/raid1/www/Hosts/bankrupt/TCR_Public/230426.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, April 26, 2023, Vol. 27, No. 115
Headlines
220 LEBANON STREET: Taps Walsh & Walsh as New Bankruptcy Counsel
4924 S MARTIN: Court OKs Cash Collateral Access Thru May 19
ACTION PROPERTY: Seeks Cash Collateral Access
ADVANCED PAIN: Court OKs Cash Collateral Access Thru May 12
AGS PRO: Court OKs Cash Collateral Access Thru May 15
ALEXANDER CUSTOM: Unsecureds to Get Share of $100K Fund
ALLENA PHARMACEUTICALS: To Seek Plan Confirmation on May 18
AMERICAN SCREENING: Court OKs Cash Collateral Access Thur April 30
AMERIMARK INTERACTIVE: Taps Consensus as Investment Banker
APOGEE GROUP: Acquamarina Says Plan Disclosures Inadequate
ARK LABORATORY: Seeks Cash Collateral Access
AULT ALLIANCE: Declares Monthly Cash Dividend of $0.2708333 Apiece
AYTU BIOPHARMA: In Talks on Potential Strategic Transactions
BARTECH GROUP: April 26 Status Hearing on Amended Plan
BED BATH & BEYOND: 14,000 Employees Threatened by Looming Closure
BED BATH & BEYOND: S&P Downgrades ICR to 'D' on Chapter 11 Filing
BERTUCCI'S RESTAURANTS: May 16 Evidentiary Hearing
BIG APPLE ENERGY: Denial of Ferreira's Reconsideration Bid Affirmed
BMI WELLNESS: Bankruptcy Administrator Unable to Appoint Committee
BMI WELLNESS: Court OKs Interim Cash Collateral Access
BMI WELLNESS: Unsecureds Owed $403K to Get 10% in Plan
BOUQUET RESTAURANT: Court OKs Interim Cash Collateral Access
BOUQUET RESTAURANT: Files Emergency Bid to Use Cash Collateral
BRAND MARINADE: Court OKs Interim Cash Collateral Access
BROADSTREET PARTNERS: S&P Rates New US$735MM Term Loan 'B'
BUILT ON THE ROCK: Court Agrees to Delay of Plan Hearing
CAMBER ENERGY: Updates Merger Agreement With Viking
CEL-SCI CORP: To Pursue Conditional Approval Pathway for Multikine
CINEMEX HOLDINGS: Disallowance of Khan Parties' Claims Affirmed
CLEAN ENERGY: Agrees to Settle Outstanding Notes for $200K
COUNTER CORTE: Unsecureds to Get 7.02 Cents on Dollar
COVENANT SOLAR: Court OKs Cash Collateral Access Thru May 12
CRESTWOOD EQUITY: S&P Alters Outlook to Negative, Affirms 'BB' ICR
CROWN COMMERCIAL: Court OKs Cash Collateral Access Thru May 11
CRYPTO CO: Widens Net Loss to $5.7 Million Net Loss in 2022
DGS REALTY: Seeks to Continue Using Cash Collateral Thru June 30
DIAMOND SPORTS: Seeks to Tap AlixPartners as Financial Advisor
EMRLD BORROWER: S&P Assigns 'BB-' ICR, Outlook Stable
ENVIVA INC: S&P Downgrades ICR to 'B+' on Elevated Leverage
ESSY QUALITY: Files Emergency Bid to Use Cash Collateral
FARR LABORATORIES: Court OKs Final Cash Collateral Access
FIRST REPUBLIC: Moody's Lowers Preferred Stock Ratings to Ca(hyb)
FUSION LLC: Barracuda's Motion to File 3rd Party Complaint Denied
GAUCHO GROUP: Widens Net Loss to $21.8 Million in 2022
GOBP HOLDINGS: S&P Withdraws 'BB-' ICR, Outlook Stable
GREENIDGE GENERATION: Releases Selected Prelim Q1 Financial Results
GREENIDGE GENERATION: Widens Net Loss to $271.1 Million in 2022
GUARDION HEALTH: Incurs $14.9 Million Net Loss in 2022
HARRIS ENERGY: Court OKs Final Cash Collateral Access
HAWTHORNE HANGAR: Seeks to Hire Gonzalez & Gonzalez as Counsel
HISTORIA INSPIRED: Court OKs Interim Cash Collateral Access
HUTCHINSON REGIONAL: Moody's Lowers Revenue Bond Rating to Ba2
IDAHO ALLERGY: Court OKs Cash Collateral Access Thru June 6
IRONWOOD FINANCIAL: Wins Cash Collateral Access Thru May 24
KAF RECYCLING: Files Emergency Bid to Use Cash Collateral
KALERA INC: U.S. Trustee Appoints Creditors' Committee
KING INTERPRETING: Court OKs Cash Collateral Access Thru May 9
KJMN PROPERTIES: Taps Law Offices of E. Vincent Wood as Counsel
LAKE DISTRICT: U.S. Trustee Unable to Appoint Committee
LANNETT CO: S&P Revised ICR to 'D' on Missed Interest Payments
LTL MANAGEMENT: U.S. Trustee Appoints Talc Claimants Committee
LUMEN TECHNOLOGIES: S&P Lowers Unsecured Debt Rating to 'CCC+'
MADISON SQUARE: Unsecureds to Get 19% Under Plan
MAKENA TRADING: Files Emergency Bid to Use Cash Collateral
MANCUSO MOTORSPORTS: Cash Collateral Access OK'd Thru May 26
MARKING IMPRESSIONS: Case Summary & 20 Largest Unsecured Creditors
MEHR GROUP: Unsecured Creditors Will Get 100% of Claims in Plan
METROHAVANA TOWN: Wins Cash Collateral Access Thru May 10
MIDWEST OVERNITE: Seeks to Hire Place Law Office as Counsel
MILLION DOLLAR SMILE: Court OKs Cash Collateral Use Thru Sept 2
MISS BRENDA: Court OKs Interim Cash Collateral Access
MOON GROUP: Move to Dismiss Legalist's Counterclaims Granted
MRC GLOBAL: S&P Upgrades ICR to 'B' on Proposed Refinancing
MUSIC GETAWAYS: Taps Law Offices of Michael Jay Berger as Counsel
NANO MAGIC: President Sees Growth Potential in 2023
NEUBERT CONSTRUCTION: Taps Johnson Pope Bokor Ruppel as Counsel
NORTHEAST TOMATO: Wins Interim Cash Collateral Access
NORTHERN MARIANA CPA: Fitch Affirms B+ on 1998A Airport Bonds
OMNIQ CORP: Named Momentum Partner of the Year
ONKAAR INC: Case Summary & Nine Unsecured Creditors
OZ NATURALS: Files Emergency Bid to Use Cash Collateral
P&P CONSTRUCTION: Court OKs Cash Collateral Access Thru May 3
PARTY CITY: Fine-Tunes Reorganization Plan and Disclosures
PEAR THERAPEUTICS: U.S. Trustee Appoints Creditors' Committee
PHASEBIO PHARMACEUTICALS: Pharmaron Steps Down as Committee Member
PHOENIX SERVICES: Seeks to Extend Exclusivity Period to July 24
PLUS THERAPEUTICS: Incurs $4.8 Million Net Loss in First Quarter
PRESTON URGENT: Seeks Cash Collateral Access
QUALITY HEATING: Wins Cash Collateral Access Thru May 9
RANDAZZO'S CLAM: Has Deal on Cash Collateral Access
RICE ENTERPRISES: Court OKs Cash Collateral Access on Final Basis
RIGHT CHOICE: Court OKs Cash Collateral Access Thru May 15
ROOF IT BETTER: Court OKs Final Cash Collateral Access
SAIBABA HOTELS: Case Summary & 20 Largest Unsecured Creditors
SCIH SALT: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable
SCUNGIO BORST: Seeks to Extend Exclusivity Period to September 20
SHREENATH HOLDING: Move to Stay Bankr. Court Sale Order Denied
SILVER CREEK: Case Summary & 20 Largest Unsecured Creditors
SILVER CREEK: Wins Interim Cash Collateral Access
SMITH DEVELOPMENT: 4th Cir. Dismissed Conway's Appeal
SPEIDEL CONSTRUCTION: Case Summary & 11 Unsecured Creditors
SPIRIPLEX INC: Court OKs Cash Collateral Access Thru June 30
STANADYNE LLC: Wins Cash Collateral Access on Final Basis
SURGEPOWER MATERIALS: Seeks Approval to Hire Independent Director
SYMBIONT.IO: Court OKs Deal on Cash Collateral Access
TALEN ENERGY: Judge Isgur Denies Nunc Pro Tunc Motion as Moot
TELEGRAPH SQUARE II: Exclusivity Period Extended to July 12
TERRA MANAGEMENT: Property Sale Proceeds to Fund Plan
TREES CORP: Incurs $9.5 Million Net Loss in 2022
TRICIDA INC: May 19 Hearing on Liquidating Plan Set
TRIDENT TPI: S&P Affirms 'B-' Issuer Credit Rating, Outlook Stable
UBO-TECHNOLOGIES: Files Emergency Bid to Use Cash Collateral
UNITED FURNITURE: Committee Taps Stewart Robbins Brown as Counsel
UPTOWN 240: U.S. Trustee Appoints Creditors' Committee
VG IMPERIAL: Exclusivity Period Extended to August 17
VISIONARY LABELS: Taps Orantes Law Firm as Bankruptcy Counsel
WAHOO FITNESS: Moody's Withdraws 'Ca' Corporate Family Rating
WILLIAM J. NAMEN: Cadlerock Sanctioned for Failure to Dissolve Writ
WINESTEAD LLC: Seeks Approval to Hire Global Tax & Accounting
YITBOS INC: Wins Final Cash Collateral Access
ZOTEC PARTNERS: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg.
*********
220 LEBANON STREET: Taps Walsh & Walsh as New Bankruptcy Counsel
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220 Lebanon Street, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Massachusetts to hire Walsh & Walsh, LLP
to substitute for Van Dam Law, LLP.
Van Dam Law received a retainer in the amount of $5,000 as the
Debtor's bankruptcy counsel.
Michael Walsh, Esq., a partner at Walsh & Walsh, disclosed in a
court filing that his firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
Walsh & Walsh can be reached at:
Michael Walsh, Esq.
Walsh & Walsh, LLP
PO Box 9
Lynnfield, MA 01940
Phone: 617-257-5496
Email: Walsh.lynnfield@gmail.com
About 220 Lebanon Street
220 Lebanon Street, LLC sought protection for relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Mass. Case No. 22-11362) on
Sept. 23, 2022, with up to $1 million in both assets and
liabilities.
Michael Walsh, Esq., at Walsh & Walsh, LLP represents the Debtor as
counsel.
4924 S MARTIN: Court OKs Cash Collateral Access Thru May 19
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized 4924 S. Martin Luther King LLC to use
cash collateral on an interim basis in accordance with the budget,
through May 19, 2023.
As previously reported by the Troubled Company Reporter, the Debtor
requires the use of cash collateral to pay its expenses.
The Debtor believes there may be pre-petition liens on its real
estate property in favor of U.S. Bank in a sum that exceeds the
value of all assets at the time of the filing for relief pursuant
to a foreclosure action filed in the Circuit Court of Cook County,
Illinois.
As adequate protection, U.S. Bank is granted a lien on the proceeds
of the cash collateral subsequent to the filing of the chapter 11
petition subject to the extent and validity of the lien.
The Debtor is also directed to make an adequate protection payment
to U.S. Bank on or before May 8, 2023 and each month thereafter of
$7,500.
A hearing on the matter is set for May 17, 2023 at 10 a.m.
A copy of the court's order and the Debtor's budget is available at
https://bit.ly/3mWnmLs from PacerMonitor.com.
The Debtor projects $10,000 in net sales and $2,498 in total
expenses for one month.
About 4924 S. Martin Luther King LLC
4924 S. Martin Luther King LLC is a Single Asset Real Estate. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N.D. Ill. Case No. 23-04726) on April 10, 2023. In the
petition signed by Faris Faycurry, president, the Debtor disclosed
up to $10 million in both assets and liabilities.
Judge Janet S. Baer oversees the case.
Paul M. Bach, Esq., at Bach Law Offices, Inc., represents the
Debtor as legal counsel.
ACTION PROPERTY: Seeks Cash Collateral Access
---------------------------------------------
Action Property SVCES, Inc. asks the U.S. Bankruptcy Court for the
Southern District of Florida for authority to use cash collateral
and provide adequate protection.
There are 22 open UCCs of record in the Florida Secured Transaction
Registry secured by the assets of the Debtor. PNC Bank is the
secured party on 11 of the UCCs and each are secured by a specific
piece of equipment. Of the remaining UCCs, seven are held by other
lenders which are also each secured by specific equipment of the
Debtor. The four remaining UCC-1's are "secured" by all assets of
the Debtor, and are the subject of the Debtor's request. There is
one Judgment (held by Kelly Tractor Co.) filed in the Florida
Judgment Registry. It was filed on June 10, 2022 and is number 5 in
priority of liens secured by "all personal property" of the
Debtor.
The value of the personal property of the Debtor that is otherwise
unencumbered by specific UCC-1's (the collateral for purchase money
loans) totals $410,708. Reliant Funding filed a UCC-1 on or about
December 19, 2019; however, Reliant has been paid in full and this
UCC-1 is pending termination. That allows the U.S. Small Business
Administration to become first priority in a secured position with
its UCC-1 filed on July 26, 2020. The SBA is owed approximately
$150,000 which is fully secured. The next and final UCC-1 was filed
by Rapid Finance on May 11, 2022, which encumbered all assets of
the Debtor. However, the Debtor has listed Rapid as a disputed,
contingent and unliquidated debt, and as of the date of the Motion,
the claims bar date has passed and Rapid has not timely filed a
proof of claim which disallows the claim. However, in event Rapid
files a claim and it is allowed, the SBA and Rapid are
over-secured.
Even though the SBA is oversecured, as a sign of good faith, the
Debtor proposes Adequate Protection payments for the SBA in the
amount of its regular loan payment of $731 per month, which it
commenced January 2023. As to Rapid Finance, because the Debtor
disputes its claim; no claim has been filed; the bar date has run,
and Rapid is over-secured, the Debtor proposes no monthly adequate
protection payments to Rapid.
A copy of the motion is available at https://bit.ly/3AhchYp from
PacerMonitor.com.
About Action Property SVCES
Action Property Svces. Inc. filed a Chapter 11 bankruptcy petition
(Bankr. S.D. Fla. Case No. 22-19389) on Dec. 8, 2022, with as much
as $1 million in both assets and liabilities.
Judge Peter D. Russin oversees the case.
The Debtor is represented by Chad Van Horn, Esq., at Van Horn Law
Group, PA.
ADVANCED PAIN: Court OKs Cash Collateral Access Thru May 12
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland authorized
Advanced Pain Medicine Institute, P.C. to use cash collateral on an
interim basis in accordance with the budget, through May 12, 2023.
The Budget reflects expenses for a one-month period. To the extent
a monthly budget item must be paid in May of 2023 (prior to May 12,
2023), the Debtor may pay that item so long as it is consistent
with the monthly budgeted items referenced in the Budget. In lieu
of the $10,000 Board of Registration fee referenced in the Budget,
the Debtor may spend up to $10,000 in May of 2023 (and potentially
prior to May 12, 2023) for expenses related to vacating the
Debtor's Chevy Chase leased premises.
The Debtor requires the use of cash collateral to pay wages and
expenses and continue to operate its business.
Cash collateral consists of cash on hand of approximately $18,000
and accounts receivable with a face amount of approximately of
$288,836.
The following creditors may have an interest in the Debtor's cash
collateral: National Funding, Kabbage, the Internal Revenue Service
and Prince George's County.
As adequate protection, the Potential Secured Creditors are granted
replacement liens in all assets of the Debtor.
A further hearing on the matter is set for May 11 at 9:30 a.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3N0pvR2 from PacerMonitor.com.
The Debtor projects $80,650 in total expenses for one month.
About Advanced Pain Medicine Institute, P.C.
Advanced Pain Medicine Institute, P.C. is a provider of medical
services. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Md. Case No. 23-12359) on April 5, 2023.
In the petition signed by Reza Ghorbani, authorized representative,
the Debtor disclosed up to $500,000 in assets and up to $10 million
in liabilities.
Judge Lori S. Simpson oversees the case.
Stephen A. Metz, Esq., at Offit Kurman, PA, represents the Debtor
as legal counsel.
AGS PRO: Court OKs Cash Collateral Access Thru May 15
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The U.S. Bankruptcy Court for the Central District of California,
Los Angeles Division, authorized AGS Pro, Inc. to use cash
collateral on an interim basis in accordance with the budget
through the close of business on May 15, 2023.
The Lee Andrews Living Trust, the Jake Andrews Living Trust, the
Randy Andrews Living Trust, and Glacial Holdings, LLC are granted a
replacement lien on all of the estate's assets, excluding avoiding
power claims and recoveries, to the extent that the Debtor's use of
cash collateral results in a decrease in value of the Secured
Parties' interest, if any, in the Debtor's assets; provided,
however, that replacement liens will only attach to the extent,
validity, and priority of the Secured Parties' prepetition liens,
and will not apply in the event that any prepetition liens are
avoided.
A final hearing on the matter is set for May 11 at 11:30 a.m.
A copy of the motion is available at https://bit.ly/3Hbipp9 from
PacerMonitor.com.
About AGS Pro, Inc.
AGS Pro, Inc. provides security services throughout the United
States and internationally with strategic alliance partnerships.
Although founded in 2017, AGS Pro, Inc.'s team has been trusted in
the security industry by businesses across the country and around
the world for decades. The Company's services include commercial
security, estate security and special events. The Company's
headquarters is located at 6133 Bristol Parkway, Suites 175 and
280, Culver City, California 90230.
AGS Pro, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C. D. Cal. Case No. 23-12236) on April 13,
2023. In the petition signed by Lee Andrews, chief executive
officer, the Debtor disclosed up to $10 million in assets and up to
$50 million in liabilities.
Judge Deborah J. Saltzman oversees the case.
Aaron E. de Leest, Esq., at Danning, Gill, Israel & Krasnoff, LLP,
represents the Debtor as legal counsel.
ALEXANDER CUSTOM: Unsecureds to Get Share of $100K Fund
-------------------------------------------------------
Alexander Custom Homes II, Inc., submitted an Amended Plan of
Reorganization.
The Debtor's Plan will be funded by the current and future income
earned by the Debtor.
Under the Plan, Class 4 General Unsecured Creditors are impaired.
The Debtor will pay a maximum of $100,000 (the "Plan Fund").however
this number will be reduced by the amount of the total allowed
administrative expense claims exceeding $15,000 (i.e. if the
allowed administrative expense claims total $45,000, $30,000 will
be subtracted from the $100,000 payment to the Class 4 claimants),
which is the Debtor's projected disposable income, to claimants in
this class. Claimants will receive a pro rata share of the Plan
Fund without interest, in six equal payments of no greater than
$16,666.67 commencing on the start of the calendar quarter at least
five months from the Effective Date of the Plan, and continuing
every six months thereafter for a total of six payments.
In the event the total allowed claims in this class are less than
$100,000, the Debtor will only be obligated to pay out the total
amount of the allowed claims. Payments would be equal to the total
amount of allowed claims, divided by six.
Promissory notes will be issued to each creditor in this class with
allowed claims to evidence payments, which promissory notes shall
be enforceable in any Court of Competent Jurisdiction. The amount
of the distribution will be considered final thirty days the entry
of the Confirmation Order, unless there is an objection to either
the distribution or a claim is pending at that time.
Mark Alexander will continue to manage the Debtor
post-confirmation. The Plan will be funded by the continued
operations of the Debtor.
Attorney for the Debtor:
Buddy D. Ford, Esq.
Jonathan A. Semach, Esq.
Heather M. Reel, Esq.
BUDDY D. FORD, P.A.
9301 West Hillsborough Avenue
Tampa, FL 33615-3008
Tel: (813) 877-4669
Office Email: All@tampaesq.com
E-mail: Buddy@tampaesq.com
Jonathan@tampaesq.com
Heather@tampaesq.com
A copy of the Amended Plan of Reorganization dated April 14, 2023,
is available at https://bit.ly/3GRDp3S from PacerMonitor.com.
About Alexander Custom Homes II
Alexander Custom Homes II, Inc., constructs custom single family
homes in the Tampa Bay area. The Debtor filed a Chapter 11
bankruptcy petition (Bankr. M.D. Fla. Case No. 22-04112) on Oct.
12, 2022, with up to $500,000 in assets and up to $1 million in
liabilities. Judge Roberta A. Colton oversees the case.
The Debtor tapped Buddy D. Ford, P.A., as its legal counsel.
ALLENA PHARMACEUTICALS: To Seek Plan Confirmation on May 18
-----------------------------------------------------------
Judge Karen B. Owens has entered an order approving the Disclosure
Statement of Allena Pharmaceuticals, Inc.
The Plan confirmation schedule is approved in its entirety as
follows:
* The Deadline to Respond to Claims Objections and to File
3018(a) Motions May 11, 2023 at 4:00 p.m. (prevailing Eastern
Time).
* The Deadline to File Plan Supplement May 4, 2023.
* The Deadline for Debtor to Respond to 3018 (a) Motions May 15,
2023.
* The combined hearing on final approval of the adequacy of the
Disclosure Statement and confirmation of the Plan is scheduled for
May 18, 2023 at 1:00 p.m. (prevailing Eastern Time).
* The deadline to file objections to the adequacy of the
Disclosure Statement and confirmation of the Plan is May 11, 2023
at 4:00 p.m. (prevailing Eastern Time).
* The deadline for the Debtor to file the Voting Report is May
15, 2023 at (prevailing Eastern Time).
* The deadline for the Debtor (and other parties in support of
the Plan) to file a brief in support of confirmation of the Plan
and/or a reply to any objections to the final approval of the
Disclosure Statement and Confirmation of the Plan, any Supporting
Declarations and the Proposed Form of Order Approving the
Disclosure Statement and Confirming the Plan is May 15, 2023
(prevailing Eastern Time).
* The deadline to submit Ballots to accept or reject the Plan
shall be May 11, 2023 at 5:00 p.m. (prevailing Eastern Time).
To the extent Claims in a Voting Class are subject to an objection
that is filed with the Court on or prior to April 27, 2023, which
is 15 days before the Voting Deadline, the holder of such Claims
shall not be entitled to vote to accept or reject the Plan unless
one or more of the following has occurred no later than 2 days
prior to the Voting Deadline (each, a "Resolution Event").
Liquidating Plan
Allena Pharmaceuticals submitted a Plan of Liquidation pursuant to
Chapter 11 of the Bankruptcy Code and a Disclosure Statement.
The Debtor proposes to liquidate under chapter 11 of the Bankruptcy
Code. Under chapter 11, a debtor may reorganize or liquidate its
businesses for the benefit of its stakeholders. The consummation of
a chapter 11 plan of liquidation is the principal objective of this
Chapter 11 Case. A chapter 11 plan sets forth how a debtor will
treat claims and equity interests.
The primary objective of the Plan is to maximize the value of
recoveries to all holders of Allowed Claims and Allowed Interests
and generally to distribute all property of the Estate that is or
becomes available for distribution generally in accordance with the
priorities established by the Bankruptcy Code. The Debtor believes
that the Plan accomplishes this objective and is in the best
interest of the Estate.
A bankruptcy court's confirmation of a chapter 11 plan binds the
debtor, any entity or person acquiring property under the plan, any
creditor of or equity security holder in a debtor, and any other
entities and persons to the extent ordered by the bankruptcy court
pursuant to the terms of the confirmed plan, whether or not such
entity or person is impaired pursuant to the plan, has voted to
accept the plan, or receives or retains any property under the
plan. Among other things (subject to certain limited exceptions and
except as otherwise provided in the Plan or the Confirmation
Order), the Confirmation Order will provide for the exclusive
treatment of Claims against the Debtor, terminate all of the rights
and interests of pre-bankruptcy equity security holders and
substitute the obligations set forth in the Plan for those
pre-bankruptcy Claims and Interests. Under the Plan, Claims and
Interests are divided into Classes according to their relative
priority and other criteria.
Generally speaking, the Plan:
* provides the vesting of all Available Cash and Retained Causes
of Action (including Avoidance Actions) in the Liquidation Trustee,
for the purpose of distribution to holders of Claims;
* designates a Liquidation Trustee to wind down the Debtor's
affairs, prosecute, continue or settle certain Retained Causes of
Action, pay and reconcile Claims, and administer the Plan and
Liquidation Trust in an efficacious manner; and
* provides for 100 percent recoveries for holders of Administrative
Claims, Secured Tax Claims, Priority Tax Claims, Other Priority
Claims and Other Secured Claims.
The Debtor believes that confirmation of the Plan will avoid the
lengthy delay and significant cost of liquidation under Chapter 7
of the Bankruptcy Code.
The Plan classifies holders of Claims and Interests according to
the type of the holder's Claim or Interest, as more fully described
below. Holders of Claims in Class 4 (General Unsecured Claims) and
Class 5 (Pontifax True-Up Obligation Claims) are entitled to vote
to accept or reject the Plan.
Under the Plan, Class 4 General Unsecured Claims totaling
$8,420,290.00. Each holder of such Allowed General Unsecured Claim
shall receive its pro rata share of the Beneficial Trust Interests,
which Beneficial Trust Interests shall entitle the holders thereof
to receive their pro rata share of the Liquidation Trust Assets.
Creditors will recover 10% of their claims. Class 4 is impaired.
Distributions under the Plan on account of the Beneficial Trust
Interests will be funded by the Liquidation Trust Assets. All other
distributions under the Plan, other than distributions on account
of Beneficial Trust Interests, will be funded by the Liquidation
Trust Claims Reserve, or the Professional Fee Claims Reserve. On
the Effective Date, the Debtor shall fund the Liquidation Trust
Claims Reserve, the Liquidation Trust Expense Reserve, and
Professional Fee Claims Reserve, in full in Cash.
Counsel to the Debtor:
Adam G. Landis, Esq.
Matthew B. McGuire, Esq.
Nicolas E. Jenner, Esq.
LANDIS RATH & COBB LLP
919 Market Street, Suite 1800
Wilmington, DE 19801
Telephone: (302) 467-4400
Facsimile: (302) 467-4450
A copy of the Order dated April 12, 2023, is available at
https://bit.ly/4199MDt from Stretto, the claims agent.
A copy of the Disclosure Statement dated April 12, 2023, is
available at https://bit.ly/3L0OFxA from Stretto, the claims
agent.
About Allena Pharmaceutical
Allena is a pre-commercial clinical biopharmaceutical company
dedicated to discovering, developing and commercializing
first-in-class, oral biological therapeutics to treat patients with
rare and severe metabolic and kidney disorders such as gout and
kidney stones.
Allena Pharmaceuticals, Inc., filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case
No. 22-10842) on Sep. 2, 2022. The petition was signed by Matthew
Foster as chief restructuring officer. At the time of filing, the
Debtor estimated $14,368,000 in assets and $3,455,000 in
liabilities.
The Hon. Karen B. Owens presides over the case.
Matthew B. McGuire, Esq., at LANDIS RATH & COBB LLP, represents the
Debtor.
AMERICAN SCREENING: Court OKs Cash Collateral Access Thur April 30
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Louisiana,
Shreveport Division, authorized American Screening, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 10% variance, through April 30, 2023.
The Debtor requires the use of cash collateral to pay reasonable
monthly expenses of operation.
First Horizon Bank asserts valid and perfected first-priority
collateral interests in, inter alia, the Debtor's cash and cash
proceeds resulting from the Debtor's operations.
The Debtor is authorized to use the following cash and cash
proceeds during the Budget Period and in strict compliance with the
Budget:
i. All funds held by Debtor on the Petition Date; and
ii. All funds held by Debtor after the Petition Date, including
receipts after the commencement of the case and property acquired
after the commencement of the case.
As adequate protection for the Debtor's use of the bank's cash
collateral, FHB will have a post-petition security interest in, and
lien upon, all of the Debtor's accounts, accounts receivable, and
all cash and non-cash proceeds thereof, which are or have been
acquired, generated or received by the Debtor after the bankruptcy
filing, in and to the same extent and priority that FHB held a
properly perfected prepetition security interest or lien in such
categories of assets immediately prior to the bankruptcy filing.
As additional adequate protection for the Debtor's use of its
alleged cash collateral, FHB will be entitled to a superiority
administrative claim pursuant to 11 U.S.C. section 507(b) for any
diminution in its pre-petition cash collateral. In and to the same
extent, validity, and priority of its alleged pre-petition liens,
the PostPetition Lien is, and will be deemed, perfected without the
need to execute or file any document or instrument that might
otherwise be required under applicable non-bankruptcy law to
perfect said lien.
As additional adequate protection, the Debtor will deliver to FHB a
payment in the total amount of $70,924.
These events constitute an "Event of Default":
(a) The use of the cash generated by the property to pay any
material expense not authorized by the Budget, written agreement of
FHB, or further Court Order;
(b) The appointment in the Chapter 11 case of a trustee;
(c) The dismissal or conversion to Chapter 7 of the Chapter 11
case; or
(d) The Order being altered, amended, vacated, supplemented,
modified, stayed, or reversed on appeal.
A second interim hearing on the matter is set for April 26 at 10
a.m. A final hearing is set for May 17 at 10 a.m.
A copy of the court's order is available at https://bit.ly/43UyMjw
from PacerMonitor.com.
About American Screening, LLC
American Screening, LLC is an ISO 13485 Certified distributor of
rapid drug and alcohol tests, infectious disease tests, and cardiac
tests, and supplies to the United States, South America, Asia,
Africa, Europe, and Australia. ASC leases its corporate office and
warehouse space from an affiliated nondebtor, Kilgarlin Holdings,
LLC.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. La. Case No. 23-10350) on April 7,
2023. In the petition signed by Ronald Kilgarlin, Jr., managing
member, the Debtor disclosed up to $9,100,921 in assets and up to
$27,251,799 in liabilities.
Judge John S. Hodge oversees the case.
Kell C. Mercer, Esq., at Kell C. Mercer, P.C, represents the Debtor
as legal counsel.
AMERIMARK INTERACTIVE: Taps Consensus as Investment Banker
----------------------------------------------------------
Amerimark Interactive, LLC and its affiliates seek approval from
the U.S. Bankruptcy Court for the District of Delaware to employ
Consensus Advisory Services, LLC and Consensus Securities, LLC as
investment banker.
The firm will provide these services:
(a) work with the Debtors' management to familiarize itself, to
the extent commercially feasible, with the business, operations,
properties, financial condition, projections, and prospects of the
Debtors;
(b) advise and assist the Debtors in identifying or evaluating
various strategic alternatives that may be available to the
Debtors, including, without limitation, adding capital in the form
of equity or debt convertible into equity (each a "Capital
Transaction,"), (ii) entering into a Material Contractual
Relationship, other than with respect to sale or other disposition,
monetization of, or realization upon, litigation claims, insurance
proceeds or tax refunds provided that such sale or other
disposition, monetization, or realization does not occur as part of
a sale of all, substantially all, or a material part of their
assets or business (each an "Excluded Transaction"), (iii) a sale
of all or any part of the business or all, substantially all, or a
material part of their assets, other than an Excluded Transaction
(a "Sale"), or (iv) a financial restructuring, including a
recapitalization or reorganization of the Debtors (including
through spin-offs, split-offs or any similar transaction), a
liquidation of the Debtors, or such other form of transaction that
Consensus believes may be of possible interest to the Debtors or
their stakeholders (a "Sale Alternative"), provided, however, any
or all of which must be approved by the bankruptcy court;
(c) work with the management in revising or supplementing the
previously produced written document (a "Company Information
Memorandum") describing the Debtors, their business, financial
condition, results of operations, prospects, projections, and other
material matters concerning the Debtors for the purpose of
soliciting interest from third parties to engage in a Transaction
(it being understood that Consensus shall not be responsible for
the production, validation, review or updating of any information
included in the Debtors Information Memorandum including, without
limitation, any projected or pro forma financial information), as
well as a summary company profile to be provided to target
acquirers or investors prior to the execution by such party of a
confidentiality agreement (a "Teaser"), it being understood that
Consensus and the Debtors will work to produce any necessary
revisions or supplements to the Confidential Information Memorandum
and Teaser as promptly as commercially reasonable after the
provision to Consensus of the necessary information;
(d) advise the Debtors as to the timing, structure and pricing
of any transaction;
(e) identify, update, revise and review with the Debtors on an
ongoing basis a list of parties that may be interested in engaging
in a transaction (the "List");
(f) approach prospective parties that may be interested in
engaging in a transaction with the Debtors and transmit to such
parties the Debtors' Company Information Memorandum or other
materials as directed by the Debtors;
(g) if so requested by the Debtors, participate on the Debtors'
behalf in negotiations for such transaction;
(h) advise and assist the Debtors in identifying or evaluating
opportunities to form or develop, in their sole and absolute
discretion, a Material Contractual Relationship Transaction; and
(i) be available at the Debtors' request to meet upon reasonable
notice and at reasonable times with the Debtors' Board of Directors
(or, if applicable, a Special Committee of the Board of Directors),
secured lenders (and any unsecured creditors committee that is
appointed in these Chapter 11 cases) to discuss any proposed
transaction and its financial implications and appear at any
hearings relating to approval of any proposed transaction.
The firm will be paid as follows:
(i) Original Retainer. A one-time upfront retainer of $125,000.
(ii) Re-Marketing Retainer. A second retainer of $50,000 if the
Debtors determine in their sole discretion (and upon consultation
with their secured lenders), that it is advisable to market the
Debtors a second time in order to satisfy legal or regulatory
requirements such as an order of a legal court to so re-market the
Debtors.
a. Capital Transaction Success Fee. In the event the Debtors
shall elect to enter into and consummate a Capital Transaction in
their sole discretion during the term of Consensus's engagement or,
if the Engagement Agreement is terminated without cause by the
Debtors and within 12 months of the termination of the Engagement
Agreement a Capital Transaction is consummated involving the
Debtors and a party on the List, the Debtors shall pay Consensus
(or cause to be paid to Consensus) a fee equal to two-and-one-half
percent (2.5%) of the capital committed by any junior or mezzanine
lender as and when received by the Debtors and five percent (5.0%)
of the consideration committed by equity or convertible debt
provider as and when received by the Debtors (the "Capital
Transaction Success Fee"), provided, however, that the aforesaid
fees shall not apply to any new capital provided by the Debtors'
existing secured lenders, unless such existing secured lenders have
voluntarily participated in a financing transaction led by a party
on the List that is also not currently a secured lender to the
Debtors.
b. Material Contractual Relationship Transaction. In the event
the Debtors shall elect to enter into and consummate a Material
Contractual Relationship Transaction with a company on the List in
their sole discretion during the term of Consensus's engagement
hereunder or, if the Engagement Agreement is terminated without
cause by the Debtors and within 12 months of the termination of the
Engagement Agreement and the Material Contractual Relationship
Transaction involves the Debtors and another party on the List, the
Debtors (or the Debtors' successor) shall pay to Consensus a fee
equal to $300,000. Consensus shall not be entitled to such fee
during such 12-month period if it has also been paid a Sale Success
Fee.
c. Sale, Alternative Success or Plan of Reorganization Fee. If
one or more Sale(s) or Sale Alternative(s) occur(s) during the term
of Consensus's engagement or, if the Agreement is terminated
without cause by the Debtors, and within 12 months of the
termination of this Agreement the Sale(s) or Sale Alternative(s)
occur(s) and it/they involve(s) the Debtors and one or more parties
on the List, then the Debtors shall pay Consensus a fee (a "Sale
Success Fee") determined by multiplying the Purchase Price interval
in the table below by the corresponding Success Fee interval
percentage, provided, however, that in no event can the Sale
Success Fee be less than $1,250,000 (the "Minimum Sale Success
Fee"):
Purchase Price Interval Success Fee Interval Percentage
Under $100 million 1.25 per cent
$100.1 million to $200 million 1.75 per cent
Over $200 million 3 per cent
(iii) Expense Reimbursement. In addition to any fees payable by
the Debtors to Consensus, the Debtors shall, whether or not any
Transaction shall be proposed or consummated, reimburse Consensus
for Consensus's actual out-of-pocket expenses incurred in
connection with or arising out of Consensus's activities under or
contemplated by this engagement during such preceding month.
Consensus must receive advance written approval (email is
sufficient) from the Debtors to incur out-of-pocket expenses in
excess of $10,000 for any subject month.
Michael O'Hara, chief executive officer and managing member of
Consensus, 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:
Michael A. O'Hara
Consensus Advisory Services LLC
Consensus Securities LLC
100 River Ridge Drive, Suite 202
Norwood, MA 02062
Tel: (617) 437-6500
Fax: (617) 437-6506
About Amerimark Interactive
AmeriMark Interactive, LLC is a direct marketer of women's apparel,
shoes, name-brand cosmetics, fragrances, jewelry, watches,
accessories, and other related products. It is based in Cleveland,
Ohio.
AmeriMark Interactive and affiliates 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 its
chief restructuring officer, Stuart Noyes, AmeriMark Interactive
disclosed up to $50,000 in assets and $100 million to $500 million
in liabilities.
Judge Thomas M. Horan oversees the cases.
The Debtors tapped McDonald Hopkins, LLC and Morris, Nichols, Arsht
and Tunnell, LLP as bankruptcy counsels; Riveron Management
Services, LLC as restructuring advisor; and Consensus Advisory
Services, LLC and Consensus Securities, LLC as investment bankers.
Stretto is the notice, claims and balloting agent.
APOGEE GROUP: Acquamarina Says Plan Disclosures Inadequate
-----------------------------------------------------------
Creditor Council of Owners of Acquamarina at Ashford 1315
Condominium objects to the Amended Disclosure Statement and Plan of
Apogee Group, LLC.
The day before the hearing scheduled for the evaluation of a prior
Amended Disclosure and Plan and of Acquamarina's Motion to Dismiss,
on March 13, 2023, Debtor filed a new Amended Disclosure Statement
Dated March 13, 2023 ("Amended Disclosure Statement" and Plan).
Debtor's Amended Plan consists of selling one asset: a real estate
property located at 1315 Ashford Avenue, PH-1, San Juan, PR 00907
(the "Property").
On March 14, 2023, the Honorable Court held the referenced hearing.
During the hearing, the Court granted Debtors' motion to sell the
property and, in connection with the Motion to Dismiss, ordered
Debtor to pay post-petition amounts owed to Acquamarina of
$14,066.55 before March 31, 2023 or the case would be dismissed.
Debtor made the ordered payment and filed a Motion in Compliance
with Order on March 31, 2023.
Although Acquamarina believes the Debtor is not the owner of the
property, improperly used this Bankruptcy proceeding to stay an
almost completed foreclosure of the Property and is admittedly not
engaged in any business that requires reorganization, Acquamarina
agrees with all parties on the need to sell the property as quickly
as possible. Hence, while reserving its right to request dismissal
in the future for the reasons stated in its Motion to Dismiss,
Acquamarina includes its latest objection to the Amended Disclosure
Statement and Amended Plan.
Acquamarina points out that the Amended Disclosure Statement fails
to provide adequate information as required by Section 1125 of the
Bankruptcy Code:
* Acquamarina recognizes that one of the amendments made by
Debtor to the Amended Disclosure Statement was to change the amount
of interest to be paid over pre-petition arrears to Acquamarina.
However, Debtor was not clear on the amounts it intends to pay
Acquamarina to make sure that it is "unimpaired" as represented to
this Court at page 9 of the Amended Disclosure Statement.
Therefore, Acquamarina objects to the repayment terms offered by
Debtor as long as such terms are insufficient to fully satisfy
Acquamarina's credit.
* Acquamarina partially objects to the rest of the amounts
proposed -"Interest Rate of 10.0% plus 1% on arrears from December
2021 to date of filing"- as it is insufficient to fully satisfy
Acquamarina's credit.
* As stated previously before this Court, on February 3, 2023,
the undersigned counsel sent a letter to Debtor's counsel to "1-
try to reach an agreement with Debtor on the amounts owed
pre-petition and future accrual of interests; 2- try to reach an
agreement for the immediate payment of all post-petition amounts
owed, which includes the amount that will become due on April 1,
2023 for Condominium Insurance." Said letter included a complete
breakdown and explanation of the amounts owed and the applicable
interests. However, Debtor never responded to the undersigned's
request.
* The Debtor has failed to acknowledge that interests pursuant
to the By-Laws applies to all pre-petition amounts owed and not
just those past December 2021. In fact the amounts included in the
$122,102.56 Default Judgment of Civil Case SJ2021CV07740 included
the interest amounts owed pursuant to the By-Laws at the time of
the filing of the Complaint.
* The Debtor stated nothing about the payment of attorney fees.
This matter has been discussed with Debtor's counsel and was part
of the February 3, 2023-letter. Given that section 4.2 of the
By-Laws allows for recovery of attorney's fees in cases where the
Council seeks collection in Court, Acquamarina asked Debtor to
include these amounts as part of the Plan. Since Debtor failed to
mention its legal obligation to reimburse Acquamarina's attorney
fees incurred in these proceedings (which do not include legal
expenses incurred at the State foreclosure proceedings),
Acquamarina hereby objects to the Disclosure Statement and Plan
until Debtor recognizes its duty to pay these amounts.
* Acquamarina objects to creditor being allowed to be in charge
of distributing any proceeds from the sale of the Property (or
becoming a Distributing Agent); to Debtor's reservation of rights
to prosecute claims against Acquamarina, to Debtor's reservation of
rights to contest claims from Acquamarina; and to request waiver of
claims from Acquamarina if it cannot collect on the amounts owed.
Counsel of Council of Owners of Acquamarina at Ashford 1315
Condominium:
Herman G. Colberg-Guerra, Esq.
PIETRANTONI MENDEZ & ALVAREZ LLC
Popular Center, 19th Floor
208 Ponce de Leon Avenue
San Juan, PR 00918
Tel: (787) 274-1212
E-mail: hcolberg@pmalaw.com
About Apogee Group
Apogee Group, LLC, is primarily engaged in renting and leasing real
estate properties.
Apogee Group, LLC, filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 22 02268)
on Aug. 2, 2022. The petition was signed by Elan P. Colen-Roger as
managing member. At the time of filing, the Debtor estimated $1
million to $10 million in both assets and liabilities.
Judge Mildred Caban Flores presides over the case.
The Law Offices of Hector Eduardo Pedrosa Luna serves as the
Debtor's counsel.
ARK LABORATORY: Seeks Cash Collateral Access
--------------------------------------------
Ark Laboratory, LLC, dba Helix Diagnostics, asks the U.S.
Bankruptcy Court for the Eastern District of Michigan for authority
to use cash collateral and provide adequate protection.
The Debtor requires the use of cash collateral to pay vendors and
employees who are critical to the operation of the Debtor's
business.
The Debtor filed its bankruptcy because of cash flow issues caused
by a combination of these four factors:
1. Declining Medicare reimbursements,
2. A decrease in COVID-19 testing,
3. The Debtor's cost structure, and
4. Erroneous denials of claims by Meridian and Blue Cross.
The Debtor's principal and its subordinated lender infused
significant funds in 2022 in order to attempt to stabilize
operations.
These claimants may have secured claims will assert claims in these
amounts:
Comerica Commercial $6,536,566
Lending Services
Peninsula Capital Partners $14,940,749
Diesel Funding $187,500
As adequate protection, the Debtor proposes to grant the purported
secured claimants a replacement lien on postpetition assets of the
same type and to the extent they have a perfected security interest
on the particular type of prepetition assets, to the extent the
prepetition asset constitutes cash collateral, to the extent that
the Debtor will be using those prepetition assets postpetition, and
at the same priority as existed prepetition.
The Debtor is confident that its post-petition operations will be
profitable and that it will be able to demonstrate its ability to
remain profitable during these bankruptcy proceedings and beyond.
A copy of the motion is available at https://bit.ly/3LfHi5o from
PacerMonitor.com.
About Ark Laboratory, LLC
Ark Laboratory, LLC owns and operates a medical laboratory. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. E.D. Mich. Case No. 23-43403) on April 12, 2023. In
the petition signed by James Grossi, its principal, the Debtor
disclosed up to $50 million in both assets and liabilities. Robert
N. Bassel, Esq., represents the Debtor as legal counsel.
AULT ALLIANCE: Declares Monthly Cash Dividend of $0.2708333 Apiece
------------------------------------------------------------------
Ault Alliance, Inc. announced that its Board of Directors has
declared a monthly cash dividend of $0.2708333 per share of the
Company's outstanding 13.00% Series D Cumulative Redeemable
Perpetual Preferred Stock. The record date for this dividend is
April 30, 2023, and the payment date is May 10, 2023.
Link to NYSE quote for the Company's 13.00% Series D Cumulative
Redeemable Perpetual Preferred Stock:
https://www.nyse.com/quote/XASE:AULTpD
The Company also advises that its audited consolidated financial
statements in its Annual Report on Form 10-K for the fiscal year
ended Dec. 31, 2022, which was filed with the Securities and
Exchange Commission on April 17, 2023, contained a going concern
explanatory paragraph in the audit opinion from its independent
registered public accounting firm. This announcement does not
represent any change or amendment to the Company's financial
statements or to its Annual Report on Form 10-K for the fiscal year
ended Dec. 31, 2022. Release of this information is required by
Section 401(h) and 610(b) of the NYSE American Company Guide.
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.
AYTU BIOPHARMA: In Talks on Potential Strategic Transactions
------------------------------------------------------------
Aytu BioPharma, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission it is engaged in discussions
with various parties regarding potential strategic transactions and
potential financing options. From time to time, AYTU receives
inbound interest from parties seeking to partner with AYTU on
potential strategic transactions.
"We are also considering steps to address the ongoing liquidity
needs of the Company. As of the date of this Current Report on
Form 8-K, AYTU is currently in preliminary discussions with certain
parties regarding potential strategic transactions and financing
options. We cannot provide assurance that any of these discussions
will result in a transaction or financing or, if they did, what the
ultimate terms of such strategic transactions or financings would
be. Equity financings would provide needed liquidity but could
also be dilutive to stockholders. A strategic transaction cannot
be assured and may not materialize. These preliminary discussions
are ongoing and the AYTU board will continue to evaluate strategic
possibilities and financing alternatives consistent with its
fiduciary duties," Aytu said.
About Aytu BioPharma
Englewood, Colorado-based Aytu BioPharma, Inc., formerly known as
Aytu BioScience, Inc. -- http://www.aytubio.com-- is a
pharmaceutical company commercializing a portfolio of commercial
prescription therapeutics and consumer health products. The
Company's prescription products include Adzenys XR-ODT
(amphetamine) extended-release orally disintegrating tablets and
Cotempla XR-ODT (methylphenidate) extended-release orally
disintegrating tablets for the treatment of attention deficit
hyperactivity disorder (ADHD), as well as Karbinal ER
(carbinoxamine maleate), an extended-release antihistamine
suspension indicated to treat numerous allergic conditions, and
Poly-Vi-Flor and Tri-Vi-Flor, two complementary fluoride-based
prescription vitamin product lines available in various
formulations for infants and children with fluoride deficiency.
Aytu's consumer health segment markets a range of over-the-counter
medicines, personal care products, and dietary supplements
addressing a range of common conditions including diabetes,
allergy, hair regrowth, and gastrointestinal conditions.
Aytu Biopharma reported a net loss of $110.17 million for the year
ended June 30, 2022, compared to a net loss of $58.29 million for
the year ended June 30, 2021. As of Sept. 30, 2022, the Company had
$150 million in total assets, $96.09 million in total liabilities,
and $53.91 million in total stockholders' equity.
Denver, Colorado-based Plante & Moran, PLLC, the Company's auditor
since 2015, issued a "going concern" qualification in its
report dated Sept. 27, 2022, citing that the Company's operations
have historically consumed cash and are expected to continue to
consume cash, which raises substantial doubt about the Company's
ability to continue as a going concern.
BARTECH GROUP: April 26 Status Hearing on Amended Plan
------------------------------------------------------
Judge Timothy A. Barnes has entered an order that a status hearing
on The BarTech Group of Illinois, Inc.'s Amended Plan is scheduled
for April 26, 2023, at 10:00 a.m. The Status Hearing may be
attended via Zoom or in person in Courtroom 744, Everett McKinley
Dirksen United States Courthouse, 219 South Dearborn Street,
Chicago, Illinois.
The BarTech Group of Illinois was ordered to file a further amended
plan on or before April 19, 2023.
On or before April 19, 2023, the Debtor shall provide proof of
insurance to counsel for Ally Bank, James M. Philbrick, as
requested in the Motion Motion for Relief from Stay or in the
Alternative Motion for Adequate Protection and the Motion for
Relief From Stay or in the Alternative Motion for Adequate
Protection filed by Ally. Failure to do so will constitute grounds
for granting either or both of the Stay Motions at the Status
Hearing.
The Debtor and John Burns Construction Company shall meet and
confer to work towards an agreement with respect to the Motion of
John Burns Construction Company to Compel the Debtor to Assume or
Reject the Barry Subcontract filed by JBCC. If the Debtor and JBCC
fail to reach an agreement by April 26, 2023, then the court will
set a deadline for the Debtor to assume or reject the Barry
Subcontract pursuant to 11 U.S.C. Sec. 365(d)(2) at the Status
Hearing.
About The BarTech Group of Illinois
The BarTech Group of Illinois Inc. -- https://www.bartechgroup.biz
-- is an MBE- and DBE-certified electrical construction
contractor.
The BarTech Group of Illinois Inc. filed a petition for relief
under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr.
N.D. Ill. Case No. 22-10945) on Sept. 23, 2022. In the petition
filed by Dwayne Barlow, as president, the Debtor reported assets
between $500,000 and $1 million and estimated liabilities between
$1 million and $10 million.
William B. Avellone has been appointed as Subchapter V trustee.
Judge Timothy A. Barnes oversees the case.
Alan L. Braunstein, Esq., at Riemer Braunstein LLP is the Debtor's
counsel. Ringold Financial Management Services, Inc., is the
financial advisor.
BED BATH & BEYOND: 14,000 Employees Threatened by Looming Closure
-----------------------------------------------------------------
As of the bankruptcy filing, Bed Bath & Beyond Inc. employs 14,000
individuals in the United States, Puerto Rico, and Canada.
Approximately 6,000 people are employed on a full-time basis and
approximately 8,000 are employed on a part-time basis.
Approximately 1,600 employees earn a salary and 12,400 are paid on
an hourly basis.
In addition, the Debtors have historically sourced critical labor
support from various agencies and periodically retain specialized
individuals as independent contractors to complete discrete
projects. At this time, the Debtors retain approximately 50
independent contractors.
Bed Bath & Beyond hasn't disclosed in court filings how many
employees will be retained while it undergoes Chapter 11
proceedings and while it conducts a wind-down of its stores.
In the 60 days prior to the Petition Date, the Debtors issued
notices pursuant to the Worker Adjustment and Retraining
Notification Act to certain governmental entities and to 252
Employees that are expected to be impacted by a qualified "mass
layoff" or "plant closing" at seven facilities, including four
distribution and fulfillment centers in Texas and three stores in
New York.
During these Chapter 11 Cases, the Debtors anticipate closing
further offices, stores, and distribution and fulfillment centers
during the postpetition period, and such closures may implicate the
WARN Act.
The Debtors have filed a motion to pay prepetition wages and
benefits owed to employees so that they will continue to provide
services necessary to continue the Debtors' operations and maximize
the value of the Debtors' estates.
The Debtors seek authority, but not direction, to pay, remit, or
reimburse, as applicable, an aggregate of $76,133,000 to pay
prepetition amounts on account of the employee compensation and
benefits programs:
* Employee Compensation: $29.4 million
* Independent Contractor Compensation: $389,000
* Payroll Processing Fees: $6.2 million
* Withholding and Deduction Obligations: $10.9 million
* Reimbursable Expenses: $1.2 million
* Health Insurance Programs: $7.5 million
* Life and AD&D Insurance and Disability Benefits: $344,000
* Workers' Compensation Program: $14.7 million
* Paid Leave: $4.4 million
* Postpetition Non-Employee Director Compensation: N/A
* Supplemental Benefits Programs: $500,000
About Bed Bath & Beyond
Bed Bath & Beyond Inc., together with its subsidiaries, is an
omnichannel retailer selling a wide assortment of merchandise in
the Home, Baby, Beauty & Wellness markets and operates under the
names Bed Bath & Beyond, buybuy BABY, and Harmon, Harmon Face
Values. The Company also operates Decorist, an online interior
design platform that provides personalized home design services.
At its peak, Bed Bath & Beyond operated the largest home furnishing
retailer in the United States with over 970 stores across all 50
states, consistently at the forefront of major home and bath
trends. Operating stores spanning the United States, Canada,
Mexico, and Puerto Rico, Bed Bath & Beyond offers everything from
bed linens to cookware to electric appliances, home organization,
baby care, and more.
Bed Bath & Beyond closed over 430 locations across the United
States and Canada before filing chapter 11 cases, implementing full
scale winddowns of their Canadian business and the Harmon branded
stores.
Left with 360 Bed Bath & Beyond and 120 buybuy BABY stores, Bed
Bath & Beyond Inc. and 73 affiliated debtors on April 23, 2023,
each filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code to pursue a wind down of operations.
The cases are pending before the Honorable Vincent F. Papalia and
have requested joint administration of the cases under Bankr.
D.N.J. Lead Case No. 23-13359.
Kirkland & Ellis LLP and Cole Schotz P.C. are serving as legal
counsel, Lazard Frères & Co. LLC is serving as investment banker,
and AlixPartners LLP is serving as financial advisor. Bed Bath &
Beyond Inc. has retained Hilco Merchant Resources LLC to assist
with inventory sales. Kroll LLC is the claims agent.
BED BATH & BEYOND: S&P Downgrades ICR to 'D' on Chapter 11 Filing
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
specialty retailer Bed Bath & Beyond Inc. (BBBY) to 'D' from
'CCC-'. At the same time, S&P lowered its issue-level rating on
BBBY's senior unsecured notes to 'D' from 'C'.
S&P lowered its issuer credit rating and issue-level ratings on
BBBY to 'D' because it and certain of its subsidiaries filed for
bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. The
company intends to liquidate its merchandise and close its
remaining 475 stores while simultaneously conducting a sales
process for some or all of its assets. BBBY has secured a
commitment for $240 million of debtor-in-possession financing to
support its operations and cover restructuring costs throughout the
Chapter 11 process.
The company's bankruptcy filing follows an accelerated
deterioration in its operating performance due to poor
merchandising decisions, deficient omni-channel capabilities, and
supply chain challenges exacerbated by its debt burden. BBBY
reported approximately $1.8 billion of debt outstanding at the time
of the Chapter 11 filing.
BBBY sells domestic merchandise and home furnishings through retail
stores and e-commerce websites under the names Bed Bath & Beyond
and buybuyBABY. The company was founded in 1971 and is
headquartered in Union, N.J.
BERTUCCI'S RESTAURANTS: May 16 Evidentiary Hearing
--------------------------------------------------
Judge Grace E. Robson has entered an order that an evidentiary
hearing will be held on May 16, 2023 at 10:00 a.m. in Courtroom D,
Sixth Floor, of the United States Bankruptcy Court, 400 West
Washington Street, Orlando, Florida 32801, to consider and rule on
the adequacy of Bertucci's Restaurants, LLC's Disclosure Statement
and to consider any other matter properly before the Court at that
time.
The Disclosure Statement Hearing may be continued from time to time
by announcement made in open Court without further notice.
Objection to approval of the Disclosure Statement, must file and
serve a written objection no later than 7 days before the
Disclosure Statement Hearing.
About Bertucci's Restaurants
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 Dec. 5,
2022. In the petition signed by Jeffrey C. Sirolly, secretary, the
Debtor disclosed up to $50,000 in assets and up to $100 million in
liabilities.
Judge Grace E. Robson oversees the case.
R. Scott Schuker, Esq., at Shuker and Dorris, P.A., is the Debtor's
legal counsel.
BIG APPLE ENERGY: Denial of Ferreira's Reconsideration Bid Affirmed
-------------------------------------------------------------------
In the appealed case captioned as VICTOR FERREIRA, Appellant, v.
RICHARD L. STERN, Chapter 7 Trustee, Appellee, Case No. 22-CV-02182
(JMA), (E.D.N.Y.), Judge Joan M. Azrack of the U.S. District Court
for the Eastern District of New York affirms the Bankruptcy Court's
order denying Victor M. Ferreira's motion for reconsideration of
the Distribution Order.
Victor M. Ferreira appeals an order of the Bankruptcy Court denying
his motion for reconsideration of a previous order, dated Dec. 16,
2021 -- the Distribution Order. The Distribution Order authorized
Richard L. Stern, the Chapter 7 Trustee of the estates of Big Apple
Energy LLC and Clear Choice Energy LLC, to pay the IRS Claims and
NYS Claim "in full and final satisfaction" of those claims against
the Big Apple estate. The Distribution Order defined the IRS Claims
precisely as they were previously defined in the Ferreira
Stipulation and the Distribution Motion.
The gravamen of Ferreira's appeal is that the Bankruptcy Court
erroneously interpreted the terms "IRS Claims" and "NYS Claim," as
used in the Ferreira Stipulation and Distribution Motion.
Specifically, he contends that because IRS Claim No. 48 notes that
a "late payment penalty will be charged," and the NYS Claim states
that "additional penalty and interest will accrue if paid after
4/13/2019," the Distribution Order should have required the Trustee
to pay the IRS Penalties assessed against him with the Segregated
Funds and funds from the Big Apple estate, if necessary.
Ferreira's argument rests on a mistaken reading of the clear terms
of the Ferreira Stipulation -- specifically, the definition of the
IRS Claims and NYS Claim in that stipulation. The Ferreira
Stipulation specifically defines the "IRS Claims" as "claim no. 1-3
in the amount of $26,928.90," and "claim no. 48 in the amount of
$48,048.95," "both on account of outstanding withholding taxes for
an aggregate amount of $74,977.85." The Ferreira Stipulation also
defines the "NYS Claim" as the Chapter 11 administrative claim,
"designated as claim no. 10 in the amount of $17,963.23 in the Big
Apple Estate."
Judge Azrack finds Ferreira correct in his contention that IRS
Claim No. 48 and NYS Claim No. 10, which were filed against the Big
Apple estate, each reserved the right to impose penalties based on
late payment. However, Judge Azrack finds this irrelevant because
the Ferreira Stipulation only authorized the Trustee to pay the
specific amounts provided in the Stipulation, and later, in the
Distribution Motion.
Therefore, even assuming, as Ferreira contends, that "as a matter
of law, interest and penalties were due on all three of the IRS and
NYS Claims" against the Big Apple estate, Judge Azrack concludes
that the Reconsideration Order correctly determined that "the
Trustee's Distribution Motion specifically requested to pay the IRS
$74,977.85 and NYS $17,962.23." Those amounts were the claim
amounts specifically incorporated into the definitions of the IRS
Claims and NYS Claim in the Ferreira Stipulation and Distribution
Motion. Ferreira has not presented any factual or legal issues
overlooked by the Bankruptcy Court that would warrant
reconsideration, nor is the Court "left with the definite and firm
conviction that a mistake has been committed."
Judge Azrack also finds that the plain terms of the notices of the
IRS Penalties that Ferreira received specifically identify Ferreira
as the "person responsible" for any Trust Fund Recovery Penalty
imposed. Thus, Judge Azrack concludes that the Reconsideration
Order did not err in finding that the IRS Penalties were asserted
against him personally. Because the Court rejects Ferreira's
interpretation of the "IRS Claims" and "NYS Claim," Judge Azrack
disagrees that the Bankruptcy Court erred in finding that the
Ferreira Stipulation did not contemplate payment of the IRS
Penalties personally assessed against Ferreira.
Likewise, as the Trustee points out, the Trustee's payment of
"non-debtor liabilities" with funds from the Big Apple estate,
including the tax penalties assessed personally against Ferreira,
"would be to the detriment of the creditors of the Big Apple
estate."
As such, Judge Azrack concludes that the Bankruptcy Court did not
abuse its discretion in denying reconsideration.
A full-text copy of the Order dated April 4, 2023, is available
https://tinyurl.com/4d5um36y from Leagle.com.
About Big Apple Energy LLC
and Clear Choice Energy
Big Apple Energy LLC and its affiliate Clear Choice Energy, LLC,
are energy-marketing firms in Woodbury, New York, that focus on
natural gas. They provide services to wholesale marketers. They
also offer consulting services to large end users on energy
utilization and utility rate structure analysis.
Big Apple Energy and Clear Choice Energy filed Chapter 11 petitions
(Bankr. E.D.N.Y. Lead Case No. 18-75807) on Aug. 27, 2018. The
petitions were signed by Victor M. Ferreira, manager of BAE Energy
Management, LLC, sole member of the Debtors. At the time of
filing, each Debtor had $10 million to $50 million in estimated
assets and liabilities. Judge Alan S. Trust presides over the
cases. The Debtors tapped Jonathan I. Rabinowitz, Esq., at
Rabinowitz, Lubetkin & Tully, LLC as their legal counsel.
BMI WELLNESS: Bankruptcy Administrator Unable to Appoint Committee
------------------------------------------------------------------
The U.S. Bankruptcy Administrator for the Eastern District of North
Carolina disclosed in a court filing that no official committee of
unsecured creditors has been appointed in the Chapter 11 case of
BMI Wellness Concepts, PLLC.
About BMI Wellness Concepts
BMI Wellness Concepts, PLLC filed a Chapter 11 bankruptcy petition
(Bankr. E.D.N.C. Case No. 23-00666) on March 9, 2023, with as much
as $1 million in both assets and liabilities. Judge Joseph N.
Callaway oversees the case.
The Debtor is represented by Danny Bradford, Esq., at Bradford Law
Offices.
BMI WELLNESS: Court OKs Interim Cash Collateral Access
------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina, Raleigh Division, authorized BMI Wellness Concepts, PLLC
to use cash collateral on an interim basis in accordance with the
budget, with a 10% variance.
The Debtor believes Wells Fargo Bank, N.A. asserts an interest in
the cash collateral by way of a Security Agreement and UCC-1
financing statement number 20190072496A, filed on July 8, 2019,
with the North Carolina Secretary of State.
At the time of the petition, the Debtor had cash on hand of
approximately $3,230 in its bank accounts, all of which was
transferred to the Debtor's DIP account after filing and personal
property valued at approximately $65,500.
As adequate protection, and to the extent that cash collateral is
used, the Potential Secured Creditor will receive a post-petition
lien on the Debtor's cash and inventory to the extent of the use
and to the extent that the pre-petition lien in the same type of
collateral was valid, perfected, enforceable, and non-avoidable as
of the petition date. In addition, the Debtor will make adequate
protection payments to Wells Fargo Bank, N.A., in the amount of
$1,295 per month, beginning April 1, 2023 and continuing monthly
for as long as the Debtor's use of cash collateral is authorized.
The Debtor's use of cash collateral will expire or terminate on the
earlier of: (i) the Debtor ceasing operations of its business; or
(ii) the non-compliance or default of the Debtor with any terms and
provisions of the Order.
A further hearing on the matter is set for May 24, 2023 at 10 a.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/420hujj from PacerMonitor.com.
The Debtor projects $10,000 in gross revenue and $5,431 in total
expenses for April/May 2023.
About BMI Wellness Concepts, PLLC
BMI Wellness Concepts, PLLC is a North Carolina professional
limited liability company that has operated as a general medical
practice, specializing in weight loss and general wellness
counseling.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. N.C. Case No. 23-00666) on March 9,
2023. In the petition signed by Sherri James, member, the Debtor
disclosed up to $100,000 in assets and up to $1 million in
liabilities.
Judge Joseph N. Callaway oversees the case.
Danny Bradford, Esq., at Paul D. Bradford, PLLC, represents the
Debtor as legal counsel.
BMI WELLNESS: Unsecureds Owed $403K to Get 10% in Plan
------------------------------------------------------
BMI Wellness Concepts, PLLC, submitted a Disclosure Statement dated
April 12, 2023.
General Unsecured Creditors are classified in Class 3 and will
receive a distribution of approximately 10% of their allowed
claims, to be distributed as follows: $2,000 shall be paid on a
pro-rate basis to Allowed General Unsecured Claims in quarterly
installments over 60 months, with the first quarterly installment
due on July 1, 2023, and with a final quarterly installment due on
April 1, 2028. The Debtor proposes to make the payments proposed in
its Plan from its continuing operations in providing weight loss
and general health and wellness services in the Raleigh, North
Carolina area.
Under the Plan, Class 3 General Unsecured Claims total $403,722.84.
The Debtor proposes to satisfy this class by paying a total of
$40,000.00. This amount will pay Allowed General Unsecured Claims
approximately 10% of each claim. Said payments shall be made in
equal quarterly installments of $2,000, over five years, on a
pro-rata basis, with the first quarterly installment due on July 1,
2023 and the final quarterly installment due on April 1, 2028.
The Debtor expects to receive gross monthly receipts in the amount
of $7,000 for the next few months. The Debtor expects revenues to
increase over time, such that it will always generate at least as
much net revenue to fund this Plan as when the Plan is filed.
A copy of the Disclosure Statement dated April 12, 2023, is
available at https://bit.ly/417PRES from PacerMonitor.com.
About BMI Wellness Concepts
BMI Wellness Concepts, PLLC is a North Carolina professional
limited liability company that has operated as a general medical
practice, specializing in weight loss and general wellness
counseling.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.C. Case No. 23-00666) on March 9,
2023. In the petition signed by Sherri James, member, the Debtor
disclosed up to $100,000 in assets and up to $1 million in
liabilities.
Judge Joseph N. Callaway oversees the case.
Danny Bradford, Esq., at Paul D. Bradford, PLLC, is the Debtor's
legal counsel.
BOUQUET RESTAURANT: Court OKs Interim Cash Collateral Access
------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Kentucky,
Covington Division, authorized Bouquet Restaurant, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 10% variance.
The Debtor requires the use of cash collateral to fund its daily
operations.
The Debtor is directed to account for all cash collateral expended
and is authorized to make the following adequate protection
payments: Newtek Small Business Finance, LLC, $3,303 and First Bank
of Richmond in the amount of $510.
Newtek is also granted a replacement lien in the same type and
manner of property it possessed pre-petition.
There is a carveout from the replacement liens granted for
professional fees in the amount of $1,500 per week.
Any replacement liens granted will be deemed effective and
perfected as of the date of filing, however, to the extent that any
party granted a replacement lien was in fact not perfected or did
not possess a security interest prior to the filing of the
bankruptcy, it will not receive a greater or higher priority than
it possessed prior to the filing of the case, if any.
A final hearing on the matter is set for May 9, 2023, at 10:30
a.m.
A copy of the order is available at https://bit.ly/3Lq1xxm from
PacerMonitor.com.
About Bouquet Restaurant, LLC
Bouquet Restaurant, LLC operates a restaurant in Covington, Ky.,
offering charcuterie, small plates, entrees, and desserts.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Kent. Case No. 23-20279) on April 19,
2023. In the petition signed by Stephen A. Williams, member, the
Debtor disclosed $115,825 in assets and $1,613,837 in liabilities.
Judge Tracey N. Wise oversees the case.
Michael B. Baker, Esq., at the Baker Firm, PLLC, represents the
Debtor as legal counsel.
BOUQUET RESTAURANT: Files Emergency Bid to Use Cash Collateral
--------------------------------------------------------------
Bouquet Restaurant, LLC asks the U.S. Bankruptcy Court for the
Eastern District of Kentucky, Covington Division, for authority to
use cash collateral to fund its daily operations on an interim
basis and provide adequate protection to the secured creditors.
Like many businesses in the restaurant and hospitality industry,
the effects of the COVID-19 pandemic have been long lasting.
Despite receiving an EIDL loan and other pandemic related
assistance, the Debtor experienced several periods in which it
needed liquidity.
Liquidity issues led the Debtor to seek several high interest loans
and merchant credit agreements. By design, many of these creditors
obfuscate the true terms of the lending agreement which often leave
the borrower starved for cash regardless of revenue.
First Bank of Richmond possesses a purchase money security interest
in a Bravo Batch Freezer valued at $5,000. The amount owed to First
Bank is approximately $13,992. The Debtor proposes to pay First
Bank of Richmond its contract payment initially as adequate
protection. Said payment is set forth on the budget.
The Debtor is indebted to Newtek by virtue of a note dated November
22, 2016 in the original principal amount of $500,000. The note is
secured by a mortgage granted by the Rastus Properties, LLC on the
real estate upon which the Debtor operates. It is believed that
Newtek is owed about $343,278. The monthly payments are $3,303.
The entities that may claim an interest in the collateral are:
1. Newtek Small Business Finance
2. United States Small Business Administration
3. Amur Equipment Finance, Inc.
4. First Bank of Richmond
5. S & P Financial Services
6. Unknown Creditor Corporation Service Company, as
representative
7. Fox Capital Group, Inc.
8. Cobalt Funding Solutions, believed to be perfected by CT
Corporation System, as representative
9. Amerifi Capital
10. Commonwealth of Kentucky
The Debtor proposes to adequately protect Newtek Small Business
Finance, LLC, by paying it its contract payment of $3,303 per
month. The Debtor pays this payment both as an obligation of the
Debtor and as rent for the uses of the real estate upon which it
operates. Newtek would also receive a replacement lien granting
same and priority as existed pre-petition on all assets of the same
like and kind, including postpetition receivables.
By separate motion, the Debtor is proposing to grant PFPL, LLC a
second position on cash collateral as to any funds expended by
PFPL, LLC under a request for post-petition financing.
The Debtor will provide adequate protection payments to First Bank
of Richmond in the amount of $511 as adequate protection on the
equipment loan for its Bravo Batch freezer.
A copy of the motion is available at https://bit.ly/3oAnLUb from
PacerMonitor.com.
About Bouquet Restaurant, LLC
Bouquet Restaurant, LLC operates a fine dining restaurant known as
Bouquet. Its sole member and owner is Stephen A. Williams.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Ky. Case No. 23-20279) on April 19,
2023. In the petition signed by Stephen A. Williams, member, the
Debtor disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Michael B. Baker, Esq., at The Baker Firm, PLLC, represents the
Debtor as legal counsel.
BRAND MARINADE: Court OKs Interim Cash Collateral Access
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
West Palm Beach Division, authorized Brand Marinade, LLC, to use
cash collateral on an interim basis in accordance with the budget,
with a 10% variance.
The Debtor is permitted to increase cost of goods and labor
spending to the extent necessary to fulfill orders not reasonably
foreseeable at the time of preparation of the budget, if the
increased expense results in a corresponding increase in revenue.
As adequate protection, the secured creditors are granted
post-petition replacement liens, in the same priority and extent as
any creditor held a valid, perfected lien prior to the filing of
the Chapter 11 case.
The Debtor will maintain all required insurance for the business
and collateral.
CDC Small Business Finance Corp. consents to the use of cash
collateral contingent upon the Debtor's compliance with the terms
of the Order. Commencing April 20, 2023, the Debtor will tender
monthly adequate protection payments of $1,560 for Loan ending in
XXX7000 and $664 for Loan ending in XXX1919 to CDC Adequate
Protection Payments will continue on the same day of each month
thereafter until the earlier of: (i) termination of the automatic
stay; (ii) confirmation of a Chapter 11 Plan; (iii) the parties
stipulate otherwise; (iv) the court orders otherwise; or (v)
dismissal of the case. The Debtor will send separate payments to
CDC for each account.
A continued hearing on the matter is set for May 23, 2023 at 1:30
p.m.
A copy of the order is available at https://bit.ly/41oLDZF from
PacerMonitor.com.
About Brand Marinade
Brand Marinade, LLC provides printing and related support services.
The company is based in Boca Raton, Fla.
Brand Marinade filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-12729) on April
7, 2023, with $597,096 in assets and $1,591,752 in liabilities.
Soneet Kapila has been appointed as Subchapter V trustee.
Judge Mindy A. Mora presides over the case.
Malinda Hayes, Esq., at the Law Offices of Malinda L. Hayes,
represents the Debtor as counsel.
BROADSTREET PARTNERS: S&P Rates New US$735MM Term Loan 'B'
----------------------------------------------------------
S&P Global Ratings assigned its 'B' debt rating to BroadStreet
Partners Inc.'s (B/Stable/--) proposed U.S. dollar 735 million
first-lien term loan tranche B-3 due 2029. S&P also assigned a '3'
recovery rating, indicating its expectation for meaningful
(50%-70%; rounded estimate: 55%) recovery of principal in the event
of default.
S&P expects BroadStreet to use the new nonfungible first-lien term
loan B-3 to fund its acquisition of Westland Insurance, a leading
independent insurance broker in Canada. Financing for Westland will
also consist of a new unrated Canadian dollar term loan A (US$434
million equivalent) due 2027 as well as equity from BroadStreet's
financial sponsor Ontario Teachers' Pension Plan (OTPP) and
rollover equity from Westland management.
BroadStreet also intends to use proceeds from the new first-lien
term loan B-3 issuance to repay current borrowings of US$158
million on its revolvers. Pro forma for the transaction both
revolving credit facilities will be undrawn and BroadStreet's
unrated revolver due 2026 will be upsized to US$496 million.
BroadStreet will not modify its US$36 million revolver due 2025.
The Westland transaction, new debt, and revolver upsize will not
affect S&P's ratings on BroadStreet--including its 'B' issuer
credit rating, 'B' debt ratings on the company's revolver due 2025
and first-lien term loans B and B-2 due 2027, and 'CCC+' unsecured
debt rating.
Including the new debt and annualized earnings contributions from
Westland and closed acquisitions, BroadStreet's S&P pro forma
adjusted leverage is approximately 6.4x for the 12 months ended
Dec. 31, 2022.
S&P said, "Westland is BroadStreet's largest core acquisition to
date. We believe Westland augments BroadStreet's existing
platform--expanding operations into Canada and modestly
diversifying into personal lines and specialty programs. We expect
BroadStreet to leverage its new core agency to drive organic
expansion and further tuck-in deal activity.
"Over 2023, we forecast a steady pace of debt-funded acquisitions,
mid-single-digit organic growth, and stable EBITDA margins to
result in leverage of 6.0x-6.5x. We expect coverage to weaken to
approximately 2.0x due to higher rates and additional variable debt
but remain supportive of the rating. Continued earnings growth and
newly established swaps will help mitigate the interest rate
burden."
BUILT ON THE ROCK: Court Agrees to Delay of Plan Hearing
--------------------------------------------------------
Built on the Rock Properties, Inc., filed an agreed Ex-Parte Motion
to Continue Hearing on Approval of Disclosure Statement and
Confirmation of Chapter 11 Small Business Plan.
The Court, having reviewed the Motion, noting that FCI Lending
Services and Lecher Pechin Trust Inc. have agreed to the
continuance, and that the U.S. Trustee has no objection to the
requested continuance, finds that good cause exists to grant the
Motion.
Judge Laurel M. Isicoff has entered an order granting the Motion,
that hearing to consider approval of the Debtor's Disclosure
Statement and confirmation of the Debtor's Chapter 11 Small
Business Plan is continued.
The Court will conduct the confirmation hearing and consider
approval of the disclosure statement and any timely-filed fee
applications on June 14, 2023, at 9:30 a.m. in C. Clyde Atkins
United States Courthouse, 301 N. Miami Avenue, Courtroom 8, Miami,
FL 33128.
The following deadlines apply with respect to the confirmation
hearing and hearing on fee applications:
* The deadline for objections to claims will be on Wednesday,
May 31, 2023.
* The deadline for filing and serving fee applications will be
on Friday, May 19, 2023.
* The deadline for filing and serving notice summarizing all fee
applications will be on Wednesday, May 24, 2023.
* The deadline for filing ballots accepting or rejecting Plan
will be on Wednesday, June 7, 2023.
* The deadline to file motions under Fed. R. Civ. P. 43(a) will
be on Wednesday, June 7, 2023.
* The deadline for objections to confirmation will be on Friday,
June 9, 2023.
* The deadline for objections to approval of the disclosure
statement Friday will be on June 9, 2023.
* The deadline for filing Proponent's report and confirmation
affidavit will be on Friday, June 9, 2023.
* The deadline for filing exhibit register and uploading any
exhibits a party intends to introduce into evidence at the
confirmation hearing will be on Friday, June 9, 2023.
Counsel for the Plan Proponent:
Chad T. Van Horn, Esq.
VAN HORN LAW GROUP, P.A.
500 N.E. 4th Street, Suite 200
Fort Lauderdale, FL 33301
Telephone: (954) 765-3166
Facsimile: (954) 756-7103
E-mail: Chad@cvhlawgroup.com
About Built on the Rock
Built on the Rock Properties, Inc., filed a petition for Chapter 11
protection (Bankr. S.D. Fla. Case No. 22-11565) on Feb. 25, 2022,
listing as much as $500,000 in both assets and liabilities. Anne
Georges, president, signed the petition. Judge Laurel M Isicoff
oversees the case.
The Debtor tapped Van Horn Law Group, P.A., as legal counsel.
CAMBER ENERGY: Updates Merger Agreement With Viking
---------------------------------------------------
Camber Energy, Inc. and Viking Energy Group, Inc. announced that on
April 18, 2023, they entered into an amendment to the Amended and
Restated Agreement and Plan of Merger, dated as of Feb. 15, 2021,
regarding the full combination of the two entities.
The Merger Agreement provides that, upon the terms and subject to
the conditions set forth therein, Viking Merger Sub, Inc., a wholly
owned subsidiary of Camber, will merge with and into Viking, with
Viking surviving the Merger as a wholly owned subsidiary of Camber
and Camber remaining the sole publicly-traded entity.
Benefits of Merger
If the Merger is consummated, Viking's shareholders would receive
one share of Camber's common stock in exchange for each of their
shares of Viking's common stock, and would benefit from owning
shares of a company listed on a national stock exchange platform
with greater liquidity and an established trading history.
If the Merger is completed, Camber would acquire full legal and
accounting control of Viking, permitting Camber to, among other
things, report underlying subsidiary revenues at the Camber level,
and Camber would benefit directly and fully from Viking's business
activities, including as it relates to Viking's interests in the
following:
* Custom Energy & Power Solutions Business;
* Exclusive License to a Patented Clean Energy & Carbon-Capture
system;
* Intellectual property rights to a fully developed, patented
ready-for-market proprietary Medical & Bio-Hazard Waste Treatment
system using Ozone Technology; and
* Patent pending ready-for-market proprietary Open Conductor
Detection systems.
Next Step:
As a next step concerning the Merger, Camber intends to file a
preliminary registration statement on Form S-4 with the Securities
and Exchange Commission.
About Camber Energy
Based in Houston, Texas, Camber Energy, Inc. --
http://www.camber.energy-- is a growth-oriented diversified energy
company. Through its majority-owned subsidiary, Camber provides
custom energy & power solutions to commercial and industrial
clients in North America and owns interests in oil and natural gas
assets in the United States. The company's majority-owned
subsidiary also holds an exclusive license in Canada to a patented
carbon-capture system, and has a majority interest in: (i) an
entity with intellectual property rights to a fully developed,
patent pending, ready-for-market proprietary Medical & Bio-Hazard
Waste Treatment system using Ozone Technology; and (ii) entities
with the intellectual property rights to fully developed, patent
pending, ready-for-market proprietary Electric Transmission and
Distribution Open Conductor Detection Systems.
Camber Energy reported a net loss attributable to the company of
$107.74 million for the year ended Dec. 31, 2022, a net loss
attributable to the company of $169.68 million for the year ended
Dec. 31, 2021, compared to a net loss attributable to the company
of $52.01 million for the nine months ended Dec. 31, 2020.
Dallas, Texas-based Turner, Stone & Company, L.L.P., the Company's
auditor since 2021, issued a "going concern" qualification in its
report dated March 17, 2023, citing that the Company has suffered
recurring losses from operations, has a stockholder deficit and has
a net capital deficiency that raises substantial doubt about its
ability to continue as a going concern.
CEL-SCI CORP: To Pursue Conditional Approval Pathway for Multikine
------------------------------------------------------------------
CEL-SCI Corporation announced it has held a productive
pre-submission meeting with Canada's regulator to determine the
best regulatory path toward market approval. Based on the existing
data that was summarized and presented, Health Canada advised
CEL-SCI to request advance consideration for approval under a
Notice of Compliance with Conditions policy. Additional
discussions explored how patients at lower risk for recurrence
could be targeted for treatment, and what sort of post-market
commitments could help ensure that only the most suitable patients
would be treated with Multikine* (Leukocyte Interleukin Injection),
based on the best available evidence.
"The Notice of Compliance with Conditions" policy facilitates
earlier access for physicians and patients to promising new drugs
for patients suffering from serious, life-threatening or severely
debilitating diseases. Acceptance of promising evidence of
clinical effectiveness of Multikine as an initial therapy for
patients with advanced primary head and neck cancer would allow for
the filing of an eligible drug submission earlier than normally
possible because it promises to fulfil an unmet medical need,"
stated CEL-SCI CEO, Geert Kersten. "We continue to prepare our
Biologics License Application for U.S. FDA approval, while also
pursuing marketing approval in other countries."
Canada was one of over 20 countries in which CEL-SCI's global
pivotal Phase 3 IT-MATTERS study enrolled a total of 928 head and
neck cancer patients (locally advanced primary squamous cell
carcinoma of the head and neck (SCCHN)). The IT-MATTERS study was
designed to determine if Multikine was safe and provided survival
and other clinical benefits.
Multikine is the first investigational cancer immunotherapy
developed as a first-line neo-adjuvant treatment to be provided to
previously untreated locally advanced primary disease SCCHN
patients before they receive surgery. As demonstrated in the
IT-MATTERS study, Multikine is the first of its kind with
substantial survival benefit in a randomized Phase 3 trial in
locally advanced primary SCCHN. Patients receiving Multikine for 3
weeks prior to surgery and radiotherapy (deemed at lower risk for
recurrence per NCCN Guidelines) showed the following advantages
over lower risk for recurrence control who had the same treatment,
but did not get Multikine:
* A median overall survival improvement of 46.5 months—nearly
four years
* 62.7% of Multikine patients were alive after five years vs.
48.6% in the control group
* Nearly 1 of every 6 patients had their tumors shrink by more
than 30% in just 3 weeks prior to surgery vs. no reported tumor
shrinkage in the control group
* 5 patients treated with Multikine had their tumors completely
disappear in just 3 weeks
* Tumor shrinkage/disappearance in 3 weeks significantly
reduced the death rate
About CEL-SCI
CEL-SCI Corporation is a clinical-stage biotechnology company
focused on finding the best way to activate the immune system to
fight cancer and infectious diseases. Its lead investigational
therapy Multikine (Leukocyte Interleukin, Injection) completed a
pivotal Phase 3 clinical trial for patients who are newly diagnosed
with locally advanced (stage III and IV) primary (not yet treated)
squamous cell carcinoma of the head and neck (SCCHN). Multikine
has received Orphan Drug Status from the U.S. Food and Drug
Administration (FDA) for this indication.
Cel-Sci Corporation reported a net loss of $36.70 million for the
year ended Sept. 30, 2022, compared to a net loss of $36.36 million
for the year ended Sept. 30, 2021. As of Dec. 31, 2022, the
Company had $44.56 million in total assets, $17.96 million in total
liabilities, and $26.59 million in total stockholders' equity.
Potomac, Maryland-based BDO USA, LLP, the Company's auditor since
2005, issued a "going concern" qualification in its report dated
Dec. 27, 2022, citing that the Company has suffered recurring
losses from operations and has future liquidity needs that raise
substantial doubt about its ability to continue as a going concern.
CINEMEX HOLDINGS: Disallowance of Khan Parties' Claims Affirmed
---------------------------------------------------------------
In the appealed case captioned as DISTRICT THEATERS, INC., et al.,
Appellants, v. CINEMEX HOLDINGS USA, INC., et al., Appellees, Case
No. 21-CV-23675-altman/rEID, (S.D. Fla.), Judge Roy K. Altman of
the U.S. District Court for the Southern District of Florida
affirms the Bankruptcy Court's final decision disallowing Khan
Parties' claims against the Debtors Cinemex Holdings USA, Inc. and
affiliates.
Omar Khan "is the sole owner of" the Khan entities. The Khan
Parties operate "10 theater locations in Texas" and "one theater in
Naperville, Illinois." The Khan Parties' claims against Cinemex's
bankruptcy estate hinged entirely on Cinemex's supposed breach of
the two Equity Purchase Agreements.
On March 10, 2020, the parties "entered into two equity purchase
agreements." The first EPA concerned the Texas theaters, and the
second involved the Illinois theater. The Texas EPA provided an
"outside closing date" of April 30, 2020, while the Illinois EPA
gave an "outside closing date" of May 31, 2020. The Illinois EPA
also provided that the parties could not close the Illinois
transaction before April 10, 2020. Within those confines, both EPAs
stipulated that closing "shall be no later than the second Business
Day after satisfaction. . . of the conditions set forth in ARTICLE
8."
Judge Altman believes that the Bankruptcy Court correctly found
that Cinemex did not breach the Equity Purchase Agreements by
refusing to close on March 26, 2020. The Bankruptcy Court correctly
concluded that (1) the Illinois EPA precluded a closing before
April 10, 2020, and (2) the Khan Parties failed to satisfy several
conditions precedent to closing. For these two reasons, Cinemex
wasn't required to close the transaction by March 26 and,
accordingly, didn't breach either EPA.
First, the Bankruptcy Court said that the Illinois EPA couldn't be
closed before April 10, 2020 because the EPAs are not indivisible
-- that EPA explicitly forbade a March closing. And, even if we
were to accept the Khan Parties' argument that the EPAs are
indivisible, the April 10th limitation would then govern both
transactions -- meaning that the parties couldn't have closed
either EPA before April 10, 2020. Either way, the result is the
same: Cinemex didn't breach the EPAs by refusing to close in March.
Thus, the Bankruptcy Court correctly found that Cinemex didn't
breach the Illinois EPA by refusing to close in March.
Second, the Bankruptcy Court concluded that Cinemex wasn't
obligated to close either transaction because the Khan Parties had
failed to satisfy several of the EPAs' conditions precedent. The
Khan Parties' satisfaction of these conditions would've then
triggered the two-business-day deadline for Cinemex to close the
EPAs. But, for two reasons, the Khan Parties failed to live up to
the EPAs' conditions: (a) the Khan Parties hadn't delivered an
executed escrow agreement by March 24, 2020, and (b) the Khan
Parties breached the ordinary-course covenant by furloughing
one-hundred percent of their workforce -- which means that
Cinemex's obligation to close was never triggered.
The Bankruptcy Court correctly found that the Khan Parties didn't
just fail to use "reasonable best efforts" to close the
transaction. They, in fact, breached the EPAs when they filed the
Texas lawsuit and declared that Cinemex had repudiated the
agreements. The Khan Parties wrongly assumed that Cinemex had
repudiated the EPAs. Because they turned out to be wrong, the Khan
Parties breached the EPAs and forfeited their right to enforce
Cinemex's obligations under those agreements. Accordingly, Judge
Altman concludes that the Bankruptcy Court properly sustained
Cinemex's objections and disallowed the Khan Parties' claims.
A full-text copy of the Order dated April 4, 2023, is available
https://tinyurl.com/35pyvhtr from Leagle.com.
About Cinemex Holdings
Cinemex USA Real Estate Holdings Inc. and Cinemex Holdings USA,
Inc., a company that operates a movie theater chain, sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Fla. Case Nos. 20-14695 and 20-14696) on April 25, 2020. On April
26, 2020, CB Theater Experience, LLC, filed a Chapter 11 petition
(Bankr. S.D. Fla. Case No. 20-14699). The cases are jointly
administered under Case No. 20-14695.
At the time of the filing, the Debtors each disclosed assets of
between $100 million and $500 million and liabilities of the same
range.
Quinn Emanuel Urquhart & Sullivan, LLP and Bast Amron, LLP serve as
the Debtors' bankruptcy counsel.
CLEAN ENERGY: Agrees to Settle Outstanding Notes for $200K
----------------------------------------------------------
Clean Energy Technologies, Inc. disclosed in a Form 8-K filed with
the Securities and Exchange Commission it reached an agreement with
Cybernaut Zfounder Ventures, LLC to pay off the outstanding
convertible notes in amount equal to $324,875 that were in default
for a settlement amount of $200,000.
About Clean Energy
Headquartered in Costa Mesa, California, Clean Energy Technologies,
Inc. -- http://www.cetyinc.com-- designs, produces and markets
clean energy products and integrated solutions focused on energy
efficiency and renewables. The Company provides waste heat recovery
solutions, waste to energy solutions, and engineering, consulting
and project management solutions.
Clean Energy reported net profit of $147,395 for the year ended
Dec. 31, 2022, compared to net profit of $278,492 for the year
ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $8.11
million in total assets, $6.24 million in total liabilities, and
$1.88 million in total stockholders' equity.
Spokane, Washington-based Fruci & Associates II, PLLC, the
Company's auditor since 2015, issued a "going concern"
qualification in its report dated April 17, 2023, citing that the
Company has an accumulated deficit, a working capital deficit and
negative cash flows from operations. These factors, among others,
raise substantial doubt about the Company's ability to continue as
a going concern.
COUNTER CORTE: Unsecureds to Get 7.02 Cents on Dollar
-----------------------------------------------------
The Counter Corte Madera LP submitted a Plan of Reorganization for
Small Business under Chapter 11 dated April 11, 2023.
Payments due under the Plan total $174,128. They are as follows:
* $14,000 for projected administrative claims of professionals
over retainer, $12,000 for the Subchapter V Trustee, and $800.00
for the Franchise Tax Board.
* Priority claims of $9,184 to the Marin County Tax Collector
and $4,527.54 for EDD The $25,478 to the Internal Revenue Service
has been paid and will be withdrawn or disallowed by objection and
order of the Court.
* The remaining $121,617 will be paid the holders of allowed
general unsecured claims on a pro rata basis in two payments, the
first on the Effective Date and second when the proceeds from sale
of the liquor license are available.
This Plan of Reorganization under Chapter 11 of the Bankruptcy Code
proposes to pay creditors of the Debtors from personal earnings,
the proceeds of repayment of a business loan, and then cash and
proceeds from the Debtors' investment account.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 7.02 cents on the dollar.
Under the Plan, Class 3 General Unsecured Claims will receive their
pro rata share of the remainder of the estate, estimated to be
$130,617.50 in two payments, the first on the Effective Date and
second when the proceeds from sale of the liquor license are
available. Class 3 is impaired.
A copy of the Disclosure Statement dated April 12, 2023, is
available at https://bit.ly/43v4Qdz from PacerMonitor.com.
About The Counter Corte Madera
The Counter Corte Madera LP operated The Counter, a restaurant
located at 201 Corte Madera Town Center, Corte Madera, California
(the "Premises"). The Debtor filed its voluntary petition for
Chapter 11 protection (Bankr. N.D. Calif. Case No. 22-30686) on
Dec. 14, 2022, with $272,574 in assets and $1,467,285 in
liabilities. Peter Katz, manager of CI Management LLC, signed the
petition.
Judge Dennis Montali oversees the case.
Binder & Malter, LLP, serves as the Debtor's legal counsel.
COVENANT SOLAR: Court OKs Cash Collateral Access Thru May 12
------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina, Raleigh Division, authorized Covenant Solar Tech LLC and
Covenant Roofing and Construction Inc. to use cash collateral on an
interim basis in accordance with the budget, with a 10% variance,
through May 12, 2023.
The Debtors need to use cash for ordinary and necessary business
expenses consistent with the specific items and amounts in the
budget.
As previously reported by the Troubled Company Reporter, as of the
Petition Date, the Debtors had cash of approximately $188,913 and
the Debtors' accounts receivable total approximately $2.079
million.
A review of the North Carolina Secretary of State's UCC filings
reveals the following financing statements which might perfect a
lien on the cash collateral:
Debtor Secured Party
------ -------------
Covenant Roofing First Horizon Bank
Covenant Roofing U.S. Small Business Administration
Covenant Roofing MW GRP Capital
Covenant Solar Consolidated Electrical Distributors,
Inc.
As adequate protection, the Secured Creditors are granted a valid
and perfected replacement liens in and upon all of the categories
and types of collateral in which they held a security interest and
lien as of the Petition Date to the same extent, validity and
priority that they held as of the Petition Date. The Secured
Creditors' liens upon the post-petition collateral shall be deemed
immediately perfected without the need for any further action on
the part of the Secured Creditors.
On or before April 20, 2023, the Debtors will pay $23,978 to First
Horizon as adequate protection to First Horizon, which corresponds
to accrued interest through March 31, 2023.
These events constitute an "Event of Default":
(i) The Debtors (one or more) fail to comply with any of the
terms or conditions of the Order;
(ii) The Debtors (one or more) use cash collateral other than
as agreed in the Order;
(iii) Appointment of a trustee or examiner in the proceeding;
(iv) Cancellation or lapse of the Debtors' (one or more)
insurance coverage;
(v) Cessation of business operations by the Debtors (one or
more); or
(vi) Conversion to chapter 7 or dismissal of the case.
A continued hearing on the matter is set for May 10 at 2 p.m.
A copy of the Court's order and the Debtors' budget is available at
https://bit.ly/4442sef from PacerMonitor.com.
The Debtors project total cash out, on a weekly basis, as follows:
$470,372 for the week beginning April 30, 2023;
$282,520 for the week beginning May 7, 2023;
$418,504 for the week beginning May 14, 2023;
$263,181 for the week beginning May 21, 2023;
$506,122 for the week beginning May 28, 2023;
About Covenant Solar Tech LLC
Covenant Solar Tech LLC and Covenant Roofing and Construction Inc.
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. E.D.N.C. Case No. 23-00998) on April 11, 2023.
In the petition signed by Julian C. Hall II, authorized person, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Joseph N. Callaway oversees the case.
L. Katie Green, Esq., at Michael Best & Friedrich LLP, represents
the Debtor as legal counsel.
CRESTWOOD EQUITY: S&P Alters Outlook to Negative, Affirms 'BB' ICR
------------------------------------------------------------------
S&P Global Ratings revised the rating outlook on Houston–based
master limited partnership Crestwood Equity Partners L.P. (CEQP) to
negative from stable and affirmed its 'BB' issuer credit rating on
the company.
S&P said, "At the same time, we affirmed our 'BB' issue-level
rating on its senior notes and our 'B' rating on its preferred
stock. Our recovery rating on the senior notes remains '4',
indicating our expectation of average (30%-50%; rounded estimate:
40%) recovery in the event of a payment default.
"The negative outlook reflects our forecast adjusted leverage of
4.5x-5x in 2023 and 2024 driven by our expectation of
lower-than-previously assumed throughput volumes in the Williston
basin.
"We revised the rating outlook to negative following the
underperformance of CEQP's assets located in the Williston basin
and its storage and logistics business relative to our expectations
for 2022. Our updated base case now assumes slower deleveraging
with adjusted debt to EBITDA of 4.5x by the end of 2024. On the
positive side, CEQP's significant scale of operations, its assets'
geographic diversification, and fixed-fee contract portfolio
support its credit profile.
"We expect slower deleveraging due to the ongoing capital
discipline of exploration and production (E&P) companies. Due to
the impact of cold winter weather and well shut-ins in CEQP's area
of operations in the Williston basin, the company ended 2022 with
S&P Global Ratings-adjusted leverage of 5.4x, which was higher than
our projected ratio of 4x. As E&P companies remained focused on
capital discipline, we lowered our base case forecast for CEQP. We
now expect CEQP to de-lever to about 5x in 2023 and 4.5x in 2024.
Our adjusted leverage includes $612 million of preferred units to
which we assign no equity content."
CEQP's significant scale of operations and asset diversification
support its credit profile. The company's natural gas gathering and
processing, crude oil gathering, and produced water gathering
assets are spread across the Williston, Powder River, and Delaware
basins. CEQP remains focused on maintaining the optimal assets
portfolio as indicated by the divestiture of its noncore natural
gas gathering and processing assets in Barnett and Marcellus and
reinvestment of proceeds in higher return ventures. In July 2022,
CEQP acquired Sendero Midstream Partners and the remaining 50%
interest in the Crestwood Permian joint venture, natural gas
gathering and processing systems in the Permian basin. While
production volumes in the Williston basin may fluctuate seasonally
due to extreme weather events in fall and winter, causing CEQP's
cash flow volatility, S&P expects that steady production in the
Permian basin will contribute to the quality of CEQP's EBITDA and
cash flows.
CEQP enjoys a long-term, fixed-fee contract profile. CEQP's average
contract tenor is nine to 13 years with the majority of revenue
generated by acreage dedication contracts with fixed-fee structure.
Its customer base is well diversified with no single customer
making up to more than 10% of revenue. However, while CEQP does not
take title to the majority of commodities it transports it has some
exposure to commodity prices via its percentage of proceeds
contracts and its logistics and storage segment. This may constrain
its profitability when commodity prices are low.
S&P said, "The negative outlook reflects our expectation of
adjusted leverage of about 5x in 2023 declining to about 4.5x in
2024. Higher-than-previously projected leverage is driven by lower
throughput volumes in the Williston basin due to E&P customers'
continued focus on capital discipline and weather-related
production activity slowdown in 2022.
"We could lower the rating of CEQP if we expect the company's
leverage to be above 4.5x on a sustained basis. This could happen
if CEQP's throughput volumes underperform the budget over the next
24 months, or if the company engages in a debt financed
acquisitions or cash distribution.
"We could revise the outlook to stable if CEQP decreases leverage
to 4.5x or below by the end of the year, and we expect it would
maintain it below that level going forward."
ESG credit indicators: E-3, S-2, G-2
S&P said, "Environmental factors are a moderately negative
consideration in our credit rating analysis of CEQP, which operates
natural gas and crude gathering and processing, storage,
transportation, and marketing businesses. This is due to increasing
environmental regulation posed by climate change and GHG emissions
faced by the midstream energy sector more broadly. In the longer
term, the company may face risks of declining volumes due to
reduced drilling activity or demand due to the transition to
renewable energy sources."
CROWN COMMERCIAL: Court OKs Cash Collateral Access Thru May 11
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized Crown Commercial Real Estate and
Development, LLC to use cash collateral on an interim basis.
The Debtor and Rialto Capital Advisors, LLC, have agreed to the
terms of a 15th interim order permitting the Debtor's continued
cash collateral access.
Rialto is the Special Servicer and Attorney-in-Fact for secured
creditor, U.S. Bank National Association, as Trustee for the
benefit of the holders of Morgan Stanley Capital I Inc., Commercial
Mortgage Pass-Through Certificates, Series 2012-05.
The Debtor stipulates and agrees to continue operating its business
and pay expenses only in accordance with the terms of the interim
order through May 11, 2023.
Bank of America made a loan to the Debtor in the original principal
amount of $27,450,000, pursuant to a loan agreement dated June 26,
2012.
The Loan is evidenced by a promissory note dated June 26, 2012,
made by the Debtor and payable to the order of the Original
Lender.
To secure repayment of the Loan, the Debtor executed and delivered
to the Original Lender a Mortgage, Assignment of Leases and Rents,
and Security Agreement dated as of June 26, 2012, encumbering the
Debtor's real property, a real property improved by a shopping
center commonly known as Chatham Village Square Shopping Center,
located at 87th Street and Cottage Grove Avenue, Chicago, IL 60619,
recorded with the Cook County Recorder of Deeds on July 20, 2012,
as document number 1220213054.
As further security for the Loan, the Debtor granted the Original
Lender a lien on all of its personal assets. On June 29, 2012, the
Original Lender perfected its security interest in the Debtor's
assets by filing a UCC Financing Statement with the Illinois
Secretary of State identifying Crown Commercial as the debtor and
the Original Lender as the secured party.
On July 2, 2012, the Original Lender negotiated the Note to the
order of Rialto pursuant to an allonge and delivered the Note with
the Allonge to Rialto.
On August 8, 2012, the Original Lender assigned the Mortgage to
Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 2012-05, by executing and delivering to the
Lender an Assignment of Mortgage, Assignment of Leases and Rents,
and Security Agreement, which was recorded with the Cook County
Recorder of Deeds on September 10, 2012, as document number
1225408405.
On August 30, 2012, Rialto perfected its security interest in the
Debtor's assets by filing a UCC Financing Statement Amendment with
the Illinois Secretary of State identifying the Debtor as the
debtor and the Lender as the secured party, as subsequently
continued by filing of those UCC Financing Statement Amendments on
September 6, 2012, January 11, 2017, and January 18, 2022.
As of the Petition Date, the Debtor owed Rialto $22,874,831.
The Debtor offers, as adequate protection of the Lender's interest
in the cash Collateral, monthly payments of interest as they were
due pre-petition in accordance with the Loan Documents, and the
Court's condition that the Debtor uses the cash collateral only in
accordance with the Twelfth Budget during the Twelfth Interim
Period. Additionally, the Debtor agrees the Lender's security
interest and liens in the Collateral will create a valid lien on
and security interest in all of the Debtor's property acquired or
generated after the Petition Date, but solely to the same validity,
extent, and priority, and of the same kind and nature, as the liens
and security interests of the Lender securing the Obligations to
the Lender under the Loan Documents.
The Debtor will ensure the payment of all personal property taxes,
real property taxes, sales taxes, payroll taxes, insurance,
maintenance expenses, and payroll/wages in connection with
preserving the Property coming due during the Interim Period.
As further adequate protection, for the use of cash collateral (in
addition to the payment in the Prior Interim Order), the Debtor
will pay the Lender, on or before May 11, 2023, one monthly
interest payment in the amount of $83,144.
These events constitute an "Event of Default":
a. The Debtor's failure to maintain appropriate insurance for
the Collateral;
b. Except for disclosed payments made following the Petition
Date through the date of the Order, if the Debtor pays obligations
not showing on the Budget without the Lender's prior written
consent or further Court order or exceeds the Budget amounts by
more than 15%;
c. The Debtor fails to provide, when due, any reports or
accounting information reasonably required by the Agreed Interim
Order;
d. Any termination by the Court of the Debtor's use of cash
collateral; or
e. Failure to make the Adequate Protection Payment when due.
A further interim hearing on the matter is scheduled for May 10,
2023 at 10 a.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/43OMep2 from PacerMonitor.com.
The budget provides for total expenses, on a weekly basis, as
follows:
$11,973 for the week ending April 20, 2023;
$8,973 for the week ending April 27, 2023;
$18,975 for the week ending May 4, 2023; and
$98,617 for the week ending May 11, 2023.
About Crown Commercial
Real Estate and Development, LLC
Crown Commercial Real Estate and Development, LLC operates shopping
center, located at 87th Street and Cottage Grove Avenue, Chicago,
IL 60619. The Property consists of a shopping center owned and
operated for 25 years by Crown Commercial.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-05113) on May 3,
2022. In the petition signed by Musa P. Tadro, manager, the Debtor
disclosed up to $50,000 in assets and up to $50 million in
liabilities.
The Law Offices of Konstantine Sparagis is the Debtor's counsel.
Judge Janet S. Baer oversees the case.
CRYPTO CO: Widens Net Loss to $5.7 Million Net Loss in 2022
-----------------------------------------------------------
The Crypto Company has filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$5.66 million on $619,538 of services revenue for the year ended
Dec. 31, 2022, compared to a net loss of $785,630 on $434,552 of
services revenue for the year ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $1.56 million in total assets,
$4.62 million in total liabilities, and a total stockholders'
deficit of $3.06 million.
Lakewood, CO-based BF Borgers CPA PC, the Company's auditor since
2019, issued a "going concern" qualification in its report dated
April 14, 2023, citing that the Company has suffered recurring
losses from operations that raises substantial doubt about its
ability to continue as a going concern.
Crypto Co said, "The ability to continue as a going concern is
dependent upon the Company generating profitable operations in the
future and/or obtaining the necessary financing to meet its
obligations and repay its liabilities arising from normal business
operations when they come due. Management is evaluating different
strategies to obtain financing to fund the Company's expenses and
achieve a level of revenue adequate to support the Company's
current cost structure. Financing strategies may include, but are
not limited to, private placements of capital stock, debt
borrowings, partnerships and/or collaborations. There can be no
assurance that any of these future-funding efforts will be
successful."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1688126/000149315223012450/form10-k.htm
About Crypto Company
Malibu, CA-based The Crypto Company -- www.thecryptocompany.com --
is in engaged in the business of providing consulting services and
education for distributed ledger technologies, for the building of
technological infrastructure, and enterprise blockchain technology
solutions.
DGS REALTY: Seeks to Continue Using Cash Collateral Thru June 30
----------------------------------------------------------------
DGS Realty, LLC asks the U.S. Bankruptcy Court for the District of
New Hampshire for authority to continue using cash collateral and
provide adequate protection to PHH Mortgage Services through June
30, 2023.
PHH Mortgage Services is the servicer for U.S. Bank National Trust
Association, as Trustee for Lehman Brothers Small Balance
Commercial Mortgage Pass-Through Certificates, Series 2006-3. It
is the cash collateral lien holder.
PHH Mortgage holds or claims to hold:
-- a blanket first priority mortgage of record on the real
estate at 74 Regional Drive, and 72 Regional Drive, both in
Concord, New Hampshire; and
-- a collateral assignment of the rents thereof.
The PHH Mortgage First Priority Mortgage and Rent Assignment secure
the payment of $2,078,589, which is evidenced by a promissory note
in the original principal amount of $862,500.
The Debtor proposes not to spend or use more than $10,192 per month
during the period between May 1 and June 30, 2023, without the
written consent of the secured lender, as appropriate.
The cash collateral will be used solely and exclusively for the
purpose of paying the mortgage and taxes of the Debtor in the
ordinary course of business to the extent provided for in the
Budget and such other costs and expenses as may be authorized in
writing by the Secured Lender, as appropriate.
The Debtor will provide PHH Mortgage with adequate protection for
any loss or diminution in value of the cash collateral securing
their claims to the extent such claims qualify as secured claims
under Bankruptcy Code Section 506 pending the further Court order
or orders.
PHH Mortgage is being paid $6,750 per month plus real estate tax
escrow in the amount of $3,066 each month as adequate protection
payments beginning on February 1, 2023, and on the same date of
each month thereafter during the Use Term. These are the Debtor's
normal monthly payments.
The Proposed Order includes a "winding down" proviso under which
the Court reserves the right to enter such further orders as may be
necessary regarding the use of cash collateral to provide for
payment of any administrative claims for wage and trade creditors
who have supplied goods or services to the Debtor during the period
of operation under the order (and any stipulation) which remain
unpaid at the time of termination of authorized cash collateral
usage, and which goods or services have created additional
collateral for the secured claimant.
The Budget for May and June, 2023 includes the monthly payment for
the Debtor consisting of a $376 payment to the Small Business
Association representing the first payment for the secured loan
from the SBA. The Debtor obtained the loan prior to filing Chapter
11; however, the loan provided that payments were to commence
February 1, 2023.
A copy of the motion is available at https://bit.ly/41P3atO from
PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3N6Zsri from
PacerMonitor.com.
The Debtor projects $99,010 in total income and $10,192 in total
expenses for May 2023 and $99,194 in total income and $10,192 in
total expenses for June 2023.
About DGS Realty
Based in Concord, New Hampshire, DGS Realty, LLC, is a real estate
limited liability company. DGS Realty owns a 3-1/2 acre parcel of
land with three buildings on the property, known as 74 Regional
Drive, Concord, New Hampshire. There is an additional parcel of
land which is an unbuildable parcel of land, "a gully", which abuts
the larger property, known as 72 Regional Drive, Concord, New
Hampshire. DGS Realty also owns these parcels.
Formed around May 10, 2017, DGS Realty is owned by David H. Booth,
Manager, Stephen W. Booth, and Gregory A. Booth, each having a 1/3
interest. The company is an affiliate of Walter H. Booth Clause 4
Trust, which sought bankruptcy protection (Bankr. D.N.H. Case No.
16-11598) on Nov. 16, 2016.
DGS Realty filed a Chapter 11 petition (Bankr. D.N.H. Case No.
18-10024) on Jan. 11, 2018. In the petition signed by David H.
Booth, the Manager, the Debtor estimated assets and debts between
$1 million and $10 million. Representing the Debtor is Eleanor Wm
Dahar, Esq., at Victor W. Dahar Professional Association.
DIAMOND SPORTS: Seeks to Tap AlixPartners as Financial Advisor
--------------------------------------------------------------
Diamond Sports Group, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to hire
AlixPartners, LLP as their financial advisor.
The Debtors require a financial advisor to:
a. assist with assessing the use of or modifications to the
Debtors' rolling 13-week cash receipts and disbursements
forecasting tool or development of a new forecasting tool, if
necessary, and with the on-going assessment of liquidity.
b. prepare statement of financial affairs, schedules, and
other regular reports required by the court as well as a disclosure
statement and plan of reorganization, if applicable.
c. assist with the preparation of the Debtors' motions to be
filed with the court or the Debtors' response to motions filed by
other parties in interest.
d. assist with the design, negotiation and implementation of a
restructuring strategy.
e. provide testimony before the court on matters that are
within the scope of this engagement and within AlixPartners' area
of testimonial competencies, if applicable.
f. assist with the management of information flow to third
parties, including the Debtors' creditor constituencies and their
advisors.
g. assist with evaluating potential legal claims that may be
brought by the Debtors against Sinclair Broadcast Group, Inc. and
its affiliates and other third parties.
h. assist with such other matters as may be requested by the
Debtors' legal counsel, Paul, Weiss, Rifkind, Wharton & Garrison
LLP, that fall within AlixPartners' expertise and that are mutually
agreeable.
The firm's standard hourly rates are as follows:
Managing Director $1,140 - $1,400
Partner $1,115
Director $880 - $1,070
Senior Vice President $735 - $860
Vice President $585 - $725
Consultant $215 - $565
Paraprofessional $360 - $380
In addition, the firm will seek reimbursement for work-related
expenses incurred.
AlixPartners received a retainer in the amount of $750,000.
Alan Holtz, managing director at AlixPartners, disclosed in court
filings that his firm is a "disinterested person" as that term is
defined in section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Alan D. Holtz
AlixPartners, LLP
909 Third Avenue
New York, NY 10022
Telephone: (212) 490-2500
Facsimile: (212) 490-1344
Email: aholtz@alixpartners.com
About Diamond Sports Group
Diamond Sports Group, LLC operates as a sports marketing company.
It offers seminars, combine, speed and agility assessments,
recruiting tools, and online training sessions for sports including
football, baseball, soccer, and basketball.
Diamond Sports Group and 29 of its affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case
No. 23-90116) on March 14, 2023. In the petition filed by David F.
DeVoe, Jr., as chief financial officer and chief operating officer,
Diamond Sports Group listed $1 billion to $10 billion in both
assets and liabilities.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP
and Porter Hedges, LLP as bankruptcy counsels; Wilmer Cutler
Pickering Hale and Dorr, LLP as special corporate and litigation
counsel; AlixPartners, LLP as financial advisor; Moelis & Company,
LLC and LionTree Advisors, LLC as investment bankers; Deloitte Tax,
LLP as tax advisor; Deloitte Financial Advisory Services, LLP as
accountant; and Deloitte Consulting, LLP as consulting services
provider. Kroll Restructuring Administration, LLC is the claims
agent.
EMRLD BORROWER: S&P Assigns 'BB-' ICR, Outlook Stable
-----------------------------------------------------
S&P Global Ratings assigned its 'BB-' issuer credit rating to EMRLD
Borrower LP (doing business as Copeland). At the same time, S&P
assigned its 'BB-' issue-level rating and '3' recovery rating to
the company's proposed senior secured term loan B facility, which
we anticipate will be up to $2.75 billion.
S&P said, "The stable outlook reflects our expectation that
relatively stable revenue trends, in conjunction with improving
margins, will drive EBITDA growth and deleveraging. We forecast S&P
Global Ratings'-adjusted leverage to decline below 8.5x over the
next 12-18 months while maintaining S&P Global Ratings'-adjusted
free operating cash flow (FOCF) to debt around 5%. Though we view
leverage as high, we recognize the cash flow benefits the PIK-only
preferred equity and seller's note provide, which we include in our
credit measures."
Blackstone, through its Blackstone Capital Partners VIII L.P. fund,
is acquiring a majority stake of Emerson Electric Co.'s climate
technologies business through new entity EMRLD Borrower LP (doing
business as Copeland) for an aggregate purchase price of $14
billion. Copeland is a leading manufacturer of highly engineered
heating, ventilation, air conditioning, and refrigeration (HVAC or
HVAC/R) components globally, primarily compressors. Emerson
Electric Co. will retain 45% ownership in the joint venture (JV)
following the acquisition.
S&P said, "Copeland holds leading market shares across the global
compressor market, but we view end-market and product diversity as
relatively low. Copeland generates the majority of its revenues
from fixed and modulating scroll compressors, which are sold
primarily to original equipment manufacturers (OEMs). Compressors
are a vital part of HVAC/R systems, as they consume the vast
majority of the system's power. Therefore, they are the primary
lever used to deliver increased system efficiency, which is
increasingly in focus given sustainability and regulatory trends.
OEMs spec the compressors into their residential and commercial
HVAC systems and refrigeration products, which increases switching
costs for customers. Copeland is significantly larger than its
peers, which drives scale advantages through the company's global
manufacturing footprint and its R&D investments. The company holds
the No. 1 market share in residential HVAC compressors, commercial
HVAC compressors, and refrigeration compressors. The company has
also maintained long-term relationships with large HVAC OEM
customers and holds significant wallet shares, which we view as
evidence of the company's technological and scale advantages over
peers. Further, we expect favorable long-term demand trends in the
HVAC industry with support from the relatively stable replacement
cycle and ongoing regulatory changes that require more efficient
products. These trends have supported growth in electrification and
heat pumps, in which Copeland is also a leading player.
"Nevertheless, offsetting these favorable attributes are the
company's relatively limited end-market and product diversification
(it derives more than 80% of revenues from HVAC/R compressors), as
well as some modest customer concentration in North American HVAC
OEMs. Further, we believe technological disruption is a potential
risk given HVAC OEM customer focus on energy efficiency and the
rapidly growing electrification market. In addition, while the
replacement cycle can support relatively predictable long-term
demand trends, demand can fluctuate annually as consumers may opt
to shift toward repair from replacements during periods of
macroeconomic weakness. Nevertheless, Copeland has demonstrated
relatively stable performance through cycles historically and has
long-term agreements (LTAs) in place for more than 80% of its North
America OEM sales, which provide improved volume visibility.
"We believe Copeland's operating performance will remain relatively
stable, despite our forecast for modest volume softness in 2023. We
forecast Copeland's revenues to decline in the low-single-digit
percent area in fiscal 2023 (ending Sept. 30, 2023), driven by
volume softness in the North American residential HVAC market as a
weaker macroeconomic environment and reduced residential
construction spending negatively affect demand. We expect this
softness to be partially offset by strength in the European HVAC
market, with support from continued trends in electrification and
demand for heat pumps. Further, we forecast Copeland's S&P Global
Ratings'-adjusted EBITDA margins to expand modestly to around 23%
in 2023, from the mid-22% area in 2022, driven by improvements in
gross margins as commodity input prices decline, partially offset
by increased operating costs associated with the transition to a
standalone entity and restructuring expenses.
"Although we forecast Copeland's debt leverage will remain high, we
believe the paid-in-kind (PIK) instruments in the capital
structure, as well as Emerson's retained ownership and the
company's strong margins and cash flow generation, are favorable
when compared with other sponsor-owned issuers with similar
leverage, which supports our rating. We forecast Copeland's S&P
Global Ratings'-adjusted leverage to be in the mid-8x area in 2023
and around 8x in 2024. This expectation for high adjusted leverage
is somewhat mitigated by our forecast for continued strong cash
flow generation, and S&P Global Ratings'-adjusted FOCF to debt of
about 5%. While we include the company's $2 billion of 7%
convertible PIK only preferred equity and $2.25 billion 5% PIK only
seller's note as debt in our financial analysis, including in our
leverage and coverage calculations, we note the benefit to cash
flow and liquidity of these instruments since neither require cash
payments. The PIK instruments are issued by certain indirect
parents of EMRLD Borrower LP and will be structurally subordinated
to the proposed senior secured debt. We assess Copeland's financial
risk as highly leveraged, consistent with most financial sponsor
owned issuers. However, we also believe the company's scale, cash
flow generation, and EBITDA margins compare favorably with many
sponsor-owned entities. In addition, we view Emerson's retained 45%
ownership in the joint venture and its influence over certain
financial policy decisions as a credit positive, given the
company's relatively conservative financial policy.
"Our stable outlook on Copeland reflects our expectation that
relatively steady revenue trends, in conjunction with margin
improvement, will drive EBITDA growth and deleveraging. We forecast
the company's S&P Global Ratings'-adjusted leverage will decline
below 8.5x over the next 12-18 months, while S&P Global
Ratings'-adjusted FOCF to debt remains around 5%. We view leverage
as high but recognize the cash flow benefits provided by the
PIK-only nature of the preferred shares and seller's note that are
included in our credit measures.
"We could lower our rating on Copeland if we expect its S&P Global
Ratings'-adjusted debt to EBITDA will remain above 8x on a
sustained basis. In addition, we could consider lower ratings if
FOCF to debt deteriorates below 5% and we expect it will remain
below this level."
An upgrade is unlikely over the next 12-24 months considering
Copeland's high debt load and ownership structure. Nevertheless,
S&P could consider higher ratings if:
-- S&P expects its S&P Global Ratings'-adjusted debt to EBITDA to
decline below 5.0x and remain at that level;
-- S&P Global Ratings'-adjusted FOCF to debt increases to the
high-single-digit percent area and we expect it remain at this
level; and
-- Management commits to a financial policy that is commensurate
with this level of leverage, including potential future
acquisitions and shareholder rewards.
ESG credit indicators: E-3, S-2, G-3
Copeland has heightened exposure to environmental factors given the
proportion of global emissions derived from heating and cooling
buildings. S&P said, "However, we believe Copeland's compressor
technology helps drive improved energy efficiency in OEM HVAC
systems. We believe Copeland will continue to dedicate R&D toward
higher efficiency products, which help to reduce end-user
emissions. Governance is a moderately negative consideration, as is
the case for most entities owned by private-equity sponsors. We
believe financial policy will be driven by corporate
decision-making that prioritizes the interests of its controlling
owners (Blackstone)." This also reflects private-equity owners'
generally finite holding periods and focus on maximizing
shareholder returns.
ENVIVA INC: S&P Downgrades ICR to 'B+' on Elevated Leverage
-----------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Enviva Inc.
'B+' from 'BB-'. S&P also revised its rating outlook to Stable from
negative.
At the same time, S&P lowered the issue-level ratings on the senior
unsecured debt to 'B' from 'B+'. The '5' recovery rating is
unchanged.
Enviva's Deferred Gross Margin Transaction negatively impacted
credit metrics in 2022. In the fourth quarter of 2022, Enviva
entered into a modified contract agreement, known as the Deferred
Gross Margin Transaction (DGMT). Enviva agreed to purchase 1.8
million metric tons (MT) of wood pellets from a customer with whom
they have existing take-or-pay contracts to sell 2.8 million MT of
wood pellets through 2026. According to U.S. GAAP-reporting
principles, Enviva must recognize this transaction as a contract
modification, and therefore the wood pellets sold to the customer
are represented as a financing transaction and appear as a cash
flow from financing activities on the company's financial
statement, rather than as revenue. As a result, Enviva recognized
$89 million less in gross margin compared to what they were
expecting to report in 2022. This negatively impacted S&P's
calculation of S&P Global Ratings-adjusted EBITDA in 2022 and
resulted in S&P Global Ratings-adjusted debt to EBITDA ratio of
approximately 18x. Excluding this impact, S&P Global
Ratings-adjusted leverage would have been significantly lower. It
expects an additional $12 million negative impact to EBITDA from
the DGMT transaction in the first fiscal quarter of this year. The
DGMT impact will reverse and S&P expects the company to recognize
50% of the deferred revenues in 2024 and the remainder in 2025.
S&P said, "We now expect S&P Global Ratings-adjusted debt to EBITDA
to be about 6.50x-6.75x in 2023 and 5.75x-6.00x in 2024. We expect
a meaningful increase in volumes sold in 2023 and 2024 compared to
2022 levels, primarily as a result of increased production from the
Lucedale and Epes plants, higher utilization rates across the
portfolio, and the ability to recognize volumes delivered to the
customer that were impacted by the DGMT. In addition, we assume
embedded contract pricing escalators in 2023 and 2024 will support
our expectation for revenue growth. However, while we continue to
expect Enviva to generate year-over-year revenue growth, our
projections are somewhat lower than our previous forecast. Our
revised forecast reflects a slower-than-expected ramp up of new
plants, lower assumptions on gross margin per metric ton, and a
reduction in volumes sold into the spot market. Positively, the EU
announced it will continue to recognize woody biomass as a
renewable energy source, which in our view will continue to be
supportive of the company's business model going forward.
Offsetting this, we note Enviva elects to make certain adjustments
to its financial metrics, which totaled about $87 million in 2022,
including "Acquisition and integration costs," "Effects of
COVID-19," "Effects of the war in Ukraine," "Support Payments," and
"Executive Separation", which we exclude from our EBITDA
calculations and result in a meaningfully lower EBITDA levels
compared to the company's reported metrics. We now expect S&P
Global Ratings-adjusted EBITDA to be between $250 million-$275
million in 2023 and between $350 million-$375 million in 2024,
compared to our previous forecast for EBITDA of about $350 million
and $460 million in 2023 and 2024, respectively. We now forecast
S&P Global Ratings-adjusted debt to EBITDA to be about 6.50x-6.75x
in 2023 and 5.75x-6.00x in 2024 compared to our previous
expectation of 5.1x and 4.4x, respectively. We forecast the company
to operate at an S&P Global Ratings-adjusted free operating cash
flow (FOCF) deficit of approximately $175 million this year and a
deficit of over $140 million in 2024. Affiliates of Riverstone
Holdings LLC own over 40% of the company, but this ownership by a
financial sponsor does not further impact our view of Enviva's
credit quality.
Enviva continued to increase debt and issue equity to pay its
dividend and fund its expansion projects. Over the past year and a
half, Enviva has continually issued debt and equity to pay its
dividend and fund its growth capital projects. In total, the
company has issued roughly $500 million in debt and almost $600
million in equity. Some of the proceeds from these issuances have
gone to repaying outstanding borrowings on their revolving credit
facility (RCF); however, the majority of proceeds fund their
capital expenditure (capex) program and their dividend, which
increased by about $50 million in 2022 to approximately $205
million. In 2022, the distribution coverage ratio was below 1.0x
and the company projects an improvement to its distribution
coverage ratio to just over 1.0x in 2023. S&P said, "In our view,
Enviva remains committed to its equity holders and we forecast its
dividend to remain relatively stable through 2024. That said, with
a dividend yield above 15% based on the current unit price, we
would view it to be unsustainable over the long term unless its
unit price appreciates from current levels."
S&P said, "The stable outlook reflects our expectation that S&P
Global Ratings-adjusted debt to EBITDA will be between 6.50x-6.75x
in 2023 and between 5.75x-6.00x in 2024. We expect Enviva will
continue to sustain elevated leverage while the company focuses on
its expansion projects and prioritizes shareholder returns through
dividends.
"We could take a negative rating action if Enviva underperforms our
forecast such that we expect S&P Global Ratings-adjusted debt to
EBITDA will be above 7.0x in 2023 or above 6.0x in 2024. This could
occur if the company encounters operational problems, modifies its
financial policy with higher-than-expected debt-financed capex, or
meaningfully increases its dividends. This could also occur if the
company encounters difficulties in acquiring or replacing
counterparties for offtake volume.
"Although unlikely in the near term, we could take a positive
rating action if Enviva performs well operationally, and we expect
it will sustain S&P Global Ratings-adjusted debt to EBITDA below
5.0x."
ESG credit indicators: E-2, S-2, G-3
S&P said, "Environmental factors are a neutral consideration in our
credit rating analysis of Enviva. We believe Enviva's management of
environmental risk is stronger than that of peers because the
company does not transport hydrocarbons, but rather biomass in the
form of wood pellets. Enviva continues to benefit from countries in
Europe and Asia switching to biomass electricity generation to
reach their renewable energy production targets. We also expect
Enviva to procure wood pellets on a sustainable basis. Governance
is a moderately negative consideration. Our assessment of the
company's financial risk profile reflects corporate decision-making
that prioritizes the interests of the controlling owners, in line
with our view of the majority of rated entities owned by
private-equity sponsors. We believe financial sponsors are more
likely to hold these companies for shorter time frames and focus on
maximizing shareholder returns."
ESSY QUALITY: Files Emergency Bid to Use Cash Collateral
--------------------------------------------------------
Essy Quality Health Care, LLC asks the U.S. Bankruptcy Court for
the Western District of Texas, San Antonio Division, for authority
to use the cash collateral of the U.S. Internal Revenue Service.
The Debtor requires the use of cash collateral to continue its
operations.
The IRS asserts a security interest in all property of the Debtor
based upon pre-petition tax liens. The Small Business
Administration also asserts a perfected security interest in the
Debtor's property.
The Debtor proposes to provide adequate protection to the creditors
by granting to them a security interest in the Debtor's property as
set forth in 26 U.S.C. section 6321 and by remaining current on
employee tax deposits. The Debtor was current on its 941 tax
payments for 2022 and but for a garnishment issued April 9, 2023
the Debtor would have been able to pay its first quarter 941 taxes
for 2023.
A copy of the motion is available at https://bit.ly/40m9HLp from
PacerMonitor.com.
About ESSY Quality Health Care, LLC
ESSY Quality Health Care, LLC is a home health care services
provider.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-50442) on April 17,
2023. In the petition signed by Dozie Zogus Ony, managing member,
the Debtor disclosed up to $50,000 in assets and up to $10 million
in liabilities.
Michael J. O'Connor, Esq., at Michael J. O'Connor Law Office,
represents the Debtor as legal counsel.
FARR LABORATORIES: Court OKs Final Cash Collateral Access
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Farr Laboratories, LLC to use cash collateral on a final basis in
accordance with the initial budget, with a 10% variance.
The Debtor needs the use of cash collateral, nunc pro tunc from the
Petition Date forward, in order to reorganize its debt and move
forward with its business.
As previously reported by the Troubled Company Reporter, the Debtor
contracts with third-party Graminex, L.L.C. located in Saginaw,
Missouri, for the manufacturing of supplements, and third-party
Imagine Fulfillment Services, LLC located in La Mirada, California,
for warehousing and order fulfillment services for the
Supplements.
On April 1, 2021, the Debtor entered into a revolving loan
agreement with Michael Reinstein, whereby the Lender agreed to
extend to the Debtor, in one or more draws, an amount not to exceed
the principal amount of $320,000.
Effective April 19, 2021 and in connection with the Revolving Loan
Agreement, the Debtor executed a promissory note in the amount of
$305,136 payable to the Lender.
On March 1, 2023, the Debtor entered into the First Amended
Revolving Loan Agreement with the Lender which increased the
Maximum Loan Amount to $400,000 and extended the maturity date to
August 1, 2023.
On March 1, 2023, the Debtor executed a promissory note in the
amount of $58,738 payable to the Lender.
The Lender filed a UCC-1 financing statement securing all amounts
due under the Loan Documents. The UCC secures all of the Debtor's
assets.
As of March 21, 2023, the balance owed to the Lender under the Loan
Documents was approximately $363,874.
As adequate protection for the use of cash collateral on a final
basis, any party with valid, binding, enforceable, and perfected
security interest in cash collateral as of the Petition Date will
receive a valid, binding, enforceable, and properly perfected
security interest in the form of a replacement lien of the same
extent, priority, and validity as existed pre-petition, provided,
however, that any replacement lien is subject to disgorgement if
lien is avoided or recharacterized.
A copy of the order is available at https://bit.ly/3LkYgzr from
PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3UW2e4C from
PacerMonitor.com.
The Debtor projects total operating expenses, on a monthly basis,
as follows:
$86,714 for April 2023;
$86,482 for May 2023; and
$125,044 for June 2023.
About Farr Laboratories, LLC
Farr Laboratories, LLC is in the vitamin and supplement business.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-10347) on March 23,
2023. In the petition signed by Frederick Reinstein, its member,
the Debtor disclosed up to $500,000 in assets and up to $10 million
in liabilities.
Judge Karen B. Owens oversees the case.
Daniel K. Astin, Esq., at Ciardi Ciardi & Astin, represents the
Debtor as legal counsel.
FIRST REPUBLIC: Moody's Lowers Preferred Stock Ratings to Ca(hyb)
-----------------------------------------------------------------
Moody's Investors Service has downgraded First Republic Bank's
preferred stock non-cumulative ratings to Ca(hyb) from Caa1(hyb)
and maintained the ratings on review for downgrade. All other
ratings are not affected by this rating action and long-term
ratings remain on review for downgrade.
RATINGS RATIONALE
The downgrade of the non-cumulative preferred stock is a result of
the bank's announcement on April 7, 2023 that the Board of
Directors determined to suspend payment of the quarterly cash
dividend on each series of the bank's outstanding noncumulative
perpetual preferred stock. Under the terms of each series of
Preferred Stock, the right of holders to receive dividends is
noncumulative, and the Board is not required to declare a dividend
payable in respect of any dividend period. As a result, Moody's
believes that the expected recoveries have fallen for those
preferred stocks due to the suspension of the dividends, indicating
some degree of impairment. The Ca(hyb) rating reflects an
approximated expected recovery rate associated with an impaired
security of 35% to 65%.
Moody's notes that the high cost of the bank's borrowings, combined
with the high proportion of fixed rate assets at the bank, is
likely to have a large negative impact on First Republic's core
profitability in coming quarters. In addition, while the news of
the banking consortium's deposits is positive in the short-run, the
longer-run path for the bank back to sustained profitability
remains uncertain.
The rating action also takes into consideration Moody's assessment
that the likelihood of government support for the bank's preferred
stockholders is low. The low level of government support for
preferred shares reflects Moody's expectation that, in the event of
a continued deterioration in the bank's financial profile, those
preferred shareholders would not be protected.
OUTLOOK MAINTAINED AT RATINGS UNDER REVIEW
The review for downgrade reflects the continuing challenges to the
bank's medium-term credit profile in light of its significantly
eroded deposit base, increased reliance on expensive / costly
short-term wholesale funding and sizeable volume of unrealized
losses on its investment securities. The review will focus on the
likelihood of the bank's preferred stocks being partly or wholly
wound down, which would trigger a further downgrade to C(hyb), the
lowest rating on Moody's scale.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade of First Republic's preferred stock ratings could occur
should the cash dividend payments be resumed and the instruments
migrate from impaired to cured.
First Republic's preferred stock ratings could be downgraded
further if the bank continues to suspend cash dividend payment for
an undetermined period of time and/or decide to partially or
totally wind down the instruments, thus lowering their expected
recovery rate below 35%.
The principal methodology used in these ratings was Banks
Methodology published in July 2021.
FUSION LLC: Barracuda's Motion to File 3rd Party Complaint Denied
-----------------------------------------------------------------
Judge Nathaniel M. Gorton of the U.S. District Court for the
District of Massachusetts denies the motion for leave to file a
third-party complaint against Fusion LLC filed by Barracuda
Networks, Inc. in the case captioned as AXIS INSURANCE COMPANY,
a/a/o ZOLL MEDICAL CORPORATION and ZOLL SERVICES LLC, and a/s/o
FUSION LLC, Plaintiff, v. BARRACUDA NETWORKS, INC., and SONIAN
INC., Defendants, Civil Action No. 20-11997-NMG, (D. Mass.).
In June, 2019, Fusion LLC filed for bankruptcy protection under
Chapter 11. Zoll Services LLC filed a proof of claim in the
bankruptcy proceeding shortly thereafter and, in January, 2020,
Fusion's bankruptcy reorganization plan became effective. The plan
permitted Zoll to seek damages from Fusion for harm suffered as a
result of the data breach "to the extent of available insurance
coverage and proceeds."
Zoll initiated arbitration with Fusion in March, 2020, asserting
claims for negligence and breach of contract. Zoll also attempted
to assert claims against Barracuda Networks, Inc., which were
dismissed for lack of privity. On Nov. 6, 2020, Zoll initiated this
action against Barracuda in the District of Massachusetts. Fusion
was allowed to intervene in June 2021. Several months later,
Barracuda brought the pending motion for leave to file a
third-party complaint against Fusion under Fed. R. Civ. P.
14(a)(1).
Judge Gorton finds that "the complicated relationships and legal
histories between Zoll, Fusion (and its predecessor), Barracuda
(and its predecessor) and their various insurers have already
contributed to a protracted course of litigation. The underlying
data breach occurred in November 2018, and Barracuda was served
with Zoll's initial arbitration demand in March 2020. The case at
bar against Barracuda was filed in the District of Massachusetts in
November 2020."
Judge Gorton holds that "Barracuda's dilatory effort to implead
Fusion as a third-party defendant and to assert multiple
contractual claims against it would, if allowed, implicate complex,
tangential questions of bankruptcy law with respect to Fusion's
January 2020, reorganization plan. Such an allowance would also
lead to further discovery, dispositive motions and legal
contentions which would otherwise be outside the scope of this
litigation." As such, Judge Gorton denies Barracuda's motion to
file a third-party complaint against Fusion because of the undue
delay and significant prejudice that it would cause.
A full-text copy of the Memorandum & Order dated April 7, 2023, is
available https://tinyurl.com/ycxeerhs from Leagle.com.
GAUCHO GROUP: Widens Net Loss to $21.8 Million in 2022
------------------------------------------------------
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.
Gaucho Group said, "The Company presently has enough cash on hand
to sustain its operations on a month-to-month basis, but if the
Company is not able to obtain additional sources of capital, it may
not have sufficient funds to continue to operate the business for
twelve months from the date these financial statements are issued.
Since inception, our operations have primarily been funded through
proceeds received in equity and debt financings. We believe we
have access to capital resources and continue to evaluate
additional financing opportunities. There is no assurance that we
will be able to obtain funds on commercially acceptable terms, if
at all. There is also no assurance that the amount of funds we
might raise will enable us to complete our development initiatives
or attain profitable operations."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1559998/000149315223012603/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.
GOBP HOLDINGS: S&P Withdraws 'BB-' ICR, Outlook Stable
------------------------------------------------------
S&P Global Ratings withdrew all of its ratings on GOBP Holdings
Inc. at the issuer's request following the company's refinancing of
its senior secured credit facilities on Feb. 21, 2023. At the time
of the withdrawal, S&P rated the company 'BB-' with a stable
outlook.
GREENIDGE GENERATION: Releases Selected Prelim Q1 Financial Results
-------------------------------------------------------------------
Greenidge Generation Holdings Inc. announced selected preliminary
financial and operating results for the first quarter of 2023.
For the three months ended March 31, 2023, Greenidge expects to
report revenue of approximately $15 million, net loss in a range of
approximately $8 million to $9 million and Adjusted EBITDA loss in
a range of approximately $1 million to approximately $2 million.
Cryptocurrency datacenter hosting revenue is expected to be
approximately $7 million, Cryptocurrency datacenter self-mining
revenue is expected to be approximately $6 million and Power and
capacity revenue is expected to be approximately $2 million for the
first quarter of 2023. The Company's cryptocurrency datacenter
operations produced approximately 698 bitcoin during the first
quarter of 2023, of which 413 bitcoin were produced for colocation
and 285 bitcoin were produced for self-mining. As of March 31,
2023, Greenidge operated approximately 24,700 miners with
approximately 2.5 EH/s of combined capacity for both colocation and
self-mining as of March 31, 2023.
Greenidge ended the quarter with approximately $17 million of cash
and approximately $97 million of debt.
About Greenidge Generation
Headquartered in Fairfield, CT, Greenidge Generation Holdings Inc.
(NASDAQ: GREE) -- www.greenidge.com -- is a vertically integrated
cryptocurrency datacenter and power generation company.
Greenidge reported a net loss of $271.07 million in 2022, compared
to a net loss of $44.48 million in 2021. As of Dec. 31, 2022, the
Company had $163.77 million in total assets, $210.81 million in
total liabilities, and $47.05 million in total stockholders'
deficit.
Dallas, Texas-based Armanino LLP, the Company's auditor since 2021,
issued a "going concern" qualification in its report dated March
31, 2023, citing that the Company incurred a loss from operations
and generated negative cash flows from operations during the year
ended Dec. 31, 2022. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
GREENIDGE GENERATION: Widens Net Loss to $271.1 Million in 2022
---------------------------------------------------------------
Greenidge Generation Holdings Inc. filed with the Securities and
Exchange Commission its Annual Report on Form 10-K disclosing a net
loss of $271.07 million on $89.98 million of total revenue for the
year ended Dec. 31, 2022, compared to a net loss of $44.48 million
on $97.32 million of total revenue for the year ended Dec. 31,
2021.
As of Dec. 31, 2022, the Company had $163.77 million in total
assets, $210.81 million in total liabilities, and $47.05 million in
total stockholders' deficit.
Dallas, Texas-based Armanino LLP, the Company's auditor since 2021,
issued a "going concern" qualification in its report dated March
31, 2023, citing that the Company incurred a loss from operations
and generated negative cash flows from operations during the year
ended Dec. 31, 2022. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
On Dec. 31, 2022, the Company had cash and cash equivalents of
$15.2 million. To date, the Company has primarily relied on debt
and equity financing to fund its operations, including meeting
ongoing working capital needs. During 2022, the Company obtained
approximately $107.1 million of additional financings, net of debt
issuance costs, through two different agreements.
Greenidge said, "Despite the additional financings obtained during
2022, our ability to continue as a going concern is dependent upon
generating profitable operations in the future and/or obtaining the
necessary financing to meet our obligations and repay our
liabilities arising from normal business operations when they come
due.
"Our operating cash flows are affected by several factors including
the price of bitcoin, cost of electricity, natural gas and
emissions credits. During the year ended December 31, 2022, our
profit and cash flows were impacted significantly by volatility in
the prices of bitcoin and natural gas. As a result, management
took certain actions during the second half of 2022 and during the
first quarter of 2023 to improve the Company's liquidity."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001844971/000162828023010227/gree-20221231.htm
About Greenidge Generation
Headquartered in Fairfield, CT, Greenidge Generation Holdings Inc.
(NASDAQ: GREE) -- www.greenidge.com -- is a vertically integrated
cryptocurrency datacenter and power generation company.
GUARDION HEALTH: Incurs $14.9 Million Net Loss in 2022
------------------------------------------------------
Guardion Health Sciences, Inc. has filed with the Securities and
Exchange Commission its Annual Report on Form 10-K disclosing a net
loss of $14.92 million on $11.05 million of total revenue for the
year ended Dec. 31, 2022, compared to a net loss of $24.74 million
on $7.23 million of total revenue for the year ended Dec. 31,
2021.
As of Dec. 31, 2022, the Company had $21.68 million in total
assets, $8.52 million in total liabilities, $5.25 million in total
redeemable preferred stock, and $7.92 million in total
stockholders' equity.
For the year ended Dec. 31, 2022, the Company used cash in
operating activities of $7,446,812. The Company's management
evaluated whether there are conditions or events considered in the
aggregate, that raise substantial doubt about the Company's ability
to continue as a going concern within one year after the date the
financial statements are issued.
Guardion Sciences said, "Notwithstanding the net loss for 2022,
management concluded that the Company will have adequate
unrestricted cash available from the Company's cash and cash
equivalents balance of $10,655,490 at December 31, 2022, so that it
is probable that the Company will be able to fund its current
operating plan and meet all of its obligations due within one year
from the date the Company's 2022 financial statements are issued.
"The amount and timing of future cash requirements will depend, in
part, on the Company's ability to ultimately achieve operating
profitability. The Company expects to continue to incur net losses
and negative operating cash flows in the near-term and will
continue to incur significant expenses for the development,
commercialization and distribution of its clinical nutrition
products (including the Viactiv product line), the development and
commercialization of its diagnostics equipment, and the successful
development and commercialization of any new products or product
lines. The Company may also utilize cash to fund additional
acquisitions.
"The Company may seek to raise additional debt and/or equity
capital to fund future operations, but there can be no assurances
that the Company will be able to secure such additional financing
in the amounts necessary to fully fund its operating requirements
on acceptable terms or at all. Over time, if the Company is unable
to access sufficient capital resources on a timely basis, the
Company may be forced to reduce or discontinue its technology and
product development programs and curtail or cease operations."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1642375/000149315223012449/form10-k.htm
About Guardion Health Sciences
Headquartered in San Diego, California, Guardion Health Sciences,
Inc. -- http://www.guardionhealth.com-- develops and distributes
clinically supported nutritional medical foods and dietary
supplements. These products are designed to support retail
consumers, healthcare professionals and providers, and their
patients by supporting bone health, eye health, cardiovascular
health, and brain health through nutrients such as Calcium, Vitamin
D, Vitamin K, Carotenoids, and Omega-3s.
Guardion Health reported a net loss of $8.57 million for the year
ended Dec. 31, 2020, a net loss of $10.88 million for the year
ended Dec. 31, 2019, and a net loss of $7.77 million for the year
ended Dec. 31, 2018. As of Sept. 30, 2022, the Company had $28.23
million in total assets, $1.73 million in total liabilities, and
$26.49 million in total stockholders' equity.
* * *
This concludes the Troubled Company Reporter's coverage of Guardion
Health until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
HARRIS ENERGY: Court OKs Final Cash Collateral Access
-----------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Wisconsin
authorized Harris Energy Group, Inc. and its debtor-affiliates to
use cash collateral on a final basis in accordance with the
budget.
The Court held that the Debtors are authorized to use cash
collateral as provided in the budget including the payment of
$6,000 per month to Harris Real Estate Holdings, LLC beginning in
April, 2023 with subsequent $6,000 monthly payments beginning in
May, subject to any motion practice under 11 U.S.C. section 365.
Commencing April 28, 2023, the Debtors are authorized on a final
basis to make monthly adequate protection payments to (1) Zero6
Energy, Inc. (f/k/a Juhl Clean Energy Assets, Inc.) in the amount
of $84,760; (2) The Stephenson National Bank and Trust in the
amount of $9,618; and (3) Berutti Energy, LLC in the amount of
$5,137.
The Debtors are directed to keep in full force and effect all
casualty insurance and provide reports of their receipts and
distributions consistent with the monthly reporting requirements
for Chapter 11 cases.
As previously reported by the Troubled Company Reporter, the
entities that assert an interest in the Debtor's cash collateral
are Juhl Clean Energy Assets, Inc., The Stephenson National Bank
and Trust, Berutti Energy LLC, and Gambit LLC.
On December 17, 2017, Juhl, Flambeau Hydro, LLC, and Renewable
World Energies, LLC entered into a Loan Agreement under which Juhl
loaned to Flambeau Hydro $7 million to be used for debt retirement,
capital improvements, and other general business purposes.
On August 26, 2021, Juhl, Flambeau Hydro, and RWE entered into the
Amended and Restated Loan Agreement under which Juhl loaned to
Flambeau Hydro an additional $1.8 million to be used for costs
associated with a transformer purchase and interconnection upgrade
at Flambeau Hydro's Maquoketa hydroelectric power plant, the
acquisition of Eau Galle Hydro, LLC, and for other general business
purposes.
On March 18, 2022, Juhl, Flambeau Hydro, and RWE entered into a
Memorandum of Understanding under which Flambeau Hydro sought
additional financing to, among other things, (a) refinance existing
debt with SNBT, (b) refinance the 2021 Note, (c) repurchase and
recapitalize Grande Pointe Power Corporation, and (d) fund capital
improvements for one of Iowa Hydro, LLC's hydroelectric
facilities.
On May 23, 2022, Juhl, Flambeau Hydro, and RWE entered into a
Second Amended and Restated Loan Agreement under which Juhl loaned
to Flambeau Hydro an addition $6.5 million (which retired the 2021
Loan) for the purposes set forth in the March 18, 2022 memorandum
of understanding. In addition, Juhl extended a $250,000 line of
credit.
Based on the 2017 Loan, the 2022 Loan, and the line of credit, the
Debtors believe the principal balance owing to Juhl is $13.750
million.
In 2015, RWE and SNBT executed a Revolving Credit and Term Loan
Agreement under which SNBT loaned to RWE $3.3 million. On December
21, 2017, the parties refinanced the 2015 Loan. RWE executed a
promissory note payable to SNBT in the principal amount of $6.61
million. The Debtors believe the current balance is $1.956
million.
On September 20, 2022, Sugarloaf Hydro, LLC executed a Promissory
Note payable to Berutti Energy in the principal amount of $550,000,
with interest accruing at the rate of 10% per annum, and a
six-month maturity date. HEG and LCO Hydro, LLC each executed
personal guaranties in favor of Berutti Energy. In addition, HEG
granted Berutti Energy a continuing security interest in HEG's
membership interest in LCO. That same day, HEG executed a
Collateral Assignment of Membership Interest in favor of Berutti
Energy.
On December 29, 2022, Sugarloaf Hydro executed an Amended
Promissory Note which increased the principal balance to
$625,000,and had a maturity date of March 19, 2023. The outstanding
balance remains at $625,000. On March 3, 2023, Berutti Energy filed
a UCC financing statement (20230306000383-6) indicating a security
interest in HEG's membership interest in LCO.
On March 10, 2023, the Debtors executed a promissory note in favor
of Gambit LLC for $250,000, with the funds used to pay retainers to
the Debtors' proposed professionals.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3N8ir4C from PacerMonitor.com.
The Debtor projects total disbursements, on a weekly basis, as
follows:
$88,800 for the week ending April 21, 2023;
$158,476 for the week ending April 28, 2023;
$52,830 for the week ending May 5, 2023;
$4,058 for the week ending May 12, 2023;
$40,627 for the week ending May 19, 2023; and
$25,882 for the week ending May 26, 2023.
About Harris Energy Group, Inc.
Harris Energy Group, Inc. and affiliates own, operate, and develop
hydroelectric power plants in Wisconsin, Michigan, Iowa, and
Illinois, generating power for sale to public utilities,
governmental agencies, and private power producers. The plants
generate power when water from rivers or lakes flows through the
blades of a turbine. The turbines are connected to a generator that
makes electricity, which is then sold to either the Midcontinent
Independent System Operation or other public entities or private
companies through power purchase agreements.
Harris Energy and its affiliates sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. E.D. Wisc. Lead Case No.
23-21117) on March 16, 2023. In the petition signed by William D.
Harris, chairman, HEG disclosed up to $50,000 in assets and up to
$1 million in liabilities.
Judge Katherine Maloney Perhach oversees the case.
Paul G. Swanson, Esq., at Steinhilber Swanson LLP, represents the
Debtors as legal counsel.
HAWTHORNE HANGAR: Seeks to Hire Gonzalez & Gonzalez as Counsel
--------------------------------------------------------------
Hawthorne Hangar Operations L.P. seeks approval from the U.S.
Bankruptcy Court for the Central District of California to hire
Gonzalez & Gonzalez Law, P.C. as its legal counsel.
The Debtor requires legal counsel to:
(a) prepare all of the required documents for the Chapter 11
filing;
(b) negotiate with creditors;
(c) respond to inquiries from creditors and parties in
interest;
(d) prepare and represent the bankruptcy estate in seeking to
reorganize its debts;
(e) sell assets;
(f) evaluate and object to claims;
(g) assist in the administration of the Debtor's Chapter 11
case; and
(h) commence any litigation seeking to avoid and recover
assets of the estate.
The firm's hourly rates are as follows:
Rosendo Gonzalez $550
Zachary I. Gonzalez $350
Paralegal $95 - $125
In addition, the firm will seek reimbursement for work-related
expenses.
Rosendo Gonzalez, Esq., a principal at Gonzalez & Gonzalez Law,
disclosed in court filings that the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Rosendo Gonzalez, Esq.
Zachary I. Gonzalez, Esq.
Gonzalez & Gonzalez Law, PC
530 S. Hewitt Street, Suite 148
Los Angeles, CA 90013
Telephone: (213) 452-0070
Facsimile: (213) 452-0080
Email: rossgonzaiez@gonzalezplc.com
zig@gonzalezplc.com
About Hawthorne Hangar Operations
Hawthorne Hangar Operations, LP --
https://www.hawthornehangarops.com -- is the owner of a large
airplane hangar facility at Hawthorne Airport located at 3507 Jack
Northrop Avenue, Hawthorne, Calif. It provides hangar space, fuel,
maintenance and repairs for small plane aircraft. Its principal
owner is Dan Wolfe, either directly with his wife or through the
Wolfe Family Trust of 1992.
Hawthorne Hangar Operations sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-11789) on
March 26, 2023. In the petition signed by Dan Wolfe, general
partner, the Debtor disclosed up to $50 million in both assets and
liabilities.
Judge Barry Russell oversees the case.
Richard Baum, Esq., at the Law Offices of Richard T. Baum, is the
Debtor's counsel.
HISTORIA INSPIRED: Court OKs Interim Cash Collateral Access
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Pennsylvania
authorized Historia Inspired LLC to use cash collateral on an
interim basis in accordance with the budget, with a 10% variance.
As previously reported by the Troubled Company Reporter, there are
four UCC Financing Statements filed with the State of Pennsylvania
with respect to the Debtor's assets that have not been terminated.
The four recorded UCC Financing Statements with respect to the
Debtor's assets are:
a) File Number 2021061502131 filed on June 15, 2021 by Vox
Funding, LLC. The Debtor believes that the underlying debt of Vox
Funding, LLC was paid in full prior to the Chapter 11 case filing
but that the UCC Financing Statement has not been terminated or
marked satisfied by the creditor.
b) File Number 2021061502236 filed on June 15, 2021 by Vox
Funding, LLC. The Debtor believes that the underlying debt of Vox
Funding, LLC was paid in full prior to the Chapter 11 case filing
but that the UCC Financing Statement has not been terminated or
marked satisfied by the creditor.
c) File Number 2022050901689 filed on May 9, 2022 by CHTD
Company. The Debtor's counsel believes that CHTD Company is an
agent for one of the Debtor's creditors but no actual creditor is
listed on the UCC Financing Statement and it is impossible to
determine which creditor this UCC Financing Statement refers to.
e) File Number 20221201069604 filed on December 1, 2022 by
Corporation Service Company, as Representative. The Debtor's
counsel believes Corporation Service Company is an agent for one of
the Debtor's creditors but no actual creditor is listed on the UCC
Financing Statement and it is impossible to determine which
creditor this UCC Financing Statement refers to.
The Court said the pre-petilion liens of any creditor with an
interest in cash collateral will continue post-petition but the
liens will not be greater post-petition than the value of their
lien at the inception of the Chapter 11 case.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3NeDjrl from PacerMonitor.com.
The Debtor projects $38,600 in total revenue and $34,510 in total
expenses.
About Historia Inspired LLC
Historia Inspired LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. Pa. Case No. 23-10126) on March
16, 2023. In the petition signed by Ronald Mattocks, as member, the
Debtor disclosed up to $50,000 in assets and up to $500,000 in
liabilities.
Judge Carlota M. Bohm oversees the case.
Christopher M. Frye, Esq., at Steidl & Steinberg, P.C., represents
the Debtor as legal counsel.
HUTCHINSON REGIONAL: Moody's Lowers Revenue Bond Rating to Ba2
--------------------------------------------------------------
Moody's Investors Service has downgraded Hutchinson Regional
Medical Center, Inc.'s (HRMC), KS revenue bond rating to Ba2 from
Ba1. The outlook has been revised to negative from stable. The
system had approximately $33 million of debt outstanding at fiscal
year-end 2022.
RATINGS RATIONALE
The downgrade to Ba2 reflects a significant year-to-date
performance decline and headwinds to improving operating
performance over the near-term as a result of industrywide labor
challenges and outsized usage of expensive temporary staffing. A
lack of management track record complicates HRMC's ability to
achieve a financial turnaround, given the recent and unexpected
executive team turnover, a governance consideration under Moody's
ESG classifications. A turnaround consulting firm has been engaged
and will focus on a significant reduction of temporary nursing
staff, physician recruitment and labor productivity in order to
stabilize performance in the latter half of fiscal 2023 and fiscal
2024. As a result of weak performance, there is an increased
probability that HRMC will breach its debt service coverage
covenant of 1.20 times for the fiscal year end 2023. The rating
incorporates the expectation that management will manage financial
covenants as necessary in the event of a covenant breach, through
the attainment of a bondholder forbearance agreement or debt
refinancing.
The rating favorably reflects the system's market essentiality as a
Medicare-designated Sole Community Provider with stable demand for
services given HRMC's full inpatient service array. While liquidity
will moderate given significant operating performance challenges,
days cash on hand will likely remain adequate to provide a cushion
for improvement initiatives to take hold. The system's manageable
capital spending plans, conservative investment allocation and
all-fixed rate debt structure will limit further calls on cash.
Leverage metrics, as measured by cash to total debt and total debt
to revenue, will remain sufficient given the system's low level of
debt and strong cash position.
RATING OUTLOOK
The negative outlook reflects Moody's expectation that financial
performance will show losses and continue to experience instability
until the turnaround management team's performance improvement plan
gains traction. Failure to show financial improvement in the latter
half of 2023 and fiscal 2024 or inability to manage a potential
covenant breach will pressure the rating further.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
-- Significant and sustained improvement in operating cash flow
(OCF) margins and debt to cash flow
-- Material growth in absolute cash and days cash on hand
-- Meaningful increase in scale and diversification
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
-- Failure to manage potential financial covenant breach as a
result of weak performance
-- Inability to significantly stabilize and improve operating
performance in the latter half of fiscal 2023 and fiscal 2024
-- Continued decline in days cash on hand or additional financial
leverage that dilutes metrics
LEGAL SECURITY
The bonds are secured by a pledge of gross revenues; no mortgages
are given. Additional indebtedness is permitted under certain
conditions. Legal covenants include 60 days cash on hand and 1.20
times debt service coverage ratio measured annually.
PROFILE
Hutchinson Regional Health System ($180 million revenue in FY2022)
is a 501 (c)(3), which includes Hutchinson Regional Medical Center,
a 190-licensed bed hospital located in Hutchinson, Kansas. The
hospital offers an array of healthcare services, including Level 3
Trauma, cardiology services, oncology and cancer services, labor
and delivery, wound care, and sleep services.
METHODOLOGY
The principal methodology used in this rating was Not-For-Profit
Healthcare published in December 2018.
IDAHO ALLERGY: Court OKs Cash Collateral Access Thru June 6
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Los Angeles Division, authorized Idaho Allergy, LLC to use cash
collateral on an interim basis in accordance with the budget,
through June 6, 2023.
The Court said the U.S. Small Business Administration will have a
replacement lien to the same validity, priority, and extent as its
lien existed as of the petition date, to the extent cash collateral
is used.
Kapitus LLC will have a replacement lien to the same validity,
priority, and extent as its lien existed as of the petition date,
to the extent cash collateral is used.
A continued hearing on the matter is set for June 6 at 11 a.m.
A copy of the order is available at https://bit.ly/40zY7MU from
PacerMonitor.com.
About Idaho Allergy, LLC
Idaho Allergy, LLC applies the latest scientific and medical
advances to provide patient care and treatment for allergies,
asthma, and COPD.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-12146) on April 10,
2023. In the petition signed by Sanjeev Jain, chief executive
officer, the Debtor disclosed up to $50,000 in assets and up to $10
million in liabilities.
Judge Deborah J. Saltzman oversees the case.
Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger,
represents the Debtor as legal counsel.
IRONWOOD FINANCIAL: Wins Cash Collateral Access Thru May 24
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Mississippi
authorized Ironwood Financial, LLC to continue using cash
collateral on an interim basis, pursuant to the budget, through May
24, 2023.
Worldpay ISO, Inc., f/k/a Vantiv, Inc., f/k/a National Processing
Company, is directed to release $122,000 of any residual payments
to the Debtor in the ordinary course of Worldpay's business after
ascertaining the amount of the residual payments in accordance with
the terms of the underlying agreement between the Debtor and
Worldpay provided that the total amount of the residual payment due
to the Debtor for the applicable period is at least $122,000.
A further telephonic hearing on the matter is scheduled for May 22
at 10 a.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/41Bd2rr from PacerMonitor.com.
The Debtor projects $72,276 in total monthly expenses.
About Ironwood Financial
Oxford, Miss.-based Ironwood Financial, LLC sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Miss. Case No.
21-10866) on May 3, 2021. In the petition signed by John H. Lewis,
manager, the Debtor disclosed up to $10 million in assets and up to
$50 million in liabilities.
Judge Jason D. Woodard oversees the case.
Mitchell, McNutt & Sams, P.A. serves the Debtor's legal counsel.
KAF RECYCLING: Files Emergency Bid to Use Cash Collateral
---------------------------------------------------------
KAF Recycling Corp. asks the U.S. Bankruptcy Court for the Southern
District of Florida, Miami Division, for authority to use cash
collateral and provide adequate protection to the secured creditor
U.S. Small Business Administration.
An immediate and critical need exists for the Debtor to be
permitted access to cash collateral to continue to operate its
business and preserve ongoing, enterprise value.
On June 1, 2020, the Debtor obtained a COVID-19 Economic Injury
Disaster Loan from the SBA in the principal amount of $500,000.
Contemporaneously with the closing of the EIDL Loan, the SBA filed
a form UCC-1 Financing Statement with the Florida Secured
Transaction Registry on June 29, 2020, under File No. 202002620820,
which indicates the SBA has a perfected interest on all of the
Debtor's assets.
As of the Petition Date, the payoff balance of the EIDL Loan is
approximately $500,000.
The Debtor believes the SBA is adequately protected notwithstanding
the Debtor's use of its cash as the Debtor continues to generate
revenue and the projected ending cash balance during the interim
period is greater than the Debtor's cash balance on the Petition
Date. The Debtor proposes to prove the SBA a post-petition
replacement lien pursuant to 11 U.S.C. section 361(2) on and in all
property of the Debtor acquired or generated after the Petition
Date, but solely to the same validity, extent and priority, and of
the same kind and nature, as the lien(s) the SBA had on the
Debtor's assets as of the Petition Date.
The Debtor requests the replacement liens granted to the SBA be at
all times subject and junior to: (i) the fees of the Office of the
United States Trustee pursuant to 28 U.S.C. section 1930; (ii) any
court costs, and (iii) the fees and expenses for Court approved
professionals awarded by the Court in the amounts and as set forth
in a prospective approved final and that such replacement liens
granted to the SBA be valid and perfected without the need for the
execution or filing of any further documents or instruments.
A copy of the Debtor's motion and the budget is available at
https://bit.ly/3UR1T33 from PacerMonitor.com.
About KAF Recycling Corp.
KAF Recycling Corp. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-12973) on April 17,
2023. In the petition signed by Coralia Cabrera, vice president,
the Debtor disclosed up to $500,000 in assets and up to $1 million
in liabilities.
Jacqueline Calderin, Esq., at Agentis PLLC, represents the Debtor
as legal counsel.
KALERA INC: U.S. Trustee Appoints Creditors' Committee
------------------------------------------------------
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Chapter 11 case of Kalera Inc.
The committee members are:
1. Turatti North America, Inc.
P.O. Box 1848
Salinas, CA 93902
Attention: Kary Ingraham
Phone: (831) 540-8318
Email: k.ingraham@turatti.com
2. House of Plastics Unlimited
2580 S. Orange Blossom Trail
Orlando, FL 32805
Attention: Todd Davis
Phone: (407) 843-3290
Email: tdavis1@hopu.com
3. Steven Douglas Associates, LLC
13450 W Sunrise Blvd., Suite 200
Sunrise, FL 33323
Attention: Shari Gottlieb
Phone: (954) 385-8595
Email: sgottlieb@stevendouglas.com
4. HP Now Aps
Sydmarken 32F
Soborg, Denmark
Attention: Ziv Gottesfeld
Phone: (917) 477-3993
Email: zivg@hpnow.eu
5. Aaron Electrical Services
1392 Merion Dr
Mount Dora, FL 32757
Attention: Caleb Talley
Phone: (352) 602-5565
Email: calebt@aaronselectrical.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 Kalera Inc.
Kalera Inc. is a vertical farming company in Aurora, Colo. It
utilizes proprietary technology and plant and seed science to
sustainably grow local, delicious, nutrient-rich, pesticide-free,
non-GMO leafy greens year-round.
Kalera sought relief under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. S.D. Texas Case No. 23-90290) on April 4, 2023. In the
petition filed by its chief restructuring officer, Mark Shapiro,
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 bankruptcy counsel and
BMC Group, Inc. as the claims agent.
KING INTERPRETING: Court OKs Cash Collateral Access Thru May 9
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division, authorized King Interpreting Services LLC to use
cash collateral on an interim basis through May 9, 2023.
EBF Holding, LLC, d/b/a Everest Business Funding; Fox Capital
Group, Inc.; Image Capital Partners, LLC; Independent Funding
Group; WEBBANK; Knightsbridge Funding, LLC; Maison Capital Group,
Inc.; and PayPal, Inc. assert an interest in the Debtor's use of
cash collateral.
Subject to the provisions of the Order, the Debtor is authorized to
use cash collateral to pay: (a) amounts expressly authorized by the
Court, including payments to the United States Trustee for
quarterly fees; (b) the current and necessary expenses set forth in
the budget; and (c) additional amounts as may be expressly approved
in writing by Creditor within 48 hours of the Debtor's request. The
Debtor will be entitled to prompt court hearings on any disputed
proposed expenditures.
As adequate protection, the Secured Creditors will have a perfected
post-petition lien against cash collateral to the same extent and
with the same validity and priority as the pre-petition lien,
without the need to file or execute any documents as may otherwise
be required under applicable non-bankruptcy law.
The Debtor will maintain insurance coverage for its property in
accordance with the obligations under the loan and security
documents with Secured Creditors.
A continued hearing on the matter is set for May 9, 2023, at 10:30
a.m.
A copy of the court's order and the Debtor's budget is available at
https://bit.ly/3V8CsKJ from PacerMonitor.com.
The Debtor projects total operating expenses, on a monthly basis,
as follows:
$32,300 for April 2023;
$32,300 for May 2023;
$32,300 for June 2023;
$32,300 for July 2023;
$32,300 for August 2023; and
$32,300 for September 2023.
About King Interpreting Services LLC
King Interpreting Services LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No.
6:23-bk-01273) on April 6, 2023. In the petition signed by Janet
King, managing member, the Debtor disclosed up to $500,000 in
assets and up to $1 million in liabilities.
Judge Grace E. Robson oversees the case.
Jeffrey S. Ainsworth, Esq., at BransonLaw, PLLC, represents the
Debtor as legal counsel.
KJMN PROPERTIES: Taps Law Offices of E. Vincent Wood as Counsel
---------------------------------------------------------------
KJMN Properties, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of California to employ The Law Offices
of E. Vincent Wood as counsel.
The firm's services include:
a. consulting with the Debtor concerning its present financial
situation, the Debtor's realistic achievable goals, and the
efficacy of various forms of bankruptcy to achieve its goals;
b. advising the Debtor concerning its duties under the
Bankruptcy Code;
c. identifying, prosecuting and defending claims and causes of
actions assertable by or against the estate;
d. preparing legal papers in connection with the administration
of the estate, including formulating a Chapter 11 plan, drafting
the plan and disclosure statement, and prosecuting legal
proceedings to seek confirmation of the plan;
e. if necessary, preparing, and prosecuting pleadings to avoid
preferential transfers or transfers deemed fraudulent as to
creditors, motions for authority to borrow money, sell property or
compromise claims, and objections to claims;
f. taking all necessary action to protect and preserve the
estate and providing all other legal services requested.
The firm will be paid at these rates:
E. Vincent Wood, Attorney $425 per hour
Nicole Zorrilla, Paralegal $175 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received from the Debtor a retainer of $2,762.
E. Vincent Wood, Esq., a partner at The Law Offices of E. Vincent
Wood, 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:
E. Vincent Wood, Esq.
The Law Offices of E. Vincent Wood
2950 Buskirk Ave., #300
Walnut Creek, CA 94597
Tel: (925) 278-6680
Fax: (925) 955-1655
Email: vince@woodbk.com
About KJMN Properties
KJMN Properties, LLC, a ompany in Gilroy, Calif., filed a petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D.
Calif. Case No. 23-50160) on Feb. 15, 2023. In the petition filed
by its managing member, Kim Narog, the Debtor disclosed between $1
million and $10 million in both assets and liabilities.
Judge Stephen L. Johnson oversees the case.
The Debtor tapped the Law Offices of E. Vincent Wood as counsel and
Rachel Sanchez-Parodi as senior tax specialist.
LAKE DISTRICT: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------
The U.S. Trustee for Region 8 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of The Lake District, LLC.
About The Lake District LLC
Lake District, LLC is a retail and residential development in
Lakeland, Tenn.
Lake District sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. W.D. Tenn. Case No. 23-21496) on March 24, 2023. In
the petition filed by Yehuda Netanel, as manager, the Debtor listed
total assets of $80,244,507 and total liabilities of $47,247,115.
Judge Jennie D. Latta oversees the case.
The Debtor is represented by Michael P. Coury, Esq., at Glankler
Brown, PLLC.
LANNETT CO: S&P Revised ICR to 'D' on Missed Interest Payments
--------------------------------------------------------------
S&P Global Ratings revised its issuer credit rating on Lannett Co.
Inc. to 'D' (default) from 'SD' (selective default). At the same
time, S&P lowered its issue-level rating on Lannett's senior
secured debt to 'D'.
On April 19, 2023, Lannett Co. Inc. announced it elected not to
make the interest payment on its second-lien payment in kind (PIK)
notes due July 2026 (not rated), and elected to defer the interest
payment on its first-lien senior secures notes due April 2026
(rated) and enter a 30-day grace period.
The revision reflects Lannett's failure to make interest payments
due on all its debt. Given the company's operating performance and
cash flow, S&P's view its capital structure as unsustainable. S&P
believes the company is considering strategic alternatives and
expect the outcome of these discussions will result in a
significant debt restructuring or bankruptcy filing.
LTL MANAGEMENT: U.S. Trustee Appoints Talc Claimants Committee
--------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent talc claimants in the Chapter 11 case of LTL
Management, LLC.
The talc committee members are:
1. Tonya Whetsel as estate
representative of Brandon Whetsel
Counsel: Erik Karst, Esq.
Karst Von Oiste LLP
23923 Gosling Rd., Ste. A
Spring, TX 77389
Tel: (281) 970-9988
Email: epk@karstvonoiste.com
2. Blue Cross Blue Shield of Massachusetts
Counsel:
Elizabeth Carter, Esq.
Hill Carter Franco Cole & Black, PC
425 Perry Street
Montgomery, AL 36104
Tel: (334) 386-4337
Email: ecarter@hillhillcarter.com
3. Kristie Doyle as estate representative of Dan Doyle
Counsel:
Steven Kazan, Esq.
Kazan, McClain, Satterley & Greenwood PLC
55 Harrison St., Ste. 400
Oakland, CA 94607
Tel: (510) 302-1000
Email: SKazan@kazanlaw.com
4. April Fair
Counsel:
Mark Robinson, Jr., Esq.
Robinson Calcagnie, Inc.
19 Corporate Plaza Drive
Newport Beach, CA 92660
Tel: (949) 720-1288
Email: mrobinson@robinsonfirm.com
5. William Henry as estate representative of Debra Henry
Counsel:
Christopher Tisi, Esq.
Levin Papantonio Rafferty
316 S Baylen Street, Suite 600
Pensacola, FL 32502
Tel: (850) 435-7000
Email: ctisi@levinlaw.com
6. Alishia Landrum
Counsel:
Leigh O'Dell, Esq.
Beasley Allen Law Firm
P.O. Box 4160
Montgomery, AL 36103
Tel: (800) 898-2034
Email: leigh.odell@beasleyallen.com
7. Rebecca Love
Counsel:
Michelle Parfitt, Esq.
Ashcraft & Gerel, LLP
1825 K Street, NW, Suite 700
Washington, DC 20006
Tel: (202) 783-6400
Email: mparfitt@ashcraftlaw.com
8. Patricia Cook
Counsel:
Perry Weitz, Esq.
Weitz & Luxenberg, P.C.
700 Broadway
New York, NY 10083
Tel: (212) 558-5500
Email: Pw@weitzlux.com
9. Randy Derouen
Counsel:
Moshe Maimon, Esq.
Levy Konigsberg, LLP
605 Third Avenue, 33rd Fl
New York, NY 10158
Tel: (212) 605-6200
Email: MMaimon@levylaw.com
10. Brandi Carl
Counsel:
Richard Golomb, Esq.
Golomb Spirt Grunfeld
1835 Market Street, Suite 2900
Philadelphia, PA 19103
Tel: (215) 985-9177
Email: rgolomb@golomblegal.com
11. Sue Sommer-Kresse
Counsel:
Daniel Lapinski, Esq.
Motley Rice, LLC
210 Lake Drive East, Suite 101,
Cherry Hill, NJ 08002
Tel: (856) 382-4670
Email: Dlapinski@Motleyrice.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 LTL Management
LTL Management, LLC is a subsidiary of Johnson & Johnson (J&J),
which was formed to manage and defend thousands of talc-related
claims and oversee the operations of Royalty A&M. Royalty A&M
owns
a portfolio of royalty revenue streams, including royalty revenue
streams based on third-party sales of LACTAID, MYLANTA/MYLICON and
ROGAINE products.
LTL Management filed a petition for Chapter 11 protection (Bankr.
W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was
transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on
Nov.
16, 2021. The Hon. Michael B. Kaplan is the case judge. At the
time of the filing, the Debtor was estimated to have $1 billion to
$10 billion in both assets and liabilities.
The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as
bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon
LLP as special counsel; McCarter & English, LLP as litigation
consultant; Bates White, LLC as financial consultant; and
AlixPartners, LLP as restructuring advisor. Epiq Corporate
Restructuring, LLC, is the claims agent.
An official committee of talc claimants was formed in the Debtor's
Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S.
Trustee for Regions 3 and 9 reconstituted the talc claimants'
committee and appointed two separate committees: (i) the official
committee of talc claimants I, which represents ovarian cancer
claimants, and (ii) the official committee of talc claimants II,
which represents mesothelioma claimants.
The official committee of talc claimants I tapped Genova Burns
LLC,
Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as
its
legal counsel. Meanwhile, the official committee of talc claimants
II is represented by the law firms of Cooley LLP, Bailey Glasser
LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and
Sherman Silverstein Kohl Rose & Podolsky P.A.
Re-Filing of Chapter 11 Petition
On January 30, 2023, a panel of the Third Circuit issued an
opinion
directing this Court to dismiss the 2021 Chapter 11 Case on the
basis that it was not filed in good faith. Although the Third
Circuit panel recognized that the Debtor "inherited massive
liabilities" and faced "thousands" of future claims, it concluded
that the Debtor was not in financial distress before the filing.
On March 22, 2023, the Third Circuit entered an order denying the
Debtor's petition for rehearing. The Third Circuit entered an
order denying LTL's stay motion on March 31, 2023, and, on the
dame
day, issued its mandate directing the Bankruptcy Court to dismiss
the 2021 Chapter 11 Case.
The Bankruptcy Court entered an order dismissing the 2021 Case on
April 4, 2023.
Johnson & Johnson on April 4, 2023, announced that its subsidiary
LTL Management LLC (LTL) has re-filed for voluntary Chapter 11
bankruptcy protection (Bankr. D.N.J. Case No. 23-12825) to obtain
approval of a reorganization plan that will equitably and
efficiently resolve all claims arising from cosmetic talc
litigation against the Company and its affiliates in North
America.
In the new filing, J&J said it has agreed to contribute up to a
present value of $8.9 billion, payable over 25 years, to resolve
all the current and future talc claims, which is an increase of
$6.9 billion over the $2 billion previously committed in
connection
with LTL's initial bankruptcy filing in October 2021. LTL also
has
secured commitments from over 60,000 current claimants to support
a
global resolution on these terms.
LUMEN TECHNOLOGIES: S&P Lowers Unsecured Debt Rating to 'CCC+'
--------------------------------------------------------------
S&P Global Ratings lowered its issue-level rating on Lumen
Technologies Inc.'s senior unsecured debt to 'CCC+' from 'B-' and
revised the recovery rating to '6' from '5'. S&P removed the rating
from CreditWatch, where S&P placed it with negative implications on
March 22, 2023. The '6' recovery rating indicates its expectation
for negligible (0%-10%; rounded estimate: 0%) recovery in the event
of payment default. S&P also raised the issue-level rating on Qwest
Capital Funding's senior unsecured debt to 'B+', one notch above
the issuer-credit rating, from 'B' and revised the recovery rating
to '2' from '3'. The '2' recovery rating indicates its expectation
for substantial (70%-90%; rounded estimate: 85%) in the event of
payment default.
The rating action follows the completion of the company's debt
exchange whereby wholly owned subsidiary Level 3 Financing Inc.
issued $924.5 million of 10.5% senior secured notes due 2030 in
exchange for $1.554 billion of Lumen's unsecured debt.
S&P said, "Despite the reduction in unsecured debt at Lumen, as
part of our updated recovery analysis, we allocated more of our
estimated emergence value to Level 3 (over 40%) given its larger
and increasing EBITDA contribution and valuable fiber-based
network. The reduction in value available to Lumen's unsecured debt
reflects a shift in value attribution from Qwest and Lumen to Level
3. Residual equity value in Qwest is the primary source of recovery
at the parent after accounting for the approximate gross enterprise
value we attribute to Lumen's direct operating subsidiaries and the
remaining Embarq assets.
"The upgrade of the unsecured debt at Qwest Capital Funding
reflects a higher cap that we use for senior unsecured debt in the
'B' rating category, which is up to one notch above the parent
rating. In our default scenario, we believe the residual value at
the Qwest entity is sufficient to cover Qwest Capital Funding's
notes, which only total $192 million."
ESG credit indicators: E2, S2, G2
MADISON SQUARE: Unsecureds to Get 19% Under Plan
------------------------------------------------
Madison Square Boys & Girls Club, Inc., a Chapter 11 Plan of
Reorganization and a Disclosure Statement.
The Plan is the result of engagement and negotiations with certain
stakeholders for more than a year, and more than four months of
vigorous negotiations in a court-ordered mediation process between
the Debtor and the Committee, and incorporates the terms of a
settlement (the "Committee Settlement") to address Abuse Claims in
a manner that the Debtor believes maximizes and expedites
recoveries to survivors of Abuse. In accordance with the Committee
Settlement, the Plan provides for a mechanism to channel all Abuse
Claims asserted against the Debtor and other Covered Parties to the
Compensation Trust, which the Debtor shall fund with the
Compensation Trust Assets. If the Plan is approved, the
Compensation Trust will exclusively administer and resolve the
Abuse Claims in accordance with the Compensation Trust Documents,
and Holders of Abuse Claims will be forever enjoined from pursuing
recoveries on account of any Abuse Claims from the Debtor, the
Reorganized Debtor, and other Covered Parties.
On the Effective Date, the Compensation Trust shall be funded with
the following forms of consideration from the Debtor, the aggregate
value of which is estimated to be between $15.1 million and $21.2
million before taking into account the proceeds of any Causes of
Action or the Insurance Recoveries assigned to the Compensation
Trust:
i. $2.225 million in Cash;
ii. $5.4 million interest-bearing promissory note;
iii. the right to 100% of the net proceeds generated from the sale
of the Debtor's Navy Yard Clubhouse;
iv. 100% of Excess Exit Cash (if any);
v. an assignment of the Madison Damages Claims and the proceeds
thereof;
vi. assignment of the Debtor's rights, claims, interests, and
benefits under or with respect to the Abuse Insurance Policies; and
vii. the Compensation Trust Causes of Action.
In accordance with the Trust Allocation Protocol, the proceeds of
the Compensation Trust Assets will be distributed equally to all
Holders of valid Direct Abuse Claims in Class 4 of the Plan (i.e.,
total cash/proceeds net of Compensation Trust Expenses divided by
the number of valid Direct Abuse Claims in Class 4 of the Plan).
Except as otherwise provided in the Trust Allocation Protocol,
Holders of Indirect Abuse Claims in Class 4 will be entitled to the
treatment set forth in Article IV.G of the Plan.
In addition, the Plan contains a mechanism by which Insurance
Companies may enter into Insurance Settlement Agreements and
provide sum-certain contributions to the Compensation Trust in
exchange for being included as a Covered Party under the Plan and
receiving the benefits of the Channeling Injunction, thereby
becoming "Settling Insurance Companies" under the Plan.
The assets contributed to the Compensation Trust by the Debtor
andother parties, including Settling Insurance Companies, if any,
will be administered by the Compensation Trustee and used to
resolve Abuse Claims in accordance with the Compensation Trust
Documents. The Compensation Trust Documents, including the Trust
Allocation Protocol, will specify the methodology for processing,
liquidating, and paying Abuse Claims.
Under the Plan, Class 3 General Unsecured Claims are impaired. On
the GUC Disbursement Date, except to the extent that a Holder of an
Allowed General Unsecured Claim agrees to less favorable treatment,
in full and final satisfaction, compromise, settlement, release,
and discharge of and in exchange for each Allowed General Unsecured
Claim, each such Holder shall receive its Pro Rata share of the GUC
Cash Pool. Creditors will recover 19% of their claims.
Distributions under the Plan shall be funded from the following
sources:
(a) The DIP Claims against the Debtor shall be converted on the
Effective Date to loans under the Exit Facility governed by the
Exit Facility Documents;
(b) The Debtor shall fund distributions on account of and
satisfy Allowed General Unsecured Claims exclusively from the GUC
Cash Pool;
(c) The Debtor shall transfer the Compensation Trust Assets to
the Compensation Trust on the Effective Date, or as soon as
reasonably practicably thereafter, and the Compensation Trust shall
make distributions on account of compensable Abuse Claims in
accordance with the Compensation Trust Documents; and
(d) The Debtor shall fund distributions on account of and
satisfy all other Allowed Claims with Cash on hand on or after the
Effective Date in accordance with the terms of the Plan and the
Confirmation Order
Ballots must be actually received by the Solicitation agent by the
Voting Deadline, which is 4:00 P.M. (Prevailing Eastern Time) on
May 30, 2023.
Counsel to the Debtor:
Alan W. Kornberg, Esq.
William A. Clareman, Esq.
John T. Weber, Esq.
Leslie E. Liberman, Esq.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
1285 Avenue of the Americas
New York, NY 10019
Telephone: (212) 373-3000
Facsimile: (212) 757-3990
A copy of the Disclosure Statement dated April 12, 2023, is
available at https://bit.ly/3GGFlfD from Epiq11, the claims agent.
About Madison Square Boys & Girls Club
Madison Square Boys & Girls Club, Inc. --
https://www.madisonsquare.org -- was established to save and
enhance the lives of New York City boys and girls who by means of
economic or social factors are most in need of its services.
Madison Square Boys & Girls Club sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-10910) on
June 29, 2022. In the petition filed by its chief financial
officer, Jeffrey Dold, the Debtor reported $50 million to $100
million in assets and $100 million to $500 million in liabilities.
Judge Sean H. Lane oversees the case.
The Debtor tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP as
bankruptcy counsel; and Pillsbury Winthrop Shaw Pittman, LLP and
Friedman Kaplan Seiler & Adelman, LLP as special counsels. Epiq
Corporate Restructuring, LLC is the claims and noticing agent.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors on July 13, 2022. The committee tapped
Pachulski Stang Ziehl & Jones, LLP as legal counsel; and Dundon
Advisers, LLC and Island Capital Advisor, LLC as financial
advisors.
MAKENA TRADING: Files Emergency Bid to Use Cash Collateral
----------------------------------------------------------
Makena Trading Corp. d/b/a Makena Express, asks the U.S. Bankruptcy
Court for the Southern District of Florida, Fort Lauderdale
Division, for authority to use cash collateral retroactive to
petition date and provide adequate protection.
The Debtor will need to use cash collateral to conduct its
operation, including, but not limited to, payment of employees,
insurance, utilities, payments to the lien holders on the Debtor's
trucks and trailers.
On May 28, 2020, the SBA and the Debtor entered into the Loan and
Security Agreement in the amount of $150,000.
On June 6, 2020, the SBA filed a UCC-1 Financing Statement with the
Florida Secured Transaction Registry.
According to the Debtor's records, approximately $150,000 remains
due and owing to the SBA.
The Debtor is prepared to pay the SBA the regular monthly payment
of $731 (which is the regular monthly payment due under the Loan
and Security Agreement), through confirmation of a Chapter 11 Plan,
or until entry of an order modifying the amount of such payments.
In addition, the SBA will all be adequately protected in that the
Debtor's proposed Budget illustrates that the Debtor will be
operating on a cash-flow positive basis and the Debtor agrees to
grant the SBA replacement liens on post-petition assets to the
extent that they have a valid lien on cash collateral, and to the
extent that its pre-petition collateral is diminished by the
Debtor's use of cash collateral.
The Debtor also requests that the Court conduct a hearing on the
matter on May 3, 2023 at 2 p.m.
A copy of the Debtor's motion and budget is available at
https://bit.ly/3N9mQo7 from PacerMonitor.com.
The Debtor projects $196,463 in gross revenue and $178,256 in total
expenses for the period from April 3, 2023 through May 1, 2023.
About Makena Trading Corp.
Makena Trading Corp. filed a petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-12637) on Apr.
3, 2023, with $1 million to $10 million in both assets and
liabilities. Guillermo Gutierrez, president, signed the petition.
Judge Scott M. Grossman oversees the case.
The Law Office of Mark S. Roher, PA serves as the Debtor's counsel.
MANCUSO MOTORSPORTS: Cash Collateral Access OK'd Thru May 26
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized Mancuso Motorsports, Inc. to use cash
collateral on an interim basis in accordance with the budget, with
a 10% variance, through May 26, 2023.
In return for the Debtor's continued interim use of cash
collateral, these parties are granted adequate protection for their
purported secured interests in cash collateral equivalents,
including the Debtor's cash, accounts receivable and inventory,
among other collateral:
Byline Bank
Ryan Daube, as trustee of the Ryan Daube Trust
DFK Direct Investments, LLC
DFK Group, Inc.
DFK Direct, LLC
Francis Roti
Ryan Daube
Rob Mancuso
The Debtor will maintain and pay premiums for insurance to cover
the Collateral from fire, theft and water damage.
The Secured Parties are granted replacement liens, attaching to the
Collateral, but only to the extent of their pre-petition liens,
with any valid liens attaching to the Collateral and its proceeds
until further Order of Court.
A further interim hearing on the matter is set for May 23 at 10
a.m.
A copy of the Court's order is available at https://bit.ly/3AiBiSY
from PacerMonitor.com.
About Mancuso Motorsports, Inc.
Mancuso Motorsports, Inc. is a privately held company that provides
automotive repair and maintenance services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-14513) on December
16, 2022. In the petition signed by Jackie Cahan, CFO and COO, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Donald R. Cassling oversees the case.
Scott R. Clar, Esq., at Crane, Simon, Clar & Goodman, serves as
counsel to the Debtor.
MARKING IMPRESSIONS: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Marking Impressions, Corp.
DBA American Waterblasting
7445 John Bragg Hwy
Murfreesboro, TN 37127
Chapter 11 Petition Date: April 24, 2023
Court: United States Bankruptcy Court
Middle District of Tennessee
Case No.: 23-01470
Judge: Hon. Charles M. Walker
Debtor's Counsel: Steven L. Lefkovitz, Esq.
LEFKOVITZ & LEFKOVITZ
908 Harpeth Valley Place
Nashville, TN 37221
Tel: 615-256-8300
Fax: 615-255-4516
Email: slefkovitz@lefkovitz.com
Total Assets: $2,741,294
Total Liabilities: $5,499,299
The petition was signed by Wayne Todd Pope as CEO.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/AR3AN3I/Marking_Impressions_Corp__tnmbke-23-01470__0001.0.pdf?mcid=tGE4TAMA
MEHR GROUP: Unsecured Creditors Will Get 100% of Claims in Plan
---------------------------------------------------------------
MEHR Group of Companies Holding, Inc., filed with the U.S.
Bankruptcy Court for the Central District of California an Original
Disclosure Statement describing Chapter 11 Plan of Reorganization
dated April 24, 2023.
The debtor is a California corporation. Debtor is in business of
renting furnished executive suites. Debtor has six commercial
master leases with substantial tenant improvements and furnishings
in Southern California.
With the COVID19 crisis Debtor suffered cash-flow problems. Debtor
has arranged payments to most of its landlords but still owes rent
arrears to four landlords in the total sum of $185,000. One
landlord, Master Building LLC brought an unlawful detainer action
and while the rent arrears had been paid, claims attorney's fees in
collection action for the rent in the sum of $25,000, seeking a
judgment in the Superior Court of California. This Chapter 11 had
to be filed to avoid losing the leases where the debtor has made
valuable investments.
The debtor's main assets are the five master leases with extensive
tenant improvements. The leased suites yield net monthly cash
proceeds of $77,522. After the expenses the available funds to pay
off the rent arrears shall be sufficient to do so within 6 months,
and to make the plan payments as proposed. The disputed item,
attorney's fees claim by Master Building LLC shall be adjudicated
as to the legitimacy, entitlement and reasonableness, under the
terms of the lease agreement. The 2-year plan is provided in good
faith given the nature of the claim.
Class 3A consists of Undisputed General unsecured (smaller) claims.
The allowed unsecured claims total $185,000. This Class will
receive a distribution of 100% of their allowed claims.
Class 3B consists of Disputed unsecured Claim. The amount of claim
in this Class total $25,000 (disputed- subject to ruling as to
entitlement and reasonableness). This Class will receive a
distribution of 100% of their allowed claims.
The Plan will be funded by the following:
* Cash from projected disposable income - monthly net proceeds
projected to be $77,522 per month.
* Quarterly UST fees of $250 are paid based on the budget
motion filed concurrently hereto) for the 2 years following
confirmation.
A full-text copy of the Original Disclosure Statement dated April
24, 2023 is available at https://bit.ly/40Iq0SJ from
PacerMonitor.com at no charge.
Attorney for Debtor:
Jaenam J. Coe, Esq.
Law Offices of Jaenam Coe PC
3731 Wilshire Blvd., Suite 910
Los Angeles, CA 90010
Telephone: (213) 389-1400
Facsimile: (213) 387-8778
Email: coelaw@gmail.com
About MEHR Group of Companies Holding
MEHR Group of Companies Holding, Inc., a company in Laguna Hills,
Calif., sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. C.D. Calif. Case No. 23-10760) on April 17, 2023. In
the petition signed by its chief executive officer, S. Javad K.
Mehrvijeh, the Debtor disclosed up to $10 million in assets and up
to $500,000 in liabilities.
Judge Scott C. Clarkson oversees the cases.
The Law Offices of Jaenam Coe PC serves as the Debtor's counsel.
METROHAVANA TOWN: Wins Cash Collateral Access Thru May 10
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Miami Division, authorized MetroHavana Town Homes, LLC continue to
use cash collateral on an interim basis in accordance with the
budget, with a 10% variance, through May 10, 2023.
As previously reported by the Troubled Company Reporter, Creditor
850 Southwest 14th Avenue 10215686, LLC, successor to U.S. Bank
National Association, as Trustee, holds a first priority lien on
the Debtor's asset, including its cash and other manifestations of
funds.
NOVIC, LLC, holds a second position priority lien on the Debtor's
asset.
As adequate protection, the Lenders will have a perfected
post-petition lien and security interest in cash collateral and
other property of the Debtor.
The Lenders will have the right to assert a super priority
administrative expense claim pursuant to 11 U.S.C. section 507(b)
to the extent of any diminution in value of its collateral arising
from the imposition of the automatic stay or the Debtor's
post-petition use of its collateral.
These events constitute an "Event of Default":
(a) Further authorization to use cash collateral is not
extended at the continued hearing or is terminated by the Court;
(b) The Debtor fails to comply in any material respect with
any of the terms or conditions of the Interim Order;
(c) The Debtor asserts in any pleading, motion, or objection
filed in any court that any material provision of the Interim Order
is not valid or binding for any reason;
(d) Any material provision of the Interim Order will, for any
reason, cease to be valid and binding without the prior written
consent of Lenders;
(e) If the Debtor files a motion or other pleading seeking
dismissal or conversion of the case under section 1112 or any other
section of the of the Bankruptcy Code;
(f) A trustee under chapter 11 of the Bankruptcy Code, or a
responsible officer or an examiner with enlarged powers relating to
the operation of the Debtor's business, is appointed under section
1106 of the Bankruptcy Code; or
(g) If the bankruptcy case is otherwise dismissed or converted
to a case under chapter 7 of the Bankruptcy Code.
A final hearing on the matter is set for May 10, 2023 at 11:30
a.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3osWyD8 from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$14,678 for June 2023;
$14,281 for July 2023;
$14,031 for August 2023;
$14,678 for September 2023; and
$14,281 for October 2023.
About MetroHavana Town Homes, LLC
MetroHavana Town Homes, LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-11349) on
February 18, 2022. In the petition signed by Kelly Beam, owner, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Laurel M. Isicoff oversees the case.
Christina Vilaboa-Abel, Esq., at Cava Law, LLC, is the Debtor's
counsel.
MIDWEST OVERNITE: Seeks to Hire Place Law Office as Counsel
-----------------------------------------------------------
Midwest Overnite, Inc. received approval from the U.S. Bankruptcy
Court for the District of Nebraska to employ the Place Law Office
as its counsel.
The Debtor requires legal counsel to:
a. give legal advice with respect to the Debtor's bankruptcy
and applicable non-bankruptcy law rights, claims, and causes of
action and investigate the same;
b. prepare legal documents;
c. attend hearings and trials as may reasonably requested by
the Debtor;
d. identify, subject to court approval and in consultation
with the Debtor and its professionals, experts, accountants or
other individuals and professionals for retention as may be
reasonably necessary; and
e. provide other necessary legal services.
Place Law Office will charge $250 per hour for its services.
As disclosed in court filings, Place Law Office is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
James Place, Esq.
Place Law Office
109 South 7th Street
Gatesville, TX 76528
Phone: 865-8475
Email: legal@allenplacelaw.com
About Midwest Overnite
Omaha-based Midwest Overnite, Inc. operates in the general freight
trucking industry.
Midwest Overnite sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Neb. Case No. 22-80737) on Oct. 6, 2022,
with up to $1 million in assets and up to $10 million in
liabilities. Chris Horn, Sr., president of Midwest Overnite, signed
the petition.
Judge Thomas L. Saladino oversees the case.
Patrick R. Turner, Esq., at Turner Legal Group, LLC and James
Place, Esq., at Place Law Office serve as the Debtor's counsels.
MILLION DOLLAR SMILE: Court OKs Cash Collateral Use Thru Sept 2
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
authorized Million Dollar Smile, LLC to use cash collateral on a
final basis through September 2, 2023.
The Debtor requires the use of cash collateral in the amounts
specified in the budget to avoid harm to the estate.
The Court order acknowledges that J.P. Morgan Chase Bank likely
holds the senior lien and likely is fully secured and followed by
First Corporate Solutions, representative for an undisclosed
entity, and it may be partially secured.
As adequate protection, the Secured Creditors are granted
replacement lien in all post-petition assets of the Debtor, other
than avoidance power actions and recoveries.
The replacement lien granted will have the same validity, extent
and priority (and will be subject to the same defenses) as the
Secured Creditors' liens held in prepetition collateral.
A copy of the order is available at https://bit.ly/3Lk84cE from
PacerMonitor.com.
About Million Dollar Smile, LLC
Million Dollar Smile, LLC offers oral hygiene and beauty products.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Cal. Case No. 23-00001) on January 2,
2023. In the petition signed by Angelo De Simone, managing member,
the Debtor disclosed up to $500,000 in assets and up to $10 million
in liabilities.
Judge Margaret Mann oversees the case.
Steven R. Fox, Esq., at The Fox Law Corporation, Inc., is the
Debtor's legal counsel.
MISS BRENDA: Court OKs Interim Cash Collateral Access
-----------------------------------------------------
The U.S. Bankruptcy Court for the District of Alaska at Anchorage
authorized Miss Brenda LLC and Sea West, Inc. to use cash
collateral on an interim basis.
The Court said the Debtors are permitted to use the Bank Account
Funds to pay insurance premiums.
In order to protect Trident Seafood Corporation from any
post-petition diminution in the value of its prepetition cash
collateral, Trident is granted a replacement lien in any
post-petition cash collateral generated by Miss Brenda LLC to the
same extent and in the same validity and priority as Trident's lien
in prepetition collateral.
As previously reported by the Troubled Company Reporter, Trident
holds an interest in the cash collateral of Miss Brenda. Trident is
the assignee of a loan from the People's Bank to the Debtor in the
original principal amount of $750,000. The People's Bank Loan
documents include a Commercial Security Agreement providing a grant
of a security interest by the Debtor Miss Brenda in the
substantially all of its personal property.
A UCC-1 financing statement was filed to perfect the People's Bank
security interest with the Alaska Department of Natural Resources
on April 25, 2018, recording number 20180072125 for which a
continuation statement was filed on December 8, 2022, recording
number 20220190364. In addition, the People's Bank loan included a
first position preferred ship mortgage on the fishing vessel Miss
Brenda, which had a survey value of $1.2 million as of May 2021.
As of the Petition Date, the Debtor calculated the outstanding
balance on the People's Bank Loan as $626,934. The loan agreement
provides for non-default interest at the rate of six percent per
annum and a default rate of 12% per annum.
Debtor Sea West is obligated to Trident on a separate loan in
amount that Debtor Sea West calculates as $255,223 as of the
Petition Date. Trident calculates the loan balance as higher, with
the difference due to the application or non-application of
approximately $70,000 in funds held by Trident on account of Sea
West.
The Sea West loan is secured by a first position preferred ship
mortgage on Debtor Sea West's vessel, Northern Dawn, and a second
position preferred ship mortgage on Miss Brenda.
As of the Petition Date, Debtor Miss Brenda held $41,304 in its
bank account, constituting Trident's prepetition cash collateral to
secure the People's Bank Loan.
Insurance premium payments for the vessels Miss Brenda and Northern
Dawn is due May 1, 2023, in the respective amounts of $13,448 and
$8,923 (half of the annual premium for each).
A copy of the order is available at https://bit.ly/3Ngi08P from
PacerMonitor.com.
About Miss Brenda LLC
Miss Brenda LLC is in the fishing industry. Miss Brenda LLC and Sea
West, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Alaska Lead Case No. 23-00041) on March
16, 2023.
In the petition signed by Jack D. Berntsen, manager, Miss Brenda
LLC disclosed $1,530,826 in assets and $626,933 in liabilities.
Judge Gary Spraker oversees the case.
Christine M. Tobin-Presser, Esq., at Bush Kornfeld LLP, represents
the Debtors as legal counsel.
MOON GROUP: Move to Dismiss Legalist's Counterclaims Granted
------------------------------------------------------------
Judge Stephanie A. Gallagher of the U.S. District Court for the
District of Maryland grants the motion to dismiss Legalist's
counterclaims filed by North Avenue Capital, LLC and and Newtek
Small Business Finance, LLC in the case captioned as NORTH AVENUE
CAPITAL, LLC, et al., Plaintiffs, v. UNITED STATES OF AMERICA, et
al., Defendants, Civil No. SAG-22-03240, (D. Md.).
Plaintiffs North Avenue Capital, LLC and Newtek Small Business
Finance, LLC filed this action to foreclose their interests in
certain real and personal property (the Collateral) owned by
Defendants Moon Group, Inc., Moon Landscaping, Inc., Moon
Nurseries, Inc., Moon Site Management, Inc., Moon Wholesale, Inc.,
and Rickert Landscaping, Inc. The Plaintiffs have also named as
Defendants various parties – including Legalist DIP GP, LLC;
Legalist DIP SPV II, LP; and Legalist DIP Fund I, LP -- that
assert, or may assert, liens and interests in the Collateral.
Two motions are pending before the Court. First, Plaintiffs have
filed a motion seeking approval to engage an auctioneer to conduct
a judicial sale of certain machinery and equipment owned by the
Moon Entities, with all liens on the Equipment to attach to the
proceeds of the sale. Second, Plaintiffs have filed a motion to
dismiss Legalist's counterclaims, which seek to set aside
Plaintiffs' security interests in the Collateral as fraudulent
conveyances. Both motions will be granted, however, Legalist will
be granted leave to amend its counterclaims, should it choose to do
so.
Judge Gallagher finds that "Legalist has failed to allege which
transfers of security interests were fraudulent, how much money and
collateral was involved in those transfers, or which of the six
Moon Entities supposedly made the offending transfers (including
which of the Moon Entities were left with unreasonably small
capital and/or were rendered insolvent as a result of the
transfer). Rather, Legalist's only factual assertion is that "one
or more of the Moon Entities did not receive fair consideration" in
exchange for the granting of the security interests." Judge
Gallagher concludes that such generalized and speculative pleadings
are insufficient to provide the Plaintiffs with adequate notice of
the claims against them.
Judge Gallagher agrees with the Plaintiffs that Legalist's
counterclaims must be dismissed because Legalist has not
established a debtor-creditor relationship with the Plaintiffs, as
the transferee of the security interests in the challenged
transactions. Judge Gallagher explains that the proper target of
Legalist's claims under Sections 15-205 and 15-206 are the Moon
Entities, which transferred the relevant security interests
Legalist seeks to avoid, and to which Legalist is a creditor.
The Plaintiffs also argue that, unless and until the Trustee
abandons the right to bring avoidance actions, including fraudulent
conveyance claims regarding the security interests transferred to
the Plaintiffs, Legalist lacks standing to assert its
counterclaims. Judge Gallagher disagrees with the Plaintiffs. She
explains that The Collateral has already been abandoned from the
estate, and therefore a claim to set aside security interests in
the Collateral would only benefit third-party creditors, like
Legalist, whose lien priorities in the Collateral would improve.
While the counterclaims will be dismissed as insufficiently pled, a
lack of standing does not preclude Legalist from attempting to
amend those counterclaims, should it choose to do so.
Similarly, Judge Gallagher concludes that Legalist's claims are not
subject to dismissal pursuant to Maryland's three-year statute of
limitations. It is not clear from the Complaint and the
counterclaims that Legalist -- which did not loan money to the Moon
Entities until after the bankruptcy petitions were filed in August
2021 -- should have discovered in 2019 that the conveyances were
allegedly fraudulent.
The Plaintiffs have also filed a motion seeking the Court's
approval to engage an auctioneer and conduct a judicial sale of the
Equipment, free and clear of liens, with the sale proceeds to be
placed in escrow pending this Court's final determination of the
parties' lien priorities. Judge Gallagher agrees with the
Plaintiffs that there is a strong interest in selling the Equipment
as soon as possible to avoid its continued depreciation. She
believes that the sale of the Equipment at the proposed Ritchie
Bros. auction in May (or at the next feasible auction date) will
best maximize the value of the Equipment to the benefit of all
lienholders.
A full-text copy of the Memorandum Opinion dated April 10, 2023, is
available https://tinyurl.com/yumhyym5 from Leagle.com.
About Moon Group
Moon Group, Inc. and its affiliates filed their voluntary petitions
for Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-11140)
on Aug. 12, 2021. John D. Pursell, Jr., chief executive officer,
signed the petitions. In its petition, Moon Group listed up to
$50,000 in assets and up to $50 million in liabilities.
Judge Christopher S. Sontchi oversees the cases.
The Debtors tapped Sullivan Hazeltine Allinson, LLC and Kurtzman
Steady, LLC as bankruptcy counsel; and Silverang Rosenzweig &
Haltzman, LLC as special litigation counsel. The Debtors also hired
SC&H Group, Inc. as investment banker but later terminated the
firm. Stretto is the claims and noticing agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors on Aug. 30, 2021. Lucian Borders Murley, Esq.,
at Saul Ewing Arnstein & Lehr, LLP and Gavin/Solmonese, LLC serve
as the committee's legal counsel and financial advisor,
respectively.
MRC GLOBAL: S&P Upgrades ICR to 'B' on Proposed Refinancing
-----------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on MRC Global
(US) Inc. to 'B' from 'B-'.
S&P said, "At the same time, we assigned our 'B' issue-level rating
to the company's proposed $300 million term loan B. The recovery
rating is '3', indicating our expectation for meaningful (50%-70%;
rounded estimate: 55%) recovery in the event of payment default. We
plan to withdraw our ratings on the existing term loan once it has
been fully repaid.
"The stable outlook reflects our expectation that MRC will maintain
S&P Global Ratings-adjusted debt to EBITDA below 4x over the next
12 months while generating positive free operating cash flow."
MRC Global plans to enter into a new $300 million term loan B and
use the proceeds to fully repay its $295 million term loan due
September 2024, as well as for transaction related fees and
expenses.
S&P's upgrade reflects the extended maturity profile of the
company's capital structure through the proposed refinancing, and
our forecast for MRC to maintain S&P Global Ratings-adjusted
leverage below 4x over the next 12 to 24 months. The proposed
refinancing eliminates near-term refinancing risk since the
proposed term loan B will mature in 2028 compared to the existing
term loan, which matures September 2024. Further, the transaction
is leverage neutral given the company will use the majority of
proceeds from the proposed term loan to repay existing debt
balances.
S&P said, "Our forecast for adjusted leverage incorporates our
expectation for continued, albeit decelerating, revenue growth in
2023 following strong (about 26%) growth in 2022. We anticipate
that price will become less of a growth driver as inflation slows,
and that growth will be underpinned mostly by volume in 2023,
supported by broad demand across MRC's end markets. We expect
upstream and midstream-related revenues will be positively affected
by exploration and production (E&P) producers increasing capital
expenditures (capex) spending (we forecast E&P capex budgets to
increase by 15%-20% in 2023) as issues around energy security and
relatively low global inventories drive a supportive commodity
price environment. We believe MRC's downstream, industrial, and
energy transition (DIET) segment will continue to benefit from
relatively stable maintenance, repair, and overhaul (MRO) related
revenues, supported by high capacity utilization rates, previously
deferred maintenance spending, and global energy transition
projects. Additionally, we expect continued demand for ongoing
safety and integrity projects for the company's gas utilities
segment, despite our forecast for lower housing starts.
"Furthermore, we forecast MRC's S&P Global Ratings-adjusted EBITDA
margins will remain stable, around 7% in 2023, as operating
leverage from volume growth is partially offset by reduced pricing
as some commodity input prices decline. Margin stability, in
conjunction with our forecast for revenue growth, translates to S&P
Global Ratings-adjusted EBITDA growth of about 9.5%-11.5% in 2023
and an associated improvement in S&P Global Ratings-adjusted
leverage to the low-3x area, from 3.4x at the end of 2022.
"We expect free operating cash flow (FOCF) to improve substantially
amid lower working capital requirements. Given the sizable revenue
growth that MRC generated in 2022, the company experienced a $210
million use of working capital, which led to a $20 million outflow
in cash from operations for the year. However, we expect that
working capital requirements will begin to normalize in 2023 as
revenue and inventory growth rates moderate, resulting in cash from
operations of around $90 million to $100 million.
"Volatility in energy markets could create a risk to our base-case
forecast. Energy prices have been somewhat volatile year-to-date,
as the possibility of a recession stemming from turbulence among
financial institutions had been pressuring WTI and Brent prices.
However, prices have more recently rebounded following the OPEC+
announcement of production cuts. If prices were to decline and
remain depressed, MRC's E&P customers may be less incentivized to
continue with capital spending plans, thus reducing demand for
MRC's products. However, we also note that our expectation for
MRC's S&P Global Ratings-adjusted debt leverage in the low 3x area
at year-end 2023 provides good cushion against our downside
threshold of 6x. Further, we expect that MRC's gas utilities
revenues (about 35%-40% of total revenues) will remain stable given
that they are not exposed to commodity prices.
"The stable outlook reflects our expectation that MRC will maintain
S&P Global Ratings-adjusted debt to EBITDA below 4x over the next
12 months while generating positive FOCF. Our outlook also reflects
our view that the company will successfully close its proposed term
loan transaction and complete the refinancing of its $295 million
term loan due September 2024."
S&P could consider a downgrade of MRC if:
-- S&P Global Ratings-adjusted debt to EBITDA approaches 6x, such
that it views the potential for end-market cyclicality to cause
leverage to increase above 6x;
-- The company is unable to generate positive FOCF amid a
moderate-growth environment with lower working capital
requirements; or
-- The company does not successfully complete the proposed term
loan issuance to refinance the September 2024 maturity.
Although unlikely given S&P's view of inherent volatility in MRC's
operating performance due to its exposure to cyclical energy
end-markets, it could consider an upgrade if:
-- The company continues to reduce its exposure to volatile oil
and gas end markets;
-- S&P Global Ratings-adjusted debt to EBITDA declines below 3x on
a sustained basis; and
-- S&P believes the company's financial policy is aligned with
maintaining metrics in those areas.
ESG credit indicators: E-3, S-2, G-2
MUSIC GETAWAYS: Taps Law Offices of Michael Jay Berger as Counsel
-----------------------------------------------------------------
Music Getaways, LLC seeks approval from the U.S. Bankruptcy Court
for the Central District of California to hire the Law Offices of
Michael Jay Berger as its bankruptcy counsel.
The firm's services include:
a. communicating with creditors of the Debtor;
b. reviewing the Debtor's Chapter 11 bankruptcy petition and
all supporting schedules;
c. advising the Debtor of its legal rights and obligations in
a bankruptcy proceeding;
d. working to bring the Debtor into full compliance with
reporting requirements of the Office of the U.S. Trustee;
e. preparing status reports as required by the court; and
f. responding to any motions filed in the Debtor's bankruptcy
proceeding.
The hourly rates of the firm's attorneys and staff are as follows:
Michael Jay Berger, Esq. $595
SofyaDavtyan, Partner $545
Carolyn M. Afari, Mid-level Associate Attorney $435
Robert Poteete, Mid-level Associate Attorney $435
Angeline Smirnoff, Associate Attorney $395
Senior Paralegals and Law Clerks $250
Bankruptcy Paralegals $200
The retainer fee is $30,000.
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 Music Getaways
Music Getaways, LLC, a company in Westlake Village, Calif.,
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. Calif. Case No. 23-10256) on April 6,
2023. In the petition signed by its managing member, Warren D.
Hill, the Debtor disclosed up to $100,000 in assets and up to $10
million in liabilities.
Judge Ronald A. Clifford III oversees the case.
Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger,
represents the Debtor as legal counsel.
NANO MAGIC: President Sees Growth Potential in 2023
---------------------------------------------------
Nano Magic, Inc. provided an update from President & CEO Tom Berman
following the Company's filing on April 11, 2023, of its Annual
Report on Form 10-K for the year ended Dec. 31, 2022.
Berman said, "Despite experiencing a disappointing 2022, riddled
with unforeseen challenges that ultimately resulted in poor sales
and a bigger than anticipated overall loss for the year, we made
progress and are well-positioned to grow in 2023. In fact, we're
already seeing momentum cementing new partnerships that were
cultivated in 2022."
Berman also noted, "After three long years, we are finally trading
again with market makers and no caveat emptor designation," Berman
believes that the free trading status will allow Nano Magic to
explore certain strategic opportunities that were not previously
available.
"Nano Magic is focused on building its brand by selling its Nano
Magic-branded products direct-to-consumer, through national
retailers, and in specialty channels such as the optical and safety
industries. Earlier this year, Nano Magic's 2-in-1 Anti Fog Lens
Cleaning wipes were featured on QVC, and Nano Magic expects to have
more live airings in the coming months along with the opportunity
to launch more products with QVC later in 2023. Another exciting
development is the upcoming rollout of a 10-pack of Auto Screen
Cleaner Wipes to over 3,300 Advance Auto Parts locations across the
United States.
"Nano Magic also shared that Best Buy intends to add Nano Magic's
Lens Cleaning Value Pack and 25-Pack of 2-in-1 Anti Fog Lens
Cleaning wipes to more locations, and Best Buy will be adding a
30-pack of Screen Cleaning wipes to checkout lanes. In late 2022,
the Nano Magic Force Field Windshield Protection Kit was featured
in Hammacher Schlemmer's Holiday catalog, and Nano Magic expects to
launch new household and auto bundles, as well as the 2-in-1 Anti
Fog Lens Cleaning wipes in the Hammacher Schlemmer fall 2023
catalog, further expanding the reach of the Nano Magic brand to a
wider audience.
"The biggest win of 2023 so far is the recent program secured with
Walmart. Nano Magic will be launching Nano Magic-branded lens
cleaning and anti-fog solutions into over 3,000 Walmart Optical
locations nationwide with a planned roll out starting in September.
"Having our brand on the shelves in Walmart Optical," Berman noted,
"will give the Nano Magic brand a significant boost in visibility
and accessibility, allowing more customers to experience the
quality and effectiveness of our lens cleaning and anti-fog
solutions."
Berman closed by reiterating: "While our revenue in 2022 was not
ideal, we made progress that is already coming to fruition in 2023.
We are thrilled that our brand and our nanotech-powered solutions
are being well-received in the marketplace. We believe that 2023
will be a year of exciting growth for Nano Magic."
About Nano Magic
Headquartered in Madison Heights, Michigan, Nano Magic Inc., now
known as Nano Magic Holdings Inc. -- www.nanomagic.com -- develops,
commercializes and markets consumer and industrial products powered
by nanotechnology that solve everyday problems for customers in the
optical, transportation, military, sports and safety industries.
Nano Magic reported a net loss of $2.10 million for the year ended
Dec. 31, 2022, compared to a net loss of $1.57 million for the year
ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $4.09
million in total assets, $2.47 million in total liabilities, and
$1.62 million in total stockholders' equity.
Sterling Heights, Michigan-based UHY LLP, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated April 11, 2023, citing that the Company has recurring losses
from operations, negative cash flow from operations, and an
accumulated deficit. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
NEUBERT CONSTRUCTION: Taps Johnson Pope Bokor Ruppel as Counsel
---------------------------------------------------------------
Neubert Construction Services, Inc. received approval from the U.S.
Bankruptcy Court for the Middle District of Florida to hire Johnson
Pope Bokor Ruppel & Burns, LLP as its counsel effective March 8,
2023.
The Debtor requires legal counsel to:
a. give advice with respect to the duties and obligations of
the Debtor under the Bankruptcy Code;
b. take necessary steps to analyze and pursue any avoidance
actions, if in the best interest of the estate;
c. prepare legal papers;
d. assist the Debtor in taking all legally appropriate steps
to effectuate compliance with the Bankruptcy Code; and
e. provide other necessary legal services.
Edward Peterson, Esq., an attorney at Johnson Pope Bokor Ruppel &
Burns, charges $450 per hour.
Mr. Peterson 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:
Edward J. Peterson, Esq.
Johnson Pope Bokor Ruppel & Burns, LLP
401 E. Jackson Street, Suite 3100
Tampa, FL 33602
Telephone: (813) 225-2500
Email: epeterson@jpfirm.com
About Neubert Construction Services
Neubert Construction Services, Inc. sought protection for relief
under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
23-00200) on Feb. 14, 2023, with as much as $1 million in both
assets and liabilities. Judge Caryl E. Delano oversees the case.
Edward J. Peterson, Esq., at Stichter Riedel Blain & Postler, P.A.
represents the Debtor as counsel.
NORTHEAST TOMATO: Wins Interim Cash Collateral Access
-----------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Pennsylvania
authorized Northeast Tomato Distributors Inc. to use cash
collateral on an interim basis in accordance with the budget, from
April 18, 2023 until the case is converted.
The Debtor requires the use of cash collateral to pay its expenses
and continue its operations.
As previously reported by the Troubled Company Reporter, PNC Bank
is believed to hold a first priority security interest in most of
the personal property of the Debtor, including accounts, accounts
receivable and cash. The Debtor is indebted to the Lender in the
approximate amount of $300,000.
The United States Small Business Association may hold a second
priority security interest in some of the personal property of the
Debtor, including accounts, and accounts receivable. The Debtor is
indebted to the SBA for an EIDL loan that may not be secured. The
amount owed on the loan is approximately $500,000.
The Debtor will, on a regular monthly basis, pay to PNC Bank
interest on the two loans granted by PNC to the Debtor. Each loan
interest payment will occur on or before the regular due date on
each such loan, except that any payments that came due prior to the
date of the Order that remain outstanding shall be made within five
days from entry of the Order. In lieu of budget variance reports,
the Debtor will timely file its monthly operating reports.
In order to provide adequate protection, the Lenders are granted
replacement liens in post-Petition Cash Collateral, and all other
assets in which the Lenders have a pre-Petition security interest
and lien, only to the extent that the Lenders are secured in
pre-Petition Cash Collateral. The replacement lien will only be
effective to the extent there is a diminution in the amount of cash
collateral post petition. In the event that post-Petition Cash
Collateral is insufficient to provide an amount equal to such
diminution, then the Lenders will have superpriority status and
have an administrative claim(s) with priority over all other
administrative claims.
A hearing on the continued use of cash collateral is set for May 16
at 10 a.m.
A copy of the order is available at https://bit.ly/3mUphjy from
PacerMonitor.com.
The Debtor projects $16,000 in total income and $6,716 in total
expenses.
About Northeast Tomato Distributors, Inc.
Northeast Tomato Distributors, Inc. is a corporation engaged in
business of produce distribution and trucking services. The Debtor
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. M.D. Pa. Case No. 23-00432) on February 28, 2023. In the
petition signed by Patrick Good, president, the Debtor disclosed up
to $10 million in both assets and liabilities.
Judge Mark J. Conway oversees the case.
Robert E. Chernicoff, Esq., at Cunningham, Chernicoff and
Warshawsky PC, represents the Debtor as legal counsel.
NORTHERN MARIANA CPA: Fitch Affirms B+ on 1998A Airport Bonds
-------------------------------------------------------------
Fitch Ratings has affirmed the 'B+' rating on Commonwealth Ports
Authority (CPA), Commonwealth of Northern Mariana Islands' (CNMI)
approximately $5.9 million of outstanding senior series 1998A
airport revenue bonds. The Rating Outlook is Stable.
Entity/Debt Rating Prior
----------- ------ -----
Northern Mariana
Islands,
Commonwealth of
(MP) [Airport]
Northern Mariana
Islands,
Commonwealth of
(MP) /Airport
Revenues/1 LT LT B+ Affirmed B+
RATING RATIONALE
The rating reflects a small air traffic base with risk of elevated
volatility tied to the islands' limited economy. Manageable capital
needs coupled with robust balance sheet liquidity in excess of debt
outstanding further support the rating. Additionally, the authority
maintains insurance coverage and strong cash reserves and
unrestricted liquidity that more than meet debt service
requirements. In addition, Fitch recognizes the relatively low debt
resulting in negative leverage throughout the forecast period.
Federal relief funds and the use of full passenger facility charge
(PFC) collections provide sufficient cash flow to cover debt
service and operations over the next year, despite continued
depressed enplanement levels. While traffic improvement remains
below peers, immediate financial pressures are mitigated by the
airport's robust liquidity position.
KEY RATING DRIVERS
Revenue Risk - Volume - Weaker
Highly Volatile Enplanement Base
The airport system is an essential enterprise, serving as the
gateway to and within the Mariana Islands. The system serves a
small, pre-pandemic enplanement base of over 700k passengers in
fiscal 2018, reflecting the island's overall population and the
more limited, weaker economy. Traffic performance is potentially
vulnerable to underlying economic stresses given the significant
component of traffic tied to the tourism industry and service
offerings are limited.
Revenue Risk - Price - Weaker
Limited Pricing Power
The authority operates under rates by ordinance. The rate
methodology for air carriers operating at CPA airports is based on
space usage and requires that rates be calculated annually,
utilizing the next fiscal year budget. If CPA determines that
airport revenues are insufficient to cover operations, the
authority may increase fees and charges to an amount sufficient to
meet all obligations. This enhanced pricing power allows for
greater financial flexibility under an adverse operating
environment. Successful implementation of the rate methodology in
the coming years, demonstrating the expected stronger cost
recovery, may warrant a higher price risk score for the airport.
Infrastructure Dev. & Renewal - Midrange
Moderate Capital Plan
The authority's capital improvement plan (CIP) is modest at
approximately $48 million. Existing projects include runway
rehabilitation, commuter terminal construction, TSA
recapitalization program and perimeter fence replacement. The CIP
is predominantly grant and CPA funded. To the extent a significant
portion of PFC revenue is needed for debt service, it could hamper
the airports' ability to provide required matching funds, thus
limiting grant receipts. However, CPA's substantial build-up of
liquidity partially mitigates this risk.
Debt Structure - 1 - Stronger
Conservative Capital Structure
The authority maintains 100% fixed-rate, fully amortizing senior
debt. Annual debt service payments are essentially level, and final
maturity on the bonds is in 2028. Structural features are strong
and in line with most of Fitch's rated airports. No additional bond
issuances are anticipated in the near term.
Financial Profile
Debt service coverage ratio (DSCR) was 8.6x in fiscal 2021 and is
estimated at 2.9x in fiscal 2022, benefitting from the receipt of
federal relief funds and insurance proceeds. The authority has
reserves in excess of debt outstanding, such that leverage is
presently negative. The ability to treat all PFCs as revenues
provides stability and has helped the airport maintain robust
liquidity levels of more than 830 days cash on hand (DCOH) in
fiscal 2021 based on Fitch's calculation. Fitch estimates cost per
enplanement (CPE) in fiscal 2023 to remain elevated at over $14.
PEER GROUP
Small hub size airports with weaker revenue characteristics and
elevated CPE profiles such as Burlington (BBB/Stable), and Dayton
(BBB/Stable), serve as comparable Fitch-rated peers. These airports
all serve smaller service areas with traffic bases below 1 million
enplanements. However, in contrast to CPA, the peer airports have
seen passenger volumes recovering to over 65% of pre-pandemic
levels, while CPA's enplanements have only recovered to
approximately 33%. CPA demonstrates higher coverage and
significantly lower leverage, though these are necessary to
mitigate its more volatile operating and financial profiles and
reflect the benefit of applying 100% of PFCs as pledged revenues.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
Lack of enplanement recovery or continuation of material traffic
declines resulting in significant revenue shortfalls and
deterioration of liquidity levels given the small, volatile
enplanement base.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
CPA airports' heavy reliance on tourism and leisure travelers,
creating an elevated degree of vulnerability to economic recessions
both within its narrow local market, as well as to the larger,
neighboring Asian markets, limits upward rating mobility;
however, should operating levels fully recover and stabilize or
grow, and the rate methodology improve opportunities for cost
recovery, positive rating action may be warranted.
CREDIT UPDATE
The recovery of passenger traffic continues to significantly lag
behind similar small-hub peer airports, as the CPA airport system
serves an island economy highly dependent on tourism from East
Asia, which has been slow to recover. Enplanements increased to
168k in fiscal 2022 from 76k in fiscal 2021, recovering to only 33%
of fiscal 2018 levels (732k enplanements).
Although Fitch expects limited passenger recovery in the near term
as tourism slowly recovers, the reductions in revenue are offset by
grants and a low debt service obligation of approximately $1.4
million. Coverage in fiscal 2022 (unaudited) and fiscal 2023 is
estimated to be approximately 2.9x and 1.4x, respectively.
Positively, the authority has robust reserves (totaling $14.9
million in unrestricted cash) in excess of debt outstanding,
resulting in negative leverage. CPA expects that federal relief
funds provided for operations and debt service will be fully
expended in fiscal 2023. Management currently has no plans to draw
on reserves to meet debt service payments in the near term.
The current capital improvement plan is modest and totals $47.7
million. Approximately 81% of capex spending is directed toward
Saipan Airport, 15% to Tinian and 3% to Rota. The CIP is funded
with FAA and TSA grants, with a select few projects partly funded
by CPA. Existing projects include improvements to the commuter
terminal construction, TSA recapitalization program, fence repairs,
loading bridges replacements as well as parking lot expansion and
rehabilitation. For ongoing capital projects, CPA noted cost
increases for supplies and materials, but these are anticipated to
be temporal and not material to the overall CIP costs.
FINANCIAL ANALYSIS
Fitch's cases assume a conservative range of traffic activity
through debt maturity in 2028 and reflect limited near-term
recovery to pre-pandemic fiscal 2018 levels. Both Fitch cases
incorporate the planned uses of federal relief funds allocated to
operations and debt service in 2023. The differences for each case
focus on the level and speed of the recovery starting in 2024
through debt maturity in 2028.
The Fitch base case, which incorporates year-to-date enplanement
and financial performance, reflects enplanement recovery to 37% of
pre-pandemic levels in fiscal 2023. Thereafter, Fitch assumes
recovery to approximately 65% and 80% of pre-pandemic levels in
2024 and 2025, respectively. Fitch also assumes that enplanements
will return to 100% of pre-pandemic levels by 2028.
Non-airline revenues and passenger facility charges (PFCs) are tied
to the recovery of enplanements in each year. The base case also
assumes that operating expenses grow annually at 2.0% through the
forecast period. Under this scenario, Fitch-calculated DSCR
averages 3.0x over fiscals 2023-2028 and leverage is projected to
remain negative. Results for 2023 are distorted by the application
of federal grants to debt service and operating expenses.
Fitch's rating case reflects a prolonged recovery trajectory,
assuming recovery to approximately 50% and 65% of pre-pandemic
levels in fiscals 2024-2025 and reaching 90% by fiscal 2028. Under
this scenario, Fitch-calculated DSCR averages 1.7x over fiscal
2023-2028. Similar to the base case, leverage remains negative
throughout the forecast period. Liquidity remains a key credit
strength and provides a mitigant to periods of financial
underperformance. Draws on unrestricted cash may be needed to meet
the rate covenant of 1.25x if enplanements continue to remain at
depressed levels.
SECURITY
The series 1998A bonds are secured by a pledge of gross airport
revenues generated by the operations of the airport, including PFCs
eligible for payment of debt service.
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.
OMNIQ CORP: Named Momentum Partner of the Year
----------------------------------------------
OMNIQ Corp. announced it has been honored with the Momentum Award
by Honeywell International. The award recognizes omniQ's success
and rapid growth in its partnership with Honeywell by bringing in
new logos, aligning with the sales teams, and incorporating
Honeywell's vision and culture to produce strong results.
"Honeywell understands the importance of a strong technology
roadmap to deliver continuous innovation to the world's largest
companies. We are proud to receive the Momentum Award, which is a
testament to our commitment to delivering innovative solutions and
exceptional service to our customers," said Shai Lustgarten, CEO of
omniQ Corp. "This award is a recognition of the hard work and
dedication of our team, and our partnership with Honeywell, which
has enabled us to achieve rapid growth and success. We have been
able to achieve this by leveraging both company's industry
expertise, incorporating our visions and cultures into the
solutions, and aligning our sales teams to produce strong
results."
omniQ's AI-based solutions continue to help customers optimize
their supply chain operations and drive efficiencies all while
enhancing the customer experience. This award follows the recent
announcement where omniQ was named a Total Solution Partner for one
of the largest global leaders in enterprise asset intelligence for
robotics supply chain management.
About omniQ Corp.
Headquartered in Salt Lake City, Utah, omniQ Corp. (OTCQB: OMQS) --
http://www.omniq.com-- provides computerized and machine vision
image processing solutions that use patented and proprietary AI
technology to deliver data collection, real time surveillance and
monitoring for supply chain management, homeland security, public
safety, traffic and parking management and access control
applications. The technology and services provided by the Company
help clients move people, assets and data safely and securely
through airports, warehouses, schools, national borders, and many
other applications and environments.
Omniq Corp reported a net loss of $13.61 million for the year ended
Dec. 31, 2022, compared to a net loss of $13.14 million for the
year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had
$64.81 million in total assets, $75.34 million in total
liabilities, and a total deficit of $10.53 million.
Salt Lake City, Utah-based Haynie & Company, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated March 30, 2023, citing that the Company has a deficit in
stockholders' equity, and has sustained recurring losses from
operations. This raises substantial doubt about the Company's
ability to continue as a going concern.
ONKAAR INC: Case Summary & Nine Unsecured Creditors
---------------------------------------------------
Debtor: Onkaar Inc.
d/b/a Chico Super Food Mart
481 East Avenue
Chico, CA 95926
Business Description: Onkaar owns gasoline stations.
Chapter 11 Petition Date: April 24, 2023
Court: United States Bankruptcy Court
Eastern District of California
Case No.: 23-21315
Judge: Hon. Christopher D. Jaime
Debtor's Counsel: Gabriel E. Liberman, Esq.
LAW OFFICES OF GABRIEL LIBERMAN, APC
1545 River Park Drive, Ste 530
Sacramento, CA 95815
Tel: 916-485-1111
Email: attorney@4851111.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Onkar Singh as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's nine unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/IFLIPRQ/Onkaar_Inc__caebke-23-21315__0001.0.pdf?mcid=tGE4TAMA
OZ NATURALS: Files Emergency Bid to Use Cash Collateral
-------------------------------------------------------
OZ Naturals LLC asks the U.S. Bankruptcy Court for the Southern
District of Florida, West Palm Beach Division, for authority to use
the cash collateral of the U.S. Small Business Administration.
The Debtor requires the use of cash collateral for the continued
operation of its business in the ordinary course.
As of the Petition Date, the Debtor is indebted to the SBA in the
total amount of approximately $200,000 pursuant to an Economic
Injury Disaster Loan. The debt is secured by, inter alia, a
Promissory Note, Security Agreement, and Loan Authorization and
Agreement dated July 19, 2021, in which the Debtor granted the
Lender a security interest in all its tangible and intangible
personal property, including but not limited to its accounts,
machinery and equipment, and intangibles.
Installment payments, including principal and interest, of $1,002
per month begin 18 months from the date of the Promissory Note. The
balance of principal and interest will be payable 30 years from the
date of the Promissory Note, with such amount to be based on a
30-year, 3.75% amortization.
The Debtor is currently behind on its payments to the Lender by
$3,006.
As adequate protection, the Debtor will grant the Lender a lien on
cash generated by the Debtor post-petition, to the same extent,
validity, and priority of the Lender’s existing prepetition
lien.
A copy of the Debtor's motion and budget is available at
https://bit.ly/3KZhRDI from PacerMonitor.com.
The Debtor projects $576,000 in gross income and $446,018 in total
expenses for one month.
About OZ Naturals, LLC
OZ Naturals, LLC manufactures natural skin care products. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. S.D. Fla. Case No. 23-13005) on April 18, 2023. In the
petition signed by CFO Michael D. Small, the Debtor disclosed
$633,123 in assets and $1,482,356 in liabilities.
Judge Mindy A. Mora oversees the case.
Aaron A. Wernick, Esq., at Wernick Law, PLLC, represents the Debtor
as legal counsel.
P&P CONSTRUCTION: Court OKs Cash Collateral Access Thru May 3
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized P&P Construction Group, LLC and
affiliates to use cash collateral on an interim basis in accordance
with the budget, with a 10% variance, through May 3, 2023.
The Debtors require the use of cash collateral to pay their direct
operating expenses and obtain goods and services needed to carry on
their businesses.
The Debtors are alleged to be party to a Loan and Security, dated
December 31, 2021, between Debtor BRH-Garver Construction, LLC, as
borrower, Debtor P&P Construction Group, LLC, as guarantor, and
Community Bank of Texas, N.A., as lender, pursuant to which
Prepetition Lender made available to Garver a term loan facility in
the original principal amount of $18 million and a revolving credit
facility up to $3 million or such lesser amount determined by the
borrowing base provisions under the Prepetition Loan Agreement. As
of the Petition Date, the Debtors were in payment default of their
obligations under the Prepetition Loan Agreement.
The Prepetition Loans are alleged to be secured by first priority
liens on and security interests in substantially all of Garver's
assets, including the Garver's accounts receivable and equipment.
P&P Construction Group, LLC, guaranteed repayment of the Term Loan
on the terms set forth in the Guaranty Agreement executed by P&P
Construction Group, LLC, in favor of the Prepetition Lender
contemporaneously with the Prepetition Loan Agreement.
As of the Petition Date, the outstanding principal balance due
under the Term Loan was alleged to be approximately $12.1 million,
and the outstanding principal balance due under the Revolver was
alleged to be $4 million, in each case plus accrued interest, fees,
and other charges due and payable under the Prepetition Loan
Agreement.
As adequate protection, the Prepetition Lender is granted valid,
perfected liens and enforceable post-petition replacement security
interests in all property of the Debtors.
The Replacement Lien will be in addition to all other rights of the
Prepetition Lender, including the Prepetition Lender's existing
prepetition liens on and security interests in property of the
Debtors.
As further adequate protection, the Prepetition Lender is granted
pursuant to 11 U.S.C. section 507(b) a superpriority claim in such
amount if and to the extent the Replacement Lien is insufficient to
provide adequate protection against the diminution, if any, in
value of the Prepetition Lender's interest in any collateral
resulting from the use of cash collateral. The priority of the
Superpriority Claim will be senior in priority of payment over the
Debtors' intercompany administrative claims and any and all
administrative expenses of the kinds specified or ordered pursuant
to any provision of the Bankruptcy Code.
The Prepetition Liens and the interests of the Sureties, if any, in
cash collateral, including Bonded Contract Proceeds, are subject
and subordinate in all respects to a carve-out in an amount equal
to the sum of (i) all fees required to be paid to the Clerk of the
Court and to the Office of the United States Trustee under 28
U.S.C. section 1930(a) plus interest at the statutory rate pursuant
to 31 U.S.C. section 3717; (ii) all reasonable fees, costs, and
expenses up to $100,000 incurred by a trustee under section 726(b);
(iii) to the extent allowed by the Court on an interim or final
basis at any time, all unpaid fees, costs, and expenses of the
Debtors (up to $100,000) or any statutory committee (up to $50,000)
earned, accrued, or incurred by persons or firms retained by the
Debtors.
These events constitute an "Event of Default":
(a) The Debtors fail to timely and punctually perform any of
their obligations in accordance with the terms hereof or otherwise
defaults hereunder or breaches any provision thereof;
(b) Any representation or warranty made in any certificate,
report, expense statement, other financial statement, or other
document delivered to the Prepetition Lender or the Sureties after
the Petition Date proves to have been false or misleading in any
material respect as of the time when made or given;
(c) Any other person or entity obtains an order permitting the
use of cash collateral without the written consent of the
Prepetition Lender; and
(d) The Replacement Liens granted to the Prepetition Lender
ceases to convey, subject to the Carve-Out, a valid and perfected
first priority lien on and security interest in the property of the
Debtors.
A final hearing on the matter is set for May 3 at 1 p.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/40nOxwk from PacerMonitor.com.
The Debtor projects total net cash flow, on a weekly basis, as
follows:
$1,116,812 for the week starting April 17, 2023;
$884,697 for the week starting April 24, 2023;
$870,602 for the week starting May 1, 2023; and
$470,437 for the week starting May 8, 2023.
About P&P Construction Group, LLC
P&P Construction Group, LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90292) on
April 12, 2023. In the petition signed by Jeffrey Anapolsky, its
chief executive officer, the Debtor disclosed up to $10 million in
assets and up to $50 million in liabilities.
Judge Christopher Lopez oversees the case.
Michael P. Cooley, Esq., at Reed Smith, LLP, represents the Debtor
as legal counsel.
PARTY CITY: Fine-Tunes Reorganization Plan and Disclosures
----------------------------------------------------------
Party City Holdco Inc., et al., submitted a First Amended Joint
Chapter 11 Plan of Reorganization, and Disclosure Statement.
Despite significant strides made on these and other initiatives in
the face of these headwinds, in late 2022, the Company, with the
assistance of its advisors, began to evaluate and consider several
strategic alternatives and transactions aimed at refinancing or
restructuring its debt obligations with minimal disruption to its
operations. Among other efforts to combat market and industry
headwinds, in November 2022, PCHI commenced discussions with the
advisors to an ad hoc group of holders of Secured Notes (the "Ad
Hoc Noteholder Group"). After thoroughly evaluating all options
available to the Company, PCHI determined that a pre-negotiated,
in-court restructuring predicated on the equitization of the
Secured Notes and the rationalization of its real estate lease
portfolio would best position the Company for future success.
These discussions were ultimately successful. Following extensive
negotiations with the Ad Hoc Noteholder Group, on January 17, 2023,
the Company entities which would become the Debtors in these
Chapter 11 Cases and the members of the Ad Hoc Noteholder Group,
who represented, at the time, more than 70% of the holders of the
principal amount outstanding under the Secured Notes, entered into
a restructuring support agreement (the "Restructuring Support
Agreement"), which, among other things, outlined the terms of the
Company's proposed restructuring. Later that day, the Debtors
commenced these Chapter 11 Cases to implement an expeditious,
pre-negotiated restructuring that will shore up the Company's
long-term viability. Per the terms of the Restructuring Support
Agreement, the Debtors have pursued a swift resolution of these
Chapter 11 Cases. The Debtors have obtained the Ad Hoc Noteholder
Group's approval of their business plan as required under the
Restructuring Support Agreement, obtained final approval of their
postpetition financing on a fully-consensual basis, and made
meaningful strides in rightsizing their lease portfolio through a
series of lease rejections and renegotiations and the approval of
procedures governing the closure of certain retail properties.
Under the terms of the Restructuring Support Agreement, which are
documented in the DIP Credit Agreement, the Plan, and this
Disclosure Statement, the Company expects to deleverage its balance
sheet and gain access to significant new capital to fund its
going-forward, post-emergence operations through (i) the
equitization of the Secured Notes, (ii) the sale of equity in
Reorganized PCHI through the Equity Rights Offering, (iii) the DIP
Equitization, and (iv) entry into the ABL Exit Facility. This
reduction in funded debt will allow the Reorganized Debtors to
focus on long-term growth and, in turn, strengthen their
competitive position in the market. The key terms of the Plan are
as follows:
* The full equitization of Secured Notes Claims pursuant to the
Plan, under which Holders of Allowed Secured Notes Claims shall
receive 100% of the New Common Stock, subject to dilution on
account of any DIP Equitization Shares, any New Common Stock issued
in connection with the Equity Rights Offering, the Backstop
Commitment Premium, and the MIP Equity Pool;
* The sale of $75 million of equity in Reorganized PCHI via the
Equity Rights Offering, which will be fully-backstopped by the
Equity Commitment Parties pursuant to the terms of the Backstop
Agreement; and
* The equitization of up to $149 million of Allowed DIP Claims
held by DIP Backstop Lenders pursuant to the DIP Equitization
Option.
Through the Restructuring Transactions, the Debtors expect to
emerge from chapter 11 with a sustainable capital structure that
will position the Reorganized Debtors for future success in the
ever-evolving retail market in which they operate. The Debtors also
believe that the Restructuring Transactions will maximize the value
of their business and allow them to capitalize on near-term
opportunities in a highly competitive and consolidating industry,
ahead of key seasonal sales windows. Moreover, this restructuring
provides a framework for the long-term sustainability of the
Debtors' business for the benefit of their employees, vendors, and
customers, and ample liquidity to fund the post-emergence
business.
As part of the Debtors' efforts to ensure this continued viability,
the Debtors and their professionals will secure the ABL Exit
Facility which, in conjunction with the new money provided through
the sale of equity in the Equity Rights Offering and the DIP
Equitization, will provide the Debtors with the liquidity necessary
to fund their going-forward operations. The Debtors have been
engaged in a weeks-long process, led by Moelis (as defined below)
in its capacity as the Debtors' investment banker and financial
advisor, to obtain and negotiate the terms of the ABL Exit
Facility. Through that process, the Debtors discussed the financing
opportunity with 13 potential counterparties, including the
Prepetition ABL Agent. This outreach led to 9 parties conducting
preliminary diligence on the business and 3 parties executing
non-disclosure agreements. The Debtors received multiple proposals
for an exit asset-based lending facility and have begun work with
the proposed lead arranger for the ABL Exit Facility. The Debtors
expect to file additional disclosures of the final terms of the ABL
Exit Facility in the Plan Supplement. As set forth in the Plan,
confirmation of the Plan shall constitute approval of the ABL Exit
Facility Documents.
The negotiation and execution, as applicable, of the Restructuring
Support Agreement, the DIP Credit Agreement, the Backstop
Agreement, the ABL Exit Facility, and the filing of the Plan and
this Disclosure Statement are significant achievements for the
Debtors given a retail environment facing an uncertain future in
the wake of COVID-19, especially one which relies heavily on raw
materials subject to price increases and supply chain disruptions
in an unpredictable geopolitical landscape. The Debtors strongly
believe that the Plan is in the best interests of the Debtors'
Estates, represents the Debtors' best available alternative, and
provides for value-maximizing transactions which will inure to the
benefit of all of the Debtors' stakeholders. Given the Debtors'
core strengths, including their experienced management team and
employees, the Debtors are confident that they can implement the
Plan's value-maximizing restructuring to ensure the long-term
viability of their business.
Under the Plan, holders of Class 5 General Unsecured Claims will
receive its Pro Rata share of the GUC Cash Allocation. Class 5 is
impaired.
"GUC Cash Allocation" means Cash in an amount to be determined by
the Debtors, with the consent of the Required Consenting
Noteholders, and in consultation with the Creditors' Committee
(which Cash amount shall be no less than $250,000), to be disclosed
in a notice to be Filed on the docket of the Chapter 11 Cases on or
before the GUC Cash Allocation Deadline and served on Holders of
General Unsecured Claims in accordance with the terms of the Order
conditionally approving the Disclosure Statement.
The Debtors and the Reorganized Debtors, as applicable, shall fund
distributions under the Plan with: (1) Cash on hand, including Cash
from operations and the proceeds from the DIP Facility, the Equity
Rights Offering, and the ABL Exit Facility; and (2) the New Common
Stock.
The voting deadline to accept or reject the Plan is 4:00 P.M.
(Prevailing Central Time) on May 9, 2023.
Co-Counsel to the Debtors:
Paul M. Basta, Esq.
Kenneth S. Ziman, Esq.
Christopher J. Hopkins, Esq.
Grace C. Hotz, Esq.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
1285 Avenue of the Americas
New York, NY 10019
Telephone: (212) 373-3000
Facsimile: (212) 757-3990
E-mail: pbasta@paulweiss.com
kziman@paulweiss.com chopkins@paulweiss.com
ghotz@paulweiss.com
- and -
John F. Higgins, Esq.
M. Shane Johnson, Esq.
Megan Young-John, Esq.
PORTER HEDGES LLP
1000 Main St., 36th Floor
Houston, TX 77002
Telephone: (713) 226-6000
Facsimile: (713) 226-6248
E-mail: jhiggins@porterhedges.com
sjohnson@porterhedges.com
myoung-john@porterhedges.com
A copy of the Disclosure Statement dated April 12, 2023, is
available at https://bit.ly/417UyhY from PacerMonitor.com.
About Party City Holdco
Party City Holdco, Inc. (NYSE: PRTY) is the global leader in the
celebrations industry, with its offerings spanning more than 70
countries around the world. It is also the largest designer,
manufacturer, distributor and retailer of party goods in North
America. Party City Holdco had 761 company-owned stores as of
September 2022 and is headquartered in Woodcliff Lake, N.J., with
additional locations throughout the Americas and Asia.
Party City Holdco and its domestic subsidiaries sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex.
23-90005) on Jan. 17, 2023. As of Sept. 30, 2022, Party City Holdco
had total assets of $2,869,248,000 against total debt of
$3,022,960,000.
Judge David R. Jones oversees the cases.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP as
legal counsel; Moelis & Company, LLC as investment banker;
AlixPartners, LLP as financial advisor; A&G Realty Partners as real
estate advisor; and Kroll as the claims agent.
PricewaterhouseCoopers LLP (PwC) provides accounting and valuation
advisory services, tax-related services, and internal audit
Sarbanes-Oxley Act support services.
Davis Polk & Wardwell, LLP and Lazard serve as legal counsel and
investment banker, respectively, to the ad hoc group of first lien
holders.
The U.S. Trustee for Region 6 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Pachulski Stang Ziehl & Jones, LLP.
PEAR THERAPEUTICS: U.S. Trustee Appoints Creditors' Committee
-------------------------------------------------------------
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of Pear
Therapeutics, Inc. and Pear Therapeutics (US), Inc.
The committee members are:
1. Truepill Inc.
Attn: Ryan Towsley
3121 Diablo Avenue
Hayward, CA 94545
Phone: 415-595-7926
Email: ryan.towsley@truepill.com
2. SVASUM AB
Attn: Fredrik Hollandare
Esbjornsgatan 4, 70217
Orebro, Sweden
Phone: +46702524480
Email: hollandare@hotmail.com
3. Hannaford & Dumas Corp.
Attn: Stephen Bryer
26 Conn Street
Woburn, MA 01801
Phone: 781-503-0100
Fax: 781-503-0103
Email: steve@hannaforddumas.com
4. Q2i LLC
Attn: Steven Jenkins
399 Boylston Street, 6th Floor
Boston, MA 02116
Phone: 646-660-2151
Email: sjenkins@q2i-group.com
5. Evan Grandfield
c/o Rene' S. Roupinian
c/o Jack A Raisner
Raisner Roupinian LLP
270 Madison Avenue, Suite 1801
New York, NY 10016
Phone: 212-221-1747
Fax: 212-221-1747
Email: rsr@raisnerroupinian.com
Email: jar@raisnerroupinian.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 Pear Therapeutics
Pear Therapeutics, Inc. is a commercial-stage healthcare company
pioneering a new class of software-based medicines, sometimes
referred to as Prescription Digital Therapeutics, which use
software to treat diseases directly.
Pear Therapeutics, Inc. and Pear Therapeutics (US), Inc. filed
their voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10429) on April 7,
2023. Christopher Guiffre, chief financial officer and chief
operating officer, signed the petitions. In the petitions, the
Debtors reported $10 million to $50 million in both assets and
liabilities.
Judge Thomas M. Horan presides over the cases.
The Debtors tapped Foley Hoag, LLP as general bankruptcy counsel;
Gibbons, P.C. as Delaware counsel; Wilmer Cutler Pickering Hale and
Dorr, LLP as special counsel; Sonoran Capital Advisors, LLC and MTS
Health Partners, L.P. as financial advisors; and Stretto, Inc. as
claims and noticing agent.
PHASEBIO PHARMACEUTICALS: Pharmaron Steps Down as Committee Member
------------------------------------------------------------------
The U.S. Trustee for Region 3 disclosed in a court filing that
Pharmaron, Inc. resigned from the official committee of unsecured
creditors in the Chapter 11 case of PhaseBio Pharmaceuticals, Inc.
The remaining members of the committee are:
1. Biovectra Inc.
Attn: Scott Zhu
11 Aviatione Avenue
Charlottetown, PE
C1E 0A1 Canada
Phone: 902-388-1951
Email: szhu@higcapital.com
2. MLM Medical Labs, LLC
Attn: Roger Gasper
140 Collins Street
Memphis, TN 38112
Phone: 484-612-5680
Email: rgasper@mlm-labs.com
3. Velocity Clinical Research Inc.
Attn: Jamie Wilkerson
807 E. Main St. Suite 6-100
Durham, NC 27701
Phone: 919-260-7650
Email: jwilkerson@velocityclinical.com
4. Synchrogenix Information Strategies LLC
Attn: Demetrius Carter
2951 Centerville Rd., Suite 100
Wilmington, DE 19803
Phone: 919-527-5131
Email: Demetrius.Carter@certara.com
5. Absci Corporation
Attn: Todd Bedrick & Natalie Stack
18105 SE Mill Plain Blvd
Vancouver, WA 98683
Phone: 520-907-6362
Email: tbedrick@absci.com
nstack@absci.com
6. Bar Advisors, LLC
Attn: Fred Manak
3525 Del Mar Heights Rd.
San Diego, CA 92130
Phone: 805-208-5506
Email: fmanak@biobaradvisors.com
About Phasebio Pharmaceuticals
PhaseBio Pharmaceuticals, Inc. -- https://www.phasebio.com/ -- is
focused on the development and commercialization of novel therapies
to treat orphan diseases, with an initial focus on cardiopulmonary
indications. It is based in Malvern, Pa.
PhaseBio Pharmaceuticals filed a petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Case No. 22-10995) on
Oct. 24, 2022. In the petition filed by its chief executive
officer, Jonathan Mow, the Debtor reported $17,970,000 in assets
and $21,320,000 in debt as of Aug. 31, 2022.
Judge Laurie Selber Silverstein oversees the case.
The Debtor tapped Cooley LLP as lead bankruptcy counsel; Richards,
Layton & Finger, PA as Delaware bankruptcy counsel;
SierraConstellation Partners, LLC as financial advisor; KPMG, LLP
as tax consultant; and Miller Buckfire & Co. as investment banker.
Omni Agent Solutions is the claims, noticing and administrative
agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors in the Debtor's case on Nov. 3, 2022. McDermott
Will & Emery, LLP and FTI Consulting, Inc. serve as the committee's
legal counsel and financial advisor, respectively.
PHOENIX SERVICES: Seeks to Extend Exclusivity Period to July 24
---------------------------------------------------------------
Phoenix Services Topco, LLC and its affiliates ask the U.S.
Bankrutpcy Court for the District of Delaware to further extend
their exclusive periods to file and solicit acceptances of their
chapter 11 plan to July 24, 2023 and September 25, 2023,
respectively.
The Debtors stated that their chapter 11 cases are moving towards
a successful conclusion as they diligently work to, among other
things:
(a) finalize long-term modifications with respect to their
unprofitable customer contracts;
(b) obtain approval of the Disclosure Statement;
(c) solicit votes for the Plan; and
(d) confirm and consummate the Plan.
The Debtors explained that the requested extension of the
exclusive periods will allow this process to continue in a
rational manner, preserve enterprise value, and provide them
with a fair and reasonable opportunity to emerge as a
going-concern.
The Debtors' current exclusive periods to file a chapter 11 plan
and solicit acceptances thereof will expire on April 25, 2023 and
June 26, 2023, respectively.
Phoenix Services Topco, LLC is represented by:
Daniel J. DeFranceschi, Esq.
Zachary I. Shapiro, Esq.
Matthew P. Milana, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
920 North King Street
Wilmington, DE 19801
Tel: (302) 651-7700
- and -
Ray C. Schrock, Esq.
Jeffrey D. Saferstein, Esq.
Garrett A. Fail, Esq.
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
Tel: (212) 310-8000
About Phoenix Services Topco
Phoenix Services Topco, LLC provides services to global
steel-producing companies, including the removal, handling, and
processing of molten slag at customer sites, and the preparation
and transportation of metal scraps, raw materials, and finished
products.
Phoenix Services Topco and eight affiliates, including Phoenix
Services Holdings Corp., sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-10906)
on Sept. 27, 2022. In the petitions signed by its chief financial
officer, Robert A. Richard, Phoenix Services Topco disclosed $500
million to $1 billion in both assets and liabilities.
Judge Mary J. Walrath oversees the cases.
The Debtors tapped Weil, Gotshal, and Manges, LLP and Richards
Layton & Finger, P.A. as legal counsels; AlixPartners, LLP as
financial advisor; PJT Partners, Inc. as investment banker; and
Stretto, Inc. as claims and noticing agent and administrative
advisor.
Barclays Bank PLC, as DIP and First Lien Group lender, is
represented by Gibson, Dunn & Crutcher LLP while Credit Suisse
Loan Funding LLC, as DIP lender, is represented by Pachulski
Stang Ziehl & Jones, LLP.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors in the Debtors' Chapter 11 cases
on Oct. 11, 2022. Squire Patton Boggs (US), LLP, Cole Schotz,
P.C. and FTI Consulting, Inc. serve as the committee's lead
bankruptcy counsel, Delaware counsel and financial advisor,
respectively.
PLUS THERAPEUTICS: Incurs $4.8 Million Net Loss in First Quarter
----------------------------------------------------------------
Plus Therapeutics, Inc. has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $4.80 million on $506,000 of grant revenue for the three months
ended March 31, 2023, compared to a net loss of $4.12 million on $0
of grant revenue for the three months ended March 31, 2022.
As of March 31, 2023, the Company had $15.64 million in total
assets, $12.96 million in total liabilities, and $2.67 million in
total stockholders' equity.
The Company has an accumulated deficit of $472.0 million as of
March 31, 2023. Additionally, the Company used net cash of $5.8
million to fund its operating activities for the three months ended
March 31, 2023. The Company said these factors raise substantial
doubt about its ability to continue as a going concern.
Plus Therapeutics stated, "To date, our operating losses have been
funded primarily from outside sources of invested capital from
issuance of our common and preferred stocks, proceeds from our term
loan with Oxford and grant funding. However, we have had, and will
continue to have, an ongoing need to raise additional cash from
outside sources to fund our future clinical development programs
and other operations. There can be no assurance that we will be
able to continue to raise additional capital in the future. Our
inability to raise additional cash would have a material and
adverse impact on our operations and would cause us to default on
our term loan."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1095981/000095017023013671/pstv-20230331.htm
About Plus Therapeutics
Headquartered in Austin, Texas, Plus Therapeutics, Inc. --
http://www.plustherapeutics.com-- is a clinical-stage
pharmaceutical company focused on the discovery, development, and
manufacturing scale up of complex and innovative treatments for
patients battling cancer and other life-threatening diseases.
Plus Therapeutics reported a net loss of $20.27 million for the
year ended Dec. 31, 2022, a net loss of $13.40 million for the year
ended Dec. 31, 2021, a net loss of $8.24 million for the year ended
Dec. 31, 2020, a net loss of $10.89 million for the year ended Dec.
31, 2019, a net loss of $12.63 million for the year ended Dec. 31,
2018, and a net loss of $22.68 million for the year ended Dec. 31,
2017. As of Dec. 31, 2022, the Company had $23.86 million in total
assets, $17.42 million in total liabilities, and $6.44 million in
total stockholders' equity.
PRESTON URGENT: Seeks Cash Collateral Access
--------------------------------------------
Preston Urgent Care Family Practice, LLC asks the U.S. Bankruptcy
Court for the Northern District of West Virginia for authority to
use cash collateral.
The cash collateral order is necessary to continue operations and
to achieve a sale of the business at the optimal price and in a
manner that will optimize return to all creditors.
Clear Mountain Bank has a first lien on accounts receivables, and
other collateral.
A subordinated loan and security agreement is held by the Small
Business Administration.
Several other entities now make claims, junior in priority to the
said claims. These include Quantam, CANCapital, Funding Metrics,
Kalamata Capital Group, and Small Business Finance Solutions.
A copy of the motion is available at https://bit.ly/3MVIFYe from
PacerMonitor.com.
About Preston Urgent Care Family Practice, LLC
Preston Urgent Care Family Practice, LLC sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. W.Va. Case No.
23-00185) on April 17, 2023. In the petition signed by Peg
Phillips, owner, the Debtor disclosed $665,118 in assets and
$1,364,407 in liabilities.
Martin P. Sheehan, Esq., at Sheehan & Associates, PLLC, represents
the Debtor as legal counsel.
QUALITY HEATING: Wins Cash Collateral Access Thru May 9
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Quality Heating and Air Conditioning Company, Inc. to use cash
collateral, on an interim basis, in accordance with the budget,
through May 9, 2023.
The Debtor acknowledges and agrees that as of the Petition Date,
the claims and liens of Wilmington Savings Fund Society, FSB: (a)
were valid, binding, enforceable, non-avoidable, and properly
perfected and were granted to, or for the benefit of, WSFS for fair
consideration and reasonably equivalent value; (b) were senior in
priority over any and all other liens on its prepetition
collateral; (c) were enforceable in accordance with the terms of
the prepetition loan documents; and (d) constitute allowed, secured
claims within the meaning of 11 U.S.C sections 502 and 506.
As adequate protection, WSFS is granted adequate protection,
replacement security interests in and replacement liens in
post-petition assets acquired using the cash collateral to the same
extent and priority as existed pre-petition in accordance with 11
U.S.C. section 361. The replacement liens and security interests
granted to WSFS are automatically deemed perfected upon entry of
the Order without the necessity of WSFS taking possession, filing
financing statements, mortgages or other documents.
The SBA is granted, as assurance of adequate protection,
replacement liens in postpetition assets to the same extent and
priority as existed pre-petition in accordance with 11 U.S.C.
section 361.
The Debtor will make regular monthly payments to WSFS as required
under the WSFS loan documents, in the amounts set forth in the
regular monthly statements issued by WSFS with the initial payments
to be made on or before April 3, 2023.
A final hearing on the matter is set for May 9 at 9:30 a.m.
A copy of the Court's order is available at https://bit.ly/41NB7en
from PacerMonitor.com.
About Quality Heating and Air Conditioning
Headquartered in Newport, Delaware, Quality Heating and Air
Conditioning provides HVAC and sheet metal services across the
Delaware, Maryland, Pennsylvania, New Jersey and Virginia areas.
Quality Heating specializes in the construction and commercial
industries and was founded over 50 years ago. It is capable of all
phases of sheet metal work and has worked on an extensive variety
of projects including new construction, industrial, pharmaceutical,
medical, educational, remodels and design-build. It has over 40,000
square feet of space dedicated to custom fabrication.
Quality Heating sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-10354) on March 27,
2023. In the petition signed by Horace Adam Wahl, III, president,
the Debtor disclosed up to $50 million in both assets and
liabilities.
Judg Karen B. Owens oversees the case.
Ronald S. Gellert, Esq., at Gellert Scali Busenkell & Brown, LLC,
represents the Debtor as legal counsel.
RANDAZZO'S CLAM: Has Deal on Cash Collateral Access
---------------------------------------------------
Randazzo's Clam Bar of NY Inc., Novac Equities LLC and Forever
Funding LLC advised the U.S. Bankruptcy Court for the Eastern
District of New York that they have reached an agreement regarding
the Debtor's use of cash collateral and now desire to memorialize
the terms of this agreement into an agreed order.
On July 7, 2022, the Debtor entered into a Standard Merchant Cash
Advance Agreement with FF by which the Debtor received $58,500 (net
of $6,500 in fees) from FF in exchange for FF purchasing $97,500 of
the Debtor's accounts receivable. On August 2, 2022, FF filed a
UCC-1 against the Debtor.
On July 22, 2022, the Debtor entered into a Standard Merchant Cash
Advance Agreement with Novac by which the Debtor received $72,000
(net of $8,000 in fees) from Novae in exchange for Novae purchasing
$127,920 of the Debtor's accounts receivable. On August 2, 2022,
Novac filed a UCC-1 against Debtor.
FF & Novac have declared the Debtor in default under the respective
agreements and have collectively demanded the sum of $115,659 from
the Debtor.
Counsel for the Debtor and FF and Novac have agreed that the
obligations under the FF and Novae Agreements were and are
guaranteed by the Debtor's principal's Paul Randazzo. The Debtor
acknowledges the FF and Novac Agreements constitute valid, duly
recorded and perfected, non-voidable and enforceable secured
obligations of the Debtor. To resolve any the Debtor disputes, the
parties agree that the $115,659 claimed due will be reduced to and
fixed at $80,000 and will be paid $5,000 a month commencing May 15,
2023 for 16 consecutive months and ending on August 15, 2024.
Upon final payment being made, FF and Novas will file UCC-3
terminations statements, will discontinue any pending lawsuits and
will provide Paul Randazzo with a general release of his guarantee.
FF and Novac will not take any action seeking to enforce or collect
on guarantee while this agreement is in full force and effect.
A copy of the stipulation is available at https://bit.ly/3H1xcSZ
from PacerMonitor.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., in Manhasset, N.Y., is the Debtor's
bankruptcy counsel.
RICE ENTERPRISES: Court OKs Cash Collateral Access on Final Basis
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Pennsylvania
authorized Rice Enterprises, LLC to use cash collateral on a final
basis in accordance with the budget.
An immediate and critical need exists for the Debtor to be
permitted access to funds in order to continue to operate its
business.
In exchange for BMO Harris, N.A., consenting to the Debtor's use of
cash collateral, the Lender is granted replacement security
interests in, and replacement liens on all of the Debtor's
post-petition assets to the same extent, priority and validity of
the Lender's Prepetition Liens against the Prepetition Collateral.
The replacement liens granted pursuant to the Interim Order will
continue and be in full force and effect under the Final Order and
will constitute valid and duly perfected security interests and
liens, and the Lender will not be required to file or serve
financing statements, notices of lien or similar instruments, which
otherwise may be required under federal or state law in any
jurisdiction, or take any action, including taking possession, to
validate and perfect such Replacement Liens.
The Lender will also receive regular payments pursuant to
Prepetition Loan Documents. The Lender may seek a super-priority
administrative claim pursuant to 11 U.S.C. section 507(b) to the
extent that the adequate protection granted provides to be
inadequate. However, the Lender is not entitled to a lien on any
avoidance action that is filed or could be filed by the Debtor.
These events constitute an "Event of Default":
a. Material non-compliance by the Debtor with the terms of the
Final Order;
b. The Debtor's failure to timely remit the payments to the
Lender as required by the Final Order;
c. Unless modified by the Interim Order or a Final Order
authorizing use of Cash Collateral, any Event of Default under any
of the Loans;
d. The Lender's Prepetition Liens, liens upon cash collateral,
or otherwise asserting rights, claims or causes of action against
the Lender with respect to the Prepetition Obligations;
e. Any stay, reversal, vacatur or rescission of the Final
Order; and
f. The dismissal of, conversion of or appointment of a trustee
in the Chapter 11 Case.
A copy of the order is available at https://bit.ly/40oac7R from
PacerMonitor.com.
About Rice Enterprises
Rice Enterprises, LLC operates in the restaurants industry.
Rice Enterprises, LLC, filed a petition for relief under Subchapter
V of Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No.
2:23-bk-20556) on March 15, 2023. In the petition signed by
Michele Rice, sole member, the Debtor disclosed up to $50 million
in assets and up to $10 million in liabilities.
Kirk B. Burkley, Esq., at Bernstein-Burkley, PC, represents the
Debtor as legal counsel.
RIGHT CHOICE: Court OKs Cash Collateral Access Thru May 15
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Fort Lauderdale Division, authorized Right Choice Vending/Coffee,
LLC to use cash collateral on an interim basis in accordance with
the budget, with a 20% variance, through May 15, 2023.
The Court said the Debtor will make adequate protection payments to
Spartan Business Solutions, LLC d/b/a Spartan Capital, as set forth
in the Budget and any future Budget per written instructions
provided by counsel for Spartan Capital. The adequate protection
payments will reduce the outstanding obligations of the Debtor to
Spartan and the parties reserve their rights as to whether such
payments reduce principal or other obligations owed under the
applicable agreements between the parties. Spartan Capital is
granted a replacement lien on all post-petition assets of the
Debtor to the same extent and priority as Spartan Capital had prior
to the petition date without the need for filing any financing
statements or other documents to properly perfect such liens.
As previously reported by the Troubled Company Reporter, on April
28, 2022, Spartan Capital and the Debtor entered into a Standard
Merchant Cash Advance Agreement for the purchase of the Debtor's
(and other non-debtor entities) $195,000 worth of receivables.
On May 19, 2022, Spartan Capital and the Debtor (and other
non-debtor entities) entered into the Standard Merchant Cash
Advance Agreement for the purchase of the Debtor's (and other
non-debtor entities) $195,000 worth of receivables.
On June 3, 2022, Spartan Capital and the Debtor (and other
non-debtor entities) entered into the Standard Merchant Cash
Advance Agreement for the purchase of the Debtor's (and other
non-debtor entities) $195,000 worth of receivables.
According to the Debtor's records, approximately $102,000 remains
due and owing to Spartan Capital.
On June 30, 2022, Unique Funding Solutions LLC and the Debtor (and
other non-debtor entities) entered into the Standard Merchant Cash
Advance Agreement for the purchase of the Debtor's (and other
non-debtor entities) $469,000 worth of receivables.
According to the Debtor's records, approximately $227,000 remains
due and owing to Unique Funding.
On August 5, 2022, Fox Capital Group, Inc. d/b/a Fox Business
Funding and the Debtor (and other non-debtor entities) entered into
the Future Receivables Sale and Purchase Agreement for the purchase
of the Debtor's (and other non-debtor entities) $125,000 worth of
receivables.
According to the Debtor's records, approximately $63,000 remains
due and owing to Fox Capital.
A further hearing on the matter is set for May 3, 2023 at 2 p.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3MV3eny from PacerMonitor.com.
The Debtor projects $2.1 million in total revenue and $2.048
million in total expenses for the period from April 3 to May 15,
2023.
About Right Choice Vending/Coffee, LLC
Right Choice Vending/Coffee, LLC operates a vending machine
business with machines located throughout the State of Florida.
Right Choice Vending/Coffee is in the business of providing drinks,
snacks and food to various businesses, industries, schools,
universities, hospital systems and governmental agencies. This is
accomplished by providing and servicing vending machines, micro
self-service markets, various coffee makers and direct delivery of
products to its clients.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-11331) on February
19, 2023. In the petition signed by Nicholas Depasquale, the Debtor
disclosed up to $50,000 in both assets and liabilities.
Judge Scott M. Grossman oversees the case.
Mark S. Roher, Esq., at the Law Office of Mark S. Roher, P.A.,
represents the Debtor as legal counsel.
ROOF IT BETTER: Court OKs Final Cash Collateral Access
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
authorized Roof It Better, LLC to use cash collateral on a final
basis in accordance with the budget, with a 10% variance.
The Debtor is a party to a UCC-1 with CT Corporation System, as
representative for One Funder, in which One may purport to have a
security interest in accounts receivable and other assets of the
Debtor. In support of the agreement and as perfection of the
purported lien thereunder, the Court finds that a UCC-1 Financing
Statement was filed on October 14, 2021, in which One claims a
security interest in the collateral.
The Debtor is a party to a UCC-1 with Forward Financing, LLC, in
which Forward purports to have a security interest in the Debtor's
future accounts receivable. In support of the agreement and as
perfection of the purported lien thereunder, the Court finds that a
UCC-1 Financing Statement was filed on January 17, 2022, in which
Forward claims a security interest in the collateral described.
As adequate protection, One and Forward are granted, as of the
Petition Date, a replacement lien to the same extent as any
pre-petition lien, pursuant to 11 U.S.C. section 361(2) on the
property set forth in its security agreements, without any
prejudice to any rights of the Debtor to seek to void the lien as
to the extent, validity, or priority of said liens.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3UT5uxM from PacerMonitor.com.
The budget provides for total expenses, on a monthly basis, as
follows:
$98,150 for April 2023;
$95,650 for May 2023; and
$95,200 for June 2023.
About Roof It Better
Roof It Better, LLC, a residential and commercial roofing
contractor, sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-14651) on June 15,
2022. In the petition signed by Teresa Mehaffey, manager, the
Debtor disclosed $123,739 in assets and $2,102,056 in liabilities.
Judge Mindy A. Mora oversees the case.
The Debtor tapped Craig I. Kelley, Esq., at Kelley, Fulton, Kaplan
& Eller PL as counsel and Venita Ackerman, CPA, at Ackerman
Rodgers, CPA, PLLC as accountant.
SAIBABA HOTELS: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Saibaba Hotels, LLC
7417 Hidden Cove Lane
Frisco, TX 75034
Business Description: The Debtor is part of the traveler
accommodation industry.
Chapter 11 Petition Date: April 24, 2023
Court: United States Bankruptcy Court
Eastern District of Texas
Case No.: 23-40703
Judge: Hon. Brenda T. Rhoades
Debtor's Counsel: Robert T. DeMarco, Esq.
DEMARCO MITCHELL, PLLC
1255 West 15th St., 805
Plano, TX 75075
Tel: (972) 578-1400
Email: robert@demarcomitchell.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Anuradha Puligundia 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/APXDA6A/Saibaba_Hotels_LLC__txebke-23-40703__0001.0.pdf?mcid=tGE4TAMA
Case No.:
SCIH SALT: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings affirmed its 'B' and 'CCC+' issue-level ratings
on SCIH Salt Holdings Inc.'s (SCIH Salt) senior secured and
unsecured debt, respectively. S&P's '3' and '6' recovery ratings on
the senior secured and unsecured debt, respectively, are
unchanged.
The stable outlook is premised on S&P's expectation that the
company's scale and supportive product pricing would lead to a
recovery in credit metrics such that its adjusted leverage trends
downward to the 7x-8x range over the next 12 months.
S&P said, "The affirmation reflects our view that the company's
credit metrics will continue improving, albeit at a slower pace
than we previously expected. SCIH Salt's leverage could improve to
the 7x-8x range in fiscal 2023, which compares favorably with 9.4x
in fiscal 2022, as it continues to integrate the Morton
acquisition. The pace of deleveraging following the acquisition has
been slower than we expected as earnings have underperformed due to
inflationary headwinds and a high interest burden, and capital
expenditure (capex) has constrained FOCF generation. The
acquisition created a global leading salt producer by size, with a
low-cost asset base and increased end market diversity partially
offsetting some of the seasonal volatility associated with the
highway deicing salt business. However, it also resulted in a
significantly higher debt burden of about $3.4 billion versus $700
million initially. We anticipate SCIH Salt will generate FOCF of
$70 million-$100 million over the next 12 months after accounting
for capex of $120 million-$160 million. We expect the financial
sponsor will prioritize this FOCF to pay down debt or shore up
liquidity given tightening credit conditions. Nevertheless, EBITDA
interest coverage will likely remain below 2x in fiscal 2023 due to
our expectation of higher interest expense given the current
high-interest-rate environment and that about 43% of company's
total gross debt bears floating interest.
"SCIH Salt's earnings and margins will continue to improve
following price increases and cost savings in all its segments,
notwithstanding the Windsor Plant strike and mild winter. We
anticipate SCIH Salt this year will experience the full benefit of
pricing increases secured in 2022 as contract pricing changes
typically have a 60–90-day lag. Therefore, we anticipate SCIH
Salt's adjusted EBITDA will improve by 20%-30% in 2023, translating
into EBITDA margins of 20%-21%, up from 16.7% in 2022. The company
implemented six different price increases in its consumer segment
to combat the effect of inflationary pressures on inputs such as
packaging materials, additives, and acids. The company also
obtained low double-digit price increases in the highway deicing
salt business. We do not anticipate a significant loss of business
due to the price increases as competitors also increased prices in
response to inflation. We also expect additional increases in
fiscal 2023 within the consumer and industrial business segment as
the company takes advantage of multiple price windows to optimize
product prices. These improvements were seen in the first quarter
of 2022 where adjusted EBITDA increased by about 42% to $150
million, compared with $106 million in first-quarter 2022. The
company's EBITDA margins also increased to 25% in first-quarter
2023, which compares favorably with 19.5% in the 2022 comparable
period. We expect these price increases will more than offset the
negative impact of an ongoing strike at the Windsor mine and low
volumes in the highway de-icing salt segment due to mild winter
weather. Although we anticipate the effect of this strike to be
minimal given the diversity of its assets (24 salt production
facilities and 15 processing plants) and that the company's busiest
quarters operationally (first and second quarter) are completed, we
acknowledge that the company could be more sensitive to future
operational events.
"The stable outlook reflects our expectation that SCIH Salt's
earnings will continue to improve as the company benefits from
price increases in all its operating segments. We expect adjusted
EBITDA will increase by 20%-30% over the next 12 months as better
product pricing, asset diversity, the nondiscretionary nature of
highway deicing salt business, and stable demand from its consumer
and industrial business partially offset the effects of the Windsor
strike and a mild winter. We believe the company's operations will
generate sufficient cash flows to cover increased capex and high
interest expense. We also expect adjusted debt to EBITDA in the
7x-8x range."
S&P could lower its ratings on SCIH Salt over the next 12 months if
it is unable to sustain the current improvement in earnings
required to support the ratings with the current debt load. In such
a scenario, S&P would expect:
-- Negative FOCF;
-- Debt to EBITDA approaching 8x; and
-- EBITDA interest coverage ratio below 2x.
An upgrade is unlikely within the next 12 months given the high
debt load and the current earnings generation capacity. For an
upgrade, S&P would require adjusted leverage sustained below 5x
along with the belief that the risk of releveraging beyond 5x is
low, considering the company's ownership by a financial sponsor.
This would require adjusted EBITDA of about $650 million-$700
million at the current debt level or $1.0 billion-$1.1 billion
reduction in adjusted debt, both unlikely within the next 12
months.
ESG credit indicators: E-3, S-2, G-3
SCUNGIO BORST: Seeks to Extend Exclusivity Period to September 20
-----------------------------------------------------------------
Scungio Borst & Associates, LLC asks the U.S. Bankruptcy Court
for the Eastern District of Pennsylvania to further extend is
exclusive periods to file a chapter 11 plan of liquidation and to
solicit acceptances thereof to September 20, 2023 and November
19, 2023, respectively.
The Debtor pointed out that its chapter 11 case is not a small
case wiht an estimated creditor base in excess of 150 creditors
with estimated claims exceeding $13,000,000.
The Debtor also stated that it has filed numerous motions since
the petition date and has entered into a consent order with
KPG-MCG Curtis Tenant, LLC to modify the automatic stay so that
the litigation claims can be adjudicated.
Further, the Debtor explained that its counsel and the UCC have
engaged in discussions and exchanged draft plans regarding a
potential consensual plan of liquidation. The Debtor claims that
its request for extension is intended to maintain a framework
conducive to an orderly, efficient and cost-effective liquidation
process.
This is the Debtor's fifth request for extension of its exclusive
periods. Its current exclusive periods to file a plan and to
solicit acceptances thereof expires on May 8, 2023 and July 5,
2023, respectively.
Scungio Borst & Associates, LLC is represented by:
Aris J. Karalis, Esq.
Robert W. Seitzer, Esq.
KARALIS PC
1900 Spruce Street
Philadelphia, PA 19103
Tel: (215) 546-4500
Email: akaralis@karalislaw.com
rseitzer@karalislaw.com
About Scungio Borst & Associates
Scungio Borst & Associates, LLC is a worldwide construction
services firm specializing in general construction, consulting and
project management. It is based in Camden, N.J.
Scungio Borst & Associates filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No.
22-10609) on March 11, 2022, listing as much as $50 million in
both
assets and liabilities. Judge Ashely M. Chan oversees the case.
Judge Ashely M. Chan oversees the case.
Aris J. Karalis, Esq., at Karalis, PC and Bochetto & Lentz, PC
serve as the Debtor's bankruptcy counsel and special litigation
counsel, respectively.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors in the Debtor's case on April 11,
2022. The committee is represented by Obermayer Rebmann Maxwell &
Hippel, LLP.
SHREENATH HOLDING: Move to Stay Bankr. Court Sale Order Denied
--------------------------------------------------------------
In the appealed case captioned as SHREENATH HOLDING LLC, Appellant,
v. KAREN E. BEZNER, Appellee, Civil Action No. 23-1721 (ZNQ),
(D.N.J.), Judge Zahid N. Quraishi of the U.S. District Court for
the District of New Jersey denies the Emergent Motion to Stay the
Bankruptcy Court's Order Pending Appeal filed by Movants Shreenath
Holding, LLC and Parag Parikh.
The instant matter was filed as an appeal from the Bankruptcy
Court's Order issued Feb. 22, 2023 that authorized the sale of
certain real property.
On Feb. 14, 2023, Parag Parikh filed a letter to the Court
regarding the motion to sell, explaining that Debtor made a higher
and better offer to purchase the Property in the amount of
$675,000. However, on Feb. 22, 2023, the Bankruptcy Court entered
an order authorizing the sale of real property by the Trustee to
Westfield Cranford Plaza V, LLC for the purchase price of $650,000.
The Debtor filed a motion to reconsider the February 22 Order, as
well as a proposed order for a stay pending appeal. However, the
Bankruptcy Court entered an order confirming title to the Property
and the absence of a stay, relieving the 14-day stay provision, and
denying the Debtor's motion for reconsideration.
On appeal, the Movants assert that the Bankruptcy Court abused its
discretion by "not addressing both Federal Rules of Civil Procedure
59(e) and 60." The Debtor argues that another buyer was offering
$25,000 more to purchase the property -- a price that would have
been closer to the Property's appraisal price. Because the Court
ignored this higher offer, the Bankruptcy Court abused its
discretion and risks irreparably harming the Movants by selling the
Property at a lower price and leaving Movants without a property.
Lastly, Movants argue that a stay would harm "no other party", and
"the public interest favors this injunctive relief in order to
afford the Constitutional protection to the right to the use and
enjoyment of property."
The Court notes that the Movants did not provide substantive
details concerning how the Bankruptcy Court "abused its discretion
by 'not addressing both Federal Rules of Civil Procedure 59(e) and
60.'" Moreover, the Movants' contention that they are likely to
succeed based on an offer that was $25,000 more "already been
addressed by the bankruptcy court's consideration of prior motions"
as admitted by the Movants themselves. The Court also notes that
the Movants makes conclusory statements concerning the allegations
they put forth, but do not supply legal or factual bases
demonstrating how they will prevail on the merits of the claims,
and do not provide detailed information concerning the abusive
actions they allege. As such, the Court concludes that the Movants
failed to show as to their likelihood of success on the merits.
As to irreparable injury, this factor appears to weigh in favor of
the Debtor, given that it may lose the Property and not be able to
reacquire it. However, because the Movants have not demonstrated a
"likelihood to prevail on the merits," the inquiry into the balance
of harms and the public interest is unnecessary. The Court,
therefore, concludes that the stay should be denied without further
analysis.
A full-text copy of the Opinion dated April 6, 2023, is available
https://tinyurl.com/34cy8ps6 from Leagle.com.
About Shreenath Holding
Shreenath Holding LLC is a Single Asset Real Estate (as defined in
11 U.S.C. Sec. 101(51B)), with its principal asset located at 1700
E. 2nd Street, Scotch Plains, NJ 07076.
Shreenath Holding LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 22-14886) on June 15,
2022. In the petition filed by Parag P. Parikh, as member, the
Debtor reports estimated assets between $500,000 and $1 million and
estimated liabilities between $1 million and $10 million. David
Stevens, of Scura Wigfield, Heyer, Stevens & Cammarota LLP, is the
Debtor's counsel.
SILVER CREEK: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Silver Creek Industries LLC
2830 Barrett Avenue
Perris, CA 92571
Business Description: Silver Creek is a modular construction
company headquartered in California.
Chapter 11 Petition Date: April 24, 2023
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-11677
Judge: Hon. Scott H. Yun
Debtor's Counsel: Robert E. Opera, Esq.
WINTHROP GOLUBOW HOLLANDER, LLP
1301 Dove Street, Suite 500
Newport Beach, CA 92660
Tel: 949-720-4130
Fax: 949-720-4111
Email: ropera@wghlawyers.com
Debtor's
Financial
Consultant: B. RILEY ADVISORY SERVICES
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $50 million to $100 million
The petition was signed by James McGeever as managing member.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/UWDVDMI/Silver_Creek_Industries_LLC__cacbke-23-11677__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. First Citizens Bank Cash $41,500,000
Attn: Corporate Officer
239 Fayetteville Street
Raleigh, NC 27601
c/o Ted Cohen, Esq.
Tel: 213-617-4237
Email: tcohen@sheppardmullin.com
2. BBMR Enterprises, Inc. Lawsuit $10,000,000
Attn: Corporate Officer
795 Incline Village
Nevada 89451
c/o Chris Celentino, Esq.
Tel: 619-400-0519
Email: christopher.celentino@dinsmore.com
3. Hartford Casualty Surety Claims $600,000
Insurance Co.
One Hartford Plaza
T-12B
Hartford, CT 06155
4. Metcalf, Inc Subcontractor $2,022,811
Attn: Corporate Officer
2690 Pomona Blvd.
Pomona, CA 91768
Todd Metcalf
Tel: 909-595-2500
Email: toddm@metcalfinc.com
5. Raymond-Southern Ca, Inc. Subcontractor $1,124,036
Attn: Corporate Officer
520 West Walnut Avenue
Orange, CA 92868
Hector Ochoa
Tel: (714) 771-7670
Email: h.ochoajr@raymondgroup
6. Hawaiian Air Corporation Subcontractor $1,007,855
Attn: Corporate Officer
600 E. Walnut Ave.
Fullerton, CA 92831
Chuck Pesci
Tel: (714) 879-8141
Email: chuck@hawaiianair.org
7. Xcel Mechanical Subcontractor $658,686
Systems, Inc.
Attn: Corporate Officer
1710 W. 130Th St
Gardena, CA 90249
Jennifer Hart
Tel: (310) 660-0090
Email: ar@xcelmech.com
8. FBM Material Supplier $573,045
Attn: Corporate Officer
Po Box 740862
Los Angeles, CA
90074-0862
Gordon Gibson
Tel: (616) 233-4111
Email: Gordon.Gibson@fbmsales
9. Kevin Renly Construction Subcontractor $529,252
Attn: Corporate Officer
Po Box 221136
San Diego, CA 92192
Kevin Renly
Tel: (619) 917-7039
Email: kevinrenly@mac.com
10. University Mechanical & Subcontractor $502,469
Engineering Contractors, Inc.
Attn: Corporate Officer
1168 Fesler Street
El Cajon, CA 92020
David Cerecerez
Tel: (714) 632-2600
Email: dcerecerez@umec.com
11. Chatfield-Clarke Material Supplier $453,354
Company Inc
Attn: Corporate Officer
14614 Valley Blvd.
Fontana, CA 92335
Joe Baeskens
Tel: (909) 823-4297
Email: joe.baeskens@chat
fieldclarke.com
12. Cal Tech Fire Subcontractor $451,438
Protection, Inc.
ATTN: Griselda Garcia
434 N. Bernal Avenue
Los Angeles, CA 90063
Michel Naha
Tel: (213) 798-1986
Email: admin@caltechfire.com
13. Freedom Painting Subcontractor $373,664
West, Inc.
DBA Freedom West Construction
8822 Calmada Ave
Whittier, CA 90605
Stacey Lundgren
Tel: (562) 696-0785
Email: stacey@freedompainting.com
14. Victorville Glass Subcontractor $338,078
Company Inc.
Attn: Corporate Officer
15296 Seventh Street
Victorville, CA 92395
Auggie Reyes
Tel: (760) 245-3456
Email: estimato@victorvilleglass.com
15. CED Material Supplier $322,617
Attn: Corporate Officer
Po Box 847106
Los Angeles, CA
90084-7106
Cameron Parker
Tel: (909) 489-6160
Email: cameron.parker@ced.com
16. Archway Insurance, Ltd. Audit Results $310,000
Debtor's Parent Company
Attn: Corporate Officer
17. David M. Bertino Mfg, Inc. Subcontractor $298,925
Attn: Corporate Officer
P.O Box 1820
Colton, CA 92324
David Bertino
Tel: (929) 888-9122
Email: david@davidmberti
nomanufacturing.com
18. Cardinal Sheet Subcontractor $284,694
Metal, Inc.
Attn: Corporate Officer
3184 Durahart Street
Riverside, CA 92507
Bruce Seylar
Tel: (951) 788-8800
Email: ardinalsheetmetal@yahoo.com
19. Squared Up Flooring Inc. Subcontractor $281,308
Attn: Corporate Officer
28187 Palm Villa Drive
Menifee, CA 92584
Chris Martin
Tel: (619) 888-8432
Email: chrisjmartin1988@gmail.com
20. B2B Industrial Packaging Material Supplier $275,545
Attn: Corporate Officer
313 S. Rohlwing Road
Addison, IL 60101
Craig Johnson
Tel: 630-396-6200
Email: craig.johnson@b2bind.com
SILVER CREEK: Wins Interim Cash Collateral Access
-------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas, Fort
Worth Division, authorized Silver Creek Investments, LLC to use
cash collateral on an interim basis in accordance with the budget,
with a 10% variance.
The Debtor requires the use of cash collateral to continue its
ordinary course of business operations and maintain the value of
its bankruptcy estate.
According to the Court order, the Debtor is authorized to collect
cash collateral in the form rents paid to the Debtor by its tenants
each month thereafter as well as any uncollected pre-petition rents
that are collected post-petition.
Family Dollar Store, a tenant at the Debtor's Glendale Shopping
Center, is authorized and directed to continue making its monthly
rent payment in the amount of $8,708 directly to Bank of DeSoto
pursuant to Bank of DeSoto's loan documents.
A final hearing on the matter is set for May 4, 2023 at 1:30 p.m.
A copy of the order is available at https://bit.ly/3Adqaqy from
PacerMonitor.com.
About Silver Creek Investments
Silver Creek Investments, LLC filed a Chapter 11 petition (Bankr.
N.D. Tex. Case No. 22-42956) on Dec. 5, 2022, with up to $50,000 in
both assets and liabilities.
Judge Edward L. Morris oversees the case.
The Debtor is represented by Marilyn D. Garner, Esq., at the Law
Offices of Marilyn D. Garner.
SMITH DEVELOPMENT: 4th Cir. Dismissed Conway's Appeal
-----------------------------------------------------
The U.S. Court of Appeals for the Fourth Circuit has dismissed the
appealed case captioned as MARTIN C. CONWAY; PESNER KAWAMATO
CONWAY, P.C., Plaintiffs-Appellants, v. SMITH DEVELOPMENT, INC.,
Defendant-Appellee, and USBC-ALEXANDRIA (UNITED STATES BANKRUPTCY
COURT), Defendant, Case No. 22-1059, (4th Cir.) for lack of
subject-matter jurisdiction to review.
Attorney Martin Conway and his law firm, Pesner Kawamato Conway,
P.C., appeal the district court's order rejecting the bankruptcy
court's report and recommendation to enjoin Smith Development,
Inc.'s legal malpractice suit against Conway and to impose
sanctions for violating the Barton doctrine and the automatic stay.
Conway assisted the company in filing its Chapter 11 bankruptcy
petition and represented it in the subsequent Chapter 11
proceedings. As the bankruptcy progressed, Smith Development
initiated three adversary proceedings against home buyers who had
defaulted on contracts. While those actions were pending, the
bankruptcy court converted the bankruptcy to a Chapter 7 case.
Post-conversion, the Chapter 7 trustee retained Conway as special
counsel to represent the trustee in the pending adversary actions.
With the approval of the trustee and the bankruptcy court, Conway
settled all three actions. In December 2011, the bankruptcy court
approved the trustee's final report, and in September 2012, the
bankruptcy court closed the case. Nearly five years later, in April
2017, Smith Development sued Conway in the Alexandria Circuit Court
in Virginia, alleging legal malpractice arising from Conway's
representation of Smith Development during the Chapter 11
proceedings and representation of the trustee in the Chapter 7
proceedings. According to Smith Development, the conflict of
interest arising from the alleged concurrent representation
influenced Conway to settle the three adversary actions for far
less than their actual value.
The Fourth Circuit determines that the district court relied on
Section 1334(c)(1) of the Bankruptcy Code as the basis for its
decision in rejecting the bankruptcy court's report and
recommendation, and to abstain from taking further action in the
matter, and to order the bankruptcy court to do the same. Indeed,
the court concluded that "comity and respect for the state courts
clearly weighed in favor of abstention" and that federal courts had
"already interfered with ongoing state proceedings without
considering these important principles." In the district court's
view, the state court provided an appropriate forum to adjudicate
Smith Development's legal malpractice claims and presumably develop
the factual record the court found necessary to conclusively rule
on Conway's arguments."
Whatever the merits of the district court's reasoning, the Fourth
Circuit concludes that "its abstention decision falls squarely
within Section 1334(c)(1) and is thus "not reviewable by appeal."
And the district court premised its abstention decision on grounds
expressly authorized in Section 1334(c)(1) when it determined that
"comity and respect for the state courts" warranted abstention. . .
Reviewing the correctness of the district court's analysis on that
score is the precise inquiry we lack jurisdiction to undertake."
Conway acknowledges the obstacle Section 1334(d) poses but offers
several reasons why that provision does not apply. Before
addressing those arguments, the Fourth Circuit observes that
underlying Conway's arguments is an implicit request to recognize
an exception to Section 1334(d) that would allow the Court to
review a district court's permissive abstention decision when it
exceeds the scope of the court's authority. Even if the Court was
to recognize the exception to Section 1334(d) that Conway's
arguments presuppose, it would not apply here, as the district
court's order was well within its statutory authority. Thus, the
Court holds that 28 U.S.C. Section 1334(d) precludes the Court from
exercising jurisdiction over Conway's appeal.
A full-text copy of the Order dated April 4, 2023, is available
https://tinyurl.com/yp7z56nz from Leagle.com.
About Smith Development
Smith Development, Inc. is engaged in building homes in Arlington
since 1984. See: http://www.smithdevelopmentinc.com/communities.htm
Smith Development filed Chapter 11 petition (Bankr. E.D. Va. Case
No. 09-10078) Jan. 6, 2009. The petition was signed by M. Kevin
Smith, president of the company. At the time of filing, the Debtor
had $7,357,200 in assets and $6,040,080 in liabilities. The
Debtors tapped Martin C. Conway, Esq., at Pesner Kawamoto Conway
PC, as legal counsel.
SPEIDEL CONSTRUCTION: Case Summary & 11 Unsecured Creditors
-----------------------------------------------------------
Debtor: Speidel Construction, Inc.
d/b/a Speidel Airfield Marking
7445 John Bragg Hwy
Murfreesboro, TN 37127
Chapter 11 Petition Date: April 24, 2023
Court: United States Bankruptcy Court
Middle District of Tennessee
Case No.: 23-01473
Judge: Hon. Marian F. Harrison
Debtor's Counsel: Steven L. Lefkovitz, Esq.
LEFKOVITZ & LEFKOVITZ
908 Harpeth Valley Place
Nashville, TN 37221
Tel: 615-256-8300
Fax: 615-255-4516
Email: slefkovitz@lefkovitz.com
Total Assets: $712,222
Total Liabilities: $1,683,616
The petition was signed by Wayne Todd Pope as owner.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 11 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/GHZ6BMY/Speidel_Construction_Inc__tnmbke-23-01473__0001.0.pdf?mcid=tGE4TAMA
SPIRIPLEX INC: Court OKs Cash Collateral Access Thru June 30
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized Spiriplex, Inc. to use cash collateral
on an interim basis in accordance with the budget, with a 10%
variance, through June 30, 2023.
The Court said the Debtor may only pay professionals after the
professional fees are approved by further Court order.
In return for the Debtor's continued interim use of cash
collateral, the Small Business Administration is granted the
following adequate protection for its purported secured interests
in cash collateral equivalents, including the Debtor's cash,
accounts receivable and inventory, among other collateral:
A. The Debtor will permit the SBA to inspect, upon reasonable
notice, and within reasonable business hours, the Debtor's books
and records;
B. The Debtor will maintain and pay premiums for insurance to
cover all of its assets from fire, theft and water damage;
C. The Debtor will, upon reasonable request, make available to
the SBA evidence of that which purportedly constitutes their
collateral or proceeds;
D. The Debtor will properly maintain the collateral and
properly manage the collateral; and
E. The Debtor will grant a replacement lien to the SBA to the
extent of its prepetition lien, and attaching to the same assets of
the Debtor in which the SBA asserted pre-petition liens.
A further hearing on the matter is set for June 27, 2023 at 1:30
p.m.
A copy of the Court's order is available at https://bit.ly/3KU9pFZ
from PacerMonitor.com.
About Spiriplex, Inc.
Spiriplex, Inc. specializes in micro-sample allergenic diagnostics,
providing clinical laboratory services throughout the U.S. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N.D. Ill. Case No. 23-02773) on March 1, 2023. In the
petition signed by David C. Fleisner, CEO, the Debtor disclosed up
to $500,000 in assets and up to $10 million in liabilities.
Judge Jacqueline Cox oversees the case.
Scott R. Clar, Esq., at Crane, Simon, Clar & Goodman, serves as
counsel to the Debtor.
STANADYNE LLC: Wins Cash Collateral Access on Final Basis
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Stanadyne LLC and its debtor-affiliates to use cash collateral on a
final basis in accordance with the budget, with a 15% variance.
The Debtors require the use of cash collateral to permit the
orderly continuation of business operations.
On May 2, 2017, the Debtors entered into a financing agreement,
under which Cerberus Business Finance, LLC served as collateral
agent and administrative agent for the lenders. The Financing
Agreement originally provided for a $15 million revolving credit
facility, and a $75 million term loan facility. The Prepetition
Credit Facility had a maturity of five years. The Financing
Agreement was subsequently amended to increase the Revolving Credit
Facility to $25 million and the Term Loan Facility to $255 million.
As of the Petition Date, the total amount due under the Financing
Agreement was approximately $273 million.
The Debtors are required to comply with these milestones:
i. Entry of an order of the Court, satisfactory to Cerberus,
approving the Debtors' retention of an investment banking firm
acceptable to Cerberus no later than April 18, 2023 (it being
understood that Angle Advisors is acceptable);
ii. Entry into an asset purchase agreement, in form and
substance satisfactory to Cerberus, memorializing an agreement with
a "stalking horse" acceptable to Cerberus, in its sole and absolute
discretion, in respect of the Sale, no later than May 5, 2023;
iii. Entry, no later than May 12, 2023, of an order of the
Court, satisfactory to Cerberus, approving bid and sale procedures,
approving the form and manner of notice of a Sale of the Debtors'
assets and assumption and assignment of executory contracts and
unexpired leases in connection therewith and scheduling (i) the
final date for submitting a qualified bid no later than June 21,
2023, (ii) so long as at least one qualified bid has been
received, the auction for the Sale for a date no later than June
28, 2023, and (iii) the sale hearing for a date that is no later
than July 10, 2023;
iv. Entry of an order of the Court, satisfactory to Cerberus,
approving a Sale no later than July 11, 2023; and
v. Consummation of the Sale on terms acceptable to Cerberus no
later than July 25, 2023.
The Debtors' authority to use cash collateral pursuant will
automatically terminate without any further action by the Court,
upon the earliest to occur of:
(i) July 25, 2023, which date may be extended with the express
written consent of Cerberus in its sole and absolute discretion;
(ii) the effective date of a plan;
(iii) the consummation of a Sale; and
(iv) the occurrence of a Termination Event.
The Events of Default include:
a. The Debtors fail to make any payment required under the
Final Order aftersuch payment becomes due under the terms thereof;
b. The Debtors fail to timely achieve any of the Milestones;
c. The Debtors fail to comply in any material respect with any
covenant, agreement, or provision of the Final Order;
d. At any point during which there is no "Approved Budget" for
such period of time in accordance with paragraph 3(a) hereof; and
e. Any Debtor uses cash collateral to fund any payments in
respect of prepetition or postpetition claims other than as
expressly contemplated by the Approved Budget subject to Permitted
Variances.
A copy of the order is available at https://bit.ly/41suyOn from
PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3Ah1vRZ from
PacerMonitor.com.
Stanadyne projects $73.950 million in total receipts and $62.169
million in total disbursements for the period ending July 16,
2023.
About Stanadyne LLC
Stanadyne LLC is a global automotive technology offering
engine-based fuel and air management systems. Stanadyne is a
developer and manufacturer of fuel pumps and fuel injectors for
diesel and gasoline engines.
Stanadyne and its affiliates sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10207) on
February 16, 2023. In the petition signed by John Pinson, chief
executive officer, the Debtor disclosed up to $500 million in both
assets and liabilities.
Judge John T. Dorsey oversees the case.
The Debtor tapped Young Conaway Stargatt & Taylor, LLP and Hughes
Hubbard and Reed LLP as co-general bankruptcy counsel; Kroll, LLC
as financial advisor; and Kurtzman Carson Consultants LLC as
claims, noticing, and balloting agent and administrative advisor.
SURGEPOWER MATERIALS: Seeks Approval to Hire Independent Director
-----------------------------------------------------------------
SurgePower Materials, Inc. seeks approval from the U.S. Bankruptcy
Court for the Western District of Texas to hire Gregory Milligan,
executive vice president of Harney Partners, as its independent
director.
Mr. Milligan's services will include:
a. managing the business and financial affairs of the Debtor
using independent business judgment;
b. assisting in hiring or removing the Debtor's professionals;
c. evaluating and enforcing the Debtor's rights and claims and
negotiating and settling such rights and claims, subject to
bankruptcy court approval;
d. leading negotiations with parties in interest and their
respective representatives with respect to the use of cash
collateral, debtor-in-possession financing (if any), plans of
reorganization or sales of the Debtor's assets;
e. to the extent the independent director deems appropriate,
seeking court approval of use of cash collateral,
debtor-in-possession financing, a plan of reorganization or a sale
of the Debtor's assets;
f. if deemed appropriate by the independent director, pursuing
and seeking court approval of the sale of all or substantially all
of the Debtor's assets utilizing a qualified court-approved
professional properly engaged under the independent director's
authority and have full authority to resolve matters necessary for
a sale that such professional recommends (and the independent
director agrees) will realize the highest and best value to the
Debtor's estate;
g. providing, when necessary, testimony before the bankruptcy
court on matters within the scope of the independent director's
engagement and responsibilities; and
h. investigating and, to the extent the independent director
deems appropriate, objecting to or settling (subject to Bankruptcy
Rule 9019) any claim, including either claims arising under Chapter
5 of the Bankruptcy Code or claims against any insider, as that
term is defined by the Bankruptcy Code, filed or deemed filed in
the Chapter 11 proceeding.
Mr. Milligan will be paid an hourly fee of $650.
In court papers, Mr. Milligan disclosed that he is a "disinterested
person" as that term is defined in Sec 101(14) of the Bankruptcy
Code.
Mr. Milligan can be reached at:
Gregory S. Milligan, CTP
Harney Partners
Westech 360
8911 Capital of Texas Highway, Suite 2120
Austin, TX 78759
Phone: (512) 464-1139
Fax: (512) 626-1818
Emai: gmilligan@harneypartners.com
About SurgePower Materials
SurgePower Materials, Inc. is a green technology company that
produces high purity graphene. The company is based in New
Braunfels, Texas.
On Dec. 20, 2022, an involuntary petition under Chapter 11 of the
Bankruptcy Code was filed against SurgePower Materials (Bankr. W.D.
Texas Case No. 22-51436) by creditors. The creditors include
Ecliptic Holdings I, LLC, Ecliptic Evergreen Innovations Fund I LP,
Harborock Ltd., Carbonaceous Green Investments LLC, Steven George
Gibson, and Richard Thomas Shaffer.
Judge Michael M. Parker oversees the case.
The creditors are represented by Marc C. Taylor, Esq., at Waller
Lansden Dortch & Davis, LLP.
SYMBIONT.IO: Court OKs Deal on Cash Collateral Access
-----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Symbiont.io, LLC, f/k/a Symbiont.io, Inc., to use cash
collateral on an interim basis in accordance with its agreement
with LM Funding America Inc.
On December 1, 2021, the Debtor and LM Funding entered into a
Secured Promissory Note and Security Agreement, whereby LM Funding
agreed to loan the Debtor up to $3 million, with a maturity date of
December 1, 2022.
The Note is secured by a lien on substantially all of the Debtor's
assets.
As of January 10, 2023, the Debtor owes $2.355 million on account
of the Note, including accrued but unpaid interest through January
11, 2023, plus documented legal fees in the amount of $114,078 for
a total of $2.470 million.
The Debtor does not dispute and agrees that LM Funding has a valid,
perfected, first-priority security interest in the Collateral.
The Debtor and LM Funding entered into a stipulation resolving the
Lift Stay Motion to the extent certain milestones were met.
The Lift Stay Stipulation provided that the Debtor would not use LM
Funding's cash collateral without the consent of LM Funding.
The Debtor was unable to meet the milestones in the Lift Stay
Stipulation and LM Funding submitted a proposed order granting the
Motion for Relief on January 26, 2023.
The Debtor has insufficient funds that are not LM Funding's cash
collateral to retain and pay the CRO, and, accordingly, the parties
have agreed that the Debtor may use LM Funding's cash collateral to
pay the reasonable fees and costs of the CRO for services rendered
in consummating a Sale, which the parties agree will occur on or
before May 8, 2023, as well as the Debtor's counsel’s fees and
the premium for a director and officer insurance policy.
In exchange for use of the cash collateral, the Debtor agrees to
provide a replacement lien and a superpriority claim to LM Funding,
which the parties agree is fair and reasonable, proposed in good
faith, and reflects the Debtor's exercise of prudent business
judgment.
The parties further agree that LM Funding will have a continued
right to credit bid its Prepetition Claim and Adequate Protection
Liens pursuant to section 363(k).
The Debtor's access to cash collateral is limited to paying:
(a) the reasonable fees and costs of the CRO through
consummation of the Sale, subject to Court approval of any fee
application;
(b) up to $30,000 per month for the reasonable fees and costs
of the Debtor's counsel through consummation of the Sale, subject
to Court approval of any fee application;
(c) the D&O Policy premium of $58,000 per year; and
(d) necessary to preserve and maintain the Collateral, subject
to LM Funding's approval and not to exceed $6,000 per month.
As adequate protection for the use of its cash collateral, LM
Funding is granted, subject to the Carve Out, from and after the
Petition Date, (a) an allowed administrative expense claim in an
amount not to exceed the Debtor's actual usage of the cash
collateral with priority over any and all other administrative
expenses, adequate protection claims, and all other claims against
the Debtor and (b) replacement liens and security interests in an
amount not to exceed the Cash Collateral Usage, in the Debtor's
personal property of any kind.
The Carve-Out means: (i) quarterly United States Trustee fees
pursuant to 28 U.S.C. section 1930(a), together with any interest,
if any; (ii) fees payable to the Clerk of the Bankruptcy Court and
any agent thereof; and (iii) the fees and expenses of a
hypothetical Chapter 7 trustee, in an amount not to exceed
$20,000.
As of the Petition Date, the Adequate Protection Liens will be
valid, perfected, enforceable and effective against the Debtor, its
successors and assigns.
These events constitute an "Event of Default":
(a) Any material failure to comply with the terms of the
Order;
(b) If a Sale is not consummated on or before May 8, 2023;
(c) The Debtor fails to provide any information requested by
the CRO and LM Funding within a reasonable time after such
information is requested;
(d) If a trustee or examiner, with authority to affect the
operation of the business of the Debtor is appointed in the
above-captioned Chapter 11 Case without the consent of LM Funding;
(e) If the Chapter 11 Case is converted to a case under
chapter 7; or
(f) If the Chapter 11 Case is dismissed.
A copy of the order is available at https://bit.ly/3or9kBT from
PacerMonitor.com.
About Symbiont.IO LLC
Symbiont.IO LLC is a technology company focused on solving complex
global finance problems using a novel enterprise blockchain
solution.
Symbiont.IO LLC filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bank. S.D.N.Y. Case No. 22-11620) on Dec. 1, 2022.
In the petition filed by Mark Smith, as CEO, the Debtor reported
assets and liabilities between $1 million and $10 million.
The case is overseen by Honorable Bankruptcy Judge Philip Bentley.
The Debtor is represented by Lawrence Morrison, Esq., at Morrison
Tenenbaum PLLC, as counsel.
TALEN ENERGY: Judge Isgur Denies Nunc Pro Tunc Motion as Moot
-------------------------------------------------------------
Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern
District of Texas denies the motion for a retroactive rejection
date filed by Talen Energy Supply, LLC, and its affiliated
debtors.
Talen Energy Supply, LLC and its affiliated debtors moved for
authorization to reject executory contracts. In particular, the
Debtors sought to reject: (i) electricity purchase agreements
between Talen Energy Marketing, LLC and various counterparties
(Retail Purchase Agreements); and (ii) related broker agreements
(Retail Broker Agreements) because TEM lost money supplying
electricity under the Retail Purchase Agreements. The Debtors
request that Retail Agreements be rejected "effective nunc pro tunc
to the Petition Date."
The Respondents Energy brokers Richards Energy Group, Inc. and URA,
Inc., and energy purchasers Masonic Villages of the Grande Lodge of
Pennsylvania and Conestoga Wood Specialties Corp. object to the
Debtors' motion. The Respondents argue that the equities weigh
against retroactive rejection because the Debtors failed to provide
reasonable notice of intent to reject prior to the Petition Date.
In addition, the Debtors allegedly provided electricity below
market rates through hedge contracts. The Debtors allegedly sold
those hedge contracts at a significant profit prior to filing
bankruptcy and distributed the proceeds to an affiliated non-Debtor
entity.
The parties agree that the Retail Agreements are executory
contracts and that the Debtors rejected the Retail Agreements. The
Court finds the Respondents' claims are simply unsecured claims.
Their claims are not elevated to administrative expense status
because they are not "actual, necessary costs and expenses of
preserving the estate" and they do not fall within the exception
for damages inflicted on innocent third parties through a trustee's
operation of a bankruptcy estate.
The Court explains that the Retail Agreements are pre-petition
contracts for which the Debtors (as debtors-in-possession) gave
notice of rejection on the first day of bankruptcy. Although the
Debtors continued performing under the Retail Purchase Agreements
until the Pick-Up Dates, they did so because it would have violated
state rules and regulations to cease performance any earlier. In
any event, the Respondents seek administrative expense status for
the breach of contract damages under the Retail Purchase Agreements
incurred after the Pick-Up Dates. Regarding the Retail Broker
Agreements, the Debtors assert, and the Respondents do not dispute,
that the unpaid fees are for services performed prior to the
Petition Date. The Retail Agreements are not post-petition
transactions.
The Court finds no evidence that the Respondents provided any
benefit to the estates under the Retail Agreements after the
Pick-Up Dates. Indeed, the Debtors immediately sought to reject the
Retail Agreements because they were losing money on the Retail
Purchase Agreements. The Court reasons that "even if the Debtors
lost money because they exited hedging positions pre-petition, the
Respondents still did not provide any benefit to the estates by
participating in a contract in which the Debtors would lose
significant sums. And there is no benefit to continuing the Retail
Broker Agreements if the Debtors intended to discontinue
performance under the Retail Purchase Agreements. The Respondents
provided no post-Pick-Up Date benefit that was necessary to
preserve the estates. These claims do not fit within the usual
definition of 'actual, necessary costs and expenses of preserving
the estate.'"
If the Court were to grant the Debtors' motion, various
counterparties to those executory contracts would fail on their
asserted administrative expense claims. The Debtors argue that
these counterparties are not entitled to administrative expense
claims. The Court agrees. Because the counterparties are only
entitled to unsecured claims, the date of rejection does not affect
the treatment of the counterparties' claims, and the Debtors'
motion for a retroactive rejection date is moot.
A full-text copy of the Memorandum Opinion dated April 6, 2023, is
available https://tinyurl.com/374s2jt4 from Leagle.com.
About Talen Energy
Allentown, Pennsylvania-based Talen Energy Corp., the parent
company of Talen Energy Supply, LLC, is an independent power
producer founded in 2015. Riverstone Holdings, LLC completed its
acquisition of the remaining 65 percent stake of TEC in 2016 for
$5.2 billion.
TEC, through Talen Energy Supply, is one of the largest competitive
power generation and infrastructure companies in North America.
Through subsidiary Cumulus Growth, TEC is developing a large-scale
portfolio of renewable energy, battery storage, and digital
infrastructure assets across its expansive footprint. On the Web:
https://www.talenenergy.com/
TES owns or controls approximately 13,000 Megawatts of generating
capacity in wholesale U.S. power markets, principally in the
Mid-Atlantic, Texas and Montana. Woodlands, Texas-based Talen
Energy Supply runs 18 power generation facilities, eight of which
rely on natural gas to make electricity.
Talen Energy Supply and 71 affiliates sought Chapter 11 protection
(Bankr. S.D. Texas Lead Case No. 22-90054) on May 9, 2022,
disclosing $10 billion to $50 billion in both assets and
liabilities on a consolidated basis. The Hon. Marvin Isgur is the
case judge.
TEC and its Cumulus Growth subsidiary, and Talen Energy Supply's
LMBE subsidiaries are excluded from the in-court process.
Talen Energy Supply and its debtor affiliates retained Weil Gotshal
& Manges, LLP as legal counsel; Evercore Group, LLC as investment
banker; and Alvarez and Marsal North America, LLC as financial
advisor for their restructuring. Kroll Restructuring
Administration, LLC is the claims agent.
TEC is represented by Vinson & Elkins as legal counsel and PJT
Partners as financial advisor.
Cumulus Growth is represented by DH Capital as legal counsel and
Ardea Partners as investment banker.
The consenting noteholders are represented by Kirkland & Ellis, LLP
and Rothschild & Co US, Inc.
On May 23, 2022, the Office of the U.S. Trustee for Region 7
appointed an official committee of unsecured creditors. The
committee tapped Milbank, LLP as legal counsel; FTI Consulting,
Inc. as financial advisor; and Moelis & Company, LLC as investment
banker.
On Dec. 15, 2022, the court confirmed the Debtors' joint Chapter 11
plan.
TELEGRAPH SQUARE II: Exclusivity Period Extended to July 12
-----------------------------------------------------------
Judge Klinette H. Kindred of the U.S. Bankruptcy Court for the
Eastern District of Virginia further extended Telegraph Square
II, a Condominium Unit Owners Association's exclusive period to
file a chapter 11 plan of reorganization and to solicit
acceptances thereof to July 12, 2023 and September 12, 2023,
respectively.
Telegraph Square II, a Condominium Unit Owners Association is
represented by:
Robert M. Marino, Esq.
REDMON PEYTON & BRASWELL, LLP
510 King Street, Suite 301
Alexandria, VA 22314
Tel: (703) 684-2000
Email: rmmarino@rpb-law.com
About Telegraph Square II
Telegraph Square II, a Condominium Unit Owners Association is
engaged in activities related to real estate. The association is
based in Fairfax, Va.
Telegraph Square sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Va. Case No. 22-10302) on March 16,
2022, with $248,032 in assets and $1,129,919 in liabilities.
Stephanie Tavares, secretary and treasurer, signed the petition.
Judge Klinette H. Kindred oversees the case.
The Debtor tapped Robert M. Marino, Esq., at Redmon Peyton &
Braswell, LLP as bankruptcy counsel; Reed Smith, LLP as special
counsel; and Analytic Financial Group, LLC, doing business as
Corporate Matters, as financial services provider.
TERRA MANAGEMENT: Property Sale Proceeds to Fund Plan
-----------------------------------------------------
Terra Management Group, LLC and Littleton Main Street LLC submitted
a Disclosure Statement to accompany Second Amended Joint Plan of
Reorganization dated April 24, 2023.
The Second Amended Plan provides for the restructuring of Terra's
debt and the sale of the principal asset of Main Street, its low
income housing residential apartment building, under Chapter 11 of
the Bankruptcy Code.
Pursuant to the Plan, once Main Street's assets have been
liquidated, the Debtors shall distribute the net proceeds to
creditors in conformity with the Bankruptcy Code. Terra shall
restructure its debts and continue operations. To effectuate the
Second Amended Plan, the Plan Sponsor will contribute capital to
the reorganized Debtors in an amount sufficient enough to cover the
payment of administrative expenses in full.
The Class 1.a Claim consists of the Secured Claim of Transamerica
related to the Main Street mortgage on the Property. Class 1.a is
impaired under the Second Amended Plan. The holder of the Class 1.a
Claim shall retain its Lien securing its Claim to the same extent
and with the same priority as its pre-petition lien and shall be
paid from Net Sale Proceeds upon the closing of the Sale and from
any Net COA Proceeds in accordance with the waterfall set forth in
the Second Amended Plan. The Class 1.a Claim shall be Allowed in
the outstanding amount of the loan as of the Confirmation Date and
shall accrue interest from and after the Effective Date through the
payment date at the rate of 5.25% per annum or such other rate set
forth in the Confirmation Order. Upon receipt of payment,
Transamerica shall release its Lien.
The Class 1.b Claim consists of an ad valorem tax claim held by the
Arapahoe County Treasurer. Class 1.b is impaired under the Second
Amended Plan. The holder of the Class 1.b Claim shall retain its
Lien securing its Claim to the same extent and with the same
priority as its prepetition lien and shall be paid from Net Sale
Proceeds upon the closing of the Sale and from any Net COA Proceeds
in accordance with the waterfall set forth in the Second Amended
Plan. Upon receipt of payment, the Arapahoe County Treasurer shall
release its Lien.
Class 3 consists of Disputed Unsecured Claims held by the Keatens
in connection with the State Court Judgment. Class 3 is impaired
under the Second Amended Plan. The Class 3 Claims will be treated
and paid as follows:
* The holders of the Class 3 Claims (to the extent Allowed)
shall receive their Pro Rata share of Net Sale Proceeds upon the
closing of the Sale of the Property and their Pro Rata share of any
Net COA Proceeds in accordance with the waterfall set forth in the
Second Amended Plan (subject to the provisions for Disputed Claims
set forth in the Second Amended Plan). The foregoing payments shall
be in full and final satisfaction, compromise, settlement, release,
and discharge of the Class 3 claimant's Allowed Claim.
* For the avoidance of doubt, a Class 3 claimant shall not
receive a greater amount under the Second Amended Plan than the
amount of its Allowed Claim.
Class 4.a consists of General Unsecured Claims against Terra in an
amount greater than $500 that does not elect to be treated as a
Convenience Claim. The holders of the Allowed Class 4.a Claims
shall receive their Pro Rata share of Net Sale Proceeds upon the
closing of the Sale of the Property and their Pro Rata share of any
Net COA Proceeds in accordance with the waterfall set forth in the
Second Amended Plan (subject to the provisions for Disputed Claims
set forth in the Second Amended Plan). The foregoing payments shall
be in full and final satisfaction, compromise, settlement, release,
and discharge of the Class 4.a claimant's Allowed Claim.
Class 4.b consists of General Unsecured Claims against Main Street
in an amount greater than $500 that does not elect to be treated as
a Convenience Claim. The holders of the Allowed Class 4.b Claims
shall receive their Pro Rata share of Net Sale Proceeds upon the
closing of the Sale of the Property and their Pro Rata share of any
Net COA Proceeds in accordance with the waterfall set forth in the
Second Amended Plan (subject to the provisions for Disputed Claims
set forth in the Second Amended Plan). The foregoing payments shall
be in full and final satisfaction, compromise, settlement, release,
and discharge of the Class 4.b claimant's Allowed Claim.
Main Street's Property and associated Personal Property will be
sold and proceeds used to make payments in accordance with the
Waterfall Recovery set forth in the Second Amended Plan. The
Debtors shall conduct the Sale in accordance with the following
provisions:
* Marketing. In conjunction with a reputable broker, engaged
in the Chapter 11 Case subject to approval of the Court, the
Debtors shall establish and promulgate written procedures and
deadlines. The Debtors may modify the procedures from time to time
in accordance with their business judgment. The Debtors will
provide access to information in a data room and make information
related to the Property and the Personal Property available for
inspection to qualified buyers who have signed an appropriate
non-disclosure agreement, if one is deemed advisable.
* Initial Bids. The Confirmation Order shall establish a
deadline for submission of initial bids that shall be accompanied
by a deposit determined by the Debtors and evidence of financial
ability to close, if not previously provided, acceptable to the
Debtors in their discretion.
* Discretion to Select Stalking Horse. The Debtors may, in
their discretion negotiate with a potential bidder and execute a
purchase and sale agreement, subject to higher and better bids, and
provide customary bid protections as part of the agreement.
A full-text copy of the Disclosure Statement dated April 24, 2023
is available at https://bit.ly/3ALnf93 from PacerMonitor.com at no
charge.
Attorneys for the Debtors:
Michael J. Pankow, Esq.
Amalia Sax-Bolder, Esq.
BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 17th Street, Suite 2200
Denver, CO 80202
Tel: (303) 223-1100
Fax: (303) 223-1111
Email: mpankow@bhfs.com
asax-bolder@bhfs.com
About Terra Management Group and Littleton Main Street
Terra Management Group, LLC is an Englewood, Colo.-based company
engaged in activities related to real estate.
Terra Management Group and Littleton Main Street, LLC filed their
voluntary petitions for Chapter 11 protection (Bankr. D. Col. Lead
Case No. 21-15245) on Oct. 15, 2021. J. Marc Hendricks, president
and manager of Terra Management Group, signed the petitions. At the
time of the filing, Terra Management Group listed up to $100,000 in
assets and up to $50 million in liabilities while Littleton listed
as much as $50 million in both assets and liabilities.
The Hon. Kimberley H. Tyson is the case judge.
The Debtors tapped Michael J. Pankow, Esq., at Brownstein Hyatt
Farber Schreck, LLP as legal counsel, and Haynie & Company as tax
accountant.
TREES CORP: Incurs $9.5 Million Net Loss in 2022
------------------------------------------------
Trees Corporation has filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$9.47 million on $13.44 million of total revenues for the year
ended Dec. 31, 2022, compared to a net loss of $8.87 million on
$5.93 million of total revenue for the year ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $31.69 million in total
assets, $25.29 million in total liabilities, and a total
stockholders' equity of $6.41 million.
Salt Lake City, Utah-based Haynie & Company, the Company's auditor
since 2021, 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 negative working capital
that raise substantial doubt about its ability to continue as a
going concern.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1477009/000155837023006067/cann-20221231x10k.htm
About Trees Corp
Headquartered in Denver, Colorado, Trees Corporation (formerly
known as General Cannabis Corp) -- provides services and products
to the regulated cannabis industry. Trees is a cannabis retailer
and cultivator in the states of Colorado and Oregon.
TRICIDA INC: May 19 Hearing on Liquidating Plan Set
---------------------------------------------------
In connection with the confirmation hearing for the Third Amended
Chapter 11 Plan of Liquidation for Tricida, Inc. filed by the
Debtor on March 27, 2023; and upon the parties’ stipulation and
agreement; and sufficient cause appearing, Judge John T. Dorsey has
entered an order that:
A. Fact Discovery
* The Discovery Parties shall provide to each other a list of
proposed lay percipient witnesses (including potential adverse
witnesses but excluding rebuttal witnesses) in connection with the
confirmation of the Plan on or before April 17, 2023, except that
the lists of witnesses may be thereafter supplemented based upon
information obtained through discovery; provided, however, that any
supplemental witnesses (other than rebuttal witnesses) must be
disclosed no later than May 5, 2023 and made available for
deposition no later than May 9, 2023.
* Any responses or objections to interrogatories and requests
for production of documents must be served on the propounding
Discovery Parties on or before April 19, 2023.
* To the extent that the Discovery Parties have a dispute with
respect to any interrogatory or request for production, or any
Discovery Party's witness list, the Discovery Parties must meet and
confer regarding the dispute on or before April 21, 2023.
* The Discovery Parties produce documents on a rolling basis
with said production being completed on or before April 26, 2023 at
5:00 pm (ET).
* All lay percipient witnesses proposed by the Discovery
Parties in connection with the confirmation of the Plan must be
made available for deposition between April 26, 2023 and May 9,
2023.
* Fact discovery shall close on May 9, 2023.
B. Expert Discovery
* Expert disclosures pursuant to Rule 26 of the Federal Rules
of Civil Procedure shall be made on or before April 21, 2023.
Expert reports pursuant to Rule 26 of the Federal Rules of Civil
Procedure shall be served on or before May 1, 2023 by 8:00 a.m.
(ET).
* All expert witnesses proposed by the Discovery Parties to
submit opening reports or declarations in connection with the Plan
shall be made available for deposition between May 3, 2023 and May
5, 2023.
* Any rebuttal expert witness designations shall be made on or
before May 5, 2023. Any rebuttal expert witness reports shall be
served on or before May 9, 2023 at 7:00 p.m. (ET).
* All expert witnesses proposed by the Discovery Parties to
submit rebuttal reports or declarations in connection with the Plan
shall be made available for deposition between May 10, 2023 and May
12, 2023.
* Expert discovery shall close on May 12, 2023.
C. Confirmation Hearing
* The Court will hold an evidentiary Confirmation Hearing on
May 19, 2023 at 10:00 a.m. (ET).
* The deadline for the Committee to file any supplemental
objection to confirmation of the Plan will be May 12, 2023 at 4:00
p.m. (ET).
* The deadline for the Debtor to file any reply to any
objections to Plan confirmation and to file any brief in support of
Plan confirmation will be May 16, 2023 at 4:00 p.m. (ET).
* By no later than May 15, 2023 at 4:00 p.m. (ET), the
Discovery Parties must exchange with each other a list and
electronic copies of all documents they intend to introduce into
evidence at the Confirmation Hearing. Objections to such documents
must be served by May 16, 2023 at 7:00 p.m. (ET).
* Motions in limine, including to exclude expert opinions,
must be filed by May 15, 2023 at 4:00 p.m. (ET). Oppositions must
be filed by May 16, 2023 at 7:00 p.m. (ET). Motions in limine will
be decided on the papers unless the Court requests oral argument on
any such motion.
* Direct testimony for fact witnesses (other than adverse
witnesses) must be presented live or by written witness
declarations to be exchanged among the Discovery Parties and filed
on the Court's docket by May 17, 2023 at 11:00 a.m. (ET). Any
expert reports exchanged pursuant to this Order must serve as each
expert's direct testimony and shall be filed on the Court's docket
by May 17, 2023 at 11:00 a.m. (ET).
* Joint exhibit lists and any separate exhibit lists must be
filed and served by the Discovery Parties no later than May 17,
2023 at 11:00 a.m. (ET). All documents listed on the joint exhibit
list must be admitted into evidence.
About Tricida Inc.
Tricida Inc. -- https://www.tricida.com/ -- is a pharmaceutical
company working to turn the tide on metabolic acidosis and
progression of chronic kidney disease. The company is based in
South San Francisco, Calif.
Tricida filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 23-10024) on Jan. 12,
2023, It disclosed $93,879,000 in total assets against $229,977,000
in total debt as of Sept. 30, 2022.
The Debtor tapped Sidley Austin, LLP and Young Conaway Stargatt &
Taylor, LLP, as counsels; SerraConstellation Partners, LLC as
financial advisor; and Stifel, Nicolaus & Company, Inc., and Miller
Buckfire, LLC as investment bankers. Kurtzman Carson Consultants,
LLC is the claims agent and administrative advisor.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case.
Womble Bond Dickinson (US) LLP and Rock Creek Advisors, LLC serve
as the committee's legal counsel and financial advisor,
respectively.
TRIDENT TPI: S&P Affirms 'B-' Issuer Credit Rating, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on
Trident TPI Holdings Inc. (doing business as Tekni-Plex).
S&P said, "We assigned our 'B-' issue-level and '3' recovery rating
to the company's proposed $880 million term loan. In addition, we
assigned our 'CCC+' issue-level and '5' recovery rating to the
company's proposed $620 million senior unsecured notes.
"The stable outlook reflects our expectation that Tekni-Plex will
be able to successfully refinance its upcoming debt maturities as
part of the proposed transaction. Though we expect Tekni-Plex to
generate negative FOCF in 2023 due to elevated interest cost and
increased capital spending, we expect stable demand for its
products into 2024 and successful integration of ongoing
acquisitions will return leverage to the 7x-8x area and generate
sufficient cash flows to cover its higher interest expense in
fiscal 2024.
"We expect Tekni-Plex will generate top-line revenue growth in the
lower-teens percent area for fiscal 2023. Through the six months
ended December 2022, the company reported revenue growth of close
to 23% from the year prior. This is due to ongoing integration of
recent acquisitions (six in 2022 and 2023), strong, high
single-digit organic growth within its health care segment, and
continued pricing tailwinds related to elevated input costs. The
company is targeting high single-digit revenue growth within the
health care segment over the next few years as hospital procedures
and volumes continue to increase, and supply chain challenges begin
to ease. Volumes within their consumer products segment remained
muted, with revenue growth in the second quarter primarily
attributable to pricing actions and the integration of its most
recent acquisition--Empaques Moldeados de America Tecnologias S. de
R.L. de C.V. (EMATEC)--into its operations. We forecast similar
growth for the consumer products segment in the low single-digit
percent area as volume challenges persist into fiscal 2024."
Mergers and acquisitions (M&A) remain a key strategic growth
initiative, with Tekni-Plex making six acquisitions in 2022 and
early 2023. Tekni-Plex integrated its most recent acquisition,
Mexican-based molded fiber packaging provider EMATEC, into its
consumer products segment. The company financed the acquisition
with a $125 million incremental term loan in July 2022 and $37
million from a delayed draw term loan. The EMATEC acquisition will
add roughly $12 million in EBITDA in 2023. In addition, Tekni-Plex
acquired consumer packaging companies Keyes Packaging, Grupo
Phoenix, M-Industries, and Fibro, as well as Johnson Plastic Group
in the health care segment in fiscal 2022. While S&P expects the
recent acquisitions to increase Tekni-Plex's profitability, the
increased debt from the incremental term loan in July and new
senior unsecured notes will cause S&P Global Ratings-adjusted
leverage to remain elevated above 9x in 2023.
S&P said, "We are forecasting negative free cash flow in 2023 with
higher-than-average projected capital spending and increased
interest costs under the new capital structure. We expect cash
flows to be negative in fiscal 2023, stemming from higher projected
capital expenditures of about $110 million, higher interest expense
under the new capital structure, moderate working capital outflows,
and transaction and acquisition costs. With only $19 million drawn
on their $126 million ABL pro forma with the transaction and no
near-term maturities due to the successful refinancing, the company
should have adequate sources to cover its projected cash shortfalls
for the year. However, we note additional downside risk should
operational performance weaken beyond our base case through the
second half of fiscal 2023 and /or into 2024, particularly as a
higher interest expense burden minimizes the company's margin for
error. We have not included any additional M&A activity into our
projections for the remainder of fiscal 2023.
"The stable outlook reflects our expectation that Tekni-Plex will
be able to successfully refinance its upcoming debt maturities as
part of the proposed transaction. Though we expect Tekni-Plex to
generate negative FOCF in 2023 due to elevated interest cost and
increased capital spending, we expect stable demand for its
products into 2024 and successful integration of ongoing
acquisitions will return leverage to the 7x-8x area and generate
sufficient cash flows to cover its higher interest expense in
fiscal 2024.
"We could lower our rating on Tekni-Plex if a decline in operating
performance results in a constrained liquidity position and/or an
unsustainable capital structure such that the company generates
negative FOCF and interest coverage falls below 1.5x, or if cash
flows are insufficient to meet its debt obligations.
"Although unlikely over the next year, we could raise our rating on
Tekni-Plex if the company reduces its S&P Global Ratings-adjusted
debt to EBITDA below 7x and we believe its sponsor is committed to
maintaining its leverage at this level inclusive of potential
future acquisitions and shareholder returns while continuing to
generate positive FOCF."
ESG credit indicators: E-3, S-2, G-3
S&P said, "Environmental factors are a moderately negative
consideration in our credit rating analysis on Trident TPI Holdings
Inc. (doing business as Tekni-Plex). The packaging industry
continually faces substitution risk from more environmentally
friendly substrates. In our view, Tekni-Plex must continue to
innovate and develop sustainable alternatives in order to stay
relevant in the industry. Furthermore, governance is a moderately
negative consideration, as is the case for most rated entities
owned by private-equity sponsors. We believe the company's highly
leveraged financial risk profile points to corporate
decision-making that prioritizes the interests of the controlling
owners. This also reflects the generally finite holding periods and
a focus on maximizing shareholder returns."
UBO-TECHNOLOGIES: Files Emergency Bid to Use Cash Collateral
------------------------------------------------------------
Ubo-Technologies, LLC asks the U.S. Bankruptcy Court for the
Southern District of Florida, Miami Dade Division, for authority to
use cash collateral and provide adequate protection.
The Debtor requires the use of cash collateral to continue its
manufacturing of ultraviolet purifying water bottles.
The personal property of the Debtor totals $345,066. The following
UCC-1s are in order of priority:
1. U.S. Small Business Administration, UCC-1 #202003483088
filed on July 17, 2020. The SBA's claim for $124,200.00 is fully
secured.
2. Yardline Capital, UCC-1 #20210697610X filed on May 5, 2021.
However, Yardline has been paid in full and this UCC-1 needs to be
terminated.
3. Ouiby d/b/a Kickfurther, UCC-1 #202203041767 filed on
September 19, 2022, for a loan in the amount of $145,962. Ouiby's
claim, if the amount remains unchanged, is secured by specific
inventory as outlined in the Ouiby UCC-1 and is partially secured
in the amount of $83,648 and unsecured as to the balance of
$62,314;
4. Pay Pal Business, UCC-1 #202203068223 filed on September
21, 2022 is fully secured to the amount of $55,465;
5. Business Backer, filed its UCC-1 #20230014489X on January
17, 2023, which is in the 90 day preference period prior to the
date the Debtor filed the Chapter 11 bankruptcy. The Debtor asserts
that the BB debt is unperfected, and is a voidable preference under
11 U.S.C. Section 547(b), resulting in its claim of $129,042 being
unsecured;
6. Forward Financing, LLC, filed its UCC-1 #202300316798 on
March 3, 2023 which is in the 90 day preference period prior to the
date the Debtor filed the Chapter 11 bankruptcy. The Debtor asserts
that the Forward debt is unperfected, and is a voidable preference
under 11 U.S.C. Section 547(b), resulting in its claim of $40,707
being unsecured.
With the COVID-19 pandemic raging around the world, the Debtor
suffered economically and needed an influx of cash. Beginning in
July 2020, after it borrowed $126,500 from the SBA, the Debtor
entered into four additional secured loans and one secured
inventory purchase that all currently have open balances.
The equity cushions enjoyed by the SBA and Pay Pal are substantial.
However, the Debtor, as a show of good faith, seeks an order
authorizing the use of cash collateral as of the date of filing and
the proposed adequate protection payments to:
(a) the SBA in the amount of its regular monthly contractual
payment of $617;
(b) Ouiby in the amount of $680 per month; and
(c) Pay Pal in the amount of $451 per month.
No adequate protection payments are offered to BB and Forward as
their respective UCC-1s were filed within 90 days of the date of
filing the Debtor's bankruptcy, and the Debtor believes the liens
created by the attempted perfection of the UCC-1's are voidable
preferences.
A copy of the Debtor's motion and budget is available at
https://bit.ly/3KMgDM9 from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as follows:
$78,602 for May 2023;
$78,602 for June 2023;
$78,602 for July 2023;
$78,602 for August 2023;
$78,602 for September 2023; and
$78,602 for October 2023.
About Ubo-Technologies, LLC
Ubo-Technologies, LLC manufactures water bottles. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
S.D. Fla. Case No. 23-12848) on April 13, 2023. In the petition
signed by Rakesh Guduru, founder and CEO, the Debtor disclosed
$327,181 in assets and $2,521,279 in liabilities.
Chad Van Horn, Esq., at Van Horn Law Group, P.A., represents the
Debtor as legal counsel.
UNITED FURNITURE: Committee Taps Stewart Robbins Brown as Counsel
-----------------------------------------------------------------
The official committee of unsecured creditors of United Furniture
Industries, Inc. seeks approval from the U.S. Bankruptcy Court for
the Northern District of Mississippi to employ Stewart Robbins
Brown & Altazan, LLC as its legal counsel.
Stewart will represent the committee in the Chapter 11 cases of
United Furniture Industries and its affiliates.
The attorneys and paralegals primarily responsible for representing
the committee, and their current standard hourly rates are:
Paul Douglas Stewart, Jr., Member $550
William S. Robbins, Member $550
Brandon A. Brown, Member $550
Brooke W. Altazan, Member $450
Nicholas J. Smeltz, Associate $350
Hayley Franklin, Associate $350
Kimberly A. Heard, Paralegal $250
Jamie D. Cangelosi, Of Counsel $450
Law Clerks $90
Paul Douglas Stewart, Jr., a member of Stewart, disclosed in a
court filing that the firm is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
In accordance with Appendix B-Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed under 11
U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, Stewart
Robbins disclosed that:
-- it has not agreed to any variations from, or alternatives
to, its standard or customary billing arrangements for this
engagement;
-- none of the professionals included in the engagement vary
their rate based on the geographic location of the bankruptcy
case;
-- the firm has not represented the Committee in the 12 months
prepetition; and
-- the Committee is aware of the proposed rates to be charged
by Stewart Robbins Brown & Altazan, as well as who will primarily
work on the file. The Committee is further aware of limitations on
this case due to circumstances, including but not limited to the
Debtors' operations, and use of funds alleged to be subject to the
security interest of other creditors. The Committee and its
professionals reserve all rights to seek approval of Committee
professional fees.
The firm can be reached through:
Paul Douglas Stewart, Jr., Esq.
Stewart Robbins Brown & Altazan LLC
301 Main Street, Suite 1640
Baton Rouge, LA 70801
Tel: +1 (225) 231-9998
Fax: +1 (225) 709-9467
Email: dstewart@stewartrobbins.com
About United Furniture Industries
United Furniture Industries, Inc. manufactures and sells
upholstery. It offers bonded leather and upholstery fabric
recliners, reclining sofas and loveseats, sectionals, and sofa
sleepers, as well as stationary sofas, loveseats, chairs, and
ottomans.
United Furniture Industries was subject to an involuntary Chapter 7
bankruptcy petition (Bankr. N.D. Miss. Case No. 22-13422) filed on
Dec. 30, 2022. The petition was signed by alleged creditors Wells
Fargo Bank, National Association, Security Associates of
Mississippi Alabama LLC, and V & B International, Inc. On Jan. 18,
2023, the court entered the order for relief, thereby, converting
the case to one under Chapter 11.
On Jan. 31, 2023, eight affiliates of United Furniture Industries
filed for Chapter 11 protection in the U.S. Bankruptcy Court for
the Northern District of Mississippi. The affiliates are LS
Logistics, LLC, Furniture Wood, Inc., UFI Transportation, LLC,
United Wood Products, Inc., Associated Bunk Bed Company, FW
Acquisition, LLC, UFI Royal Development, LLC, and UFI Exporter,
Inc. Their Chapter 11 cases are jointly administered under Case No.
22-13422.
Judge Selene D. Maddox oversees the cases.
Wells Fargo is represented by R. Spencer Clift, III, Esq., while
Security Associates is represented by Andrew C. Allen, Esq., at The
Law Offices of Andrew C. Allen.
Derek Henderson is the trustee appointed in the Debtors' Chapter 11
cases. The trustee hired McCraney, Montagnet, Quin, Noble, PLLC as
bankruptcy counsel; King & Spencer, PLLC and NC Eminent Domain Law
Firm as special counsel; Harper Rains Knight & Company as financial
advisor; and B. Riley Real Estate, LLC as real estate advisor.
On April 4, 2023, David Asbach, Acting U.S. Trustee for Region 5,
appointed an official committee to represent unsecured creditors in
the Debtors' Chapter 11 cases. The committee is represented by
Stewart Robbins Brown & Altazan, LLC.
UPTOWN 240: U.S. Trustee Appoints Creditors' Committee
------------------------------------------------------
The U.S. Trustee for Region 19 appointed an official committee to
represent unsecured creditors in the Chapter 11 case of Uptown 240,
LLC.
The committee members are:
1. Aaron Bartels
2. Joel Cochran
3. Richard LaPierre
4. Matthew Follett
5. Angela Ward
6. Harry Salzman
7. David Holt
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 Uptown 240
Uptown 240, LLC owns and operates a condominium complex in Dillon,
Colo. The residences are an exclusive collection of 80-luxury
mountain and lakeview condominiums.
Uptown 240 filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Colo. Case No. 23-10617) on Feb.
23, 2023, with $10 million to $50 million in both assets and
liabilities. Danilo A. Ottoborgo, president of Uptown 240, signed
the petition.
Judge Thomas B. Mcnamara presides over the case.
The Debtor tapped Keri L. Riley, Esq., at Kutner Brinen Dickey
Riley, P.C. as legal counsel and Eide Bailly, LLP as accountant.
VG IMPERIAL: Exclusivity Period Extended to August 17
-----------------------------------------------------
Judge Nancy Hershey Lord of the U.S. Bankruptcy Court for the
Eastern District of New York extended VG Imperial Inc.'s
exclusive time period to file a chapter 11 plan of reorganization
and disclosure statement to August 17, 2023.
The judge determined that the legal and factual bases set forth
in the Debtors' Motion establish just cause for the relief
granted.
VG Imperial Inc. is represented by:
Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
2799 Coney Island Avenue, Suite 202
Brooklyn, NY 11235
Tel: (718) 513-3145
Email: alla@kachanlaw.com
About VG Imperial Inc.
VG Imperial Inc. filed a Chapter 11 bankruptcy petition (Bankr.
E.D.N.Y. Case No. 22-42627) on Oct. 21, 2022, with as much as $1
million in both assets and liabilities. Judge: Nancy Hershey Lord
oversees the case.
The Law Offices of Alla Kachan, PC and Wisdom Professional
Services, Inc. serve as the Debtor's legal counsel and
accountant, respectively.
VISIONARY LABELS: Taps Orantes Law Firm as Bankruptcy Counsel
-------------------------------------------------------------
Visionary Labels and Packaging, LLC seeks approval from U.S.
Bankruptcy Court for the Central District of California to hire
Orantes Law Firm, PC.
The Debtor requires legal counsel to:
(a) give advice regarding bankruptcy law matters;
(b) represent the Debtor in any proceedings or hearings in the
bankruptcy court;
(c) conduct examinations of witnesses, claimants or adverse
parties and prepare legal papers;
(d) advise the Debtor concerning the requirements of the
bankruptcy court and applicable rules;
(e) assist the Debtor in the negotiation, formulation,
confirmation, and implementation of a Chapter 11 plan; and
(f) perform other necessary legal services.
Orantes Law Firm received from the Debtor a retainer of $21,738,
plus the filing fee of $1,738.
The firm's attorneys and staff will be billed as follows:
Giovanni Orantes, Esq. $695 per hour
Associates $250 - $695 per hour
Paralegals $160 per hour
Giovanni Orantes, Esq., an attorney at the Orantes Law Firm,
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:
Giovanni Orantes, Esq.
The Orantes Law Firm, PC
3435 Wilshire Blvd., Suite 2920
Los Angeles, CA 90010
Telephone: (213) 389-4362
Facsimile: (877) 789-5776
Email: go@gobklaw.com
About Visionary Labels and Packaging
Visionary Labels and Packaging, LLC is in the business of labeling
and providing labeled cans to beer brewers and other makers of
canned beverages. The company is based in Fontana, Calif.
Visionary Labels and Packaging sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-11032)
on March 17, 2023. In the petition signed by its chief executive
officer, Frank Sanchez, the Debtor disclosed up to $500,000 in
assets and up to $10 million in liabilities.
Judge Magdalena Reyes Bordeaux oversees the case.
Giovanni Orantes, Esq., at The Orantes Law Firm, A.P.C., represents
the Debtor as legal counsel.
WAHOO FITNESS: Moody's Withdraws 'Ca' Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service withdrew its ratings for Wahoo Fitness
Acquisition L.L.C.'s, consisting of the Ca Corporate Family Rating,
the D-PD Probability of Default Rating, and the Ca rating on the
company's senior secured bank credit facilities. Prior to the
withdrawal the outlook was negative.
The following ratings/assessments are affected by the action:
Withdrawals:
Issuer: Wahoo Fitness Acquisition L.L.C.
Corporate Family Rating, Withdrawn, previously rated Ca
Probability of Default Rating, Withdrawn, previously rated D-PD
Senior Secured Bank Credit Facilities, Withdrawn, previously rated
Ca (LGD3)
Outlook Actions:
Issuer: Wahoo Fitness Acquisition L.L.C.
Outlook, Changed To Rating Withdrawn From Negative
RATINGS RATIONALE
Moody's has decided to withdraw the ratings for its own business
reasons.
Founded in 2009 Wahoo Fitness is a designer and distributor of
indoor cycling and endurance training products such as indoor bike
trainers and related accessories, GPS bike computers, bike pedals,
sensors, and applications. Following the July 2021 leverage buyout
transaction, the company is majority owned by Rhone Group, with the
company's founder having a significant ownership investment and
other shareholders holding a minority stake. Wahoo reported revenue
of under $500 million for the last twelve months period ending
September 30, 2022.
WILLIAM J. NAMEN: Cadlerock Sanctioned for Failure to Dissolve Writ
-------------------------------------------------------------------
Judge Jason A. Burgess of the U.S. Bankruptcy Court for the Middle
District of Florida grants Debtor William J. Namen, II's motion for
sanctions for violation of the automatic stay.
Pre-petition, Cadlerock Joint Venture, LP served a Writ of
Garnishment on Blue Cross Blue Shield, which resulted in an initial
pre-petition garnishment of $11,839 from funds BCBS owed from
services performed by the Debtor William J. Namen, II.
Post-petition, BCBS continued to garnish funds and informed the
Debtor that the garnishments would continue until Cadlerock took
affirmative action to dissolve the Writ. Although the Debtor's
attorney immediately notified Cadlerock of the bankruptcy filing
and contacted Cadlerock via email about dissolving the Writ to stop
the continued garnishment of post-petition funds, Cadlerock
declined to do so. Cadlerock's refusal to dissolve the Writ, led to
the filing of the instant Motion.
The primary focus and concern of the Debtor was to the continued
garnishment of post-petition funds in violation of the automatic
stay. The Debtor asserts that Cadlerock's delay in dissolving the
Writ resulted in approximately $70,000 being garnished
post-petition, which led to him not being able to fund his payroll
and temporarily losing several employees integral to the efficient
running of his medical practice. The Debtor also testified that
approximately one-third of his earnings come from funds owed to him
from BCBS, and that the payments go directly into his PA account.
Judge Burgess finds that Cadlerock has committed a willful
violation of the automatic stay under Section 362(a)(1) and Section
362(a)(2) of the Bankruptcy Code. Judge Burgess points out that
"Upon receiving notice of the Debtor's bankruptcy filing, Cadlerock
not only failed to take affirmative action to dissolve the Writ or
stay the case as to the Debtor in state court, but it also failed
to dissolve the Writ after the Court specifically instructed it to
do so. . . Although Cadlerock maintains that its failure to
dissolve the Writ was an honest oversight, the fact remains that
Cadlerock did not prioritize the Court's directive to do so. This
is particularly concerning because, at the hearing on Dec. 20,
2022, the Court emphasized the importance of the Writ being
dissolved so that the Debtor could pay his employees who rely upon
their wages to support their families."
Ultimately, the continued garnishments resulted in the Debtor not
being able to adequately fund payroll, which led to him temporarily
losing several employees whom he considered integral to the smooth
and efficient running of his medical practice. The cascade of
negative consequences could have been mitigated if Cadlerock had
moved to stay the State Court Action as to the Debtor or had
dissolved the Writ in a timely fashion. Unfortunately, for all
parties, Cadlerock decided to play the role of the Court and
interpret on its own what it deemed the law to be. This resulted in
damages to the Debtor, for which Cadlerock will now be held
responsible. Further, although the Court is here to adjudicate
disputes, the violations of the automatic stay that continued to
occur, even after the Court directed that the Writ should be
immediately dissolved, is not a good use of judicial resources. As
the Court has determined that Cadlerock willfully violated the
automatic stay under 11 U.S.C. Section 362, a second trial will be
held on the issue of damages.
A full-text copy of the Findings of Fact and Conclusions of Law
dated April 5, 2023, is available https://tinyurl.com/4p2tduna from
Leagle.com.
William Joseph Namen, II, filed a Chapter 11 petition (Bankr. M.D.
Fla. Case No. 22-02272) Nov. 10, 2022. The Debtor is represented
by Bryan K. Mickler, Esq.
WINESTEAD LLC: Seeks Approval to Hire Global Tax & Accounting
-------------------------------------------------------------
Winestead, LLC seeks approval from the U.S. Bankruptcy Court for
the Central District of California to employ Global Tax &
Accounting, Inc. as its accountant.
The firm's services include the preparation of monthly accounting
statements, monthly operating reports and tax returns, and other
accounting matters.
David Garelick, president of Global Tax & Accounting, disclosed in
a court filing that his firm does not have any interest adverse to
the Debtor and the bankruptcy estate.
The firm can be reached through:
David Garelick, EA
Global Tax & Accounting, Inc.
5300 West Hillsboro Blvd., Suite 217
Coconut Creek, FL 33073
Phone: (954)421-7300
Fax: (954)421-0305
Email: accounting@gtatax.com
About Winestead LLC
Winestead, LLC is a local boutique winery in Newport Beach offering
wine made with the finest grapes sourced from Temecula Valley, Paso
Robles and Lodi, Calif.
Winestead filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-14222) on Nov. 8,
2022. In the petition filed by its manager, Douglas G. Weins, the
Debtor reported assets between $500,000 and $1 million and
liabilities between $1 million and $10 million.
Judge Mark Houle oversees the case.
The Debtor tapped Robert B Rosenstein, Esq., at Rosenstein &
Associates as legal counsel and Global Tax & Accounting, Inc. as
accountant.
YITBOS INC: Wins Final Cash Collateral Access
---------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of California,
Sacramento Division, authorized Yitbos Inc., dba Mr. Pickles
Sandwich Shop, to use cash collateral on a final basis, subject to
the adequate protection payments proposed by the Debtor.
As additional adequate protection for the Debtor's use of cash
collateral, secured creditors will have replacement liens in the
Debtor's pre- and post-petition assets of the same type and
validity as are subject to valid pre-petition liens and security
interest, with the same priority as the prepetition liens and
security interests, and only to the extent of diminution in value
of the collateral, as a result of the Debtor's use of cash
collateral on a post-petition bases.
The Secured Creditors' liens upon, and security interests in, the
replacement collateral will be perfected without any other act or
filing upon entry of the Order.
A copy of the order is available at https://bit.ly/43IZGuH from
PacerMonitor.com.
About Yitbos Inc.
Yitbos Inc. primarily operates in the sandwiches and submarines
shop business. The Debtor sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D. Cal. Case No. 23-20913) on March
23, 2023. In the petition signed by Darin Frain Hughes, chief
executive officer, the Debtor disclosed $186,975 in assets and
$1,097,412 in liabilities.
Judge Christopher M. Klein oversees the case.
Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger,
represents the Debtor as legal counsel.
ZOTEC PARTNERS: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg.
-----------------------------------------------------------------
Moody's Investors Service downgraded the corporate family rating
for Zotec Partners, LLC to Caa1 from B3 and the probability of
default rating to Caa2-PD from B3-PD, reflecting Moody's view of
heightened default risk with an above average recovery in the event
of default. Moody's also downgraded the company's senior secured
first lien credit facility rating to Caa1 from B3. The outlook was
changed to negative following the ratings downgrade. The company is
an Indiana-based provider of technology-enabled revenue cycle
management services and software to the healthcare industry.
The ratings downgrade reflects increasing refinancing risk and
weakening liquidity until the company is able to address its
February 2024 term loan and revolver maturities. Moody's expects
free cash flow will be negative in 2023, which also weighs on the
ratings.
RATINGS RATIONALE
The Caa1 CFR reflects Zotec's heightened refinancing risk, negative
free cash flow, high leverage and relatively small scale in a
competitive industry. Very high debt-to-EBITDA leverage should
improve from around 10x as of September 2022 (Moody's-adjusted
including capitalized software costs as an expense, pro forma with
the termination of the Optum contract, and certain cost savings and
non-recurring costs) towards 6x by 2024. Similarly, Moody's expects
free cash flow deficits to improve by 2024 as Zotec benefits from
cost saving initiatives and new client wins while one-time costs
and capital expenditures diminish. However, Moody's considers the
company's current earnings predictability as weak given the
uncertainty around the costs associated with the integration and
eventual exit from the Optum contract, and the total amount of cost
savings needed to improve profitability and restore positive free
cash flow generation, which elevates risks.
Positively, the integration and costs savings are mostly one-time
in nature and/or tied to serving the Optum contract, such that
Moody's expects the company should eventually restore profitability
closer to its historical track-record of EBITDA margins in the high
20% range (net of capitalized software costs).
All financial metrics cited reflect Moody's standard adjustments.
Moody's includes capitalized software cash outflows in EBITDA and
debt leverage credit metrics as Moody's considers these costs
mostly recurring and linked to ongoing operating expenses.
The negative outlook reflects Zotec's looming debt maturities and
weakened liquidity profile. Moody's expects reported revenue will
decline in 2023 to roughly $230 million from $291 million in 2021,
as the contribution from the temporary contract with the state of
Indiana and the Optum contract roll off, with EBITDA margins
trending towards historical levels in the high 20% range. The
company's cost reduction plan entails operational risks as Zotec
completes the termination of the Optum contract and adjusts its
cost structure to restore profitability. Lower than anticipated
margins and cash flow could further deteriorate the credit profile
and complicate refinancing efforts. The outlook could be changed to
stable if the company is able to refinance its upcoming debt
maturities and Moody's expects the liquidity profile to improve.
Moody's considers Zotec's liquidity profile to be weak. The company
does not have enough internal sources to repay the $307 million
term loan maturing February 2024 and will require external
financing over the next 12 months. Moody's expects the company's
free cash flow to be negative in 2023 due to elevated costs related
to the Optum contract termination, tax payments and an increasing
interest expense burden as floating rates rise. The company will
rely on its cash balances ($44 million as of September 30, 2022) to
cover operational deficits. Access to Zotec's $20 million revolving
credit facility (undrawn as of September 30, 2022) is constrained
by its upcoming maturity in February 2024, which springs 91 days
ahead of the February 2024 term loan expiration. Moody's expects
capitalized technology development costs to moderately decline in
2023 after elevated spend in 2022. Moody's anticipates Zotec will
remain in compliance with the credit agreement covenants, mainly a
5.5x total net leverage ratio (per the credit agreement
definition).
The Caa1 rating on Zotec's senior secured credit facilities,
including the $20 million revolver and the $307 million term loan
maturing in February 2024, reflect both the Caa2-PD probability of
default rating and the expectation for a higher than average
recovery rate in the event of default. There is no other meaningful
debt in the capital structure to absorb potential losses, the
senior secured facilities are rated in line with the Caa1 corporate
family rating. The rated term loan and revolver benefit from
secured guarantees of all existing and subsequently acquired
domestic subsidiaries. The credit agreement allows for unrestricted
subsidiaries to operate outside of the restricted group, which
increases the risk of asset leakage.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company is able to refinance
its near-term maturities and Moody's expects: (1) revenue growth to
be sustained along with improved profitability; (2) positive free
cash flow will be maintained; (3) debt to EBITDA to remain below
7x; and (4) adequate liquidity.
The ratings could be downgraded if Moody's expects: (1) revenue
growth, profits or free cash flow to deteriorate; (2) sustained
negative free cash flow and diminishing liquidity; or (3) the
company will not be able to refinance its term loan and revolver
facilities.
The principal methodology used in these ratings was Software
published in June 2022.
Zotec Partners LLC, based in Carmel, Indiana, provides
technology-enabled revenue cycle management services and software
to the healthcare industry. Healthcare RCM is the process that
begins with scheduling a patient's appointment and ends with the
payment from the patient, insurer or government agency for the
health services provided. Zotec is owned primarily by its founder
and CEO, T. Scott Law, Sr. Over the twelve-month period ending
September 30, 2022, Zotec generated $274 million in revenue.
Downgrades:
Issuer: Zotec Partners, LLC
Corporate Family Rating, Downgraded to Caa1 from B3
Probability of Default Rating, Downgraded to Caa2-PD from B3-PD
Senior Secured 1st Lien Bank Credit Facility, Downgraded to Caa1
(LGD3) from B3 (LGD3)
Outlook Actions:
Issuer: Zotec Partners, LLC
Outlook, Changed To Negative From Stable
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2023. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
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