Partners, LLC; and claims and
noticing agent is Omni Agent Solutions.
The Debtors listed $100 million to $500 million in both estimated
assets and estimated liabilities. The petitions were signed by
James Marcum as chief executive officer.
Then with over 300 stores, David's Bridal, Inc., and its three
affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case
No. 18-12635) on Nov. 19, 2018. The Hon. Laurie Selber Silverstein
was the case judge. Debevoise & Plimpton LLP served as the
Company's legal advisor, Evercore LLC was the financial advisor and
AlixPartners LLP was the restructuring advisor. In January 2019,
David's Bridal successfully emerged from Chapter 11 bankruptcy and
completed its financial restructuring.
DECISION POINTE: Taps Allen Vellone Wolf Helfrich as Counsel
------------------------------------------------------------
Decision Pointe Solutions, LLC seeks approval from the U.S.
Bankruptcy Court for the District of Colorado to employ Allen
Vellone Wolf Helfrich & Factor P.C. as its counsel.
The firm will handle all matters concerning the administration of
the estate including the preparation of the bankruptcy statements
and schedules, a plan of reorganization and disclosure statement,
as well as all contested and litigation matters that arise in the
Debtor's Chapter 11 case.
The firm will be paid at these rates:
Jeffrey A. Weinman $625 per hour
Lance J. Henry $350 per hour
Paralegal (Senior) $225 per hour
Paralegal (Junior) $120 per hour
As disclosed in court filings, Allen is a "disinterested person"
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Jeffrey A. Weinman, Esq.
Lance Henry, Esq.
Allen Vellone Wolf Helfrich & Factor, P.C.
1600 Stout Street, 1900
Denver, CO 80202
Tel: (303) 534-4499
Email: jweinman@allen-vellone.com
LHenry@allen-vellone.com
About Decision Pointe Solutions
Decision Pointe Solutions, LLC filed a Chapter 11 bankruptcy
petition (Bankr. D. Colo. Case No. 23-11338) on April 3, 2023, with
as much as $50,000 in assets and $500,001 to $1 million in
liabilities.
Allen Vellone Wolf Helfrich & Factor P.C. is the Debtor's legal
counsel.
DIOCESE OF ALBANY: Taps Blank Rome as Special Insurance Counsel
---------------------------------------------------------------
The Roman Catholic Diocese of Albany, New York seeks approval from
the U.S. Bankruptcy Court for the Northern District of New York to
employ Blank Rome, LLP.
The Debtor requires a special insurance counsel to:
(a) give legal advice with respect to insurance coverage under
policies covering the Debtor;
(b) prosecute or defend litigation arising under or with respect
to the Debtor's insurance coverage and policies;
(c) analyze the Debtor's insurance programs and risks;
(d) assist the Debtor's bankruptcy and general counsel in
developing and proposing a reorganization plan for payment to
creditors, including Child Victims Act claimants; and
(e) perform all other necessary legal services for the Debtor.
The firm will charge $525 per hour for junior associates and $1,350
per hour for partners.
Prior to the petition date, the Debtor paid Blank Rome the amount
of $437,230.11 in consideration for fees and costs incurred in the
firm's representation of the Debtor.
James Murray, Esq., a partner at Blank Rome, disclosed in a court
filing that his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
James R. Murray, Esq.
Blank Rome, LLP
1825 Eye Street NW
Washington, D.C. 20006
Tel: (202) 420-2200
Email: jim.murray@blankrome.com
About The Roman Catholic Diocese of Albany
The Roman Catholic Diocese of Albany is a religious organization in
Albany, N.Y. It covers 13 counties in Eastern New York, including a
portion of a 14th county. Its Mother Church is the Cathedral of the
Immaculate Conception in the city of Albany.
New York's Child Victims Act, which took effect in August 2019,
temporarily sets aside the usual statute of limitations for
lawsuits to give victims of childhood sexual abuse a year to pursue
even decades-old claims. Hundreds of new lawsuits have been filed
against churches and other institutions since the law took effect
on Aug. 14, 2019.
Facing the financial weight of new sexual misconduct lawsuits, at
least four of the eight Roman Catholic dioceses in the state, has
already sought Chapter 11 protection. The dioceses that have
declared bankruptcy include the Diocese of Rochester and the
Diocese of Rockville Centre on Long Island.
The Catholic Diocese of Albany sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D.N.Y. Case No. 23-10244) on
March 15, 2023. In the petition filed by Fr. Robert P. Longobucco,
the Debtor estimated assets between $10 million and $50 million and
liabilities between $50 million and $100 million.
Judge Robert E. Littlefield, Jr. oversees the case.
The Debtor tapped Nolan Heller Kauffman, LLP as bankruptcy counsel;
Tobin and Dempf, LLP as special litigation counsel; Blank Rome, LLP
as special insurance counsel; and Keegan Linscott & Associates, PC
as financial advisor. Donlin, Recano & Company, Inc. is the claims
and noticing agent.
DOW RUMMEL: Fitch Affirms BB Issuer Default Rating, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed the 'BB' rating on revenue bonds issued
by the City of Sioux Falls, SD on behalf of Dow Rummel Village (Dow
Rummel).
Fitch has also affirmed Dow Rummel's Issuer Default Rating (IDR) at
'BB'.
The Rating Outlook is Stable.
Entity/Debt Rating Prior
----------- ------ -----
Dow Rummel
Village (SD) LT IDR BB Affirmed BB
Dow Rummel
Village (SD)
/General
Revenues/1 LT LT BB Affirmed BB
The 'BB' rating primarily reflects Dow Rummel's high debt load
following a new money issuance in 2017 to finance its most recent
capital project. Its business profile attributes are solidly
'midrange', with historically sound operations supported by high
occupancy across all levels of care. Recent capital projects to
expand and renovate the campus have remedied Fitch's concerns that
age and condition of plant will affect Dow Rummel's longer-term
demand profile adversely.
The rapid fill of the new memory care/high acuity assisted living
units (ALUs) and its track record of maintaining solid, stable
occupancy, even during the pandemic, indicate that Dow Rummel is
providing adequate services and amenities to maintain solid demand,
despite operating in a very competitive primary market area (PMA).
SECURITY
The bonds are secured by a pledge of Dow Rummel's gross revenues, a
first mortgage lien, and a debt service reserve fund (DSRF) equal
to maximum annual debt service (MADS).
KEY RATING DRIVERS
Revenue Defensibility - 'bbb'
Stable, Strong Occupancy in Competitive Market
Dow Rummel operates in a very competitive market for senior living
facilities in Sioux Falls, but continues to maintain strong
occupancy and an active wait list for units across the community.
It provides adequate services and amenities to compete effectively
and meet market demand, as evidenced by the rapid fill of its
newly-constructed memory care/high acuity ALUs and a track record
of stable, strong demand, even during the pandemic.
An average of 95% of independent living units (ILUs), 93% of
assisted living units (ALUs), 84% of memory care units (MCUs), and
91% of skilled nursing facility (SNF) beds were occupied in fiscal
years 2019-2022 (FYE April 30). Approximately 96% of ILUs, 96% of
ALUs, 96% of MUCs, and 93% of SNF beds were occupied in the nine
months ended Jan. 31, 2023.
Dow Rummel has a history of regular rate increases across the
continuum of care, which it increased to a range of 5% to 6% in
fiscal 2023 compared to a historical average of between 4% and 5%
with no effect on demand, and weighted average entrance and monthly
service fees are affordable relative to prevailing home values and
income levels in its PMA.
Operating Risk - 'bbb'
Track Record of Sound Operations; Successful Completion of Capex
Dow Rummel has a track record of stable 'midrange' operating
performance, and the community completed its recent largescale
capital project successfully. Dow Rummel demonstrates 'midrange'
operating cost flexibility, with average operating ratio of 97.5%,
net operating margin (NOM) of 11.7%, and NOM-adjusted of 14.9% in
the last four fiscal years. Its operating ratio weakened to 101.0%
in fiscal 2022 and 102.4% in the first nine months of fiscal 2023,
due to escalating wage expense; however, management is reporting a
decline in the use of agency staffing, which should allow for
operational improvements back to levels consistent with Fitch's
'bbb' assessment.
Dow Rummel's near-term capital expenditures are expected to be
adequate and limited to routine maintenance, given its relatively
low average age of plant of 10.6 years. A SNF renovation is
possible over the longer term, but Dow Rummel is at the very
beginning of the planning stages for this project. Fitch believes
the community will have adequate debt capacity at the time of
execution, owing to capital-related metrics that have moderated
considerably since its last major borrowing in 2017. Dow Rummel had
1.4x revenue-only MADS coverage, 9.9x debt-to-net available and
14.8% MADS to revenue in fiscal 2022, compared to 0.8x, 15.7x and
21.5% in fiscal 2019.
Financial Profile - 'bb'
High Debt Load
Dow Rummel carries a high debt load following its new money
issuance in 2017 to fund capex. As of FYE 2022, the community had
approximately $17.8 million in unrestricted cash and investments
and a $3.4 million DSRF, representing 43.6% of adjusted debt and
329 days cash on hand. Dow Rummel's cash position grew to
approximately $19.3 million as of Jan. 31, 2023 (unaudited), owing
to relatively stable demand, strong turnover net entrance fees, and
more supportive financial market performance. The community's MADS
coverage was a solid 1.5x in fiscal 2022 and 1.3x in the first nine
months of fiscal 2023.
In light of expectations for 'midrange' revenue defensibility and
operating risk, Dow Rummel's financial profile is expected to
remain consistent with a 'bb' assessment throughout its
forward-looking stress case scenario, which factors in an assumed
degree of volatility in both economic conditions and its business
cycle. While the immediate concerns about Dow Rummel's age of plant
have been remedied with its most recent capital project, Fitch
believes the community's capital needs will remain elevated, owing
to its competitive environment, which will likely keep its debt
load high over the next five years.
Asymmetric Additional Risk Considerations
No asymmetric risk factors are relevant to the rating. Darla
VanRosendale, the current CEO, has announced her intention to
retire at the end of April 2023. Her successor has been identified
and is already at the community.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Unexpected, sustained compression of Dow Rummel's operating
performance or liquidity, or the issuance of additional debt that
results in weakened leverage and capital-related ratios.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- While not likely during the Outlook period, significant growth in
liquidity and material moderation of Dow Rummel's debt burden could
lead to positive rating action over a medium to longer-term time
horizon.
PROFILE
Dow Rummel is a type-C life plan community (LPC) situated on 13.2
acres in Sioux Falls, SD. The community now consists of 114 ILUs,
34 ALUs, 30 ILU/ALU 'flex' apartments, 60 memory care/high acuity
ALUs, and a 50-bed SNF. Dow Rummel had total revenues of
approximately $19.7 million in fiscal 2022.
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.
ENDO INT'L: Court Okays $27-Mil. Novavax Contract Fight Settlement
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Rick Archer of Law360 reports that a New York bankruptcy judge on
Wednesday gave Endo International permission to settle a contract
dispute with COVID-19 vaccine maker Novavax for $27 million after
the pharmaceutical company said Novavax may be heading for
bankruptcy itself.
The debtors sought Court approval for a Settlement Agreement and
Release of Claims, by and among debtor Par Sterile Products, LLC,m
and Novavax, Inc.
Par's proposed settlement with Novavax arises out of its
arrangement to provide fill-finish manufacturing services for
Novavax's COVID-19 vaccine and the validity of Novavax's purported
termination of that arrangement.
In particular, Par and Novavax are party to a Manufacturing
Services Agreement ("MSA"), which is a "take or pay" type
arrangement that obligated Par to reserve manufacturing capacity in
its facility to produce a certain number of vials of vaccine for
Novavax and obligated Novavax to purchase that number of vials of
vaccine from Par or pay Par for the shortfall. The work to be
performed under the MSA was in support of one or more of Novavax's
agreements it had directly or indirectly with the U.S. government.
In November 2021, pursuant to the MSA, Par issued Novavax an
invoice for $96.7 million for the guaranteed minimum amount that
Par contended was due under the MSA. After receiving this invoice,
Novavax purported to terminate the MSA, and argued that by virtue
of its termination, only a $15 million termination fee remained
payable to Par, rather than the full amount that Par had invoiced.
Novavax filed its Form 10-K for the fiscal year ended December 31,
2022, which included a going- concern opinion (the "Going-Concern
Opinion") that stated, “substantial doubt exists regarding
[Novavax's] ability to continue as a going concern through one year
from the date that these financial statements included in this
Annual Report were issued." According to the Annual Report,
Novavax’s auditors issued the Going-Concern Opinion because (i)
another of Novavax's counterparties is also pursuing similar
arbitration claims against Novavax, claiming approximately $700
million in damages and (ii) future government revenues became
uncertain when the U.S. government indicated it may not extend a
COVID-19 vaccine funding agreement, which would result in a loss of
$416 million in expected revenue.
In February 2023, Par and Novavax, advised by counsel, entered into
settlement negotiations, which generated multiple successive
counteroffers by each side. Ultimately, on April 4, 2023, Par and
Novavax entered into the Settlement Agreement memorializing the
terms of the settlement. As a condition to the effectiveness of the
Settlement Agreement, Par is required to seek the Court's approval
pursuant to section 363(b) of the Bankruptcy Code and Bankruptcy
Rule 9019.
Under the Settlement Agreement, Novavax has agreed to pay Par $27
million and to transfer title to certain equipment to resolve Par's
claims.
In addition to the inherent risks, uncertainty, and ongoing costs
involved in any arbitration proceeding, Par faced a risk that, in
light of the Going-Concern Opinion, a bankruptcy filing by Novavax
would make it impossible to collect any judgment. Indeed, Par was
concerned that by the time it obtained an enforceable judgment
(likely in 2024), Novavax could already have filed for chapter 11
based upon the risks identified in the Going-Concern Opinion.
Instead, by virtue of the Settlement Agreement, Par brings in $27
million of cash to its estates with
minimal collection risk.
About Endo International
Endo International plc is a generics and branded pharmaceutical
company. It develops, manufactures, and sells branded and generic
products to customers in a wide range of medical fields, including
endocrinology, orthopedics, urology, oncology, neurology, and other
specialty areas. On the Web: http://www.endo.com/
On Aug. 16, 2022, Endo International and certain of its
subsidiaries initiated voluntary prearranged Chapter 11 proceedings
(Bankr. S.D.N.Y. Lead Case No. 22-22549). The cases are pending
before Judge James L. Garrity, Jr. A Web site dedicated to the
restructuring is at http://www.endotomorrow.com/
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom, LLP as
legal counsel; PJT Partners, LP as investment banker; and Alvarez &
Marsal North America, LLC as financial advisor. Kroll
Restructuring Administration, LLC is the claims agent and
administrative advisor.
Roger Frankel, the legal representative for future claimants in the
Chapter 11 cases, tapped Frankel Wyron LLP and Young Conaway
Stargatt & Taylor, LLP as legal counsels, and Ducera Partners, LLC
as investment banker.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors on Sept. 2, 2022. The committee tapped Kramer
Levin Naftalis & Frankel as legal counsel; Lazard Freres & Co. LLC
as investment banker; and Dundon Advisers, LLC and Berkeley
Research Group, LLC as financial advisors.
Meanwhile, the official committee representing the Debtors' opioid
claimants tapped Cooley, LLP as bankruptcy counsel; Akin Gump
Strauss Hauer & Feld, LLP as special counsel; Province, LLC as
financial advisor; and Jefferies, LLC as investment banker.
David M. Klauder, Esq., the court-appointed fee examiner, is
represented by Bielli & Klauder, LLC.
FREE FLOW: Swings to $2.76 Million Net Loss in 2022
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Free Flow, Inc. has filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$2.76 million on $195,137 of total revenues for the year ended Dec.
31, 2022, compared to net income of $543,898 on $745,675 of total
revenues for the year ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $732,327 in total assets,
$1.73 million in total liabilities, $330,000 in series B redeemable
preferred stock, $470,935 in series C redeemable preferred stock,
and a total stockholders' deficit of $1.79 million.
Free Flow said, "The Company's present revenues are marginally
sufficient to meet operating expenses. The financial statement of
the Company has been prepared assuming that the Company will
continue as a going concern, which contemplates, among other
things, the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company had
incurred cumulative net losses of $1,794,855 since its inception
thus requires greater sales for its contemplated operational and
marketing activities to take place. The Company's ability to
increase additional sales through the future is unknown. The
obtainment of additional sales, the successful development of the
Company's contemplated plan of operations, and its transition,
ultimately, to the attainment of profitable operations are
necessary for the Company to continue operations. The ability to
successfully resolve these factors raise substantial doubt about
the Company's 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/0001543652/000109690623000860/fflo-20221231.htm
About Free Flow
Free Flow, Inc. was incorporated on Oct. 28, 2011 under the laws of
State of Delaware to enter the green energy industry. The Company
began with the idea of developing swimming pool solar pump system
to create a blend of green energy harvesting while maintaining the
present system. Having received firm inquiries from overseas
farmers, Free Flow began with focus on the sale of solar panels to
the agriculture sector, providing alternate means of electricity to
operate pumps for water wells in India and Pakistan.
GARDNER AGENCY: Wins Cash Collateral Access on Final Basis
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The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Gardner Agency of Texas, LLC to use
cash collateral on a final basis in accordance with the budget.
The Debtor has an immediate and critical need to use cash
collateral to operate its businesses and effectuate a
reorganization.
As of the Petition Date, the Debtor is liable to Bankwell Bank in
the aggregate principal amount of $1.759 million, plus interest in
the amount of $77,338, late fees in the amount of not less than
$11,340 and legal fees in the amount of $26,721 that is due and
owing under Prepetition Facility Documents or applicable law.
Unless by further Court order, the Debtor's right to use the cash
collateral will terminate immediately upon the earlier of:
(i) the expiration of the Approved Budget
(ii) the date any material provision of the Final Order will
for any reason cease to be valid and binding or the Debtor will
assert in any pleading filed with the Court;
(iii) the date an application is filed by the Debtor for the
Approval of any superpriority claim or any lien in the Chapter 11
case which is pari passu with or senior to the liens granted to the
Lender pursuant to the Interim Order without the prior written
consent of the Lender;
(vi) the date the Chapter 11 case is converted to a Chapter 7
case, or the Debtor is displaced of debtor in possession status
pursuant to section 1185 of the Bankruptcy Code;
(vi) the date of the commencement of any action by the Debtor
against the Lender with respect to the Prepetition Facility
Obligations or the Prepetition Liens; or
(vii) an Event of Default occurring under the Final Order.
As adequate protection, the Lender is granted valid, enforceable,
nonavoidable and fully perfected, first-priority postpetition
security interests in and liens on any collateral, valid,
enforceable, nonavoidable and fully perfected, junior priority
security interests in and postpetition liens, valid, enforceable,
nonavoidable and fully perfected, first priority postpetition
security interests in and replacement liens on, and first-priority
superpriority administrative expense claims under 11 U.S.C. section
507(b).
As additional adequate protection, the Debtor will make the
adequate protection payments provided in the Approved Budget, which
include weekly payments of the greater of $3,300 or 15% of weekly
commission revenue starting on March 27, 2023.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/40nk4OR from PacerMonitor.com.
The Debtor projects total expenses, on a weekly basis, as follows:
$11,050 for the week ending April 24, 2023;
$8,550 for the week ending May 1, 2023;
$8,050 for the week ending May 8, 2023;
$7,800 for the week ending May 15, 2023;
$11,050 for the week ending May 22, 2023; and
$4,000 for the week ending May 29, 2023.
About Gardner Agency of Texas, LLC
Gardner Agency of Texas, LLC is an insurance agency in Woodlands,
Texas. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. S.D. Tex. Case No. 23-30883) on March 13,
2023. In the petition signed by Steven C. Gardner, managing member,
the Debtor disclosed $10,643 in assets and $1,909,966 in
liabilities.
Judge Jeffrey P. Norman oversees the case.
Dean W. Greer, Esq., at West & West Attorneys at Law, P.C.,
represents the Debtor as legal counsel.
GAUCHO GROUP: Widens Net Loss to $21.8 Million in 2022
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Gaucho Group Holdings, Inc. has filed with the Securities and
Exchange Commission its Annual Report on Form 10-K disclosing
a net loss of $21.83 million on $1.64 million of sales for the year
ended Dec. 31, 2022, compared to a net loss of $2.39 million on
$4.92 million of sales for the year ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $18.69 million in total
assets, $7.90 million in total liabilities, and $10.79 million in
total stockholders' equity.
New York, NY-based Marcum LLP, the Company's auditor since 2013,
issued a "going concern" qualification in its report dated April
17, 2023, citing that the Company has a significant working capital
deficiency, has incurred significant losses and needs to raise
additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's 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/0001559998/000149315223012603/form10-k.htm
About Gaucho Group
Headquartered in New York, NY, Gaucho Group Holdings, Inc. --
http://www.algodongroup.com-- was incorporated on April 5, 1999.
Effective Oct. 1, 2018, the Company changed its name from Algodon
Wines & Luxury Development, Inc. to Algodon Group, Inc., and
effective March 11, 2019, the Company changed its name from Algodon
Group, Inc. to Gaucho Group Holdings, Inc. Through its
wholly owned subsidiaries, GGH invests in, develops and operates
real estate projects in Argentina. GGH operates a hotel, golf and
tennis resort, vineyard and producing winery in addition to
developing residential lots located near the resort. In 2016, GGH
formed a new subsidiary and in 2018, established an e-commerce
platform for the manufacture and sale of high-end fashion and
accessories. The activities in Argentina are conducted through its
operating entities: InvestProperty Group, LLC, Algodon Global
Properties, LLC, The Algodon - Recoleta S.R.L, Algodon Properties
II S.R.L., and Algodon Wine Estates S.R.L. Algodon distributes its
wines in Europe through its United Kingdom entity, Algodon Europe,
LTD.
GB SCIENCES: Zach Swarts Quits as CFO; Interim Replacement Named
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Zach Swarts resigned his position as chief financial officer of GB
Sciences, Inc. in order to pursue other business interests. The
Company expresses its thanks to Mr. Swarts for the years of
dedicated service he has given the Company and wishes him the best
going forward. The resignation of Mr. Swarts was not a result of
any disagreement or discord with the Company or its board of
directors, the Company said in a Form 8-K filed with the Securities
and Exchange Commission.
Also on April 14, 2023, the Company's board of directors elected
John Poss the Interim CFO of the Company. Mr. Poss is currently
the CEO of the Company, a position he has held since April 29,
2016. Mr. Poss also serves as Chairman of the board of directors.
Mr. Poss has served as the CFO of the Company in the past from
August 2015 through August 2016.
Mr. Poss has over 30 years of experience working as a consultant to
companies facing major transitions and transformations. Mr. Poss
began his career in the Washington, D.C. office of Arthur Andersen
& Co. and has served as chief executive officer, chief operating
officer, chief financial officer and chief technology officer of
both public and private companies in such diverse industries as
homebuilding, mining, telecommunications, manufacturing, logistics,
construction lending and mortgage banking. Immediately prior to
joining the Company in 2015, Mr. Poss served as chief executive
officer of Experiential Teaching Online Corp., an educational
content developer and for four years prior thereto owned and
operated his own consulting firm. Mr. Poss has also worked
extensively internationally, successfully negotiating agreements in
countries throughout Asia, Europe and the Americas. Mr. Poss
graduated from the University of Texas in 1974 with a degree in
accounting. Mr. Poss is 75 years of age.
About GB Sciences
Headquartered in Las Vegas, Nevada, GB Sciences, Inc. is a
plant-inspired, biopharmaceutical research and development company
creating patented, disease-targeted formulations of cannabis- and
other plant-inspired therapeutic mixtures for the prescription drug
market through its wholly owned Canadian subsidiary, GbS Global
Biopharma, Inc.
GB Sciences reported a net loss of $530,873 for the year ended
March 31, 2022, compared to a net loss of $3.73 million for the
year ended March 31, 2021. As of Dec. 31, 2022, the Company had
$2.79 million in total assets, $4.40 million in total liabilities,
and a total stockholders' deficit of $1.61 million.
Margate, Florida-based Assurance Dimensions, the Company's auditor
since 2020, issued a "going concern" qualification in its report
dated June 30, 2022, citing that the Company has sustained net
losses since inception, which have caused an accumulated deficit of
$104,580,122 at March 31, 2022. The Company also had a working
capital deficit of $3,607,638 and consumed cash in its operating
activities of $1,866,154 including $87,772 used in discontinued
operations for the year ended March 31, 2022. These factors raise
substantial doubt about the Company's ability to continue as a
going concern.
GIRARDI & KEESE: Trustees Defend Embattled Legal Lenders Deal
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Brandon Lowrey of Law360 reports that bankruptcy trustees for
former trial lawyer Tom Girardi and his law firm Girardi Keese have
urged a Los Angeles federal judge to toss objections to their plan
to pay off a lender accused of playing a role in the firm's
scandalous downfall, saying Wednesday, April 12, 2023, the payment
would resolve costly litigation and clear the way for money to flow
to other creditors.
About Girardi & Keese
Girardi and Keese or Girardi & Keese was a Los Angeles-based law
firm founded in 1965 by lawyers Thomas Girardi and Robert Keese. It
served clients in California in a variety of legal areas. It was
known for representing plaintiffs against major corporations.
An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No.
20-21022) was filed in December 2020 against GIRARDI KEESE by
alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian,
Erika Saldana, Virginia Antonio, and Kimberly Archie.
The petitioners' attorneys:
Andrew Goodman
Goodman Law Offices, Apc
Tel: 818-802-5044
E-mail: agoodman@andyglaw.com
Elissa D. Miller, a member of the firm SulmeyerKupetz, has been
appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7
trustee can be reached at:
Elissa D. Miller
333 South Grand Ave., Suite 3400
Los Angeles, California 90071-1406
Telephone: (213) 626-2311
Facsimile: (213) 629-4520
E-mail: emiller@sulmeyerlaw.com
An involuntary Chapter 7 petition was also filed against Thomas
Vincent Girardi (Case No. 20-21020) on Dec. 18, 2020. The Chapter 7
trustee can be reached at:
Jason M. Rund
Email: trustee@srlawyers.com
840 Apollo Street, Suite 351
El Segundo, CA 90245
GROM SOCIAL: Falls Short of Nasdaq Bid Price Requirement
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Grom Social Enterprises, Inc. received a deficiency letter from the
Listing Qualifications Department of The Nasdaq Stock Market LLC on
April 10, 2023, notifying the Company that, based upon the closing
bid price of the Company's common stock, par value $0.001 per
share, for the last 30 consecutive business days, the Company is
not currently in compliance with the requirement to maintain a
minimum bid price of $1.00 per share for continued listing on The
Nasdaq Capital Market, as set forth in Nasdaq Listing Rule
5550(a)(2).
The Notice has no immediate effect on the continued listing status
of the Common Stock on The Nasdaq Capital Market, and, therefore,
the Company's listing remains fully effective.
The Company is provided a compliance period of 180 calendar days
from the date of the Notice, or until Oct. 9, 2023, to regain
compliance with Nasdaq Listing Rule 5550(a)(2). If at any time
before Oct. 9, 2023, the closing bid price of the Common Stock
closes at or above $1.00 per share for a minimum of 10 consecutive
business days, subject to Nasdaq's discretion to extend this period
pursuant to Nasdaq Listing Rule 5810(c)(3)(H), Nasdaq will provide
written notification that the Company has achieved compliance with
the Minimum Bid Requirement, and the matter would be resolved.
If the Company does not regain compliance with the Minimum Bid
Requirement during the initial 180 calendar day compliance period,
the Company may be eligible for an additional 180 calendar day
compliance period. To qualify, the Company would be required to
meet the continued listing requirement for market value of publicly
held shares and all other initial listing standards for The Nasdaq
Capital Market, with the exception of the Minimum Bid Requirement,
and would need to provide written notice of its intention to cure
the deficiency during the second compliance period, by effecting a
reverse stock split, if necessary.
The Company intends to actively monitor the closing bid price of
the Common Stock and will evaluate available options to regain
compliance with the Minimum Bid Requirement. However, there can be
no assurance that the Company will regain compliance with the
Minimum Bid Requirement during the initial or additional 180
calendar day compliance period, secure the additional 180 calendar
day compliance period, or maintain compliance with the other Nasdaq
listing requirements. If the Company does not regain compliance
with the Minimum Bid Requirement within the allotted compliance
periods, including any extensions that may be granted by Nasdaq,
Nasdaq will provide notice that the Common Stock will be subject to
delisting. The Company would then be entitled to appeal that
determination to a Nasdaq hearings panel.
If the Common Stock ceases to be listed for trading on The Nasdaq
Capital Market, the Company expects that the Common Stock would be
traded on one of the three tiered marketplaces of the OTC Markets
Group.
About Grom Social Enterprises Inc.
Boca Raton, Florida-based Grom Social Enterprises, Inc. --
http://www.gromsocial.com-- is a media, technology and
entertainment company focused on delivering content to children
under the age of 13 years in a safe secure Children's Online
Privacy Protection Act ("COPPA") compliant platform that can be
monitored by parents or guardians.
Grom Social Enterprises reported a net loss of $16.77 million for
the year ended Dec. 31, 2022, compared to a net loss of $10.22
million for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the
Company had $24.64 million in total assets, $4.30 million in total
liabilities, and $20.35 million in total stockholders' equity.
Somerset, New Jersey-based Rosenberg Rich Baker Berman, P.A., the
Company's auditor since 2022, issued a "going concern"
qualification in its report dated April 17, 2023, citing that the
Company's significant operating losses and negative cash flows from
operations raise substantial doubt about its ability to continue as
a going concern.
GROM SOCIAL: Incurs $16.8 Million Net Loss in 2022
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Grom Social Enterprises, Inc. has filed with the Securities and
Exchange Commission its Annual Report on Form 10-K disclosing
a net loss of $16.77 million on $5.43 million of sales for the year
ended Dec. 31, 2022, compared to a net loss of $10.22 million on
$6.30 million of sales for the year ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $24.64 million in total
assets, $4.30 million in total liabilities, and $20.35 million in
total stockholders' equity.
Somerset, New Jersey-based Rosenberg Rich Baker Berman, P.A., the
Company's auditor since 2022, issued a "going concern"
qualification in its report dated April 17, 2023, citing that the
Company's significant operating losses and negative cash flows from
operations raise substantial doubt about its ability to continue as
a going concern.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1662574/000168316823002483/grom_i10k-123122.htm
About Grom Social Enterprises Inc.
Boca Raton, Florida-based Grom Social Enterprises, Inc. --
http://www.gromsocial.com-- is a media, technology and
entertainment company focused on delivering content to children
under the age of 13 years in a safe secure Children's Online
Privacy Protection Act ("COPPA") compliant platform that can be
monitored by parents or guardians.
HIDDEN ACRES: PCO Kim Marheine Submits Report
---------------------------------------------
Kim Marheine, the duly appointed patient care ombudsman, filed with
the U.S. Bankruptcy Court for the Middle District of Tennessee a
report regarding the quality of patient care provided at the
nursing home operated by Hidden Acres Healthcare, LLC and its
affiliates.
The PCO reported that the nursing home has continued to be very
home-like and personalized in its decor, is clean, and appeared to
be well-supplied for all necessary supplies and materials according
to resident needs and preferences.
The PCO noted recently received complaints regarding the lack of
cable TV availability throughout the building, impacting the
quality of life of some residents who reported preferring being in
their rooms as opposed to in-group activities, relying on TV for
social and news contact. Antennas and smart TVs were provided to
each resident, and the new NHA reports the issue has been corrected
and the cable TV contract has resumed.
The PCO cited the recent regulatory issues experienced by the
nursing home, having been cited at the immediate jeopardy level
when a resident with dementia was able to exit the building without
staff awareness. She was located and uninjured. Another cite was
issued relative to the continued use of a broken mechanical lift,
which could have caused injury to the many residents who rely on
this equipment for transfers several times daily. This has also
been corrected.
A copy of the ombudsman report is available for free at
https://bit.ly/3KGmJgT from PacerMonitor.com.
About Hidden Acres
Hidden Acres Healthcare, LLC, Trousdale Property Holdings, LLC,
Benchmark Healthcare of Dane County, Inc., and Madisonville Real
Estate Investors, LLC are 100% owned by The Trousdale Foundation,
which is a Massachusetts chartered nonprofit corporation formed in
1989.
Hidden Acres Healthcare and its affiliates filed for Chapter 11
protection (Bankr. M.D. Tenn. Lead Case No. 22-02780) on Aug. 30,
2022. At the time of the filing, Hidden Acres Healthcare reported
as much as $50,000 in both assets and liabilities.
Judge Marian F. Harrison oversees the cases.
The Debtors are represented by Robert Gonzales, Esq., at Emergelaw,
PLC.
HIGHWATER GROUP: Taps Michael Jay Berger as Bankruptcy Counsel
--------------------------------------------------------------
Highwater Group LLC seeks approval from the U.S. Bankruptcy Court
for the Central District of California to employ the Law Offices of
Michael Jay Berger as bankruptcy counsel.
The firm's services include:
a. communicating with creditors of the Debtor;
b. reviewing the Debtor's Chapter 11 bankruptcy petition and
all supporting schedules;
c. advising the Debtor of its legal rights and obligations in
a bankruptcy proceeding;
d. working to bring the Debtor into full compliance with
reporting requirements of the Office of the U.S. Trustee;
e. preparing status reports as required by the court; and
f. responding to any motions filed in the Debtor's bankruptcy
proceeding.
The firm will charge these hourly fees:
Michael Jay Berger, Esq. $595
Sofya Davtyan, Partner $545
Carolyn M. Afari, Mid-level Associate Attorney $435
Robert Poteete, Mid-level Associate Attorney $435
Gary Baddin, Bankruptcy Analyst/Field Agent $275
Senior Paralegals and Law Clerks $250
Bankruptcy Paralegals $200
In addition, the firm will seek reimbursement for out-of-pocket
expenses incurred.
The retainer is $20,000.
Michael Jay Berger, Esq., a partner at the Law Offices of Michael
Jay Berger, disclosed in a court filing that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Michael Jay Berger, Esq.
Sofya Davtyan, Esq.
Law Offices of Michael Jay Berger
9454 Wilshire Blvd., 6th Floor
Beverly Hills, CA 90212-2929
Telephone: (310) 271-6223
Facsimile: (310) 271-9805
Email: michael.berger@bankruptcypower.com
Sofya.davtyan@bankruptcypower.com
About Highwater Group
Highwater Group LLC filed a Chapter 11 bankruptcy petition (Bankr.
C.D. Calif. Case No. 23-10245) on Jan. 30, 2023, with as much as
$500,000 in assets and $500,001 to $1 million in liabilities. Judge
Ronald A. Clifford, III oversees the case.
The Debtor tapped the Law Offices of Michael Jay Berger as
bankruptcy counsel.
HMH CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: HMH Construction, LLC
2501 E State Avenue
Suite 110
Meridian, ID 83642
Chapter 11 Petition Date: April 20, 2023
Court: United States Bankruptcy Court
District of Idaho
Case No.: 23-00191
Judge: Hon. Joseph M. Meier
Debtor's Counsel: D. Blair Clark, Esq.
LAW OFFICE OF D. BLAIR CLARK, PC
967 E. Parkcenter Blvd., #282
Boise, ID 83706
Tel: (208) 475-2050
Fax: (208) 475-2055
Email: dbc@dbclarklaw.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by John Odom as managing member.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/S3FVEDY/HMH_Construction_LLC__idbke-23-00191__0003.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/FFKI6YA/HMH_Construction_LLC__idbke-23-00191__0001.0.pdf?mcid=tGE4TAMA
IMAGEFIRST HOLDINGS: S&P Rates New $100MM First-Lien Term Loan 'B'
------------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '3'
recovery rating to ImageFirst Holdings LLC's proposed $100 million
non-fungible incremental first-lien term due 2028. The recovery
rating indicates its expectation for meaningful (50%-70%, rounded
estimate: 55%) recovery in its simulated default. S&P views the
transaction as mostly leverage neutral because it understands the
company will use proceeds to finance acquisitions that will improve
EBITDA slowly and repay revolver borrowings. S&P forecasts leverage
in the 5x area and FOCF to debt in the low-single-digit percent
area.
S&P's 'B' issuer credit rating, stable outlook, and issue-level
ratings remain unchanged. It forecasts operating performance will
improve due to new contract wins, price increases, and higher
volumes as the company meets customer disinfection needs.
ImageFIRST is a national provider of linen rental and laundry
services to health care organizations. It is headquartered in King
of Prussia, Pa.
Issue Ratings--Recovery Analysis
Key analytical factors
The company's debt capitalization consists of a $50 million
revolving credit facility due 2026, a $100 million incremental
first-lien term loan, an existing $220 million first-lien term
loan, and a $50 million first-lien delayed-draw term loan tranche
due 2028.
S&P's simulated default contemplates a default in 2026 stemming
from operational challenges, which could reflect a prolonged
decline in outpatient health care spending, intense competition
from market participants, operational pitfalls, and unsuccessful
acquisitions that strain its cash flows.
ImageFirst Holdings LLC is the borrower under the first-lien credit
facilities. The facilities will also benefit from guarantees and
liens from the borrower's material subsidiaries.
S&P's recovery analysis assumes that first-lien collateral
represents substantially all of emergence enterprise value.
Simulated default assumptions
-- Simulated year of default: 2026
-- EBITDA at emergence: $45 million
-- EBITDA multiple: 5.5x
-- Gross enterprise value: $247 million
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $234
million
-- Valuation split (obligors/non-obligors): 100%/0%
-- Estimated first-lien claim: $411 million
-- Value available to first-lien debt claims: $234 million
--Recovery expectations: 50%-70% (rounded estimate: 55%)
Note: All debt amounts include six months of prepetition interest.
INMET MINING LLC: Former Blackjewel Mines Back in Chapter 11
------------------------------------------------------------
Inmet Mining LLC filed for chapter 11 protection to pursue a sale
of its assets.
The Debtor has just under 400 employees and has current ongoing
coal mining operations in Kentucky; The Virginia operations of the
Debtor were recently idled. The Debtor's mines are all underground
mines but as opportunities arise prospectively the Debtor may
conduct some surface mining operations. Currently the Debtor has
three active mines in Kentucky. They are known as the Darby, Tyree
and Panther mines. The Osaka mine in Virginia is currently idled.
The Orchard Mine in Kentucky is a contract mine that began
operations in April 2023. The Wax mine in Kentucky is also under
development and is expected to begin operations in 2024. All of the
Debtor's mines are nonunion.
By "Assignment and Assumption Agreement and Bill of Sale Regarding
Specific Assets" dated Sept. 7, 2019, in the Blackjewel, L.L.C., et
al. bankruptcy case, filed in the Southern District of West
Virginia, and known as Case No. 19-30289, the Debtor was conveyed
the bulk of the assets they currently own in Lee and Wise Counties
in Virginia, and Harlan, Letcher, Clay and Leslie Counties in
Kentucky.
The Debtor has rights to mine on most of its leasehold properties
by way of a lease with ACIN LLC dated October 1, 2021. The Debtor
had purchased mining permits out of the Blackjewel bankruptcy case
by order entered Sept. 7, 2019. At that time the Debtor only
purchased the permits from Blackjewel because the underlying
leasehold properties had been rejected by Blackjewel in its
bankruptcy. Consequently, the Debtor entered into an initial lease
on Sept. 10, 2019, which was terminated after default by the
Debtor.
Subsequent to that lease termination, the Debtor and ACIN entered
into a Limited Coal License Agreement dated Sept. 30, 2020, which
was in place until the current lease was entered into on Oct. 1,
2021. The current lease was partially guaranteed by Javelin Global
Commodities (UK) Ltd., which is a related company to the principal
secured lender of the Debtor. The Debtors own and lease a small
amount of their Kentucky properties through a lease with Kentucky
River Properties and a small assortment of other lessors. The
Virginia properties of the Debtor are leased primarily through Penn
Virginia, and also a small assortment of other lessors.
Events Leading to Filing
Since its inception on August 15, 2019, and to date, the Debtor is
owned 100% by Industrial Minerals Group, LLC, which is its sole
member, which in turn is owned one hundred percent (100%) by
Charles H. (Hunter) Hobson.
Until March 26, 2023, Mr. Hobson was CEO of the Debtor and its
parent entity, Industrial Minerals. However, on March 26, 2023,
Black Mountain Marketing and Sales LP ("BMMS"), the Debtor's
principal secured creditor, exercised its rights under Mr. Hobson's
pledge of his equity interest in Industrial Minerals and removed
Mr. Hobson from his management of the Industrial Minerals and the
Debtor for the stated reason that it was in the best interests of
Industrial Minerals and the Debtor to address the unauthorized
distribution of Debtor funds to or for the benefit of Mr. Hobson
and the continuing risk of his acts in contravention of his duties
of loyalty to the Debtor and to ensure the protection of the assets
of the Debtor, including specifically its principal coal lease.
Within days of the Debtor's purchase of mining permits and other
assets out of the Blackjewel bankruptcy case, the Debtor entered
into a Coal Marketing Agreement and Master Coal Purchase and Sale
Agreement, both dated September 18, 2019, with BMMS.
To fund the purchase of assets out of the Blackjewel bankruptcy and
ongoing operations, the Debtor had entered into an arrangement with
BMMS pursuant to the terms of the Master Coal Purchase and Sale
Agreement dated September 18, 2019, and subsequent documents.
As of the filing date, the Debtor owed BMMS over $100,000,000 and
BMMS has a secured lien position on substantially all of the
Debtor's assets. BMMS had indicated pre-petition that it would no
longer keep funding the Debtor without a Chapter 11 bankruptcy case
being filed and without this ongoing funding the Debtor did not
have the ability to pay its bills and ongoing obligations.
The Debtor intends that the case be a liquidating Chapter 11 case
and hopes to accomplish this by obtaining a post-petition
Debtor-in-Possession ("DIP") financing loan from its largest
creditor, BMMS. Once DIP financing is approved by the Court, the
Debtor intends to sell substantially all of its assets by obtaining
bankruptcy court approval for 11 U.S.C., Section 363 sales. The
sales process would involve two separate sales.
One sale would be for the currently idled Virginia assets of the
Debtor for which a buyer is willing to purchase the Debtor's assets
in that area and take on a significant amount of reclamation
liability. The other sale would be for the active Kentucky
operations of the Debtor. Currently the Debtor anticipates
rejecting the Penn Virginia lease for the idled Virginia mine as
the proposed buyer wants to negotiate a new lease. The Debtor
anticipates assuming the ACIN and Kentucky River leases as part of
the sales process of its Kentucky mines.
As indicated previously, BMMS removed Hunter Hobson, as the Manager
and as a member of the Board of Managers of Industrial Minerals and
as Chief Executive Officer and president of the Debtor. To
maintain the operations of the Debtor and to guide the Debtor
through its restructuring process, BMMS and Industrial Minerals
appointed Jeffrey (Jeff) Strobel as the Debtor's Chief
Restructuring Officer and sole manager, and Dennis Kostic as the
Debtor's Chief Executive Officer.
About Inmet Mining LLC
Inmet Mining LLC has current ongoing coal mining operations in
Kentucky. It has three active mines in Kentucky: the Darby, Tyree
and Panther mines. It also owns the Osaka mine in Virginia, which
is currently idled.
Inmet Mining LLC filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. E.D. Ky. Case No. 23-70113) on April 5,
2023.
In the petition filed by Jeffrey Strobel, as chief restructuring
officer, the Debtor reported assets between $50 million and $100
million and liabilities between $100 million and $500 million. The
petition states that funds will be available to unsecured
creditors.
The case is overseen by Honorable Bankruptcy Judge Gregory R.
Schaaf.
The Debtor is represented by:
Jeffrey Kent Phillips, Esq.
144 E. Marketplace Blvd.
Knoxville, TN 37922
Tel: 859-219-8210
Email: jeff.phillips@steptoe-johnson.com
INMET MINING: Court OKs $11.2MM DIP Loan from Black Mountain
------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District to Kentucky
authorized Inmet Mining, LLC to use cash collateral and obtain
postpetition financing, on an interim basis.
The Debtor obtained postpetition financing on a priming and senior
secured superpriority basis consisting of:
-- a new money multiple draw senior term loan facility in an
aggregate principal amount of up to $46.2 million, of which (x)
$11.2 million will be available to the Debtor, in a single draw on
the Closing Date; and (y) up to an additional $35 million will be
available to the Debtor, in multiple draws following entry of the
Final Order; and
-- a roll-up facility in an aggregate amount equal to, upon
entry of the Final Order, $40 million of the amounts owing under
prepetition prepayment documents, which in each case, will
automatically be deemed to be substituted and exchanged for DIP
Loans will be exchanged and substituted for, and will be deemed
advanced and rolled-up, on a dollar for dollar basis, into the DIP
Facility and will be considered DIP Loans,
in each case, pursuant to the terms and conditions of the Interim
Order and the Debtor in Possession Secured MultiDraw Term
Promissory Note, among the Debtor and Black Mountain Marketing and
Sales LP, as lender.
Black Mountain Marketing and Sales LP and the Debtor are party to
(1) the Master Coal Purchase and Sale Agreement, dated September
18, 2019, between BMMS and INMET, as amended by, among other
things, the Amendment to Master Coal Purchase and Sale Agreement,
dated as of September 18, 2019, between BMMS and INMET; and (2) the
Coal Marketing Agreement, dated September 18, 2019, between BMMS
and INMET.
BMMS and the Debtor are party to:
(1) the Prepaid Purchase Agreement Confirmation dated as of
September 18, 2019, between BMMS and INMET;
(2) the Purchase and Sale Confirmation dated as of July 31,
2020 between BMMS and INMET;
(3) the Purchase and Sale Confirmation dated as of July 19,
2021 (with trade date of March 29, 2021) between BMMS and INMET;
(4) the Purchase and Sale Confirmation datedas of June 16,
2021 (with trade date of September 23, 2020) between BMMS and
INMET;
(5) the Purchase and Sale Confirmation dated as of October 12,
2021 (with trade date of September 16, 2021) between BMMS and
INMET;
(6) the First Amended and Restated Purchase and Sale
Confirmation dated as of May 17, 2021 between BMMS and INMET; and
(7) the Purchase and Sale Confirmation dated as of April 4,
2022 (with trade date of February 25, 2022) between BMMS and
INMET.
As of the Petition Date, the Debtor was indebted to BMMS in the
aggregate principal amount of not less than $29.754 million plus
any other amounts due and payable under the Prepetition Working
Capital Documents as of prior to the Petition Date.
As of the Petition Date, the Debtor was liable and indebted to the
Prepetition BMMS Secured Parties, in the aggregate principal amount
of not less than $74.689 million plus any other amounts due and
payable under the Prepetition Prepayment Documents as of prior to
the Petition Date.
The Debtor has an immediate need to obtain the DIP Loans and other
financial accommodations and to continue to use the Prepetition
Collateral to, among other things, (i) avoid the liquidation of its
estate, (ii) permit the orderly continuation of the operation of
its businesses, (iii) maintain business relationships with
customers, vendors and suppliers, (iv) make payroll, (v) satisfy
other working capital, capital improvement and operational needs,
(vi) pay professional fees and expenses benefitting from the
Carve-Out, and (vii) pay costs, fees, and expenses associated with
or payable under the DIP Facility, in each case, subject to the
terms of the Interim Order and the DIP Loan Documents.
The Debtor is authorized to borrow and incur all of the DIP
Obligations, up to an aggregate principal amount of $11.2 million
in DIP Loans under the New Money DIP Facility, together with
applicable interest, in each case, subject to the terms and
conditions set forth in the Interim Order and the DIP Loan
Documents.
As adequate protection, the Prepetition BMMS Secured Parties are
granted a valid, binding, enforceable and automatically perfected
postpetition lien on all DIP Collateral, to the extent of any
Diminution in Value of the Prepetition BMMS Secured Parties'
interests in the Prepetition Collateral. The Adequate Protection
Liens will (x) rank junior to the Carve-Out, the DIP Liens and the
Permitted Prior Senior Liens and (y) otherwise rank senior to any
and all other liens or security interests in the DIP Collateral.
The Prepetition BMMS Secured Parties are granted allowed
superpriority administrative expense claims, to the extent of any
Diminution in Value of the Prepetition BMMS Secured Parties'
interests in the Prepetition Collateral.
A final hearing on the matter is set for May 2, 2023 at 4 p.m.
A copy of the order is available at https://bit.ly/3mI3HyQ from
PacerMonitor.com.
About Inmet Mining, LLC
Inmet Mining, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Ky. Case No. 23-70113) on April 5,
2023. In the petition signed by Jeffrey Strobel, chief
restructuring officer, the Debtor disclosed up to $100 million in
assets and up to $500 million in liabilities.
Judge Gregory R. Schaaf oversees the case.
Jeffrey Phillips, Esq., at Steptoe & Johnson PLLC, serves as
counsel to the Debtor.
INMET MINING: U.S. Trustee Appoints Creditors' Committee
--------------------------------------------------------
Paul Randolph, Acting U.S. Trustee for Region 8, appointed an
official committee to represent unsecured creditors in the Chapter
11 case of Inmet Mining, LLC.
The committee members are:
1. Blackjewel Liquidation Trust, LLC
c/o David J. Beckman, as Trustee
999 17th Street, Suite 700
Denver, CO 80202
Phone: (303) 689-8800
Email: dave.beckman@fticonsulting.com
2. Penn Virginia Operating Co., LLC
c/o Stephen F. Looney, Senior Vice President
Seven Sheridan Square, Suite 400
Kingsport, TN 37660
Phone: (423) 723-0224
Email: Steve.Looney@EnergyTransfer.com
3. Phillips Global, Inc.
c/o Donald Rucker, CFO
367 George Street
Beckley, WV 25801
Phone: (304) 255-0537, ext. 1014
Email: Drucker@PhillipsGlobal.us
4. Combs Equipment Group, LLC
c/o C. Bishop Johnson
P.O. Box 573
Pineville, KY 40977
Phone: (606) 337-6500
Email: CBishopJohnson@BellSouth.net
5. Dinsmore & Shohl LLP
c/o Ellen Arvin Kennedy, Esq.
100 W. Main Street, Suite 900
Lexington, KY 40507
Phone: (859) 425-1000
Email: Ellen.Kennedy@Dinsmore.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 Inmet Mining
Inmet Mining, LLC is a company in Knoxville, Tenn., which operates
in the coal mining industry.
Inmet Mining sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Ky. Case No. 23-70113) on April 5, 2023, with $50
million to $100 million in assets and $100 million to $500 million
in liabilities. Jeffrey Strobel, chief restructuring officer of
Inmet Mining, signed the petition.
Judge Gregory R. Schaaf oversees the case.
Jeffrey Phillips, Esq., at Steptoe & Johnson, PLLC is the Debtor's
legal counsel.
JONES DESLAURIERS: Incremental Notes No Impact on Moody's B3 CFR
----------------------------------------------------------------
Moody's Investors Service said the B3 corporate family rating and
B3-PD probability of default rating of Jones DesLauriers Insurance
Management Inc., a wholly owned subsidiary of Navacord Corp.,
remain unchanged following the company's announcement that it plans
to issue an incremental USD100 million of senior secured notes,
raising the total outstanding amount of senior secured notes to
USD600 million (rated B2). Jones DesLauriers will use net proceeds
from the offering for general corporate purposes and to help fund
acquisitions. The rating outlook for Jones DesLauriers is unchanged
at stable.
RATINGS RATIONALE
According to Moody's, the company's ratings reflect Navacord's
growing market presence as the fourth-largest commercial lines
insurance broker in Canada generally serving middle market clients.
The company has a good mix of business across commercial and
personal property & casualty insurance and employee benefits, with
specialties in construction and transportation. The company is
diversified geographically across Canada, particularly in Ontario,
Alberta and British Columbia. Navacord has produced strong organic
growth in the low double digits in past years, supporting healthy
EBITDA margins in the low-30s (per Moody's calculations). The
company maintains an active acquisition strategy and operates using
a decentralized model that allows acquired entities to manage their
business fairly autonomously while benefitting from Navacord's
centralized services.
These strengths are tempered by Navacord's aggressive financial
leverage and low fixed charge coverage, execution risk associated
with acquisitions, and limited scale relative to other rated
insurance brokers. Navacord also faces potential liabilities
arising from errors and omissions, a risk inherent in professional
services.
Giving effect to the proposed incremental financing, Moody's
estimates that Navacord's pro forma debt-to-EBITDA ratio will be
slightly above 7.5x, with (EBITDA-capex) coverage of interest of
1.0x-1.5x and a free-cash-flow-to-debt ratio in the low single
digits. These pro forma metrics include Moody's adjustments for
operating leases, certain other debt-like obligations, and run-rate
earnings from acquisitions. Moody's expects the company to improve
its coverage metrics in the next 12 to 18 months through growth in
EBITDA.
Based in Toronto, Canada, Navacord Corp. offers a diversified mix
of property & casualty insurance, employee benefits and specialized
products mainly to middle market businesses across Canada. The
company generated revenue of CAD483 million for the 12 months
through January 2023.
JUST BELIEVE: Court OKs Cash Collateral Access on Final Basis
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
West Palm Beach Division, authorized Just Believe Recovery Center
of Port Saint Lucie LLC and Just Believe Recovery Center LLC to use
cash collateral on a final basis in accordance with the budget,
with a 10% variance.
The Debtor requires the use of cash collateral to pay its regular
business operating expenses and administrative expenses and other
ordinary expenses as they become due.
ASD Specialty Healthcare, LLC may purport to have a a security
interest in accounts receivable and other assets of the Debtor. A
UCC-1 Financing Statement was filed in which ASD claims a security
interest in the collateral.
Texas Capital Bank, N.A. purports to have a security interest in
the Debtor's future receivables, personal property and general
intangibles. UCC-1 Financing Statements were filed in which Texas
Capital claims a security interest in the collateral.
As adequate protection for and to the extent of the Debtor's use of
cash collateral, ASD, Texas Capital, AFG, City, Cloudfund and NewCo
are granted, as of the Petition Date:
(a) a replacement lien to the same extent as any pre-petition
lien, pursuant to 11 U.S.C. section 361(2), on and in all property
acquired or generated post-petition by the Debtor to the same
extent and priority and of the same kind and nature as their
prepetition liens and security interests in the cash collateral,
without any prejudice to any rights of the Debtor to seek to void
the lien as to the extent, validity, or priority of said liens;
and
(b) the secured claim of Texas will be increased by any missed
post-petition mortgage payments, accrued but unpaid post-petition
interest, and Texas' reasonable attorneys' fees and costs.
A copy of the order is available at https://bit.ly/43NAD9U from
PacerMonitor.com.
About Just Believe Recovery Center
Just Believe Recovery Center of Port Saint Lucie --
https://justbelieverecoverycenter.com/ -- is a drug and alcohol
addiction rehabilitation and detox facility with locations in
Florida and Pennsylvania.
Just Believe Recovery Center of Port Saint Lucie sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case
No. 22-15739) on July 27, 2022, listing up to $50,000 in assets and
up to $10 million in liabilities. Its affiliate, Just Believe
Recovery Center, LLC filed for Chapter 11 protection (Bankr. S.D.
Fla. Case No. 22-16046) on Aug. 4, 2022, listing up to $50,000 in
assets and up to $10 million in liabilities. The cases are jointly
administered under Case No. 22-15739.
Judge Mindy A. Mora oversees the cases.
Kelley Fulton Kaplan & Eller, P.L., is the Debtors' legal counsel.
KALERA INC: Gets Nasdaq Delisting Notice Amid Chapter 11 Woes
-------------------------------------------------------------
Seeking Alpha Reports that Kalera (NASDAQ:KAL) said that on April
6, 2023 it received a delisting notice from Nasdaq informing that
the exchange would suspend trading of the company's common shares,
effective April 17, 2023.
Nasdaq noted that the company is a public shell and that the
continued listing of its securities was no longer warranted; and
that the company has not filed its Form 10-K for the fiscal year
ended Dec. 31, 2022 with the Securities and Exchange Commission
(SEC) and Nasdaq thus failing to comply with the exchange's listing
rule.
The company's warrants listed under symbol KALWW also no longer
qualify for listing.
Kalera noted that currently, it does not expect to appeal Nasdaq's
determination.
On April 4, 2023. Kalera announced that its main operating unit
Kalera Inc. filed a voluntary petition in the U.S. Bankruptcy Court
for the Southern District of Texas seeking relief under Chapter 11
of Title 11 of the United States Code.
The company had noted that Kalera PLC, Kalera S.A. and other
subsidiaries including Vindara Inc. and Iveron Materials Inc. were
not included in the Chapter 11 filing.
The company plans to use the court-supervised process to evaluate
strategic alternatives for Kalera, including a potential sale of
Kalera or its assets.
About Kalera Inc.
Kalera Inc. is a vertical farming company. The Company utilizes
proprietary technology and plant and seed science to sustainably
grow local, delicious, nutrient-rich, pesticide-free, non-GMO leafy
greens year-round.
Kalera Inc. sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. S.D. Tex. Case No. 23-90290) on April 4, 2023. In the
petition filed by Mark Shapiro, as chief restructuring officer, the
Debtor estimated assets between $1 million and $10 million and
estimated liabilities between $10 million and $50 million.
The Debtor tapped BAKER & HOSTETLER LLP as counsel. BMC GROUP,
INC., is the claims agent.
KOHL'S CORP: Moody's Cuts CFR to Ba2 & Alters Outlook to Negative
-----------------------------------------------------------------
Moody's Investors Service downgraded Kohl's Corporation's corporate
family rating to Ba2 from Ba1, its probability of default rating to
Ba2-PD from Ba1-PD and its senior unsecured ratings to Ba3 from
Ba2. Its speculative grade liquidity rating (SGL) remains SGL-2.
The outlook was changed to negative from stable.
The downgrades reflect the continued deterioration in credit
metrics and the erosion of Kohl's market position as it enacts a
turnaround to its operating performance in 2023. Significant
improvement will require successful execution by its new senior
leaders, particularly in merchandising and inventory management
during a difficult consumer environment. Moody's expects Kohl's
profitability to remain well below historical levels given the lead
time needed to implement its initiatives while its value oriented
consumer contends with a challenging economic backdrop particularly
ongoing high inflation.
The negative outlook reflects the risk related to returning
profitability consistently to levels that would support the Ba2
rating. Although leaner inventories, its continued Sephora rollout,
and lower freight costs support progress in 2023, Kohl's will need
to make substantial improvement as its consumer remains pressured.
Any pursuit of share repurchases until cash balances return to
historical levels and profitability is on consistent trajectory of
improvement would be viewed negatively.
The SGL-2 reflects Moody's view that profitability and free cash
flow generation will be positive over the next twelve months, such
that its $1.5 billion secured revolver will be undrawn at the end
of fiscal 2023 and cash balances will begin to rebuild toward to
historic levels.
Downgrades:
Issuer: Kohl's Corporation
Corporate Family Rating, Downgraded to Ba2 from Ba1
Probability of Default Rating, Downgraded to Ba2-PD from Ba1-PD
Senior Unsecured Regular Bond/Debenture, Downgraded to Ba3 (LGD4)
from Ba2 (LGD4)
Outlook Actions:
Issuer: Kohl's Corporation
Outlook, Changed to Negative from Stable
RATINGS RATIONALE
Kohl's Ba2 CFR reflects its significant market position and scale
with approximately $18.1 billion of revenue. The company has a
long-term track record of innovative merchandising which includes a
high level of private label and exclusive merchandise which
resonates with its value oriented customers. Kohl's enacted a major
realignment of its inventories in the fourth quarter of 2022 as
sales performance remained pressured which resulted in a
significant deterioration in both earnings and credit metrics.
Moody's debt/EBITDA rose substantially to 5.7x at the end fiscal
2022 compared to 2.4x at the end of fiscal 2021 reflecting weaker
sales performance and the margin pressure associated with its
aggressive clearing inventory. The rating also reflects governance
considerations including its commitment to a 2.5x leverage target
(per the company's definition) and a moratorium on share
repurchases in 2023. Nonetheless, the company's capital allocation
was aggressive in 2022, completing $0.7 billion of share
repurchases including a $500 million accelerated share repurchase
program despite having negative free cash flow. Moody's expects
reduced product costs, improved inventory management, its Sephora
rollout and new merchandising efforts to contribute to margin
expansion in 2023 and reduce leverage per Moody's calculation to
approximately 4.5x. The turnaround will require Kohl's to enhance
its execution at a time when its consumer must still contend with
inflation and higher interest rates.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if operating margin reflect consistent
and significant improvement toward historical levels as comparable
sales growth reflects stable to improving market positioning. An
upgrade would also require Kohl's to maintain at least good
liquidity including significant free cash flow generation while its
financial strategy remains balanced. Quantitatively ratings could
be upgraded should debt/EBITDA be sustained below 4.0x and
EBIT/interest coverage is sustained above 2.75x.
Ratings could be downgraded if operating strategies implemented are
not successful, reflecting by an inability to improve operating
margins significantly and stabilize its market position. Rating
could also be downgraded should liquidity deteriorate for any
reason or if financial strategies become more aggressive.
Quantitatively, ratings could be downgraded should debt/EBITDA be
sustained above 4.75x or EBIT/interest coverage is sustained below
2.25x.
Headquartered in Menomonee Falls, Wisconsin, Kohl's Corporation is
a leading department store retailer with 1,170 stores in the US.
Total revenue is approximately $18.1 billion for the fiscal year
ended January 28, 2023.
The principal methodology used in these ratings was Retail
published in November 2021.
LOYALTY VENTURES: Seeks to Hire Friedman as Litigation Counsel
--------------------------------------------------------------
Loyalty Ventures Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to employ
Friedman Kaplan Seiler Adelman & Robbins, LLP as special litigation
counsel.
The firm's services include:
-- assisting the Debtors in analyzing, investigating and
prosecuting claims and causes of action;
-- preparing and filing pleadings;
-- conducting examinations of witnesses, claimants, and other
parties in interest in connection with such litigation;
-- identifying and communicating with expert consultants and
expert witnesses as needed to analyze and prosecute claims and
causes of action;
-- representing the Debtors in any adversary cases and other
proceedings before the bankruptcy court and in any other judicial
or administrative proceedings related to the claims and causes of
action being pursued;
-- collecting any judgment that may be entered in the
litigation;
-- handling any appeals that may result from the litigation;
-- performing any other legal services that may be appropriate
in connection with the prosecution of the litigation; and
-- advising the Debtors on certain aspects of the Debtors'
Chapter 11 plan, debtor-in-possession orders, plan supplement, the
liquidating trust agreement and other documents that relate to the
claims and causes of action being pursued.
The firm will be paid at these rates:
Lawrence Robbins $1,615 per hour
Edward Friedman $1,615 per hour
Jeffrey Fourmaux $945 per hour
Priyanka Wityk $675 per hour
Bria Delaney $585 per hour
Matthew Tharp $526.50 per hour
Paraprofessionals $247.50 to $328.5 per hour
Friedman Kaplan received payments from the Debtors totaling
$1,024,974 for pre-bankruptcy services rendered and expenses
incurred from August 2022 up to the petition date.
Lawrence Robbins, Esq., a partner at Friedman, 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.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Mr.
Robbins disclosed the following:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: Yes. The Debtors have negotiated an engagement letter
with Friedman providing for an hourly fee arrangement at a discount
to the firm's standard rates for new clients in 2022.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Response: Friedman has represented the Debtors in the 12 months
prior to their Chapter 11 filing. The rates and terms for the
pre-bankruptcy engagement are the same as the rates and terms on
which Friedman is proposing to represent the Debtors post-petition.
Specifically, Friedman represented LVI before the petition date,
beginning in August 2022, using the hourly rates, which reflect an
agreed upon 15% discount for the two most senior attorneys on the
matter and 10% for all other timekeepers.
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: Friedman has not finalized a budget and staffing
plan.
The firm can be reached at:
Lawrence S. Robbins, Esq.
Friedman Kaplan Seiler Adelman & Robbins, LLP
7 Times Square
New York, NY 10036-6516
Tel: (212) 833-1118
Fax: (212) 373-7918
Email: lrobbins@fklaw.com
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 and its affiliates sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case No.
23-90111) on March 10, 2023. As of Sept. 30, 2022, Loyalty Ventures
had $1,591,218,000 in total assets against $1,980,850,000 in total
liabilities.
Judge Christopher Lopez oversees the cases.
The Debtors tapped Akin Gump Strauss Hauer & Feld, LLP and Jackson
Walker, LLP as U.S. bankruptcy counsels; PJT Partners, LP as
investment banker; Alvarez & Marsal North America, LLC, as
restructuring advisor; and Kroll Restructuring Administration, LLC
as claims, noticing and solicitation agent. Cassels Brock &
Blackwell, LLP serves as Canadian legal counsel to LoyaltyOne while
Alvarez & Marsal Canada ULC serves as LoyaltyOne's Canadian
financial and restructuring advisor.
Bank of America, N.A. is the 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. Bank of America
tapped Haynes and Boone, LLP as legal counsel and FTI Consulting,
Inc. as financial advisor.
The Ad Hoc Group of Term B Loan Lenders retained Gibson Dunn &
Crutcher, LLP as counsel and Piper Sandler & Co as investment
banker.
LOYALTY VENTURES: Taps Alvarez & Marsal as Financial Advisor
------------------------------------------------------------
Loyalty Ventures Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to employ
Alvarez & Marsal North America, LLC as financial advisor.
The firm's services include:
(a) assistance to the Debtors with information and analyses
required pursuant to their debtor-in-possession financing;
(b) assistance with the identification and implementation of
short-term cash management procedures;
(c) advisory assistance in connection with the development and
implementation of key employee compensation and other critical
employee benefit programs;
(d) assistance with the identification of executory contracts
and leases, and performance of cost/benefit evaluations with
respect to the affirmation or rejection of each;
(e) assistance to the Debtors' management team and counsel
focused on the coordination of resources related to the ongoing
Chapter 11 cases;
(f) assistance with the preparation of financial information for
distribution to creditors and others, including, but not limited
to, cash flow projections and budgets, cash receipts and
disbursement analysis, analysis of various asset and liability
accounts, and analysis of proposed transactions for which Court
approval is sought;
(g) attendance at meetings and discussions with potential
investors, banks and other secured lenders, any official committee
appointed, the U.S. trustee and other parties in interest;
(h) analysis of creditor claims by type, entity and individual
claim, including assistance with the development of databases, as
necessary, to track such claims;
(i) assistance with the preparation of information and analysis
necessary in these Chapter 11 cases, including information
contained in the disclosure statement; and
(j) testimony before the bankruptcy court and other courts, as
applicable, with respect to financial and restructuring matters
consistent with the scope of the firm's engagement.
The firm will be paid at these rates:
Managing Directors $1,025 to $1,375 per hour
Directors $775 to $975 per hour
Analysts/Associates $425 to $775 per hour
The retainer fee is $1 million.
Brian Fox, managing director at Alvarez & Marsal, 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:
Brian J. Fox
Alvarez & Marsal North America, LLC
600 Madison Avenue, 8th Floor
New York, NY 10022
Tel: (212) 759-4433
Fax: (212) 759-5532
Email: bfox@alvarezandmarsal.com
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 and its affiliates sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case No.
23-90111) on March 10, 2023. As of Sept. 30, 2022, Loyalty Ventures
had $1,591,218,000 in total assets against $1,980,850,000 in total
liabilities.
Judge Christopher Lopez oversees the cases.
The Debtors tapped Akin Gump Strauss Hauer & Feld, LLP and Jackson
Walker, LLP as U.S. bankruptcy counsels; PJT Partners, LP as
investment banker; Alvarez & Marsal North America, LLC, as
restructuring advisor; and Kroll Restructuring Administration, LLC
as claims, noticing and solicitation agent. Cassels Brock &
Blackwell, LLP serves as Canadian legal counsel to LoyaltyOne while
Alvarez & Marsal Canada ULC serves as LoyaltyOne's Canadian
financial and restructuring advisor.
Bank of America, N.A. is the 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. Bank of America
tapped Haynes and Boone, LLP as legal counsel and FTI Consulting,
Inc. as financial advisor.
The Ad Hoc Group of Term B Loan Lenders retained Gibson Dunn &
Crutcher, LLP as counsel and Piper Sandler & Co as investment
banker.
LOYALTY VENTURES: Taps Jackson Walker as Local Counsel
------------------------------------------------------
Loyalty Ventures Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to employ
Jackson Walker, LLP as local counsel and conflicts counsel.
The firm's services include:
-- providing the Debtors with legal advice regarding local
rules, practices and procedures, including Fifth Circuit law;
-- providing certain services in connection with the
administration of the Debtors' Chapter 11 cases, including, without
limitation, preparing agendas, hearing notices and witness and
exhibit lists, and coordinating with chambers;
-- reviewing and commenting on proposed drafts of pleadings to
be filed with the court;
-- at the request of the Debtors, appearing in court and at any
meeting with the U.S. trustee and creditors;
-- performing all other services assigned by the Debtors to the
firm; and
-- provide legal advice on any matter on which Akin Gump Strauss
Hauer & Feld, LLP may have a conflict.
The firm will be paid at these rates:
Partners $750 to $1,045 per hour
Associates $475 to $750 per hour
Paraprofessionals $230 to $250 per hour
The Debtors paid an initial retainer to the firm in the amount of
$321,258 for services performed and to be performed in connection
with the filing of the Chapter 11 cases. Subsequently, the Debtors
paid an additional retainer to the firm in the amount of $259,014
for pre-bankruptcy fees. Prior to the filing of these cases, the
firm received payment in the aggregate amount of $256,071 from the
Debtors.
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Matthew Cavenaugh, Esq., a partner at Jackson Walker, disclosed in
a court filing that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Mr.
Cavenaugh disclosed the following:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Response: Mr. Cavenaugh's hourly rate is $1,045. The rates of
other restructuring attorneys at the firm range from $475 to $1,045
an hour and the paraprofessional rates range from $230 to $250 per
hour. The firm represented the Debtors during the weeks immediately
before the petition date, using the foregoing hourly rates.
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: The firm has not prepared a budget and staffing
plan.
The firm can be reached at:
Matthew D. Cavenaugh, Esq.
Jackson Walker, LLP
1401 McKinney Street, Suite 1900
Houston, TX 77010
Tel: (713) 752-4200/(713) 752-4284
Fax: (713) 752-4221
Email: mcavenaugh@jw.com
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 and its affiliates sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case No.
23-90111) on March 10, 2023. As of Sept. 30, 2022, Loyalty Ventures
had $1,591,218,000 in total assets against $1,980,850,000 in total
liabilities.
Judge Christopher Lopez oversees the cases.
The Debtors tapped Akin Gump Strauss Hauer & Feld, LLP and Jackson
Walker, LLP as U.S. bankruptcy counsels; PJT Partners, LP as
investment banker; Alvarez & Marsal North America, LLC, as
restructuring advisor; and Kroll Restructuring Administration, LLC
as claims, noticing and solicitation agent. Cassels Brock &
Blackwell, LLP serves as Canadian legal counsel to LoyaltyOne while
Alvarez & Marsal Canada ULC serves as LoyaltyOne's Canadian
financial and restructuring advisor.
Bank of America, N.A. is the 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. Bank of America
tapped Haynes and Boone, LLP as legal counsel and FTI Consulting,
Inc. as financial advisor.
The Ad Hoc Group of Term B Loan Lenders retained Gibson Dunn &
Crutcher, LLP as counsel and Piper Sandler & Co as investment
banker.
LSF11 TRINITY: S&P Assigns 'B' ICR on Acquisition by Lone Star
--------------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to MHI
Holdings LLC (d/b/a Titan). At the same time, S&P assigned its 'B'
issue-level rating and '3' recovery rating to the company's
proposed $675 million term loan B.
The stable outlook reflects S&P's expectation that its S&P Global
Ratings-adjusted debt to EBITDA will remain about 5x incorporating
potential acquisitions and dividends.
Lone Star Funds is acquiring Titan with a combination of equity and
debt issued at LSF11 Trinity Bidco Inc.
Lone Star will fund the acquisition with a proposed $675 million
term loan and cash equity contribution. The new term loan will
replace Titan's current term loan. The proposed capital structure
also includes a revolving credit facility of $100 million - $125
million (not rated), which we expect to be undrawn at close.
S&P doesn't expect Titan's business to change because of the
acquisition. Titan will continue to provide ship repair and
fabrication services to U.S. government and commercial customers,
primarily in the Pacific Northwest, Alaska, San Diego, and Norfolk,
Va. Revenue for both ship repair and fabrication declined in 2022
due to the timing of some Navy modernization projects and the
company being more selective with fabrication opportunities. Repair
schedules suggest ship repair revenue will return to growth in
coming years, while fabrication volumes increase due to work on
various missile defense programs and infrastructure opportunities.
The likelihood for acquisitions and dividends will likely limit the
improvement in the company's credit metrics and cash flow.Titan has
a history of acquiring drydocks and other properties and may
continue to use some combination of excess cash and debt to
complete similar transactions. If no attractive acquisitions are
available, we expect the sponsor to take some cash out of the
company in the form of dividends. Therefore, S&P expects debt to
EBITDA to be 5.0x-5.5x over the next few years.
S&P said, "The stable outlook on Titan reflects our expectation
that its debt to EBITDA will remain near 5x throughout our
forecast. Although the company could increase its leverage to fund
acquisitions or additional dividends, we do not believe its debt to
EBITDA will rise above 7x for an extended period."
Although unlikely in the next 12 months, S&P could lower its rating
on Titan if its debt to EBITDA increases above 7x for a sustained
period. This could occur because of a combination of the
following:
-- Operating problems, such as significant cost overruns or
program delays;
-- A decline in its earnings due to decreased demand for military
or commercial ship repair; or
-- A large debt-financed acquisition, capital improvement, or
dividend.
Although unlikely due to its financial-sponsor ownership, S&P could
raise its rating on Titan if:
-- It expands, both in terms of its scale and by diversifying into
more geographic regions and service offerings, likely through
acquisitions; or
-- Its leverage declines and we believe its debt to EBITDA will
remain well below 5x even after potential acquisitions or
dividends.
ESG credit indicators: E-2, S-2, G-3
S&P said, "Governance is a moderately negative consideration in our
credit rating analysis of Titan, as is the case for most rated
entities owned by private-equity sponsors. We believe the company's
highly leveraged financial risk profile points to corporate
decision-making that prioritizes the interests of its controlling
owners. This also reflects private-equity owners' generally finite
holding periods and focus on maximizing shareholder returns."
LTR INTERMEDIATE: Moody's Alters Outlook on 'B3' CFR to Negative
----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of LTR Intermediate
Holdings, Inc. (Liberty Tire or LTR), including the B3 corporate
family rating and senior secured debt rating and the B3-PD
probability of default rating. Concurrently, Moody's changed the
outlook to negative from stable.
The outlook change to negative reflects the company's weaker
liquidity, including negative free cash flow from high working
capital use and capital spending. Moody's expects cash flow to
remain constrained as LTR navigates cost inflation, higher interest
rates and weakening economic growth. The broad macroeconomic
slowdown will result in demand and pricing pressure on Liberty
Tire's outbound/beneficial reuse products. Moody's also expects
adjusted debt-to-EBITDA to remain high in 2023 but improve towards
6.4x, from about 7x in 2022, limiting financial flexibility.
Affirmations:
Issuer: LTR Intermediate Holdings, Inc.
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Senior Secured First Lien Term Loan B, Affirmed B3 (LGD4) from
(LGD3)
Senior Secured First Lien Revolving Credit Facility, Affirmed B3
(LGD4) from (LGD3)
Outlook Actions:
Issuer: LTR Intermediate Holdings, Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
The ratings reflect Liberty Tire's high financial leverage, modest
scale with a niche focus of scrap tire collection and recycling,
and the challenge of matching used tire (inbound) collections with
profitable and sustainable demand for the company's (outbound) end
products. Demand for outbound products (sales of grade/used tire
and processed tire/beneficial reuse end-products, e.g. crumb rubber
and mulch) is volatile with a correlation to the economic cycle.
These products also compete with other low-priced products.
Liberty Tire's acquisitive nature poses execution risks.
Continued top-line growth has benefited from steady inbound
collections and sales of graded tire, which could see increased
demand amid weakening economic conditions. However, Moody's
anticipates the company will face demand and pricing pressures on
the outbound side as big box retail customers face slowing consumer
demand. As well, the company's ability to recoup costs of
separating steel wire from tires and reselling the steel as scrap
metal is vulnerable to commodity price volatility.
Moody's believes Liberty Tire will remain focused on initiatives
around stronger pricing for inbound contracts and at volume levels
that drive profitability, along with higher value outbound
products. The company is well-positioned in its market, with a
national footprint, long-standing customers and steady scrap-tire
collection that provides good revenue visibility at modest margins.
Conversely, recycled outbound products rely on volatile end-market
applications that generate lower margins. Continued efforts to
increase higher-value recycled products of crumb rubber and mulch,
supported by recent facility investments to improve production
capacity and quality, should gradually improve outbound earnings
along with pricing actions. Moody's expects these factors and some
moderation in cost inflation to support moderate EBITDA growth and
margin expansion over the next year.
Moody's views Liberty Tire's liquidity as weak, with nominal cash
balances of about $5 million, modest availability under its $60
million revolving credit facility and negative free cash flow,
including working capital impacts from securitization borrowings.
The company has relied on the revolver for working capital, with
availability of about $23 million (in Q1 2023) freed up by proceeds
from the new $65 million A/R securitization facility.
Moody's expects capital spending to moderate from 2022 levels.
Scaling back growth capital spending closer to maintenance levels
will improve free cash flow. The revolving facility is subject to
a springing net leverage covenant threshold of 8x, tested if
borrowings exceed 35% of the revolver commitment. Moody's expect
Liberty Tire to maintain compliance. The term loan does not have
any financial maintenance covenants.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded with deteriorating liquidity or no
earnings expansion, including from weaker performance of outbound
operations (e.g. inability to increase prices or higher landfill
volumes). Debt-to-EBITDA expected to remain above 6x beyond 2023,
weakening margins and EBITDA less capex to interest sustained below
1x could also drive a downgrade. Additionally, an inability to
integrate acquisitions successfully or meaningful debt financed
transactions that weaken the metrics would also contribute to a
rating downgrade. The ratings could also be downgraded with an
increased probability of a debt restructuring.
The ratings could be upgraded with profitable growth, including
material improvement in earnings with stronger margins, such that
debt-to-EBITDA is expected to remain below 5x and EBIT-to-interest
approaches 1.5x. Good liquidity, including consistent positive
free cash flow and ample availability on the revolving facility,
would also be a prerequisite to an upgrade.
The principal methodology used in these ratings was Environmental
Services and Waste Management Companies published in April 2018.
LTR Intermediate Holdings, Inc., through its principal subsidiary,
Liberty Tire Recycling Holdco, LLC, provides scrap-tire collection
and rubber recycling services primarily in the United States and in
Canada. Its three primary revenue streams are 1) Inbound
Collections, which are fees received for used tire collections, 2)
Grade/Used Tires or the resale of road-worthy tires, and 3)
Beneficial Reuse (processed outbound products) derived from
processing recycled tires into various alternative applications.
Revenue was approximately $731 million for the year ended December
31, 2022.
MAGNOLIA MANOR-IV: Taps Law Office of Nima Taherian as Counsel
--------------------------------------------------------------
Magnolia Manor-IV, LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of Texas to employ the Law Office
of Nima Taherian.
The Debtor requires legal counsel to:
i. analyze the financial situation of the Debtor;
ii. advise the Debtor with respect to its rights, duties and
powers in its Chapter 11 case;
iii. represent the Debtor at all hearings and other proceedings;
iv. prepare and file schedules of assets and liabilities,
statements of affairs and legal papers;
v. represent the Debtor at any meeting of creditors;
vi. represent the Debtor in all proceedings before the
bankruptcy court and in any other judicial or administrative
proceeding where the rights of the Debtor may be litigated or
otherwise affected;
vii. prepare and file a disclosure statement and Chapter 11 plan
of reorganization;
viii. assist the Debtor in analyzing the claims of creditors and
in negotiating with such creditors; and
ix. assist the Debtor in any matters relating to or arising out
of its bankruptcy case.
The firm will be paid at the hourly rate of $450 and will be
reimbursed for out-of-pocket expenses incurred.
The retainer is $10,262.
Nima Taherian, Esq., a partner at the Law Office of Nima Taherian,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Nima Taherian, Esq.
Law Office of Nima Taherian
701 N. Post Oak Rd, Ste 216
Houston, TX 77024
Tel: (713) 540-3830
Fax: (713) 862-6405
Email: nima@ntaherian.com
About Magnolia Manor-IV
Houston-based Magnolia Manor-IV, LLC filed its voluntary petition
for Chapter 11 protection (Bankr. S.D. Texas Case No. 23-31247) on
April 4, 2023, with as much as $1 million to $10 million in both
assets and liabilities. Aman Ahmed Khan, sole managing member of
Magnolia Manor-IV, signed the petition.
Judge Marvin Isgur oversees the case.
The Law Office of Nima Taherian serves as the Debtor's bankruptcy
counsel.
MARCH ON HOSPITALITY: Has Cash Collateral Access on Final Basis
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas, Fort
Worth Division, authorized March On Hospitality, LLC to use cash
collateral on a final basis in accordance with the budget.
The Court said the Debtor may transfer post-petition cash
collateral contained in the Segregated Account in the amount of
$20,440 to the Debtor's debtor-in-possession account. This amount,
plus funds currently being held in the Debtor's DIP Account, may be
used by the Debtor to pay the outstanding post-petition invoices
reflected on the budget. After the payment of the outstanding
post-petition invoices, the Debtor may use remaining funds in the
DIP Account, up to the amount of $10,000, solely to pay any
additional outstanding post-petition invoices and/or Subchapter V
Trustee fees during the pendency of the case.
As previously reported by the Troubled Company Reporter, the Debtor
disputed that Simmons Bank, a successor-in-interest to Southwest
Bank, possesses a valid lien on the Debtor's cash collateral.
As adequate protection for any secured creditor that holds a valid
unavoidable security interest in prepetition cash or cash
equivalents for the Debtor's use of cash collateral, to the extent
that the Debtor's use of cash collateral results in a diminution in
value of the Lender's interest in the cash collateral, each Lender
were granted a replacement lien in the Debtor's assets that serve
as collateral under each Lender's applicable agreements, in the
same order of priority that existed as of the Petition Date.
As additional partial adequate protection, to the extent of any
diminution in value and a failure of the other adequate protection
provided by the Order, the Lenders will have an allowed
superpriority administrative expense claim in the case and any
successor case as provided in and to the fullest extent allowed by
Sections 503(b) and 507(b) of the Bankruptcy Code.
The Replacement Liens are subject and subordinate to a carve-out of
funds for all fees required to be paid to: (i) the Clerk of the
Bankruptcy Court, (ii) the Office of the United States Trustee
pursuant to 28 U.S.C. Section 1930(a), and (iii) the Subchapter V
Trustee.
The Replacement Liens are valid, perfected, enforceable and
effective as of the Petition Date without the need for any further
action by the Debtor or the Lenders, or the necessity of execution
or filing of any instruments or agreements.
A copy of the Court's order is available at https://bit.ly/3A0XHUL
from PacerMonitor.com.
About March on Hospitality LLC
March on Hospitality LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-40140) on
January 17, 2023. In the petition signed by Douglas Whatley, the
Debtor disclosed up to $10 million in both assets and liabilities.
Jude Mark X. Mullin oversees the case.
Suzanne K. Rosen, Esq., at Forshey & Prostok, LLP, represents the
Debtor as legal counsel.
MARCH ON HOSPITALITY: May Use $2,450 to Pay Simmons
---------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas, Fort
Worth Division, authorized March On Hospitality, LLC to use cash
collateral in the amount of $2,450 to make a payment to Simmons
Bank to reduce the amount of lien asserted by Simmons against the
Sale Proceeds.
The Bank objected to the Debtor's request to access cash
collateral.
The Court said Simmons will accept the Lien Payment and apply it to
reduce the amount of the Simmons Lien without prejudice to (i)
Simmons' right to apply the Lien Payment to reduce the amount of
the Simmons Lien in any manner it deems appropriate, or (ii) the
Debtor's right to assert that the application of the Lien Payment
to the Simmons Lien by Simmons should be readjusted in connection
with its objection to the proof of claim asserted by Simmons or
through a separate motion or objection, as appropriate, and both
parties reserve all rights with respect to the application of the
Lien Payment to the Simmons Lien.
A copy of the Court's order is available at https://bit.ly/41u012A
from PacerMonitor.com.
About March on Hospitality LLC
March on Hospitality LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-40140) on
January 17, 2023. In the petition signed by Douglas Whatley, the
Debtor disclosed up to $10 million in both assets and liabilities.
Jude Mark X. Mullin oversees the case.
Suzanne K. Rosen, Esq., at Forshey & Prostok, LLP, represents the
Debtor as legal counsel.
MARISCOS LOS: David Sousa Named Subchapter V Trustee
----------------------------------------------------
Tracy Hope Davis, U.S. Trustee for Region 17, appointed David Sousa
as Subchapter V trustee for Mariscos Los Primoz.
Mr. Sousa declared that he is a "disinterested person," according
to Section 101(14) of the Bankruptcy Code.
Mr. Sousa can be reached at:
David M. Sousa
4112 S. Demaree St.
Visalia, CA 93277
Office (559) 733-0544, ext. 108
Email: Dave@fresnotrustee.com
About Mariscos Los Primoz
Mariscos Los Primoz filed a Chapter 11 petition (Bankr. E.D. Calif.
Case No. 23-20712) on March 6, 2023, with as much as $50,000 in
assets and $100,001 to $500,000 in liabilities. Judge Christopher
M. Klein oversees the case.
The Debtor is represented by Noel Christopher Knight, Esq., at The
Knight Law Group.
MERIDIAN RESTAURANTS: Closes 27 Burger King Locations
-----------------------------------------------------
Restaurant Business reports that Meridian Restaurants Unlimited,
the 116-unit Burger King franchisee that filed for bankruptcy in
March 2023, is closing 27 restaurants, according to court filings.
The locations are in Minnesota, Utah, Montana, Kansas, Nebraska and
North Dakota. Many of them are in small towns, such as Lewiston,
Montana, a town of about 6,000 people 126 miles north of Billings.
The franchisee is also leaving open the possibility of more
closures ahead, saying "it is possible, if not likely," that
further analysis suggests more closures are "appropriate." But the
company in a filing said that it doesn't anticipate closing "all or
even a substantial portion of their restaurants."
Meridian and its advisers are negotiating rent concessions and
operational improvements with landlords. "It will be in the
debtors' best interest not to conduct store closings at most of its
locations," the company said in a filing.
The company initially sought court approval to close 23 restaurants
on March 29, 2023 but last week added four more to the list. The
closures represent one out of five of Meridian's locations.
Meridian is one of two large-scale Burger King operators to file
for bankruptcy while a third closed 26 restaurants in Michigan.
The company has struggled with weak sales and weak profitability at
a time when costs have soared. While Burger King has been investing
behind marketing and remodels, many of its locations operate with
lower unit volumes.
The 90-unit operator Toms King was sold out of bankruptcy court
last week, with four buyers acquiring 82 of its 90 restaurants for
$33 million.
Meridian operated 120 restaurants, most of which it acquired when
they were struggling, believing they could be turned around. The
company has had unit volumes lower than Burger King’s $1.45
million average and struggled with high labor and food costs, which
prompted its filing in March 2023. The operator closed four units
before declaring Chapter 11 bankruptcy protection.
About Meridian Restaurants Unlimited
Meridian Restaurants Unlimited own and operate 118 Burger King
locations in Utah and other states. The South Ogden, Utah-based
company, one of Burger King’s largest franchisees, operates
restaurants in Utah, Montana, Wyoming, North Dakota, South Dakota,
Minnesota, Nebraska, Kansas and Arizona.
Meridian Restaurants Unlimited, LC, and its affiliates sought
relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Utah. Lead Case No. 23-20731) on March 2, 2023. In the petition
filed by James Winder, manager for PSCP Meridian, LLC, the Debtor
reports estimated assets and liabilities between $10 million and
$50 million.
Judge Kevin R. Anderson oversees the cases.
The Debtors tapped Ray Quinney & Nebeker PC as counsel and Peak
Franchise Capital, LLC as their financial advisor.
MERIDIEN ENERGY: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Meridien Energy, LLC
12647 Rt. 394 Randolph-Jamestown Road
Randolph, NY 14772
Business Description: Meridien Energy, LLC is a full-service
pipeline construction company headquartered
in New York state with division offices in
Pennsylvania, Virginia, and Florida.
Chapter 11 Petition Date: April 20, 2023
Court: United States Bankruptcy Court
Eastern District of Virginia
Case No.: 23-31377
Debtor's Counsel: Brandy M. Rapp, Esq.
WHITEFORD, TAYLOR & PRESTON LLP
1021 E. Cary Street
Suite 1700
Richmond, VA 23219
Tel: 540-759-3577
Email; brapp@whitefordlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by John W. Teitz as chief restructuring
officer.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/JXMGTYA/Meridien_Energy_LLC__vaebke-23-31377__0001.4.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/JHZEXHI/Meridien_Energy_LLC__vaebke-23-31377__0001.0.pdf?mcid=tGE4TAMA
MISS BRENDA: Taps Bush Kornfeld as Bankruptcy Counsel
-----------------------------------------------------
Miss Brenda, LLC and Sea West, Inc. seek approval from the U.S.
Bankruptcy Court for the District of Alaska to employ Bush
Kornfeld, LLP as their bankruptcy counsel.
The firm's services include:
a. providing the Debtors with legal advice regarding their
powers and duties in the continued operation of their businesses
and management of their property;
b. preparing legal papers;
c. advising the Debtors with respect to all processes
surrounding their jointly administered Chapter 11 cases;
d. assisting the Debtors in reviewing all claims and in
determining all issues associated with the distribution on allowed
claims;
e. taking necessary action to avoid any liens subject to the
Debtors' avoidance; and
f. performing other necessary legal services.
The hourly rates for attorneys and support personnel at Bush
Kornfeld who may perform services range from $105 to $625.
Christine Tobin-Presser, Esq., a partner at Bush Kornfeld,
disclosed in a court filing that her firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Christine Tobin-Presser, Esq.
Bush Kornfeld, LLP
601 Union Street, Suite 5000
Seattle, WA 98101
Telephone: (206) 292-2110/(206) 521-3856
Facsimile: (206) 292-2104
Email: ctobin@bskd.com
About Miss Brenda and Sea West
Miss Brenda, LLC, a company in Sand Point, Alaska, and its
affiliate, Sea West, Inc., filed voluntary petitions for Chapter 11
protection (Bankr. D. Alaska Lead Case No. 23-00041) on March 16,
2023. At the time of the filing, both Debtors reported $1 million
to $10 million in assets and $500,001 to $1 million in liabilities.
Judge Gary Spraker oversees the cases.
Bush Kornfeld, LLP serves as the Debtor's legal counsel.
MOBIQUITY TECHNOLOGIES: 2 Investors Convert $265,563 Debt to Equity
-------------------------------------------------------------------
As disclosed in a Form 8-K filed with the Securities and Exchange
Commission, Dr. Gene Salkind and a non-affiliated investor
converted their outstanding Mobiquity Technologies, Inc. debt in
the amount of $235,563 and $30,000 into 1,385,663 shares and
176,470 shares of restricted common stock, respectively. This
brought Dr. Salkind's family ownership interest to 4,478,017 shares
of common stock, excluding their derivative securities.
Exemption from registration is claimed under section 4(2) of the
Securities Act of 1933, as amended.
About Mobiquity Technologies Inc.
Headquartered in Shoreham, NY, Mobiquity Technologies, Inc. is a
next-generation marketing and advertising technology and data
intelligence company which operates through its proprietary
software platforms in the programmatic advertising space. The
Company's product solutions are comprised of two proprietary
software platforms: its advertising technology operating system
(or ATOS) platform; and its data intelligence platform.
Mobiquity reported a net loss of $8.06 million in 2022, compared to
a net loss of $18.33 million in 2021. As of Dec. 31, 2022, the
Company had $2.63 million in total assets, $2.65 million in total
liabilities, and a total stockholders' deficit of $10,830.
Palm Beach Gardens, FL-based D. Brooks & Associates, the Company's
auditor since 2022, issued a "going concern" qualification in its
report dated March 31, 2023, citing that the Company has incurred
operating losses, has incurred negative cash flows from operations
and has an accumulated deficit. These and other factors raise
substantial doubt about the Company's ability to continue as a
going concern.
MUSIC GETAWAYS: Court OKs Interim Cash Collateral Access
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of California, Northern
Division, authorized Music Getaways LLC to use cash collateral on
an interim basis in accordance with the budget, except that no
adequate protection payment is to be made to Alternative Funding
Group Corp.
The Court said Alternative Funding Group Corp., Wynwood Capital
Group, 24 Capital LLC, Pearl Beta Funding LLC, Castro Investments,
LLC, and Wolters Kluwer Lien Solutions are to be granted
replacement liens to the same extent, validity and priority as each
of these parties held on the petition date.
A continued hearing on the matter is set for May 16, 2023 at 2
p.m.
A copy of the order is available at https://bit.ly/3A5NRkv from
PacerMonitor.com.
About Music Getaways LLC
Music Getaways LLC arranges and schedules music events. It was
formed in 2019. The majority of the Company's events were held at
Hard Rock Hotels, and the Company received a contract with Hard
Rock Hotels to produce shows for their time share customers.
Music Getaways sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-10256) on April 6,
2023. In the petition signed by Warren D. Hill, managing member,
the Debtor disclosed up to $100,000 in assets and up to $10 million
in liabilities.
Judge Ronald A. Clifford III oversees the case.
The Law Offices of Michael Jay Berger represents the Debtor as
legal counsel.
NATIONAL CINEMEDIA: Wins Interim Cash Collateral Access
-------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized National Cinemedia, LLC to use cash
collateral on an interim basis in accordance with the budget.
The Debtor requires the use of cash collateral to:
(A) permit the orderly continuation of its business;
(B) pay adequate protection payments; and
(C) pay the costs of administration of its estate, including
the payment of professional fees and expenses, and to satisfy other
working capital and general corporate needs of the Debtor.
Under the Credit Agreement, dated as of June 20, 2018, and all
other Loan Documents, among National CineMedia, LLC, JPMorgan Chase
Bank, N.A., as Administrative Agent, the lenders from time to time
party thereto and the other parties thereto, the Borrower borrowed
loans thereunder consisting of:
(x) Term Loans of up to $270 million in Term Loan
Commitments;
(y) New Incremental Term Loans of up to $50 million in New
Incremental Term Loan Commitments; and
(z) Revolving Credit Loans and other extensions of credit,
including the issuance of letters of credit, of up to $175 million
in Revolving Credit Commitments.
As of the Petition Date, the Borrower owed, and was liable to, the
Prepetition Original Secured Parties pursuant to the Original Loan
Documents an aggregate principal amount of:
* not less than $257.9 million of Term Loans;
* not less than $49.1 million of New Incremental Term Loans;
and
* not less than $167 million of Revolving Credit Loans and
other extensions of credit, including not less than $800,000 in
issued and outstanding letters of credit,
plus, all accrued and unpaid interest with respect thereto and any
additional fees.
Under the Credit Agreement dated as of January 5, 2022, by and
among the Borrower, Wilmington Savings Fund Society, FSB, as
administrative and collateral agent thereunder, and the several
lenders from time to time parties thereto, the Borrower borrowed
revolving loans thereunder in an amount of $50 million in Revolving
Credit Commitments. As of the Petition Date, the Borrower owed
the Prepetition New RCF Secured Parties pursuant to the New RCF
Documents in the aggregate principal amount of not less than $50
million on account of Revolving Credit Loans plus all accrued and
unpaid interest with respect thereto and any additional fees.
In addition, the Borrower, as Issuer, and Wells Fargo Bank,
National Association, as Trustee are parties to the Indenture,
dated as of October 8, 2019, pursuant to which the 5.875% Senior
Secured Notes due 2028 were issued. As of the Petition Date, the
Borrower was indebted to the Prepetition Notes Secured Parties
pursuant to the 5.875% Notes Documents in the aggregate principal
amount of not less than $400 million plus all accrued and unpaid
interest with respect thereto and any additional fees.
In connection with each of the Original Loan Agreement, the New
Revolving Credit Agreement and the 5.875% Notes Indenture and to
secure the applicable Prepetition Secured Indebtedness, the Debtor
entered into various security and collateral documents in favor of
the applicable Prepetition Agent or Notes Trustee.
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 Debtor's now-owned and hereafter-acquired real
and personal property, assets and rights.
As further adequate protection, the Prepetition Agents, for the
benefit of itself and the other Prepetition Original Loan Secured
Parties and Prepetition New RCF Secured Parties, as applicable, and
the Notes Trustee, for the benefit of itself and the Prepetition
Notes Secured Parties, are granted allowed superpriority
administrative expense claims in the Case ahead of and senior to
any and all other administrative expense claims in the Case to the
extent of any Diminution in Value, junior only to the Carve Out.
The Carve-Out means:
(i) all fees required to be paid to the Clerk of the Court and
to the Office of the U.S. Trustee plus interest at the statutory
rate;
(ii) all reasonable fees and expenses up to $75,000 incurred by
a trustee;
(iii) to the extent allowed at any time, whether by interim
order, procedural order, or otherwise, all unpaid fees and expenses
incurred by persons or firms retained by the Debtor or the
Committee (if any) at any time before delivery by the Ad Hoc Group
of a Carve Out Trigger Notice, whether allowed by the Court prior
to or after delivery of a Carve Out Trigger Notice; and
(iv) Allowed Professional Fees of Professional Persons in an
aggregate amount not to exceed $2 million incurred after the first
business day following delivery by the Ad Hoc Group of the Carve
Out Trigger Notice, to the extent allowed at any time, whether by
interim order, procedural order, or otherwise, less the amount of
any prepetition retainers received by any such Professional Persons
and not previously returned or applied to fees and expenses.
A final hearing on the matter is set for May 4, 2023 at 3 p.m.
A copy of the order is available at https://bit.ly/3MLXBba from
PacerMonitor.com.
About National CineMedia, LLC
National CineMedia, LLC, based in Centennial, Colo., owns the
largest cinema-advertising network in North America. NCM derives
its revenue principally from the sale of advertising to national,
regional, and local businesses, which is displayed on a national
and regional digital network of movie theaters.
National CineMedia, LLC, filed a Chapter 11 petition (Bankr. S.D.
Tex. Case No. 23-90291) on April 11, 2023, listing $500 million to
$1 billion in estimated assets; and $1 billion to $10 billion in
estimated liabilities. The petition was signed by Ronnie Ng, chief
financial officer of National CineMedia, Inc.
The Hon. David R. Jones presides over the case.
Paul, Weiss, Rifkind, Wharton & Garrison LLP, led by Paul M. Basta,
Esq., Kyle J. Kimpler, Esq., Sarah Harnett, Esq., and Shafaq Hasan,
Esq., serves as counsel to the Debtor. John F. Higgins, Esq., at
Porter Hedges LLP, serves as the Debtor's local counsel.
The Debtor tapped Latham & Watkins LLP as special corporate &
litigation counsel; Lazard Freres & Co., as investment banker; FTI
Consulting, Inc., as restructuring advisor; and Omni Agent
Solutions as notice, claims and balloting agent.
NEW BEGINNING: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of New Beginning Missionary Baptist Church, Inc., according
to court dockets.
About New Beginning Missionary Baptist Church
New Beginning Missionary Baptist Church, Inc., a religious
organization in Miami Gardens, Fla., sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No.
23-11933) on March 13, 2023. In the petition signed by its chief
executive officer, Eric Readon, the Debtor disclosed up to $10
million in assets and up to $1 million in liabilities.
Judge Robert A. Mark oversees the case.
Peter Spindel, Esq., at Peter Spindel, Esq., PA serves as the
Debtor's counsel.
NEW YORK INN: Court OKs Interim Cash Collateral Access
------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas,
Dallas Division, authorized New York Inn Inc. to use cash
collateral on an interim basis in accordance with the budget, with
a 15% variance.
The Debtor requires the use of cash collateral to continue the
operation of its business.
Spectra Bank and the U.S. Small Business Administration assert an
interest in the Debtor's cash collateral.
To the extent of any diminution in value in the Pre-Petition
Collateral of the Secured Lenders, the Secured Lenders are granted
valid, binding, enforceable, and perfected liens co-extensive with
the Secured Lenders' pre-petition liens in all currently owned or
hereafter acquired property and assets of the Debtor.
The replacement liens granted to the Secured Lenders are
automatically perfected without the need for filing of a UCC-1
financing statement with the Secretary of State's Office or any
other such act of perfection.
The Debtor is directed to pay Spectra Bank $4,000 or the amount
agreed upon between the Debtor and the Bank, as adequate protection
for use of cash collateral, on or before the 5th of each month,
commencing in the month of February 2023.
A final hearing on the matter is set for May 23, 2023, at 2 p.m.
A copy of the Court's order and the Debtor's one month budget is
available at https://bit.ly/3UHj1by from PacerMonitor.com.
The Debtor projects $23,500 in total income and $10,687 in total
expenses for one month.
About New York Inn
A group of creditors including AP Interior, Prateek Desai and
Wajattat Ali Khan, filed an involuntary Chapter 11 petition against
Arlington, Texas-based New York Inn Inc. (Bankr. N.D. Tex. Case No.
21-30958) on May 21, 2021. The creditors are represented by Bill
Rielly, Esq.
The Debtor owns and operates a hotel located in Arlington, Texas.
After an involuntary bankruptcy petition was filed, the Debtor
consented to an Order for Relief in order to restructure its debts
after suffering reduced revenues from the downturn in the economy
precipitated by the COVID-19 pandemic and also by damage to the
hotel due to the freeze that occurred in February 2021.
Additionally, the Hotel was damaged following the Texas winter
storm in February 2021 and has been closed since that time. The
Debtor is waiting for its property insurance company to release
funds to pay for the necessary repairs so that it can reopen. The
Debtor is commencing legal action to collect on its insurance and
has retained an independent adjuster, a contractor and litigation
counsel all of which it is seeking to employ to move this case
along.
The Debtor has $1.02 million in total assets and $2.35 million in
total liabilities.
Judge Michelle V. Larson oversees the case.
New York Inn tapped Joyce W. Lindauer Attorney, PLLC as bankruptcy
counsel. Katharine Battaia Clark serves as the Subchapter V
Trustee. Under its Second Amended Plan of Reorganization Under
Subchapter V of Chapter 11, the Debtor will pay Secured Claims and
will pay a 10% return to Allowed Unsecured Claims over 36 months.
NGL ENERGY: S&P Ups ICR to 'B-' On Improved Leverage and Liquidity
------------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on NGL Energy
Partners L.P. to 'B-' from 'CCC+'.
S&P said, "At the same time, we raised our issue-level rating on
NGL's senior secured notes to 'B+' from 'B' and our issue-level
rating on its senior unsecured notes to 'CCC' from 'CCC-'. Our '1'
recovery rating on the secured notes and '6' recovery rating on the
unsecured notes are unchanged.
"The stable outlook reflects our expectation that the partnership
will reduce its leverage toward the mid-5x area over the next 12
months by modestly expanding its EBITDA and paying down its debt
using its free operating cash flow (FOCF)."
NGL's redemption of its 2023 notes and commitment to further debt
reduction will help position it to refinance the remainder of its
capital structure, which comes due in calendar years 2025 and
2026.On March 31, 2023, the partnership redeemed the entire
outstanding amount of its 7.5% senior unsecured notes due November
2023. In our previous research update on NGL, S&P highlighted the
maturity as a significant concern, particularly given our view of
the company's liquidity as very tight at that time. Following the
redemption of its unsecured notes, the partnership's capital
structure now comprises:
-- A $600 million asset-based lending (ABL) facility maturing in
February 2026, which features a springing maturity of 91 days
before the earliest maturity of any debt with at least $50 million
of outstanding principal;
-- About $380 million of 6.125% senior unsecured notes due March
2025;
-- About $2.05 billion of 7.5% senior secured notes due February
2026; and
-- About $331 million of 7.5% senior unsecured notes due April
2026.
With two years until its next debt maturity (not considering the
ABL facility's potential springing maturity), NGL has time to
proactively pay down its 2025 senior notes and position the balance
sheet to pursue a holistic refinancing of its capital structure.
S&P said, "We note that management has publicly communicated their
desire to reduce the partnership's leverage and prevent the debt on
its balance sheet from becoming current. Based on our cash flow
expectations--assuming management remains dedicated to leverage
reduction--NGL will likely be able to materially reduce the
outstanding balance on its 2025 notes over the next 12 months. Our
base-case forecast incorporates this paydown and assumes the
partnership's leverage improves by roughly half a turn to the
mid-5x area in fiscal year 2024 (from about 6x in fiscal year
2023)."
S&P said, "We no longer believe NGL's capital structure is
unsustainable, though its remaining maturities entail material
refinancing risk. This reflects our view that the partnership must
pursue a refinancing to address its 2026 maturities, given their
size relative to its liquidity sources. If NGL's performance
falters or speculative-grade issuers find it harder to access the
capital markets, this would heighten its refinancing risk. We also
note that management has historically delayed refinancing its
maturities and instead allowed them to become current, which has
led to elevated event risk." Furthermore, NGL has a history
undertaking leveraging acquisitions that have stretched its balance
sheet and led to prolonged spikes in its leverage.
S&P Global economists forecast a very shallow U.S. recession in
calendar year 2023, and S&P believes recent market events (such as
U.S. bank failures) have increased the risk of further financial
market volatility.
S&P said, "NGL has improved its liquidity headroom, which we
believe will be sufficient to support its operations in the near
term. On Feb. 16, 2023, the partnership entered into an amendment
to its ABL facility, which extended the maturity date of the
additional $100 million of commitments under the accordion to the
maturity date of the facility (in February 2026). This prevented
NGL's total commitments from falling to $500 million as of March
31, 2023. It also completed the sale of its marine assets and added
the net proceeds of about $65 million to its balance sheet, which
it used to repay the outstanding balances on its revolver. With
these actions and the repayment of its 2023 notes, we believe NGL's
liquidity has improved and now view it as having a satisfactory
liquidity cushion over the near term."
The accruing distributions on the partnership's preferred equity
are a headwind to its deleveraging efforts. NGL began accruing
distributions on its preferred equity early in calendar year 2021
to preserve its liquidity and prioritize its excess cash flows for
the repayment of its 2023 notes. S&P said, "While we view the debt
paydown as credit positive, we include the accrued distributions in
their entirety in our calculation of the partnership's S&P Global
Ratings-adjusted debt calculation. We also incorporate the equity's
principal value, including 50% for the class B and class C shares
and 100% for the class D shares, in our measure of its S&P Global
Ratings-adjusted debt."
The total accrued distributions were relatively immaterial to NGL's
credit metrics in both fiscal year 2021 and 2022. However, in the
latest fiscal period (ended Dec. 31, 2022) its total accumulated
and unpaid distributions increased to about $220 million. S&P
expects that the partnership will remain focused on its refinancing
efforts such that it does not anticipate it will direct cash toward
paying down the distributions over the next 12 months. Because of
this, the balance will expand to over $300 million by the end of
fiscal year 2024, when it will represent roughly half a turn of
leverage based on our EBITDA forecast.
The partnership's current principal outstanding on each class of
preferred equity is:
-- $315 million of class B floating-rate cumulative redeemable
perpetual preferred units (intermediate equity; 50% debt);
-- $45 million of class C fixed-to-floating rate cumulative
redeemable perpetual preferred units (intermediate equity; 50%
debt); and
-- $600 million of class D preferred units (no equity; 100%
debt).
The stable outlook reflects S&P's expectation that NGL will reduce
its leverage toward the mid-5x area over the next 12 months on its
modestly expanding EBITDA and debt repayment using its FOCF.
S&P could lower its rating on NGL if:
-- It does not proactively address the maturities in its capital
structure, which would be indicated by material obligations
becoming current (due within 12 months);
-- S&P believes the likelihood that its lenders will be repaid at
less than par has materially increased; or
-- S&P believes its capital structure is unsustainable.
S&P could raise its rating on NGL if:
-- It addresses all of the maturities in its capital structure
well in advance of their maturity date;
-- S&P anticipates a continued stable operating performance such
that it sustains S&P Global Ratings-adjusted leverage of below 6x;
and
-- S&P believes there is a clear path for the partnership to pay
down the accrued distributions on its preferred equity.
ESG credit indicators: E-3, S-2, G-3
S&P said, "Environmental factors are a moderately negative
consideration in our credit rating analysis of NGL. Although the
partnership's diversification into water solutions supports the
longevity of its business, it also faces multiple risks related to
climate change, including longer-term volume risks from reduced
drilling activity or demand due to the transition to renewable
energy sources in the midstream industry. Governance is also a
moderately negative consideration because of NGL's history of
leveraging acquisitions, which have stretched its balance sheet and
led us to assess its financial risk profile as highly leveraged."
NORTH SHORE MANOR: No Patient Care Concern, 1st PCO Report Says
---------------------------------------------------------------
Leah McMahon, duly appointed patient care ombudsman for North Shore
Manor, Inc., filed a first report regarding the company's nursing
home facility.
The ombudsmen observed numerous staff caring for residents,
cleaning the hallways, working in the kitchen and walking
throughout the facility. The ombudsmen observed snacks available to
the residents and clean laundry in the resident rooms.
Additionally, the ombudsmen observed that activity calendars were
hanging up in a visible location for residents to view and had
several activities each day. There was a bingo game happening
during the visit where approximately 10 residents were in
participation.
During the visit, the ombudsmen interviewed several residents and
explained the role of the ombudsman. All residents spoken with
appeared to be clean, well groomed, and wearing comfortable
clothes.
Residents state that the facility "seems short staffed at times and
it takes awhile to answer a call light." Moreover, residents report
receiving all prescribed medications on time each day. One resident
denied any concerns about care.
A copy of the ombudsman report is available for free at
https://bit.ly/3MMA1uP from PacerMonitor.com.
About North Shore Manor
North Shore Manor, Inc. operates skilled nursing facilities. The
company is based in Loveland, Colo.
North Shore Manor filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. D. Colo. Case No. 23-10809) on March
6, 2023, with $1 million to $10 million in both assets and
liabilities. Joli A. Lofstedt has been appointed as Subchapter V
trustee.
Judge Joseph G. Rosania Jr. oversees the case.
The Debtor tapped Aaron A. Garber, Esq., at Wadsworth Garber Warner
Conrardy, PC as bankruptcy counsel; Levin Sitcoff Waneka, PC as
special counsel; and Eisner Advisory Group, LLC as accountant.
The U.S. Trustee for Region 19, appointed Leah McMahon as patient
care ombudsman for the Debtor.
OFFICE INTERIORS: Seeks Cash Collateral Access
----------------------------------------------
Office Interiors of Virginia, Inc. asks the U.S. Bankruptcy Court
for the Eastern District of Virginia, Richmond Division, for
authority to use cash collateral and provide adequate protection.
The Debtor requires the use of its cash collateral in order to
operate its business, pay its employees, and maintain operations
until a sale can be consummated and/or in order to effectively
reorganize.
After the unexpected death of both cofounders, the Debtor was sold
to its current owner in February 2020, just before the COVID-19
pandemic impacted the US in unprecedented ways.
By 2021, the Pandemic had significantly impacted the Debtor's cash
flow through increased wages, increased costs of goods and
supplies, and supply chain delays, which in turn caused costly
project delays. Committed to meeting its vital obligations, the
Debtor took out a number of merchant cash advance loans, which only
worsened the Debtor's finances. Although the Debtor has been able
to rid itself of those onerous obligations, it has not been able to
fully recover from their impact in combination with the continued
effects caused by the Pandemic.
To the best of the Debtor's knowledge, First Community Bank is the
only secured creditor with a lien on the Debtor's accounts.
Pursuant to a promissory note and security agreement dated
September 16, 2022, in the original principal amount of $750,000,
FCB has a blanket lien on all assets of the Debtor. In addition,
pursuant to a promissory note and security agreement dated October
6, 2022 in the original principal amount of $500,000, FCB has a
blanket lien on all assets of the Debtor, including the Cash
Collateral. The Line of Credit was subsequently increased to
$600,000 UCC-1 Financing Statements have been filed evidencing the
FCB Obligations.
As adequate protection, the Debtor proposes to provide
post-Petition Date liens to FCB upon all assets of the same type as
FCB's cash collateral, which are or have been acquired, generated,
or received by the Debtor after the Petition Date. The replacement
liens will be perfected, enforceable, choate, and effective without
the necessity of the lienholders taking any other action, including
the filing of any additional security documents with respect
thereto. The Debtor proposes that the replacement lien be granted
only to secure an amount equal to the actual amount of cash
collateral used by the Debtor.
A copy of the Debtor's motion and budget is available at
https://bit.ly/41zNf2f from PacerMonitor.com.
The Debtor projects total operating expenses, on a weekly basis, as
follows:
$11,750 for the week ending April 22, 2023;
$58,405 for the week ending April 29, 2023;
$59,500 for the week ending May 6, 2023; and
$58,405 for the week ending May 13, 2023.
About Office Interiors of Virginia, Inc.
Office Interiors of Virginia, Inc. was founded in 1988 in Ashland,
Virginia, and provides an array of services to central Virginia and
beyond, including office space design and construction, office
moving services, general construction, and data migration.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Va. Case No. 23-31324) on April 16,
2023. In the petition signed by Othniel Glenwood Jordan, chief
executive officer, the Debtor disclosed up to $10 million in both
assets and liabilities.
Brittany B. Falabella, Esq., at Hirschler Fleischer, P.C,
represents the Debtor as legal counsel.
ONE IMPORTERS: Court OKs Interim Cash Collateral Access
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts
authorized One Importers and Distributors, LLC to use cash
collateral on an interim basis in accordance with the terms and
conditions set forth in the Amended Second Order Authorizing
Debtor's Further Use of Cash Collateral until the Court enters a
confirmation order.
As previously reported by the Troubled Company Reporter, the U.S.
Small Business Administration asserts an interest in the Debtor's
cash collateral.
On or before April 12, the Debtor was directed to file as
attachments to a notice of supplemental documents to the Cash
Collateral Motion (i) an updated 13-week budget, and (ii) a revised
form of order, as a well as a redline comparison of the proposed
form of order to the Order. The Debtor was also directed to file a
budget-to-actual report by the 14th day of each month in which the
Order remains in effect comparing the Debtor's use of cash
collateral in the preceding month to the prior projections and
explaining any material deviations therefrom.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3oiU3mH from PacerMonitor.com.
About One Importers and Distributors, LLC
One Importers and Distributors, LLC operates a wholesale commercial
bakery at 100 Weymouth Street, Unit # G2, Rockland, Massachusetts.
It owns the commercial condominium unit in which it operates.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 22-11592) on November 11,
2022. In the petition signed by Maria Betania Damota, manager, the
Debtor disclosed up to $1 million in both assets and liabilities.
Judge Christopher J. Panos oversees the case.
Marques C. Lipton, Esq., at Lipton Law Group, LLC, is the Debtor's
counsel.
PACKABLE HOLDINGS: Deadline to File Claims Set for May 15
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware set May 15,
2023, at 5:00 p.m. (Prevailing Eastern Time) as the last date and
time for persons and entities, and all governmental units to file
their proofs of claim against Pack Liquidation LLC, f/k/a Packable
Holdings LLC, and its debtor-affiliates.
Each proof of claim must be filed by sending an original proof of
claim form to:
a) if by mail:
Pack Liquidating LLC
fka Packable Holdings LLC
Claims Processing Center
c/o Epiq Corporate Restructuring LLC
P.O. Box 4419
Beaverton, OR 97005
- or -
b) by completing the online proof of claim form available at
https://epiqworkflow.com/cases/PKA.
The proof of claim form, the payment request form, the bar date
order, and all other pleadings filed in these Chapter 11 cases are
available free of charge on Epiq's website at
https://dm.epiq11.com/cases/packable/info. If you have questions
concerning the filing or processing of claims, contact the Debtors'
claims and noticing agent by email at packableinfo@epiqglobal.com
or by telephone at (844) 804-4365 for U.S. Parties, or +1 (503)
520-4451.
About Packable Holdings LLC
Packable Holdings LLC -- https://www.packable.com/ -- is a
multi-marketplace e-commerce enablement platform.
Packable Holdings LLC and five affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 22-10797) on August 29, 2022. In the petition filed by Maria
Harris, as chief legal officer, the Debtor reported assets and
liabilities between $100 million and $500 million each.
Judge Craig T. Goldblatt oversees the case.
Cooley LLP and Potter Anderson & Corroon LLP serve as the Debtors'
attorneys. Alvarez and Marsal North America, LLC, is the financial
advisor. Epiq Corporate Restructuring, LLC, is the claims agent.
Hilco Merchant Resources, LLC, is the liquidation agent.
The Official Committee of Unsecured Creditors is represented by
A.M. Saccullo Legal, LLC and Kelley Drye & Warren LLP.
JPMorgan Chase Bank, N.A., as Administrative Agent, is represented
by Richards, Layton & Finger, P.A. and Morgan, Lewis & Bockius LLP.
PARAMOUNT RESTYLING: Court OKs Deal on Cash Collateral Access
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Riverside Division, authorized Paramount Restyling Automotive Inc.
to use cash collateral on an interim basis in accordance with its
agreement with GemCap Holdings, LLC and the U.S. Small Business
Administration, through May 31, 2023.
As previously reported by the Troubled Company Reporter, the Debtor
and the Secured Creditors have agreed to extend the Debtor's use of
cash collateral through and including May 31, 2023, pursuant to the
terms thereof and the budget.
The Debtor is in arrears on its payments, each in the amount of
$36,000, owed to GemCap for the months of March and April 2023
under the Budget. Upon the entry of a Court order approving the
Stipulation, the Debtor will be deemed to be:
(a) required to pay the Make-Up Payments in the total amount
of $72,000 to GemCap by no later than April 24, 2023;
(b) authorized to use cash collateral through and including
May 31 pursuant to the Extended Budget attached upon terms
consistent with the terms of the Order; and
(c) required to make all other payments to GemCap and the SBA
set forth in the Amended Budget.
GemCap asserts a claim in the approximate amount of $2.123 million
and its claim is secured by first priority security interests and
liens upon substantially all of the Debtor's assets.
The SBA asserts a claim in the approximate amount of $503,129,
which is secured by second priority security interests and liens
upon substantially all of the Debtor's assets.
A copy of the Court's order is available at https://bit.ly/3GTSz8W
from PacerMonitor.com.
About Paramount Restyling Automotive Inc.
Paramount Restyling Automotive Inc. is a manufacturer of automotive
parts, accessories, and tires.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-10069) on January 9,
2023. In the petition signed by Samson Yang, vice president and
authorized signatory, the Debtor disclosed up to $10 million in
both assets and liabilities.
Judge Wayne Johnson oversees the case.
David L. Neale, Esq., at Levene, Neale, Bender, Yoo & Golubchik,
LLP, represents the Debtor as legal counsel.
PHUNWARE INC: Falls Short of Nasdaq Bid Price Requirement
---------------------------------------------------------
Phunware, Inc. received a notice from The Nasdaq Stock Market LLC
on April 13, 2023, indicating that the Company is not in compliance
with Nasdaq Listing Rule 5550(a)(2) because the bid price of the
Company's common stock on the Nasdaq Capital Market had closed
below $1.00 per share for the previous 30 consecutive business
days.
The notice received has no immediate effect on the Company's Nasdaq
listing. The notice from Nasdaq states that, under Nasdaq Listing
Rule 5810(c)(3)(A), the Company has been provided a period of 180
calendar days, or until Oct. 10, 2023, to regain compliance with
the Bid Price Requirement. To regain compliance, the bid price of
the Company's common stock must close at $1.00 per share or more
for a minimum of ten consecutive business days.
If the Company fails to regain compliance with the Bid Price
Requirement prior to the Compliance Date, the Company may be
eligible for an additional 180 calendar day compliance period,
provided (i) it meets the continued listing requirement for market
value of publicly held shares and all other applicable requirements
for initial listing on the Nasdaq Capital Market (except for the
Bid Price Requirement), and (ii) it provides written notice to
Nasdaq of its intention to cure this deficiency during the second
compliance period by effecting a reverse stock split, if necessary.
In the event the Company does not regain compliance with the Bid
Price Requirement prior to the expiration of the initial period,
and if it appears to Nasdaq that the Company will not be able to
cure the deficiency, or if the Company is not otherwise eligible,
Nasdaq will provide the Company with written notification that its
securities are subject to delisting from the Nasdaq Capital Market.
At that time, the Company may appeal the delisting determination
to a hearings panel.
The Company intends to monitor the closing bid price of its common
stock and may, if appropriate, take all measures necessary to
regain compliance with the Bid Price Requirement within the 180
calendar day compliance period provided by Nasdaq. However, there
can be no assurance that the Company will be able to regain
compliance with the Bid Price Requirement or maintain compliance
with other Nasdaq continued listing requirements.
About Phunware
Headquartered in Austin, Texas, Phunware, Inc. --
http://www.phunware.com-- offers a fully integrated software
platform that equips companies with the products, solutions and
services necessary to engage, manage and monetize their mobile
application portfolios globally at scale.
Houston, Texas-based Marcum LLP, Phunware Inc.'s auditor since
2018, issued a "going concern" qualification in its report dated
March 31, 2023, citing that the Company has a significant working
capital deficiency, has incurred significant losses and needs to
raise additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
Phunware reported a net loss of $50.89 million for the year ended
Dec. 31, 2022, compared to a net loss of $53.52 million for the
year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had
$54.83 million in total assets, $29.95 million in total
liabilities, and $24.88 million in total stockholders' equity.
PRECISION FORGING: Court OKs Interim Cash Collateral Access
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Los Angeles Division, authorized Precision Forging Dies, Inc. to
use cash collateral on an interim basis in accordance with the
budget, with a 15% variance.
The Debtor anticipated additional growth in 2020 and had forecasted
sales of $12 million for that year. The Debtor's pre-pandemic
increases in sales were due to the fact that one of its major
customers, Weber Metals, obtained new valuable contracts and sent
most of its related machining work to the Debtor to handle.
Specifically, the Debtor was designing and building the tooling to
machine Weber Metals' production parts. To meet this increase in
demand from Weber Metals, the Debtor invested heavily new
machines.
In 2020, the pandemic hit, halting the Debtor's business as most of
California was shut down starting in March 2020, including most of
the Debtor's major customers like Boeing. As a result, the Debtor
started to slowly fall behind in payments. The Debtor's 2020 sales
dropped to $4.3 million and dipped further in 2021 to $3.4 million
dollars. In 2022, the Debtor started to recuperate a bit,
increasing sales at $4.1 million dollars, and was looking forward
to rebounding in 2023 to around $6 million dollars. However, in the
early part of 2023, the Debtor's largest customer, Weber Metals,
opened its own machine shop and pulled most of the work Debtor was
doing for it "in house."
Global Finance Group, Inc., Financial Pacific Leasing, Inc., TCF
National Bank, CT Corporation System, Citibank, N.A., Bank of The
West, US Small Business Administration, and Signature Finance LLC
appear to assert an interest in the cash collateral.
The Debtor's secured creditors are mostly equipment lenders, many
of which hold liens exclusive to specific pieces of machinery for
which the Debtor's debt to such creditors was incurred. Among these
creditors are Global Finance Group, with which it has had a 26-year
relationship and experienced no default issues until after the
pandemic. Global Finance and other secured creditors commenced
pre-petition litigation against the Debtor regarding debt defaults
and actions to attach or obtain possession of their collateral.
One such creditor, Signature Financial Leasing LLC d/b/a/ Signature
Financial and Leasing LLC, which previously had UCC-1 liens filed
against the Debtor, filed a JL-1 UCC lien against the Debtor's
assets in October 2022.
The Debtor also disputes alleged secured liens filed by Citibank,
N.A. and CT Corporation System, as Representative, potentially
among other filings.
A final hearing on the matter is set for May 4, 2023 at 10 a.m.
A copy of the motion is available at https://bit.ly/3GRibDk from
PacerMonitor.com.
A copy of the order is available at https://bit.ly/3UKlyBK from
PacerMonitor.com.
About Precision Forging Dies, Inc.
Precision Forging Dies, Inc. specializes in precision manufacturing
and servicing of structural components, tooling, and turbines for
military, commercial and space industries.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-12015) on April 3,
2023. In the petition signed by Dan Kloss, chief executive officer,
chief financial officer, the Debtor disclosed up to $50 million in
assets and up to $10 million in liabilities.
Judge Julia W. Brand oversees the case.
Robert P. Goe, Esq., at Goe Forsythe and Hodges LLP, represents the
Debtor as legal counsel.
PRECISION FORGING: Starts Subchapter V Bankruptcy Case
------------------------------------------------------
Precision Forging Dies Inc. filed for chapter 11 protection in the
District of Central California. The Debtor elected on its
voluntary petition to proceed under Subchapter V of chapter 11 of
the Bankruptcy Code.
The Debtor is a California corporation and is based in the City of
Southgate, California. Founded in 1987 by Dan Kloss, who remains
its sole owner, Debtor has operated a machine shop fabricating dies
for different businesses industrial sectors.
Specifically, the Debtor specializes in manufacturing structural
components for the aerospace, oil and gas, military defense, and
space industries. For most of Debtor's existence, its business
grew steadily from its founding. In 2017, the Debtor had
approximately $6.6 million in sales, in 2018, the Debtor had
approximately $6.8 million in sales, and in 2019, it had $9.1
million in sales. In 2019, Debtor had a workforce of nearly 50
employees.
The Debtor anticipated additional growth in 2020 and had forecasted
sales of $12 million for that year. The Debtor's pre-pandemic
increases in sales were due to the fact that one of its major
customers, Weber Metals, obtained new valuable contracts and sent
most of its related machining work to the Debtor to handle.
Specifically, the Debtor was designing and building the tooling to
machine Weber Metals' production parts. To meet this increase in
demand from Weber Metals, the Debtor invested heavily new
machines.
In 2020, the pandemic hit, which halted Debtor's business as most
of California was shut down starting in March 2020, including most
of the Debtor's major customers like Boeing. As a result, the
Debtor started to slowly fall behind in payments. The Debtor's
2020 sales dropped to $4.3 million and dipped further in 2021 to
$3.4 million dollars. In 2022, the Debtor started to recuperate a
bit, increasing sales at $4.1 million dollars, and was looking
forward to rebounding in 2023 to around $6 million dollars.
However, in the early part of this year, the Debtor's largest
customer, Weber Metals, opened its own machine shop and pulled most
of the work Debtor was doing for it "in house."
The Debtor filed the Chapter 11 case to reorganize the Debtor's
business operations and to propose a chapter 11 plan of
reorganization. The Debtor’s industry continues to rebound from
the pandemic. The Debtor requires bankruptcy protection to stay
piecemeal collection actions against it, preserve its assets,
rebuild its customer base, and restructure its debt.
The Debtor's workforce was commensurately downsized to 26
employees, who rely on their employment to support families. The
Debtor is also seeking to reorganize to safeguard the jobs of its
workers and preserve vendor relationships, in line with the
policies underlying chapter 11. As of the Petition Date, Debtor
was current on its payroll.
According to court filings, Precision Forging Dies Inc. estimates
between $1 million and $10 million in debt owed `to 50 to 99
creditors.
Among the creditors are Global Finance Group, Inc., with which has
had a 26 year relationship and experienced no default issues until
after the pandemic. Global Finance and other secured creditors
commenced pre-petition litigation against Debtor regarding debt
defaults and actions to attach or obtain possession of their
collateral.
The petition states that funds will be available to unsecured
creditors.
About Precision Forging Dies
Precision Forging Dies Inc. -- https://precisionforgingdies.com --
specializes in precision manufacturing and servicing of structural
components, tooling, and turbines for military, commercial and
space industries.
Precision Forging Dies Inc. filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal.
Case No. 23-12015) on April 3, 2023. In the petition filed by Dan
Kloss, as chief executive officer, the Debtor reported assets
between $10 million and $50 million and liabilities between $1
million and $10 million.
Robert P Goe of Goe Forsythe & Hodges LLP is the Debtor's counsel.
RANDAZZO'S CLAM: Taps Vincent Lentini as Bankruptcy Attorney
------------------------------------------------------------
Randazzo's Clam Bar NY, Inc. seeks approval from the U.S.
Bankruptcy Court for the Eastern District of New York to employ
Vincent Lentini, Esq., a practicing attorney in Manhasset, N.Y., to
handle its Chapter 11 case.
Mr. Lentini's services include:
a. advising the Debtor with respect to its powers and duties
and the continued management of its property and business affairs;
b. representing the Debtor in the bankruptcy court and at all
hearings on matters pertaining to its affairs;
c. assisting the Debtor in the preparation and negotiation of
a plan of reorganization with its creditors;
d. preparing legal documents;
e. performing all other legal services.
Mr. Lentini will charge $650 per hour for his services. The
attorney received a retainer in the amount of $15,000, plus the
$1,738 filing fee.
As disclosed in court filings, Mr. Lentini is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
Mr. Lentini holds office at:
Vincent M. Lentini, Esq.
1129 Northern Blvd. Ste. 404
Manhasset, NY 11030
Tel: (516) 228-3214
Cell: (516) 225-5214
Email: Vincentmlentini@gmail.com
About Randazzo's Clam Bar NY
Randazzo's Clam Bar NY Inc., filed a Chapter 11 bankruptcy petition
(Bankr. E.D.N.Y. Case No. 23-41151) on April 3, 2023, with as much
as $1 million in assets and $100,001 to $500,000 in liabilities.
Judge Nancy Hershey Lord oversees the case.
Vincent M. Lentini, Esq., a practicing attorney in Manhasset, N.Y.,
is the Debtor's bankruptcy counsel.
RECEPTION MEZZANINE: Fitch Affirms B+ LongTerm IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed Reception Mezzanine Holdings, LLC's and
Reception Purchase, LLC's (dba STG Logistics, Inc.) Long-Term
Issuer Default Rating (IDR) at 'B+' and the senior secured revolver
and term loan at 'BB-'/'RR3'. The Rating Outlook is Stable.
STG's ratings reflect its good market position within port-focused
intermodal services including drayage, rail brokerage and
logistics. These markets are competitive with price sensitivity
though STG differentiated through its integrated and scaled
network. The ratings also consider its financial profile with
credit metrics currently expected to be positioned near the weak
end of Fitch's rating thresholds in 2023 before incrementally
improving thereafter.
Offsetting the concern is the company's comfortable liquidity,
standing at $158 million at YE2022 and no maturities until
2027-2028, which is supportive of near-term financial flexibility.
Fitch does not anticipate credit-negative capital allocation
actions even with M&A transactions a possibility.
KEY RATING DRIVERS
High Liquidity Supports Financial Flexibility: Fitch expects FCF
generation to remain positive through the forecast with FCF margins
in the low-to-mid single digits and supportive of financial
flexibility. EBITDA interest coverage is expected to step down to
about 2.1x in 2023 from 5.2x in 2022 due to the combination of
weaker EBITDA and rising interest rates. Fitch forecasts an
improvement in coverage over the subsequent two years to the
high-2.0x range, assuming rates follow the forward curve, however;
SOFR rates sustained at current approximately 5% levels would
maintain EBITDA coverage in the low-2.0x range.
Liquidity is also comfortable for the rating level with $98 million
of cash and an undrawn $60 million revolver at YE2022, which is
well above Fitch's estimate of minimum operating needs.
Forecast EBITDAR Leverage Rises to 5.0x: EBITDAR leverage was 4.2x
and EBITDA leverage was 3.9x at YE2022 and both metrics are
expected to rise in 2023 to 5.1x and 4.4x, respectively. The level
is at the high end of the leverage range for the 'B+' rating, and
the potential for leveraging transactions is a persistent risk. The
rise in leverage in 2023 is being driven by the decline in
profitability as temporarily strong yields revert in 2023 and the
fully debt funded acquisitions of Frontline and Clearlane in early
2023. Fitch does not anticipate material debt repayment given the
demonstrated appetite for M&A, and the large cushion under STG's
financial covenant set at 7.0x total net leverage, as defined by
the credit agreement.
Decent Market Position: STG occupies a top three market position as
an intermodal and drayage service provider with coverage at 8 of 10
major U.S. ports and numerous inland distribution locations. Its
position is supported by its ability to offer end-to-end solutions
for shippers, network of third-party transport and established
relationships insulates its position. The drayage, brokerage and
logistics markets in which STG operates remain competitive and
likely to constrain EBITDA margins to the low-double digits.
Cyclical Industry, Near-Term Weakness: The intermodal industry is
cyclical, reflecting high exposure to consumer and industrial
markets that can weigh on volumes and yields. Intermodal pricing
reflects broader trucking conditions given the substitutive nature
of rail intermodal and truckload shipping. STG and industry-wide
pricing is expected to decline in 2023, reflecting the weaker
conditions in freight economy and improvement in freight transport
networks. Fitch assumes industry conditions improve in 2H 2023,
with a drive for retailers re-stocking inventories.
Limited Remaining Integration Risks: Fitch does not see meaningful
integration risks remaining from the combination with XPO's
intermodal business that was completed in March 2022. STG has
realized various synergies to date and Fitch's forecast does not
assume large incremental savings. The low integration risk reflects
the asset-light nature of STG's operations. The recent acquisitions
of Frontline and Clearlane add deferred LTL services which due to
the relatively low-price point add a down-market solution and could
add some stability in an economically weak/price sensitive
environment.
DERIVATION SUMMARY
The transportation and logistics markets in which STG competes are
highly fragmented, though there are a number of large-scale players
including J.B. Hunt, Hub Group, CH Robinson and GXO Logistics
(BBB/Negative). However, many of STG's large competitors have a
variety of services that extend beyond directly related intermodal
shipments or rail brokerage. Like many of its peers, STG is
susceptible to the cyclicality of freight markets, which is driven
by both demand conditions as well as supply-side capacity
considerations that can affect profitability.
STG's contracts with customers are typically short-term in nature,
driving exposure to changes in freight rates like trucking
operators though brokerage margins are typically less sensitive to
cyclical shifts. Fitch views the brokerage market as competitive
given the limited differentiation of the business model though
STG's end-to-end offering can offer a steadier customer base.
STG's EBITDAR and EBITDA interest coverage are expected to range in
the high-1.0x and low-to-mid 2.0x through the forecast, while
EBITDAR and EBITDA leverage are around 5.0x and low-to-mid 4.0x. In
2023 these coverage and leverage are expected to be at the weak end
of these ranges and weaker than typical mid-cycle 'B+' rated
transportation credits. FCF generation is expected to be positive,
which along with a comfortable liquidity position, enhance
financial flexibility in the near term.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer:
- Revenue growth in the low-single digits in 2023 due to declining
freight rates, which are offset by acquisitions and additional
capacity added via container purchases. Organic revenue growth
remains in the low-to-mid single digits thereafter;
- Fitch calculated EBITDA margin declines by about 300bpsin 2023,
and remains steady going forward;
- Tax payments are temporarily high in 2023 due to timing of FY22's
payments;
- Capex, which includes container leases, steps down in 2023 after
high spending for containers in 2022. Capital intensity runs in the
low-single digits going forward;
- SOFR in the 4%-5% range through 2024 followed by 3% levels
thereafter.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Adoption of a financial policy supporting EBITDAR leverage below
4.5x and/or EBITDA leverage below 4.0x;
- Financial flexibility improves as indicated by sustaining EBITDAR
fixed-charge coverage above 2.5x and/or EBITDA interest coverage
above 3.0x;
- A material increase in scale or a development in STG's business
model that reduces cyclical risks to cashflow.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Financial flexibility is reduced as indicated by sustaining
EBITDAR fixed charge coverage approaching the mid-1x and/or EBITDA
interest coverage below 2.5x;
- An active M&A pipeline or other leveraging transactions that
sustains EBITDAR leverage above 5.0x and/or EBITDA leverage 4.5x;
- Operating challenges or a change in strategy that leads to
heightened variability or constrains STG's cash flow profile;
- Weakening liquidity position as evidenced by a forecasted
negative FCF profile and expectations that cash and revolver
availability is persistently pressured.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: As of Dec. 31, 2022, STG had $98 million of
cash and full availability under the $60 million revolving credit
facility. STG's term loan amortizes at $8 million per year. The
revolver matures first in 2027, followed by the term loan in 2028.
In January 2023, the company borrowed an incremental $38.7 million
on its first lien term loan to support completed acquisitions.
Lease Treatment: Fitch capitalizes operating lease costs at 8.0x,
consistent with its typical treatment for real estate assets under
lease. For finance leases, Fitch utilizes the reported liability
since these leases are predominately for intermodal containers,
which all carry discounted purchase options at the end of their 4-5
year lease term.
ISSUER PROFILE
STG is a provider of integrated, port-to-door containerized
logistic services including drayage, transloading, warehousing,
fulfilment, rail brokerage and final-mile solutions. It serves the
continental U.S. including major ports.
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
----------- ------ -------- -----
Reception
Mezzanine
Holdings, LLC LT IDR B+ Affirmed B+
Reception
Purchaser, LLC LT IDR B+ Affirmed B+
senior secured LT BB- Affirmed RR3 BB-
RESHAPE LIFESCIENCES: Incurs $46.2 Million Net Loss in 2022
-----------------------------------------------------------
Reshape Lifesciences Inc. has filed with the Securities and
Exchange Commission its Annual Report on Form 10-K disclosing a net
loss of $46.21 million on $11.24 million of revenue for the year
ended Dec. 31, 2022, compared to a net loss of $63.15 million on
$13.60 million of revenue for the year ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $11.14 million in total
assets, $7.48 million in total liabilities, and $3.66 million in
total stockholders' equity.
Irvine, California-based RSM US LLP, the Company's auditor since
2022, issued a "going concern" qualification in its report dated
April 17, 2023, citing that the Company has suffered recurring
losses and negative cash flows. The Company currently does not
generate revenue sufficient to offset operating costs and
anticipates such shortfalls to continue. This raises substantial
doubt about the Company's 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/0001427570/000155837023006079/rsls-20221231x10k.htm
About ReShape Lifesciences
ReShape Lifesciences Inc. (Obalon Therapeurtics, Inc.) is a weight
loss and metabolic health-solutions company, offering an integrated
portfolio of proven products and services that manage and treat
obesity and metabolic disease.
ROMANS HOUSE: Court OKs Appointment of New Bankruptcy Trustee
-------------------------------------------------------------
Judge Edward Morris of the U.S. Bankruptcy Court for the Northern
District of Texas approved the appointment of Carey Ebert as
Chapter 11 trustee for Romans House, LLC and Healthcore System
Management, LLC.
The ruling comes upon the application filed by William Neary, the
U.S. Trustee for Region 6, to appoint a new bankruptcy trustee who
will succeed Michael McConnell, the official initially appointed to
oversee the companies' Chapter 11 cases.
Ms. Ebert disclosed in a court filing that she does not have any
connection with the companies and their creditors or other parties
in interest.
Ms. Ebert can be reached at:
Carey D. Ebert
500 N. Central Expressway, Suite 350
Plano, TX 75074
Phone: 972-943-2580
About Romans House
Based in Forth Worth, Texas, Romans House, LLC operates Tandy
Village Assisted Living, a continuing care retirement community and
assisted living facility for the elderly in Fort Worth, Texas. Its
affiliate, Healthcore System Management, LLC, operates Vincent
Victoria Village Assisted Living, also an assisted living facility
for the elderly.
Romans House and Healthcore System Management sought Chapter 11
protection (Bankr. N.D. of Texas Case No. 19-45023 and 19-45024) on
Dec. 9, 2019. At the time of the filing, Romans House had between
$1 million and $10 million in both assets and liabilities.
Meanwhile, Healthcore System Management disclosed total assets of
up to $10 million and total liabilities of up to $50 million.
The Hon. Edward L. Morris is the case judge.
Demarco Mitchell, PLLC and Levene, Neale, Bender, Yoo & Brill
L.L.P. serve as the Debtors' legal counsel.
Carey D. Ebert is the Chapter 11 trustee appointed in the Debtors'
bankruptcy cases.
S&S SENIOR HOUSING: Files for Chapter 11 Bankruptcy
---------------------------------------------------
S&S Senior Housing of Burnsville LLC filed for chapter 11
protection without stating a reason.
According to court filings, S&S Senior Housing of Burnsville LLC
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.
The Debtor filed a motion to extend through and including April 26,
2023, the time within which to file its schedules of assets and
liabilities and statement of financial affairs. The additional
time will provide the Debtor with an opportunity to thoroughly
prepare the Schedules and will result in an accurate reporting of
the information required to be disclosed therein.
A telephonic meeting of creditors under 11 U.S.C. Section 341(a) is
slated for May 10, 2023 at 3:00 p.m. The extension of time should
not adversely impact the creditor meeting. The Debtor's attorney
will serve a copy of the schedules on the United States Trustee
assigned to supervise this case upon
filing.
About S&S Senior Housing of Burnsville
S&S Senior Housing of Burnsville LLC is a Single Asset Real Estate
(as defined in 11 U.S.C. Section 101(51B)).
S&S Senior Housing of Burnsville filed a petition for relief
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No.
23-40495) on April 4, 2023. In the petition filed by Kenneth Mark
Simons, as manager, the Debtor reported assets between $500,000 and
$1 million and liabilities between $1 million and $10 million.
The Debtor is represented by:
Cameron M. McCord, Esq.
Jones & Walden, LLC
302 W.I. Parkway
Dallas, GA 30132
Tel: 404-564-9300
Email: info@joneswalden.com
SAM'S PLACE: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Sam's Place Lottery & Tobacco, Inc.
3769 Peters Mountain Road
Halifax, PA 17032
Chapter 11 Petition Date: April 20, 2023
Court: United States Bankruptcy Court
Middle District of Pennsylvania
Case No.: 23-00874
Judge: Hon. Henry W. Van Eck
Debtor's Counsel: Robert E. Chernicoff, Esq.
CUNNINGHAM, CHERNICOFF & WARSHAWSKY PC
2320 N. Second St
Harrisburg, PA 17110
Tel: (717) 238-6570
Email: rec@cclawpc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michael A. Somers as president.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/SIKS4GQ/Sams_Place_Lottery__Tobacco_Inc__pambke-23-00874__0003.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/SFSHRKY/Sams_Place_Lottery__Tobacco_Inc__pambke-23-00874__0001.0.pdf?mcid=tGE4TAMA
SILICON VALLEY BANK: Collapse Not Caused by Bank Rule Rollbacks
---------------------------------------------------------------
Jon Hill of Law360 reports that Federal Deposit Insurance Corp.
Vice Chairman Travis Hill said Wednesday, April 12, 2023, that bank
rule rollbacks during the Trump administration had "nothing to do
with" the collapse of Silicon Valley Bank, and stressed a need for
speed at his agency when dealing with any future regional bank
failures.
About Silicon Valley Bank
Silicon Valley Bank was the nation's 16th largest bank and the
biggest to fail since the 2008 financial meltdown.
During the week of March 6, 2023, Silicon Valley Bank, Santa Clara,
CA, experienced a severe "run-on-the-bank." On the morning of
March 10, 2023, the California Department of Financial Protection
and Innovation seized SVB and placed it under the receivership of
the Federal Deposit Insurance Corporation (FDIC).
The FDIC on March 13, 2023, disclosed that it transferred all
deposits -- both insured and uninsured -- and substantially all
assets of the former Silicon Valley Bank of Santa Clara,
California, to a newly created, full-service FDIC-operated "bridge
bank" in an action designed to protect all depositors of Silicon
Valley Bank.
SVB Financial Group is a financial services company focusing on the
innovation economy, offering financial products and services to
clients across the United States and in key international markets.
Prior to March 10, 2023, SVB Financial Group owned and operated
Silicon Valley Bank, a state-chartered bank.
On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 23-10367). The Hon. Martin
Glenn is the bankruptcy judge. The Debtor had assets of
$19,679,000,000 and liabilities of $3,675,000,000 as of Dec. 31,
2022.
Centerview Partners LLC is proposed financial advisor, Sullivan &
Cromwell LLP proposed legal counsel and Alvarez & Marsal proposed
restructuring advisor to SVB Financial Group as
debtor-in-possession. Kroll is the claims agent.
SKILLZ INC: S&P Downgrades ICR to 'SD' on Distressed Exchange
-------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on San
Francisco-based mobile gaming platform operator Skillz Inc. to 'SD'
(selective default) from 'CCC+' and its issue-level rating on its
debt to 'D' from 'CCC'.
S&P said, "The downgrade follows Skillz' below-par debt repurchase,
which we view as a distressed exchange. On April 13, 2023, the
company announced that it repurchased roughly $160 million in
aggregate principal amount of its senior secured notes due 2026 in
an open market transaction ($130 million remains outstanding).
Skillz paid roughly $136 million for this transaction, which is
roughly 15% below par. In our view, this transaction is a
distressed exchange and tantamount to default because its lenders
received less than they were originally promised under the
securities.
"We intend to review our ratings on Skillz, including our issuer
credit rating and issue-level rating, over the next week. We intend
to review our ratings on the company and its debt over the next
week to incorporate the debt repurchase and our forward-looking
opinion of its creditworthiness. Given our belief that Skillz will
continue to burn substantial amounts of cash over the next few
years, it is unlikely we will raise the issuer credit rating above
'CCC+' despite the reduction in its outstanding debt."
SKINNY & CO: Court OKs Cash Collateral Access Thru May 8
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana,
Indianapolis Division, authorized Skinny & Co. Inc. to use cash
collateral on an interim basis in accordance with the budget,
through May 8, 2023.
The Debtor contends that if it is not permitted to use cash
collateral, it will be unable to pay necessary expenses for labor,
material and services related to the operation of its business.
The Debtor believes the U.S. Small Business Administration and
Breakout Capital, LLC have properly perfected security interests in
certain of the Debtor's assets that would extend to cash
collateral.
To the extent the SBA or Breakout has valid, enforceable,
perfected, and unavoidable prepetition liens on or security
interests in the cash collateral used by the Debtor, the SBA and/or
Breakout are granted replacement liens, to the extent the cash
collateral suffers a diminution in value, with such replacement
liens attaching to cash collateral generated post-petition by the
Debtor, to the same extent, validity and priority as the
prepetition liens.
In accordance with 11 U.S.C. section 507(b), the SBA and Breakout
will have allowed superpriority administrative expenses to the
extent that the replacement liens do not adequately protect them
against the diminution in value of their collateral.
A final hearing on the matter is set for May 4, 2023 at 9:30 a.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/41vQbgn from PacerMonitor.com.
The Debtor projects total expenses, on a weekly basis, as follows:
$86.69 for the week ending April 22, 2023;
$73.84 for the week ending April 29, 2023;
$631.30 for the week ending May 6, 2023;
$2,278 for the week ending May 13, 2023;
$400.72 for the week ending May 20, 2023; and
$63.73 for the week ending May 27, 2023.
About Skinny & Co.
Skinny & Co. is a skincare company offering chemical-free products
for skin, hair, and body.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Ind. Case No. 23-01410) on April 7,
2023. In the petition signed by Luke Geddie, president, the Debtor
disclosed $390,275 in assets and $2.954 million in liabilities.
Judge Jeffrey J. Graham oversees the case.
Wendy Brewer, Esq., at Fultz Maddox Dickens, PLC, represents the
Debtor as legal counsel.
SORRENTO THERAPEUTICS: Two New Equity Committee Members Appointed
-----------------------------------------------------------------
The U.S. Trustee for Region 7 appointed Adam Gui and HZ
Investments, LLC as new members of the official committee of equity
security holders in the Chapter 11 cases of Sorrento Therapeutics,
Inc. and Scintilla Pharmaceuticals, Inc.
Meanwhile, Xie Yuehui and Hongguo International Holdings Ltd. have
been removed from the committee.
As of April 14, the members of the equity committee are:
1. Michael Connell
13068 Caminito Mar Villa
Del Mar, CA 92014
Phone: 917-714-4821
Email: Mconnell2120@gmail.com
2. Kenneth S. Grossman
18 Norfolk Rd.
Great Neck, NY 11020
Phone: 516-993-2604
Email: kensgrossman@gmail.com
3. AC Choudhury
907 Sea Shell Dr.
Mesquite, TX 75149
Phone: 972-816-3989
Email: oneahsan@yahoo.co
4. Adam Gui
1750 W. Ogden #4106
Naperville, IL 60567
Phone: 646-736-2567
Email: Gui.adam@gmail.com
5. HZ Investments LLC
650 Halstead Ave.
Mamaroneck, NY 10543
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. Berkeley Research
Group, LLC is the committee's financial advisor.
SOUTHERN HOSPITALITY: Case Summary & 20 Top Unsecured Creditors
---------------------------------------------------------------
Debtor: Southern Hospitality Event Rentals, LLC
69451 Hwy 59
Suite B
Abita Springs, LA 70420
Business Description: The Debtor is an event rentals company in
Abita Springs, LA.
Chapter 11 Petition Date: April 20, 2023
Court: United States Bankruptcy Court
Eastern District of Louisiana
Case No.: 23-10597
Judge: Hon. Meredith S. Grabill
Debtor's Counsel: Robin R. De Leo, Esq.
THE DE LEO LAW FIRM, LLC
800 Ramon St
Mandeville, LA 70448
Tel: (985) 727-1664
Fax: (985) 727-4388
Email: lisa@northshoreattorney.com
Total Assets: $434,411
Total Liabilities: $1,777,088
The petition was signed by Robert N. Verdi as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/FVOIITI/Southern_Hospitality_Event_Rentals__laebke-23-10597__0001.0.pdf?mcid=tGE4TAMA
ST. CHARLES MEMORY: Court OKs Interim Cash Collateral Access
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas, Fort
Worth Division, authorized St. Charles Memory Care, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 15% variance.
An immediate and critical need exists for the Debtor to use cash
collateral for the continued operation and rehabilitation of its
existing business.
BMO Harris Bank is the Debtor's secured creditor claiming liens on
the Debtor's personal property including rents.
As of the Petition Date, the Secured Lender claims the Debtor owes
approximately $7.506 million in principal with respect of loans
made by the Secured Lender to the Debtor pursuant to, and in
accordance with the pre-petition loan agreement.
As adequate protection, the Secured Lender is granted a
post-petition claim against the Debtor's estate. To secure the
Adequate Protection Claim, the Secured Lender is granted valid,
binding, enforceable, and perfected liens co-extensive with the
Secured Lender's pre-petition liens in the Debtor's assets.
The occurrence of any of the following will constitute a
Termination Event:
(a) The chapter 11 Case is either dismissed or converted to a
case under chapter 7 of the Bankruptcy Code;
(b) A trustee or an examiner with the expanded powers of a
trustee is appointed in the Case;
(c) Without the prior written consent of the Secured Lender,
(i) the Debtor takes any action or ceases operations of its present
businesses or takes any material action -- which is inconsistent
with the Budget -- for the purpose of effecting the foregoing, or
(ii) or there shall occur a dissolution or termination of the
existence of the Debtor or any subsidiary of the Debtor;
(d) Non-compliance or default by the Debtor with any of the
terms and provisions of this Order after a seven-day notice of
default and opportunity to cure the default;
(e) Any other super-priority claim or lien equal or superior
in priority to that granted pursuant to or permitted thereunder
will be granted except on motion filed with the Court for such
approval; or
(f) The automatic stay of 11 U.S.C. section 362 is lifted so
as to allow a the Secured Lender or a third party to proceed
against any asset of the Debtor valued at $75,000 or more.
A final hearing on the matter is set for May 10 at 3 p.m.
A copy of the Court's order is available at https://bit.ly/3GP6ME6
from PacerMonitor.com.
About St. Charles Memory Care, LLC
St. Charles Memory Care, LLC operates a continuing care retirement
community and assisted living facility for the elderly.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-40253) on January 27,
2023. In the petition signed by Tracy Bazzell, agent, the Debtor
disclosed up to $10 million in assets and up to $50 million in
liabilities.
Judge Mark X. Mullin oversees the case.
Joyce W. Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC,
represents the Debtor as legal counsel.
SVB FINANCIAL: Taps Centerview Partners as Investment Banker
------------------------------------------------------------
SVB Financial Group seeks approval from the U.S. Bankruptcy Court
for the Southern District of New York to employ Centerview
Partners, LLC as investment banker.
The firm's services include:
a. General Financial Advisory and Investment Banking Services:
i. familiarize itself with the business, operations,
properties, financial condition, and prospects of the Debtor;
ii. review the Debtor's financial condition and outlook;
iii. assist the Debtor in the development of financial data
and presentations to the Debtor's Board of Directors, various
creditors, and other parties;
iv. evaluate the Debtor's debt capacity and capital structure
alternatives;
v. participate in negotiations among the Debtor, and related
creditors, suppliers, lessors, and other interested parties with
respect to any of the transactions contemplated by the Engagement
Letter; and
vi. perform such other financial advisory services as may be
specifically agreed upon in writing by the Debtor and Centerview.
b. Restructuring Services:
i. analyze various restructuring scenarios and the potential
impact of these scenarios on the value of the Debtor, and the
recoveries of those stakeholders impacted by the restructuring;
ii. provide financial and valuation advice and assistance to
the Debtor in developing and seeking approval of a Chapter 11 plan
of reorganization or liquidation;
iii. provide financial advice and assistance to the Debtor in
structuring any new securities to be issued pursuant to the
restructuring;
iv. assist the Debtor or participate in negotiations with
entities or groups affected by the restructuring; and
v. if requested by the Debtor, participate in hearings before
the court with respect to the matters upon which Centerview has
provided advice, including, as relevant, coordinating with Debtor's
counsel with respect to expert reports or testimony in connection
therewith.
c. Financing Services:
i. provide financial advice and assistance to the Debtor in
structuring and effecting a financing, identifying potential
Investors and, at the Debtor's request, contacting such Investors;
and ii. assist in the arranging of a financing, the due diligence
process and negotiating the terms of any proposed financing.
d. Sale Services:
i. provide financial advice and assistance to the Debtor in
connection with any sale of any assets, equity or property of the
type typically marketed and sold by Centerview or comparable
investment banks, including identifying potential acquirors and, at
the Company's request, contacting such potential acquirors; and
ii. assist the Debtor or participate in negotiations with
potential acquirors.
The firm will be paid as follows:
i. Monthly Advisory Fee. A monthly financial advisory fee of
$300,000, the first of which shall be due and paid by the Debtor
upon execution of the Engagement Letter and thereafter on each
monthly anniversary thereof during the term of Centerview's
engagement. After receipt of aggregate monthly advisory fees of
$3,600,000, 50% of the amount of any subsequent monthly advisory
fees paid to Centerview will be credited (but only once) against a
completion fee payable to Centerview pursuant to subparagraph 2(b)
of the Engagement Letter.
ii. Completion Fee. If at any time during the term of
Centerview's engagement or within the 12 full months following the
termination of this engagement (including the term of this
engagement, the "Fee Period"), the Debtor consummates any
restructuring or whole company sale, Centerview shall be entitled
to receive a transaction fee (the "Completion Fee"), contingent
upon the consummation of such restructuring or whole company sale
and payable at the closing thereof equal to $20,000,000; provided,
however, that in the event a whole company sale is effectuated
during a chapter 11 case, and such transaction is consummated prior
to the consummation of a restructuring, half of the Completion Fee
earned ($10,000,000) shall be payable at the closing of the whole
company sale and the balance ($10,000,000) shall be payable at the
closing of a Restructuring.
iii. Discrete M&A Sale Fee. If at any time during the Fee
Period, whether in connection with the consummation of a
Restructuring or otherwise, (x) the Debtor consummates any sale of
either (i) all or substantially all of the business, assets or
operations of SVB Securities, (ii) all or substantially all of the
business, assets or operations of SVB Capital, (iii) all or
substantially all of the warrant portfolio or (iv) all or
substantially all of the direct investment portfolio (a "discrete
M&A sale") or (y) the Debtor enters into an agreement in principle
or definitive agreement to effect a discrete M&A sale, and at any
time during the Fee Period such discrete M&A sale is consummated,
the Debtor shall pay Centerview a fee (a "discrete M&A sale fee")
calculated based upon the aggregate consideration of each such
transaction and the following fee matrix:
1. 1 percent of aggregate consideration greater than $1
billion;
2. 1.25 percent of aggregate consideration greater than $500
million and less than or equal to $1 billion;
3. 1.5 percent of aggregate consideration less than $500
million; and
4. 1 percent of aggregate consideration of the warrant and
direct investment portfolio described in (iii) and (iv) above.
iv. Financing Fee. If at any time during the Fee Period, the
Debtor consummates any financing, the Debtor will pay to Centerview
the following:
1. 1 percent of the aggregate amount of financing commitments
of any indebtedness issued that is secured by a first lien;
2. 3 percent of the aggregate amount of financing commitments
of any indebtedness issued that (x) is secured by a second or
junior lien, (y) is unsecured and/or (z) is subordinated;
3. 4 percent of the aggregate amount of financing commitments
of any equity or equity-linked securities or obligations issued;
and
4. 1 percent of the aggregate amount of financing commitments
of any debtor-in possession financing.
Marc Puntus, a partner at the Debt Advisory and Restructuring
Practice of Centerview, disclosed in court filings that his firm is
a "disinterested person" within the meaning of Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Marc Puntus
Centerview Partners, LLC
31 West 52nd Street, 22nd Floor,
New York, NY 10019
Telephone: (212) 380-2650
Facsimile: (212) 380-2651
About SVB Financial Group
SVB Financial Group is a financial services company focusing on the
innovation economy, offering financial products and services to
clients across the United States and in key international markets.
Prior to March 10, 2023, SVB Financial Group owned and operated
Silicon Valley Bank, a state-chartered bank. During the week of
March 6, 2023, Silicon Valley Bank, Santa Clara, CA, experienced a
severe "run-on-the-bank." On the morning of March 10, the
California Department of Financial Protection and Innovation seized
SVB and placed it under the receivership of the Federal Deposit
Insurance Corporation. SVB was the nation's 16th largest bank and
the biggest to fail since the 2008 financial meltdown.
On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 23-10367). The Debtor had
assets of $19,679,000,000 and liabilities of $3,675,000,000 as of
Dec. 31, 2022.
The Hon. Martin Glenn is the bankruptcy judge.
The Debtor tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Centerview Partners, LLC as investment banker; and Alvarez & Marsal
North America, LLC as restructuring advisor. William Kosturos, a
partner at Alvarez & Marsal, serves as the Debtor's chief
restructuring officer. Kroll Restructuring Administration, LLC is
the claims and noticing agent and administrative advisor.
SVB FINANCIAL: Taps Kroll as Administrative Advisor
---------------------------------------------------
SVB Financial Group seeks approval from the U.S. Bankruptcy Court
for the Southern District of New York to employ Kroll Restructuring
Administration, LLC as administrative advisor.
The Debtor requires an administrative advisor to:
(a) assist with, among other things, solicitation, balloting and
tabulation of votes, prepare any related reports in support of
confirmation of a Chapter 11 plan, and process requests for
documents;
(b) prepare an official ballot certification and, if necessary,
testify in support of the ballot tabulation results;
(c) assist with the preparation of the Debtor's schedules of
assets and liabilities and statements of financial affairs, and
gather data in conjunction therewith;
(d) provide a confidential data room, if requested;
(e) manage and coordinate any distributions pursuant to a
Chapter 11 plan; and
(f) provide other processing, solicitation, balloting and other
administrative services.
Prior to the petition date, the Debtor paid the firm in advance the
amount of $250,000.
Benjamin Steele, managing director at Kroll, disclosed in a court
filing that his firm is a "disinterested person" within the meaning
of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Benjamin J. Steele
Kroll Restructuring Administration, LLC
55 East 52nd Street, 17th Floor
New York, NY 10055
Telephone: (212) 593-1000
About SVB Financial Group
SVB Financial Group is a financial services company focusing on the
innovation economy, offering financial products and services to
clients across the United States and in key international markets.
Prior to March 10, 2023, SVB Financial Group owned and operated
Silicon Valley Bank, a state-chartered bank. During the week of
March 6, 2023, Silicon Valley Bank, Santa Clara, CA, experienced a
severe "run-on-the-bank." On the morning of March 10, the
California Department of Financial Protection and Innovation seized
SVB and placed it under the receivership of the Federal Deposit
Insurance Corporation. SVB was the nation's 16th largest bank and
the biggest to fail since the 2008 financial meltdown.
On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 23-10367). The Debtor had
assets of $19,679,000,000 and liabilities of $3,675,000,000 as of
Dec. 31, 2022.
The Hon. Martin Glenn is the bankruptcy judge.
The Debtor tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Centerview Partners, LLC as investment banker; and Alvarez & Marsal
North America, LLC as restructuring advisor. William Kosturos, a
partner at Alvarez & Marsal, serves as the Debtor's chief
restructuring officer. Kroll Restructuring Administration, LLC is
the claims and noticing agent and administrative advisor.
SVB FINANCIAL: Taps Sullivan & Cromwell as Legal Counsel
--------------------------------------------------------
SVB Financial Group seeks approval from the U.S. Bankruptcy Court
for the Southern District of New York to employ Sullivan &
Cromwell, LLP as legal counsel.
The firm's services include:
a. advising the Debtor with respect to its powers and duties,
including the legal and administrative requirements of operating in
Chapter 11;
b. advising the Debtor with respect to provision of services,
intercompany issues, access of books, records and information
systems and migration of systems, contracts and employees and
related interactions with Silicon Valley Bridge Bank, N.A., the
Federal Deposit Insurance Corporation as Receiver of Silicon Valley
Bank, and First-Citizens Bank & Trust Company;
c. advising the Debtor with respect to responses and discussions
with local and federal governmental authorities and regulators;
d. advising the Debtor with respect to the potential sale of all
or part of its business and negotiating and preparing on the
Debtor's behalf all agreements related thereto;
e. attending meetings and negotiating with representatives of
creditors and other parties in interest;
f. assisting with the preservation of the Debtor's estate,
including the prosecution of actions commenced under the Bankruptcy
Code or otherwise on its behalf, and objections to claims filed
against the estate;
g. preparing and prosecuting legal papers;
h. negotiating and preparing a Chapter 11 plan, disclosure
statement and all related documents;
i. advising the Debtor with respect to certain corporate,
financing, tax and employee benefit matters as requested by the
Debtor and without duplication of other professionals' services;
j. appearing before the bankruptcy court and any appellate
courts; and
k. other legal services in connection with the Debtor's Chapter
11 case.
The firm will be paid $1,575 to $2,165 per hour for partners and
special counsel, $810 to $1,475 per hour for associates, and $425
to $595 per hour for paralegals. In addition, the firm will receive
reimbursement for out-of-pocket expenses incurred.
As of the petition date, the firm holds a retainer in the amount of
$4,143,555.30 as security for payment of its fees and expenses.
James Bromley, Esq., a partner at Sullivan & Cromwell, 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.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Mr.
Bromley disclosed the following:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: Yes. The firm does not ordinarily determine its fees
solely on the basis of hourly rates. For the purposes of its
engagement by the Debtor, the firm has agreed that it will charge
for services performed during this Chapter 11 case and will apply
to the court for approval of such charges on the basis of the
hourly rates proposed by the firm. The firm hourly rates for
services provided to the Debtor in this Chapter 11 case are the
same or less than the hourly rates used by the firm under its
normal hourly billing practices. In particular, the rates for the
more senior timekeepers for each class of personnel represent a
discount from the rates used by the firm when preparing estimates
of fees under its normal billing practices for non-bankruptcy
engagements.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed postpetition, explain the
difference and the reasons for the difference.
Response: Prior to the petition date, in connection with general
corporate matters, the firm performed services for the Debtor and
was compensated for its services at rates that reflect all of the
factors prescribed by rule 1.5(a) of the New York Rules of
Professional Conduct, including the firm's contribution to the
relevant matter, the responsibility assumed, the results achieved,
the difficulty and complexity of the matter, the amount involved,
the experience of, and demands on, the lawyers involved and the
fees customarily charged for such matters consistent with the
firm's practice for non-bankruptcy engagements. The hourly rates
used by the firm for this Chapter 11 case are the same or less than
the hourly rates used by the firm for work performed for the Debtor
prior to the petition date. In particular, the rates in this
Chapter 11 case for the more senior timekeepers for each class of
personnel represent a discount and are capped at $2,165 per hour
for partners and special counsel, $1,475 per hour for associates
and $595 per hour for paralegals.
Question: Has your client approved your prospective budget and
staffing plan, and, if so, for what budget period?
Response: The Debtor has approved the firm's budget and staffing
plan for the period from the petition date to April 30, 2023. If
necessary, the firm expects to submit for approval by the Debtor
prospective budgets and staffing plans for the duration of this
Chapter 11 case.
The firm can be reached at:
James L. Bromley
Sullivan & Cromwell, LLP
125 Broad Street
New York, NY 10004-2498
Tel: (212) 558-4000
Fax: (212) 558-3588
Email: bromleyj@sullcrom.com
About SVB Financial Group
SVB Financial Group is a financial services company focusing on the
innovation economy, offering financial products and services to
clients across the United States and in key international markets.
Prior to March 10, 2023, SVB Financial Group owned and operated
Silicon Valley Bank, a state-chartered bank. During the week of
March 6, 2023, Silicon Valley Bank, Santa Clara, CA, experienced a
severe "run-on-the-bank." On the morning of March 10, the
California Department of Financial Protection and Innovation seized
SVB and placed it under the receivership of the Federal Deposit
Insurance Corporation. SVB was the nation's 16th largest bank and
the biggest to fail since the 2008 financial meltdown.
On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 23-10367). The Debtor had
assets of $19,679,000,000 and liabilities of $3,675,000,000 as of
Dec. 31, 2022.
The Hon. Martin Glenn is the bankruptcy judge.
The Debtor tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Centerview Partners, LLC as investment banker; and Alvarez & Marsal
North America, LLC as restructuring advisor. William Kosturos, a
partner at Alvarez & Marsal, serves as the Debtor's chief
restructuring officer. Kroll Restructuring Administration, LLC is
the claims and noticing agent and administrative advisor.
SVB FINANCIAL: Taps William Kosturos of Alvarez & Marsal as CRO
---------------------------------------------------------------
SVB Financial Group seeks approval from the U.S. Bankruptcy Court
for the Southern District of New York to employ Alvarez & Marsal
North America, LLC and designate William Kosturos as chief
restructuring officer.
Alvarez & Marsal's services include:
(a) assisting the Debtor's finance personnel and financial
advisors in a financial review of Debtor's business, including but
not limited to a review and assessment of financial information
that has been, and that will be, provided by the Debtor to its
creditors, including without limitation the Debtor's short and
long-term projected cash flows and business plans;
(b) assisting in the management and analysis required for the
Debtor's debtor-in-possession financing facility;
(c) assisting in the identification and execution of cost
reduction and operational improvement opportunities;
(d) assisting in the development and management of a 13-week
cash flow forecast;
(e) assisting in financing issues including assistance in
preparation of reports and liaison with creditors;
(f) assisting in contingency planning efforts;
(g) providing testimony on matters related to the engagement;
(h) serving as the principal contact with the Debtor's creditors
with respect to the Debtor's financial and operational matters;
(i) assisting in the discussions with and providing information
to potential investors, lenders, official committees, the U.S.
Trustee as deemed necessary and appropriate by the Debtor;
(j) assisting the overall financial reporting division in
managing the administrative requirements of the Bankruptcy Code,
including post-petition reporting requirements and claim
reconciliation efforts;
(k) assisting the Debtor and its other advisors in developing
restructuring plans or strategic alternatives for maximizing the
enterprise value of their various business lines;
(l) provide tax services relating to assisting in filing
required tax returns and responding to outstanding tax audits by
various tax agencies, investigating the net operating loss and
other tax attributes relating to the Debtor, and investigating
consolidated tax sharing agreement issues among the subsidiaries,
and other issues that may arise at the request of the Debtor's
board of directors (the "Board"); and
(m) performing such other services in connection with the
restructuring process as reasonably requested or directed by the
Board and other authorized Debtor personnel, consistent with the
role played by the firm in this matter and not duplicative of
services being performed by other professionals in these
proceedings.
The firm will be paid at these rates:
Managing Director $1,025 to $1,375 per hour
Director $775 to $975 per hour
Analyst/Associate $425 to $775 per hour
The firm received $1 million as a retainer in connection with
preparing for and conducting the filing of the Chapter 11 case. In
the 90 days prior to the petition date, the firm received the
retainer and an additional $500,000 payment for pre-bankruptcy
services, totaling $1.5 million in the aggregate for services
performed for the Debtor.
Mr. Kosturos, a partner at Alvarez & Marsal, disclosed in a court
filing that his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
William C. Kosturos
Alvarez & Marsal North America, LLC
600 Madison Avenue, 8th Floor
New York, NY 10022
Tel: (212) 759-4433
Fax: (212) 759-5532
Email: bkosturos@alvarezandmarsal.com
About SVB Financial Group
SVB Financial Group is a financial services company focusing on the
innovation economy, offering financial products and services to
clients across the United States and in key international markets.
Prior to March 10, 2023, SVB Financial Group owned and operated
Silicon Valley Bank, a state-chartered bank. During the week of
March 6, 2023, Silicon Valley Bank, Santa Clara, CA, experienced a
severe "run-on-the-bank." On the morning of March 10, the
California Department of Financial Protection and Innovation seized
SVB and placed it under the receivership of the Federal Deposit
Insurance Corporation. SVB was the nation's 16th largest bank and
the biggest to fail since the 2008 financial meltdown.
On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 23-10367). The Debtor had
assets of $19,679,000,000 and liabilities of $3,675,000,000 as of
Dec. 31, 2022.
The Hon. Martin Glenn is the bankruptcy judge.
The Debtor tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Centerview Partners, LLC as investment banker; and Alvarez & Marsal
North America, LLC as restructuring advisor. William Kosturos, a
partner at Alvarez & Marsal, serves as the Debtor's chief
restructuring officer. Kroll Restructuring Administration, LLC is
the claims and noticing agent and administrative advisor.
SWURVE MEDIA: Taps Buddy D. Ford P.A. as Legal Counsel
------------------------------------------------------
Swurve Media Corporation seeks approval from the U.S. Bankruptcy
Court for the Middle District of Florida to employ Buddy D. Ford,
P.A. as its legal counsel.
The firm's services include:
a. analysis of the financial situation of the Debtor;
b. advising the Debtor with regard to its powers and duties in
the continued operation of the business and management of the
property of the estate;
c. preparing and filing schedules of assets and liabilities,
statement of affairs, and other documents required by the court;
d. representing the Debtor at the Section 341 creditors'
meeting;
e. advising the Debtor with respect to its responsibilities in
complying with the United States Trustee's Operating Guidelines and
Reporting Requirements and with the rules of the court;
f. preparing legal papers and appear at hearings;
g. protecting the interest of the Debtor in all matters
pending before the court;
h. representing the Debtor in negotiation with its creditors
in the preparation of a Chapter 11 plan; and
i. other necessary legal services.
The firm will be paid at these rates:
Attorneys $450 per hour
Senior Associate Attorneys $400 per hour
Junior Associate Attorneys $350 per hour
Senior paralegal $150 per hour
Junior paralegal $100 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The Debtor paid the firm a retainer of $7,500.
As disclosed in court filings, Buddy D. Ford is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Buddy D. Ford, Esq.
Buddy D. Ford, P.A
Jonathan A. Semach, Esq.
Heather M. Reel, Esq.
9301 West Hillsborough Avenue
Tampa, FL 33615-3008
Tel: (813) 877-4669
Email: Buddy@tampaesq.com
Jonathan@tampaesq.com
Heather@tampaesq.com
About Swurve Media Corporation
Swurve Media Corporation filed a Chapter 11 bankruptcy petition
(Bankr. M.D. Fla. Case No. 23-01337) on April 5, 2023, with
$100,001 to $500,000 in both assets and liabilities. Judge
Catherine Peek McEwen oversees the case.
Buddy D. Ford, P.A. is the Debtor's legal counsel.
TALEN ENERGY: Moody's Assigns B1 CFR, Outlook Stable
----------------------------------------------------
Moody's Investors Service assigned a B1 Corporate Family Rating and
B1-PD Probability of Default Rating to Talen Energy Supply, LLC. At
the same time, Moody's assigned a Ba3 rating to its proposed senior
secured bank revolving credit facility, notes and term loans, as
well as a B3 rating to its existing senior unsecured bonds issued
by Pennsylvania Economic Dev. Fin. Auth. (PEDFA). Additionally,
Moody's assigned a Speculative Grade Liquidity (SGL) rating of
SGL-2. The outlook is stable.
On December 15, 2022, the U.S. Bankruptcy Court for the Southern
District of Texas confirmed Talen's plan of restructuring [1]. The
ratings have been assigned in anticipation of the emergence from
bankruptcy and consider the company's exit credit profile,
including good liquidity, an updated capital structure with less
leverage, adequate coverage metrics and its small but diversified
power plant portfolio. The assignment of the ratings is based on
the successful execution of all aspects of the plan of
reorganization and the confirmation order.
Assignments:
Issuer: Talen Energy Supply, LLC
Corporate Family Rating, Assigned to B1
Probability of Default Rating, Assigned B1-PD
Speculative Grade Liquidity Rating, Assigned SGL-2
Senior Secured Term Loan B, Assigned Ba3 (LGD3)
Senior Secured Term Loan C, Assigned Ba3 (LGD3)
Senior Secured Revolving Credit Facility, Assigned Ba3 (LGD3)
Senior Secured Regular Bond/Debenture, Assigned Ba3 (LGD3)
Issuer: Pennsylvania Economic Dev. Fin. Auth.
Senior Unsecured Revenue Bonds, Assigned B3 (LGD5)
Outlook Actions:
Issuer: Talen Energy Supply, LLC
Outlook, Assigned Stable
RATINGS RATIONALE
"Talen's B1 CFR incorporates Moody's expectation that its nuclear
and fossil fuel power plant operations will produce adequate cash
flow to support the lower debt levels incorporated in its
post-bankruptcy capital structure," stated Edna Marinelarena,
Assistant Vice President. Although the new debt profile is still
sizeable for a company of Talen's size and scope at about $2.8
billion, it should generate a CFO pre-working capital to debt ratio
between 9% and 11% and a run rate debt to EBITDA ratio of about 5x.
The rating also incorporates the inherent volatility of the
merchant power markets and the higher business and financial risk
stemming from Talen's 75% ownership of Cumulus Digital, consisting
of digital infrastructure development projects adjacent to its
Susquehanna Nuclear Power Plant.
As part of the plan of reorganization, Talen's capital structure
includes proposed new debt of an approximate $825 million senior
secured Term Loan B and about $825 million senior secured notes.
Additional proposed senior secured debt includes Talen's $575
million revolving credit facility and a $545 million Term Loan C
for letters of credit. The only senior unsecured debt to be
outstanding is Talen's pre-petition PEDFA Bonds, Series B and C
that total $131 million. There is also $295 million of
non-recourse debt issued by LMBE-MC Holdco II LLC (B1 negative) and
about $185 million of debt issued by Cumulus Digital LLC (Cumulus
Digital).
Talen's asset base is a mix of nuclear, natural gas and coal fired
power plants largely operating in the PJM (84% of owned
generation), ERCOT and WECC power markets. Although diversified by
generation, because of the large concentration in PJM, Talen's
market diversification is limited. The PJM market does provide for
some cash generation from capacity revenue, which Moody's views as
credit positive, recent PJM auctions have resulted in lower
capacity revenue than historical levels, which may persist in the
next auction.
Favorably, approximately 45% of Talen's revenue is derived from its
sole nuclear asset, Susquehanna, which is eligible for the nuclear
production tax credits (PTC) incorporated in the Inflation
Reduction Act of 2022. Moody's views the nuclear PTC as providing a
substantial benefit to Talen because the PTC will insulate the
company from weak power prices and provide support for its revenue
base.
Although Moody's views the contracted cash flow from the still
developing data center and bitcoin mining operations as having the
capacity to provide substantial upside to Talen's financial
performance, there is high execution risk associated with that
business and with it the potential for it to consume capital,
financial resources and management time and attention. Although the
bitcoin mining operation has commenced and the data center is
complete and ready to be leased Moody's do not incorporate any cash
flow from these operations in to Moody's projections and do not
expect Talen to invest material additional capital into Cumulus
Digital.
ESG Considerations
ESG factors are material to the ratings assignment. Talen's ESG
Credit Impact Score is CIS-4, reflecting highly negative
environmental risk exposure (E-4 issuer profile score), moderately
negative social risk exposure (S-3 issuer profile score) and highly
negative governance risk exposure (G-4 issuer profile score). The
environmental risk exposure stems from carbon transition risk
arising from its coal power plants and waste and pollution risks
associated with Susquehanna. Talen's corporate governance risks
reflects the company's developing track record following emergence
from bankruptcy and high financial risk resulting from the 75%
ownership of Cumulus Digital. Moody's views the investment in
Cumulus Digital as innovative but new, untested, and carrying
higher business risk than its legacy power plant operations.
Talen's private ownership structure is higher risk because of the
potential for more aggressive financial policies that favor
shareholders. Talen's board of directors is comprised of 7
independent members plus Talen's CEO. As management executes on its
operating and financial plans that lead to a track record of
financial stability, this could result in improvement in the
Financial Policy factor score.
Liquidity analysis
The SGL-2 rating reflects Talen's good liquidity that will include
about $200 million of unrestricted cash at emergence and expected
access to about $575 million (or up to $700 million depending on
final terms) of capacity on its senior secured revolving credit
facility. Moody's expect Talen to meet its cash and working capital
obligations through internal sources with minimal reliance on
external sources over the next 12 months. The revolver's expected
financial covenant is a maximum consolidated first lien net
leverage ratio of 4.0x between Q3-2023 and Q1-2024, increasing to
4.25x beginning in Q2-2024. Moody's expect the company to meet
these financial covenants and maintain adequate headroom.
Rating Outlook
The stable outlook incorporates Moody's expectation that Talen will
exhibit a higher degree of operating and financial consistency upon
its emergence from bankruptcy and benefit from lower debt levels
and good liquidity. Moody's expect Talen's generation assets to
operate with high availability and capability factors, thereby
generating sufficient cash flow to exhibit CFO pre-WC to debt
ratios ranging between 9% and 11% over the next several years.
Additionally, Moody's expect the company to generate positive free
cash flow and incur no additional new debt, which should support
credit quality.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A rating upgrade could be considered if Talen develops a consistent
track record of successfully operating both its power plant
portfolio and its ancillary bitcoin and data center businesses
post-bankruptcy, while also demonstratesing financial stability and
strong liquidity management over time. A rating upgrade could also
occur if Talen's cash flow leads to a ratio of CFO pre-WC to debt
above 13% on a sustained basis.
A rating downgrade could result if Talen's cash flow decreases or
if leverage increases leading to a ratio of CFO pre-WC to debt
below 9%. If Talen's plant operations deteriorate or its other
businesses are not successful, leading to an increase in operating
costs or weaker liquidity, a downgrade could also occur.
Talen Energy Supply, LLC (Talen) is an independent power producer
with about 12 GW of generating capacity, wholly-owned by Talen
Energy Corporation (TEC). TEC is headquartered in Woodlands, TX,
and is a privately owned holding company primarily held by a
consortium of private investors and 1.0% owned by an affiliate of
Riverstone Holdings LLC (Riverstone). TEC conducts all its business
activities through Talen.
Talen owns 75% of Cumulus Digital Holdings, LLC (Cumulus Digital)
and preferred equity investment in other Cumulus subsidiaries
focused on renewable energy and battery storage development
projects. Cumulus Digital, through its subsidiaries, owns a data
center campus and interest in a Bitcoin mining facility all
adjacent to the Susquehanna power plant.
The principal methodology used in these ratings was Unregulated
Utilities and Unregulated Power Companies published in May 2017.
TALEN ENERGY: S&P Assigns 'B+' Long-Term ICR, Outlook Stable
------------------------------------------------------------
S&P Global Ratings assigned its 'B+' long-term issuer credit rating
(ICR) to Talen Energy Supply LLC; and its 'BB' issue-level rating,
and '1' recovery rating, to the company's proposed senior secured
term loan B facility (TLB), senior secured notes (notes), senior
secured term loan C facility (TLC), and senior secured revolving
credit facility (RCF).
Leverage will improve significantly with the restructuring
transactions. Talen, which voluntarily filed for Chapter 11
bankruptcy protection in May 2022, is completing the strategic
balance sheet restructuring transactions that were contemplated in
the restructuring support agreement (RSA) that it entered into with
its unsecured noteholders. Under the terms of the RSA, Talen is
raising fresh equity capital of up to $1.55 billion, as well as new
debt funding for up to $1.78 billion. In addition, the company's
unsecured notes ($1.30 billion) will be fully equitized, with its
current sponsor, Riverstone Holdings LLC (Riverstone), receiving 1%
of the reorganized equity. In conjunction with accumulated cash
through the bankruptcy period (about $1.3 billion), Talen will use
the funds from the new financings to fully repay secured claims
($3.2 billion), repay DIP financing ($1.0 billion), pay transaction
related costs, and transfer cash (about $175 million) to its
balance sheet for ongoing liquidity purposes. At emergence, the
company's restructured balance sheet will continue to include
LMBE-MC Holdco (LMBE) nonrecourse debt (about $287 million), PEDFA
series B and C bonds ($131 million), and limited recourse debt
($185 million) at its digital infrastructure growth vehicle,
Cumulus Digital Holdings LLC (Cumulus). Talen will also have access
to a $545 million TLC, that will cash collateralize the letters of
credit, as well as a $575 million to $700 million RCF for liquidity
management and general corporate purposes.
Following the restructuring transactions, Talen's leverage will
improve considerably as it evolves from an unsustainable point to
reasonable levels, given the company's operating risk. At the time
of bankruptcy filing, Talen's debt-to-EBITDA ratio was tracking
well in excess of 10x, which we expect to transition to 4.0x-4.5x
between 2024 and 2025, based on our forecast of the company's
earnings during that period. Talen also expects to generate more
than $1 billion in EBITDA during 2023, largely owing to strong
energy pricing and current hedges, which would place S&P Global
Ratings' adjusted debt to EBITDA at about 2.5x.
S&P said, "Business risk has improved with nuclear PTCs; however,
we view it on the weaker end of a fair category assessment. Talen's
most significant asset is Susquehanna, a nuclear power generation
facility in the PJM with a total capacity of 2.5 gigawatts (GW; 2.2
GW on a net ownership basis). Although nuclear assets have
struggled financially over the past decade due to a systemic
decline in power prices spurred by renewable proliferation and the
buildup of efficient gas-fired generation, given their clean
attributes and a highly baseload nature, nuclear facilities in
certain U.S. states (New York and Illinois) have also received
financial support via some mechanism (such as zero emission credits
and clean energy standard) to stay afloat and prolong their
economic lives, enabling them to continue to provide reliable and
clean power to the grid. Most recently, the Inflation Reduction Act
provides a production credit for up to $15/megawatt-hour (MWh) to
nuclear power generation facilities between 2024-2032 (inclusive),
placing a soft floor on their revenues at about $40/MWh-$44/MWh,
and converting them into a nine-year contracted business. This is a
game changer for nuclear plants such as Susquehanna, which now have
long-term cash flow visibility under the PTC regime. We consider
this a key factor in our fair business risk assessment, largely
because of Susquehanna's significant contribution to the company's
overall generation and earnings potential. For perspective, at
about a 93% capacity factor, approximately $25/MWh in nuclear fuel
and operations and maintenance (O&M) costs, and $41/MWh-$44/MWh in
realized gross receipts (includes energy, capacity, and ancillary
payments), Susquehanna would generate annual EBITDA of $325
million-$385 million. This would represent more than half to
two-thirds of our projected EBITDA for the entire company,
providing a reasonable degree of visibility into future earnings
and cash flow generation capacity.
Apart from Susquehanna, however, a large portion of Talen's fleet
is old and inefficient, with heat rates in excess of 9,000 Btu per
kilowatt hour (Btu/KWh), which limits the potential to dispatch
power into the grid that has become increasingly competitive with
the entry of zero-cost and subsidized renewables, as well as
efficient natural gas-fired combined cycle plants. Essentially
operating as peakers, these assets are largely dependent on the
strength of capacity markets, and therefore lack the ability to
weather prolonged periods of weak capacity pricing. S&P considers
this a competitive weakness. The capacity factor for Talen's entire
fleet during 2022, 2021, and 2020 was 33%, 26% and 31%,
respectively, which reflects its high heat rate and low-dispatch
nature.
One of the other factors influencing S&P's overall assessment of
Talen's business risk is the concentration in its operations.
Although the company's fleet is fairly large, it is heavily
concentrated in the PJM region, which includes about 84% of its
total capacity. In addition, almost 66% of Talen's fleet is in a
single state, Pennsylvania, although it is also one of the largest
states in the country from a power generation, consumption, and
export perspective. On the contrary, Talen's peers in the
independent power producer group (Vistra Corp., NRG Energy Inc.,
and Calpine Corp.), which are much larger in terms of their fleet
size and EBITDA generation, are much more diversified from an
asset, locational, and RTO standpoint.
S&P said, "Talen has made progress in advancing its digital
infrastructure initiatives, although they have a limited effect on
our assessment of the company's credit profile at this stage. Talen
is developing a digital infrastructure platform, which is housed
under Cumulus. Essentially, Cumulus is building a carbon-free
campus for hyperscale data centers and crypto currency mining
operations adjacent to the Susquehanna nuclear plant. The electric
power to support these facilities will be directly supplied by
Susquehanna under power purchase agreements. Talen has completed
the construction of phase 1 of the coin mining facility (150
megawatts [MW]), which achieved commercial operations in early
2023. In addition, building 1 (48 MW) of the data center initiative
has also undergone foundational construction and development, and
the facility is expected to be operationalized at some stage;
however, the timing of completion for this project is unclear.
Given the volatility in digital currency markets, as well as
Talen's limited track record in crypto currency mining, we have
included very negligible earnings from this source in our financial
projections. Therefore, the company's engagement in these
activities does not affect our assessment of its business risk at
this stage.
"We consolidate $185 million in Cumulus-related limited-recourse
debt to calculate Talen's leverage ratios. The rationale for this
adjustment is twofold. Talen has extended financial support to
Cumulus in the form of guarantee and a backstop letter of credit.
In addition, given the financial and management resources used to
develop Cumulus to date, we consider the entity as having a degree
of strategic relevance for Talen, and therefore believe that Talen
could use its balance sheet to provide further financial support
(if required) for the advancement of existing and future digital
infrastructure projects. Due to these factors, we consider Cumulus'
financial obligations akin to those of Talen."
Governance could improve under the new ownership and board. Given
Talen's unsecured notes will be fully equitized, the company's new
owners will include numerous investors with varying levels of
ownership interests. Riverstone, Talen's current sponsor, will hold
only 1% of the reorganized equity, and will therefore have
negligible influence on the company's strategic decision making. We
considered Riverstone a financial sponsor, given its aggressive
financial policy stance that prioritized shareholder returns over
balance sheet and credit strength. Although financial sponsor-like
entities cumulatively will hold a notable portion of Talen's
equity, S&P also notes that this ownership is fragmented, as well
as the fact that the company will now be governed by a largely
independent board, which could help provide better long-term
direction, risk oversight, and management scrutiny.
S&P said, "The stable outlook reflects our expectation of an
improved business risk profile with the introduction of the nuclear
PTC, as well as a notably improved financial risk position at
emergence from the balance sheet restructuring that will lead to
the repayment and elimination of a substantial amount of debt. For
2024 and 2025, we expect that Talen's debt-to-EBITDA ratio will be
4.0x-4.5x, as it operates its assets and pursues any growth
initiatives, such as the development of digital and clean energy
infrastructure.
"We would take a negative rating action if Talen's operational or
financial performance lagged our expectations, which could result
in the company failing to maintain a debt-to-EBITDA ratio below 5x.
Factors that could lead to such an outcome include a material
deterioration in power prices and energy spreads or depressed
capacity prices, both of which could negatively affect the
company's non-nuclear fleet. In addition, unforeseen operational
failures at its assets would also result in revenue and cash flow
loss for the company. Given Susquehanna's material contribution to
Talen's earnings, any extended forced outages, or technical
problems at the asset could meaningfully weaken the company's
EBITDA and cash generation. Finally, we would lower the rating if
we believed the company would pursue an aggressive financial
policy, which could lead to higher-than-expected leverage ratios
over our outlook period.
"We could consider a positive rating action if the company
de-levers the balance sheet, such that we expect debt to EBITDA
will remain below 4x with sufficient headroom. This could be
achieved if power and capacity prices outperform our forecast
consistently, resulting in stronger-than-projected cash flow
generation from Talen's generation fleet. We could also raise the
rating if Talen used free cash flow from its operating assets to
reduce debt, improving its balance sheet and leverage profile
consistent with our upgrade triggers."
ESG credit indicators: E4, S3, G3
S&P said, "Environmental factors are a moderately negative
consideration in our credit rating analysis of Talen. The
assessment is reflective of the company's operation of an entirely
thermal-based fleet, the largely old and inefficient nature of its
assets, as well as a meaningful proportion of coal-fired resources
in the overall asset portfolio (36% of total capacity). Susquehanna
provides a strong offset against these weaknesses, delivering
baseload and reliable clean power to the grid; however, nuclear
power has also attracted considerable controversy by various
environmental and social groups that consider it a public safety
risk due to several meltdown events in the past (Chernobyl, Three
Mile Island, Fukushima). Talen is also taking steps to reduce its
emission footprint via coal-to-gas conversion projects; however, we
do not expect these initiatives to meaningfully alter the carbon
profile of the company's portfolio. Governance has also been a
negative consideration in the past given the company's ownership by
an aggressive sponsor, Riverstone, that prioritized its interests
over Talen's financial health. However, we think that governance
could improve under the new ownership structure and an independent
board."
TOPBUILD CORP: Moody's Affirms 'Ba1' CFR, Outlook Remains Stable
----------------------------------------------------------------
Moody's Investors Service affirmed TopBuild Corp.'s Ba1 Corporate
Family Rating, Ba1-PD Probability of Default Rating and the Ba2
ratings on the company's senior unsecured notes. The company's
speculative grade liquidity rating remains SGL-1. The outlook is
stable.
"TopBuild is well positioned to contend with the material reduction
in new single-family housing starts, the main driver of the
company's revenue, and the resulting worsening in credit metrics,"
according to Peter Doyle, a Moody's VP-Senior Analyst.
The following ratings are affected by the action:
Affirmations:
Issuer: TopBuild Corp.
LT Corporate Family Rating, Affirmed Ba1
Probability of Default Rating, Affirmed Ba1-PD
Senior Unsecured Regular Bond/Debenture, Affirmed Ba2 (LGD5)
Outlook Actions:
Issuer: TopBuild Corp.
Outlook, Remains Stable
RATINGS RATIONALE
TopBuild's Ba1 Corporate Family Rating reflects Moody's expectation
that the company will perform well despite the material decline in
new single-family home construction. Moody's projects adjusted
EBITDA in the run-rate range of 18% - 19% over the next two years
and low leverage, with adjusted debt-to-EBITDA sustained below
2.5x. TopBuild is the largest installer and distributor of
insulation and related products in North America. This scale
enhances profitability by extracting additional operating
efficiencies, from purchasing power to administrative activity.
Moody's project over an 18% decline this year in new single-family
home construction, exhibiting significant volatility in response to
rising mortgage rates and weakening demand. Exposure to volatile
new housing construction remains TopBuild's greatest credit
challenge. TopBuild also faces intense competition.
TopBuild's SGL-1 Speculative Grade Liquidity Rating reflects
Moody's view that the company will maintain a very good liquidity
profile through 2024, generating at least $500 million of free cash
flow in each of the next two years. TopBuild has access to a $500
million revolving credit facility maturing late 2026.
The stable outlook reflects Moody's belief that TopBuild will
generate good operating margins and cash flow. Very good liquidity,
no material near-term maturities and ongoing conservative financial
policies further support the stable outlook.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade of TopBuild's ratings could ensue if end markets remain
supportive of organic growth such that adjusted debt-to-EBITDA is
below 2x. Upwards rating movement also requires preservation of
very good liquidity, a capital structure that ensures maximum
financial flexibility and ongoing conservative financial policies.
A downgrade could occur if TopBuild's adjusted debt-to-EBITDA is
above 3x. Negative ratings pressure may also occur if the company
experiences a weakening of liquidity or adopts aggressive
acquisition or financial policies.
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in February 2023.
TopBuild Corp., headquartered in Daytona Beach, Florida, is the
largest installer and distributor of insulation and related
products in North America.
VIRGIN ORBIT: Seeks Rapid Asset Sale Hoping to Exit Ch.11 in May
----------------------------------------------------------------
Jeff Foust of Space News reports that Virgin Orbit is proposing a
rapid sale of the company or its assets in bankruptcy, hoping to
conclude the process before the end of May 2023.
In a motion filed with federal bankruptcy court in Delaware April
7, 2023, Virgin Orbit provided a schedule for an "expedited" sale
of the launch company through a bidding process that would solicit
bids in early May 2023, concluding with an auction on May 18,
2023.
Virgin Orbit filed for Chapter 11 bankruptcy April 4, 2023 after
failing to raise money needed to continue operations. The company
had, days earlier, laid off about 85% of its workforce as its cash
reserves dwindled.
The company said in the filing that it hopes to attract other
interest in the company than before that Chapter 11 filing,
including those interested in only some of its assets rather than
the entire company. It is working with Ducera Partners LLC, an
investment banker, to help market the company and its assets.
Ducera, it stated in the filing, has "already begun the
postpetition marketing process in connection with the filing of
these Chapter 11 Cases, contacting all parties from the prepetition
process as well as additional potential purchasers, including those
who may be interested in only a subset of the Assets." That ongoing
marketing effort "will include a broader universe of potential
buyers than the prepetition process,' the company added.
Other filings made as part of the bankruptcy case show that Virgin
Orbit had been struggling financially since the completion of its
SPAC merger at the end of 2021, which netted the company far less
money than expected when most of the SPAC shareholders redeemed
their stock. Virgin Orbit received only $67.8 million in SPAC
proceeds versus the potential total of $382 million.
"Since the de-SPAC, the Company has pursued a broad range of
strategic transactions designed to address its continuing liquidity
needs," Dan Hart, chief executive of Virgin Orbit, said in an
affidavit filed as part of the Chapter 11 proceedings. That
included working with Goldman Sachs in early 2022, shortly after
the completion of the SPAC merger, to either raise capital or
pursue a sale of the company.
Virgin Orbit "received responses from several parties potentially
interested in participating in varying transactions," Hart stated,
but could not complete a deal. The company's January 9, 2023
LauncherOne failure resulted in "negative publicity and further
challenges in identifying a buyer or capital source," he added.
Hart noted that the company "received one indication of interest
with respect to a sale from a potential buyer, and one indication
of interest with respect to a structured financing transaction,"
but that both efforts ended shortly before the Chapter 11 filing.
He did not disclose the parties Virgin Orbit had been in talks
with, but one is Texas investor Matthew Brown, who publicly said he
was planning to buy the company in late March. That deal fell
through, reportedly because of concerns about his ability to follow
through on a transaction of up to $200 million.
Virgin Orbit shares continue to be traded on the Nasdaq since the
Chapter 11 filing, closing April 10, 2023 at 16.75 cents. The
company said after the close of trading that it has been informed
by Nasdaq that, because of the Chapter 11 filing and a lack of a
Form 10-K filing with the Securities and Exchange Commission,
trading of its shares would be suspended effective at the opening
of business April 13 as part of the delisting process. Virgin Orbit
said it would appeal the delisting effort but added that would not
affect the upcoming suspension of trading.
About Virgin Orbit
Virgin Orbit Holdings, Inc (Nasdaq: VORB) --
http://www.virginorbit.com/-- operates one of the most flexible
and responsive space launch systems ever built. Founded by Sir
Richard Branson in 2017, the Company began commercial service in
2021, and has already delivered commercial, civil, national
security, and international satellites into orbit. Virgin Orbit's
LauncherOne rockets are designed and manufactured in Long Beach,
California, and are air-launched from a modified 747-400 carrier
aircraft that allows Virgin Orbit Holdings, Inc., to operate from
locations all over the world in order to best serve each customer's
needs.
Virgin Orbit Holdings, Inc., and its affiliates sought relief
under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10405) on April 4, 2023.
In the petition filed by Daniel M. Hart, as chief executive, the
Debtor reported total assets amounting to $242,978,000 and total
debtamounting to $153,491,000 as of Sept. 30, 2022.
The Debtors tapped YOUNG CONAWAY STARGATT & TAYLOR, LLP, and LATHAM
& WATKINS LLP as counsel; DUCERA PARTNERS LLC as investment banker
and financial advisor; and ALVAREZ & MARSAL NORTH AMERICA LLC as
restructuring advisor. KROLL RESTRUCTURING ADMINISTRATION LLC is
the claims agent.
WERNER CO: Creditors Tap Paul Weiss Prior to 2024 Debt Deadline
---------------------------------------------------------------
Rachel Butt of Bloomberg News reports that a group of bondholders
to ladder maker Werner Co. is seeking legal advice from Paul Weiss
Rifkind Wharton & Garrison ahead of a deadline next year to
refinance a term loan, according to people with knowledge of the
matter.
Holders of the unsecured bonds are organizing as the company faces
a so-called springing maturity in 2024. That would cause the
maturity of an asset-based lending facility to jump ahead by two
years to April 2024 if the term loan isn't addressed by then, S&P
Global Ratings wrote in December 2022.
About Werner Co.
WernerCo, with U.S. corporate headquarters in Greenville, PA and
international headquarters in Schaffhausen, Switzerland, is a
global manufacturer and distributor of ladders, climbing equipment,
fall protection products, access towers, stagings and trestles,
wheelbarrows, jobsite storage and truck and van tool storage
products and systems. U.S. operations generate the preponderance of
sales. Revenues for the 12 months through March 31, 2017, totaled
about $875 million.
WESTERN URANIUM: Incurs $714K Net Loss in 2022
----------------------------------------------
Western Uranium & Vanadium Corp. has filed with the Securities and
Exchange Commission its Annual Report on Form 10-K disclosing a net
loss of $713,767 on $7.86 million of revenues for the year ended
Dec. 31, 2022, compared to a net loss of $2.07 million on $272,142
of revenues for the year ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $33.20 million in total
assets, $3.94 million in total liabilities, and $29.26 million in
total shareholders' equity.
Mississauga, Canada-based MNP LLP, the Company's auditor since
2015, issued a "going concern" qualification in its report dated
April 17, 2023, citing that the Company has incurred continuing
losses and negative cash flows from operations and is dependent
upon future sources of equity or debt financing in order to fund
its operations. These conditions raise substantial doubt about the
Company's 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/1621906/000121390023030341/f10k2022_westernuranium.htm
About Western Uranium & Vanadium
Western Uranium & Vanadium Corp. is engaged in the business of
exploring, developing, mining and production from its uranium and
vanadium resource properties.
*********
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
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