/raid1/www/Hosts/bankrupt/TCR_Public/230508.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, May 8, 2023, Vol. 27, No. 127
Headlines
1325 LLC: Seeks to Extend Exclusivity Period to August 4
1716 R STREET: Property Sale Proceeds to Fund Plan
1716 R STREET: Property Sale Proceeds to Fund Plan
26 GLOBAL: Seeks Approval to Hire Ensafi Law as Bankruptcy Counsel
476 GATES REALTY: Property Sale Proceeds to Fund Plan
634 WILSON: Seeks to Hire Kirby Aisner as Bankruptcy Counsel
ACJK INC: U.S. Trustee Unable to Appoint Committee
AKORN INC: Recalls Products Nationwide After Filing Bankruptcy
AL NGPL: $90MM Incremental Loan No Impact on Moody's 'Ba3' Rating
ALL ACTION SECURITY: Court OKs Deal on Cash Collateral Access
ALL AMERICAN BLACK: Court OKs Cash Collateral Access Thru Oct 31
ALL DAY ACQUISITIONCO: $200M Bank Debt Trades at 85% Discount
ALTERRA MOUNTAIN: Moody's Rates New $500MM 1st Lien Revolver 'B1'
ALTERRA MOUNTAIN: S&P Rates New $500MM Term Loan B 'B+'
AMERICANAS S.A.: Minority Shareholders Name New Board
ANCHOR GLASS: $647M Bank Debt Trades at 25% Discount
ARCHDIOCESE OF NEW ORLEANS: Guidry Recuses Over Donations Scandal
AVENTIS SYSTEMS: Seeks to Extend Exclusivity Period to September 5
AVENTIV TECHNOLOGIES: $282.5M Bank Debt Trades at 21% Discount
BANYAN CAY RESORT: U.S. Trustee Unable to Appoint Committee
BELLAIRE IN SPRING: Taps Ernie Garcia as Special Counsel
BENZRENT 7: Seeks to Extend Exclusivity Period to August 5
BEVERLY COMMUNITY: Court OKs Cash Collateral Access Thru May 12
BIGHORN RESTAURANTS: Case Summary & 20 Top Unsecured Creditors
BLACKHAWK NETWORK: S&P Rates New Sec. First-Lien Term Loan 'B'
BRIDGE COMMUNICATIONS: Court OKs Cash Collateral Access Thru Aug 1
BROOKLYN PARK: Seeks to Tap Leech Tishman Robinson Brog as Counsel
C&L AUTOMOTIVE: Wins Interim Cash Collateral Access
CALIFORNIA RESOURCES: Fitch Assigns 'B+' First-Time LongTerm IDR
CALLON PETROLEUM: Moody's Puts 'B2' CFR on Review for Upgrade
CARVANA CO: Creditors Offer Debt-for-Equity Swap
CEDIPROF INC: Seeks to Extend Exclusivity Period to July 3
CENTURION PIPELINE: Moody's Withdraws 'B1' CFR on Debt Repayment
CHECKERS HOLDINGS: Moody's Cuts CFR to Ca & Alters Outlook to Neg.
CHEM-WAY CORPORATION: Unsecureds to be Paid in Full in Plan
CHRISTMAS TREE: Case Summary & 30 Largest Unsecured Creditors
COINBASE GLOBAL: Hires Scalia, Ex-Fed Enforces to Help in SEC Fight
CONCRETE SOLUTIONS: Court OKs Cash Collateral Access Thru May 30
CORPORATION SERVICE: Fitch Affirms BB LongTerm IDR, Outlook Stable
CRESCENT ENERGY: Eagle Ford Deal No Impact on Moody's 'Ba3' CFR
CYXTERA TECHNOLOGIES: Skips Interest Payment Amid Debt Talks
DAWG'S SPORTS: Amends Unsecured Claims Pay Details
DAWN ACQUISITIONS: $550M Bank Debt Trades at 48% Discount
DIEBOLD NIXDORF: Five Proposals Passed at Annual Meeting
DNP EATS: Seeks to Hire Lindemann Law as Bankruptcy Counsel
EARTH.COM: Seeks Chapter 11 Bankruptcy, Owes $5Mil. for Domain Name
EFS PARLIN: Hits Chapter 11 Bankruptcy Protection
EMERALD DEBT: Fitch Gives 'BB+(EXP)' Rating on Senior Secured Notes
EMERALD DEBT: Moody's Rates New $2.75BB Senior Secured Notes 'Ba3'
EMPLOYBRIDGE: $925M Bank Debt Trades at 15% Discount
EMRLD BORROWER: S&P Rates New $2.75BB Senior Secured Notes 'BB-'
ENTEGRIS INC: Fitch Affirms LongTerm IDR at 'BB', Outlook Stable
ENVISION HEALTHCARE: $300M Bank Debt Trades at 20% Discount
ESCO LTD: Court OKs $1.5MM DIP Loan from Truist
EVERYTHING BLOCKCHAIN: Swings to $9.4M Net Loss in FY Ended Jan. 31
EVOKE PHARMA: GIMOTI Nasal Spray Patent Listed in FDA Orange Book
FIRST REPUBLIC BANK: Fitch Lowers & Withdraws 'D' LongTerm IDR
FIRST REPUBLIC BANK: Shut by Regulators; JPM Assumes Deposits
FIRST STUDENT: Moody's Lowers CFR & Senior Secured Debt to B1
FOCUS FINANCIAL: Moody's Cuts CFR to 'B1', Outlook Stable
FOCUS FINANCIAL: S&P Lowers Long-Term ICR to 'B+', Outlook Stable
FORMING MACHINING: $260M Bank Debt Trades at 22% Discount
FORREST CONCRETE: Court OKs Interim Cash Collateral Access
FRANCO'S PAVING: Court OKs Cash Collateral Access Thru July 31
FREE SPEECH: Wins Continued Cash Collateral Access
FXI HOLDINGS: Moody's Affirms Caa2 CFR & Rates New Sec. Notes Caa2
G & G TOWERING: Court OKs Interim Cash Collateral Access
GENESIS GLOBAL: Creditors Walk Away from Previous Restructuring Pla
GENESIS GLOBAL: Panel Taps Seward & Kissel as Litigation Counsel
GWG HOLDINGS: Solicitation Exclusivity Period Extended
H-FOOD HOLDINGS: $1.15B Bank Debt Trades at 17% Discount
H-FOOD HOLDINGS: $415M Bank Debt Trades at 17% Discount
H-FOOD HOLDINGS: $515M Bank Debt Trades at 17% Discount
HCC CATERERS: Case Summary & 20 Largest Unsecured Creditors
HOLLY ENERGY: S&P Places 'BB+' ICR on CreditWatch Positive
HOUGHTON MIFFLIN: Fitch Affirms LongTerm IDR at 'B', Outlook Stable
HYLAND SOFTWARE: Moody's Cuts CFR to B3 & Alters Outlook to Neg.
HYLIFE FOODS WINDOM: Seeks Chapter 11 Bankruptcy in Delaware
IEH AUTO PARTS: Unsecureds to Recover 10% in Liquidating Plan
INFOW LLC: Court Approves Rejected Firms' Fee Deal in Ch.11 Case
INTERNAP HOLDING: Seeks Chapter 11 Bankruptcy for 2nd Time
INVACARE CORP: Court Approves Chapter 11 Plan
INW MANUFACTURING: $340M Bank Debt Trades at 17% Discount
IQVIA INC: Moody's Hikes CFR to Ba1 & Senior Unsecured Bond to Ba2
IVANTI SOFTWARE: $545M Bank Debt Trades at 40% Discount
JUMBA LLC: Files Amendment to Disclosure Statement
KALERA INC: Court OKs $2.13MM DIP Loan from Sandton
KINGS 828 TRUCKING: Seeks to Hire Eric A. Liepins as Legal Counsel
LEAR CAPITAL: Contribution & Ongoing Operations to Fund Plan
LIFESCAN GLOBAL: $1.48B Bank Debt Trades at 21% Discount
LIGADO NETWORKS: $117.6M Bank Debt Trades at 44% Discount
LLM INTERNET: Unsecureds Will Get 100% of Claims in Plan
LONGRUN PBC: Unsecureds Will Get 8% of Claims in 3 Years
LUCIRA HEALTH: Bought by Pfizer for $36.4M at Bankruptcy Auction
M & S TRUCKING: Taps Southwest Arkansas Accounting Services
MANNINGTON: $261.3M Bank Debt Trades at 16% Discount
MARYLAND ECONOMIC: S&P Alters Outlook to Pos, Affirms 'BB+' LT ICR
MATTEL INC: Fitch Affirms 'BB+' LongTerm IDR, Outlook Positive
MAVENIR SYSTEMS: $145M Bank Debt Trades at 22% Discount
MAVENIR SYSTEMS: $585M Bank Debt Trades at 22% Discount
MAXAR TECHNOLOGIES: Moody's Withdraws B2 CFR on Advent Transaction
MERIDIEN ENERGY: $1.6MM DIP Loan from ICT-DIP Wins Interim OK
MERIDIEN ENERGY: U.S. Trustee Unable to Appoint Committee
MILLENNIUM URBAN: Voluntary Chapter 11 Case Summary
MOVING PROS: Unsecureds to Split $13K in Subchapter V Plan
NAVIENT CORP: Fitch Gives BB-(EXP) Rating on $500MM Unsec. Notes
NEWELL BRANDS: Moody's Affirms Ba1 CFR & Alters Outlook to Negative
PACIFICCO INC: Wins Final Cash Collateral Access
PALASOTA CONTRACTING: Wins Cash Collateral Access Thru May 15
PANOCHE ENERGY: Moody's Puts 'B1' Rating on Review for Upgrade
PERFORMANCE POWERSPORTS: Creditors to Get Proceeds From Liquidation
PILL CLUB PHARMACY: Court OKs Interim Cash Collateral Access
PILL CLUB PHARMACY: U.S. Trustee Appoints Creditors' Committee
PRECISION DRILLING: Fitch Alters Outlook on 'B+' IDR to Positive
PRESTON URGENT: Court OKs Interim Cash Collateral Access
PROVIDENT GROUP: Moody's Cuts Rating on Sr. Secured Bonds to Caa3
PUERTO RICO: PREPA Bondholders Argue for Lien Appeal
PUG LLC: $327.5M Bank Debt Trades at 19% Discount
QAD REALTY: Case Summary & One Unsecured Creditor
R&G DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors
R2&C LLC: Seeks to Hire Calaiaro Valencik as Bankruptcy Counsel
RECREATIONAL LIVING: Voluntary Chapter 11 Case Summary
RESOLUTE INVESTMENT: Moody's Cuts CFR to B2, On Further Review
REVERSE MORTGAGE: Chapter 11 Plan Confirmed by Court on 2nd Try
REVLON INC: Further Fine-Tunes Plan Documents
RIPE INC: Case Summary & 20 Largest Unsecured Creditors
RJT FOOD: Seeks to Hire Ronald D. Weiss as Bankruptcy Counsel
RYMAN HOSPITALITY: S&P Alters Outlook to Pos., Affirms 'B' ICR
SABRE GLBL: $404M Bank Debt Trades at 21% Discount
SALE LLC: Seeks to Hire Lipton Law Group as Bankruptcy Counsel
SEMRAD LAW: Court OKs Interim Cash Collateral Access
SENTINEL INTELLIGENCE: Case Summary & Two Unsecured Creditors
SILICON VALLEY BANK: Federal Reserve Takes Some Blame for Collapse
SINCLAIR TELEVISION: $750M Bank Debt Trades at 16% Discount
SORRENTO THERAPEUTICS: Hires Moelis & Company as Investment Banker
SOUTH VALLEY CEMENT: $16.5M Bank Debt Trades at 16% Discount
SOUTHERN HERITAGE: Court OKs Cash Collateral Access Thru May 23
SOUTHERN HOSPITALITY: Taps De Leo Law Firm as Bankruptcy Counsel
STARR GENERAL: Court OKs Interim Cash Collateral Access
STRUCTURLAM MASS TIMBER: U.S. Trustee Appoints Creditors' Panel
SVB FINANCIAL: Seeks Court Approval to Sell SVB Securities
TENET HEALTHCARE: Fitch Assigns BB- Rating on First Lien Notes
TGPC PROPERTIES: Gets Approval to Hire Realty One Group as Realtor
TMK HAWK: Moody's Lowers CFR & Tranche B Term Loan to Caa3
TRINITY INDUSTRIES: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
TUESDAY MORNING: Court Okays Sale to Hilco for $32.1 Million
TWIN CITIES GERMAN: S&P Affirms 'BB' Rating on 2013/19 Rev Bonds
UNITED PF HOLDINGS: $525M Bank Debt Trades at 23% Discount
UNIVERSAL DOOR: Unsecureds Will Get 2% of Claims in 60 Months
US STEEL: Fitch Gives BB Rating on New $240MM Environmental Bonds
VECTRA CO: S&P Downgrades ICR to 'CCC+' on Weaker Credit Metrics
VISTAM INC: Seeks to Hire Selwyn D. Whitehead as Legal Counsel
VIVO TECHNOLOGIES: Case Summary & 20 Largest Unsecured Creditors
WESTERN GLOBAL: Fitch Cuts LongTerm Issuer Default Rating to CCC-
YIELD10 BIOSCIENCE: Signs Investment LOI With Marathon Petroleum
[^] BOND PRICING: For the Week from May 1 to 5, 2023
*********
1325 LLC: Seeks to Extend Exclusivity Period to August 4
--------------------------------------------------------
1325, LLC asks the U.S. Bankruptcy Court for the Southern
District of Florida to extend its exclusive periods to file a
plan and disclosure statement and to solicit acceptances to
August 4, 2023 and November 4, 2023, respectively.
Unless extended, the Debtor's exclusivity period ends on May 4,
2023. The Debtor stated, however, that a motion for sale is set
for hearing on May 4, 2023, after the closing of which and
disbusement of proceeds, the case can be dismissed. The Debtor
explained that more time is needed to resolve issues in this
case.
1325, LLC is represented by:
Joel M. Aresty, Esq.
JOEL M. ARESTY, P.A.
309 1st Ave S
Tierra Verde, FL 33715
Tel: (305) 904-1903
Email: Aresty@Mac.com
About 1325 LLC
1325, LLC sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-10031) on Jan. 4,
2023, with $100,001 to $500,000 in assets and $500,001 to $1
million in liabilities. Judge Robert A Mark presides over the
case.
Joel M. Aresty, Esq., at Joel M. Aresty, P.A. is the Debtor's
legal counsel.
1716 R STREET: Property Sale Proceeds to Fund Plan
--------------------------------------------------
1716 R Street Flats LLC and The Z Flats L.L.C. filed with the U.S.
Bankruptcy Court for the District of Columbia a Disclosure
Statement with respect to First Amended Joint Plan of Liquidation
dated May 2, 2023.
1716 R Street Flats LLC and The Z Flats L.L.C. are single asset
real estate limited liability companies organized under the laws of
the District of Columbia with a principal place of business located
in the District of Columbia.
The sole significant tangible asset of each Debtor is Debtor's real
property located at:
* For 1716 R Street Flats LLC, the 1716 R Street Property:
that certain real property located at 1716 R Street, SE, Washington
DC 20020, Lot 0003, Square 5596, and all improvements thereon.
* For The Z Flats L.L.C. Z Flats Property: that certain real
property located at 116 Emerson Street, NW Washington, DC 20011,
Lot 0005, Square 3401, and all improvements thereon.
The events precipitating the Chapter 11 filing are the foreclosure
filings scheduled by WCP on the Debtors' properties.
The Plan proposes the sale of the Z Flats Property pursuant to the
Contract attached to the Plan, subject to higher and better bids.
Unless higher and better bids are received, the sales proceeds will
not exceed the first lien of Trustar Bank, and administrative and
general unsecured creditors will receive a distribution of $4,000
(the "Z Flats Reserve").
The Plan proposes to sell the 1716 R Street Property to WCP in
exchange for a $7,500 reserve (the "1716 R WCP Reserve").
Class 1C consists of the Unsecured Claims against The Z Flats, LLC.
On the Distribution Date, The Z Flats, LLC shall pay any amounts
left over from the Z Flats Reserve after payment of Administrative
and Priority Tax Claims, to holders of General Unsecured Claims in
full and complete satisfaction of General Unsecured Claims. The
Class 1C Claim is impaired. Holders of Allowed Class 1C Claims are
entitled to vote to accept or reject the Plan.
Class 2C consists of Unsecured Claims against 1716 R Street LLC. On
the Distribution Date, 1716 R Street LLC shall pay any amounts left
over from the 1716 R WCP Reserve after payment of Administrative
and Priority Tax Claims, to holders of General Unsecured Claims in
full and complete satisfaction of General Unsecured Claims. The
Class 2C Claim is impaired. Holders of Allowed Class 2C Claims are
entitled to vote to accept or reject the Plan.
Holders of Class 3 Interests shall retain their interests under the
Plan. Holders of Class 3 Interests will not receive any payments
unless and until all Holders of Allowed Class 1 and Class 2 Claims
are paid in full. Class 3 Interests are unimpaired under the Plan.
The Holders of Class 3 Interests are not entitled to vote to accept
or reject the Plan.
To generate sufficient funds to assist in consummating this Plan,
The Z Flats, L.L.C. will sell the Z Flats Property to Buyer within
60 days of confirmation free and clear of liens (the "Z Flats
Sale") pursuant to the contract attached to the Disclosure
Statement. The sales price will be not less than 1,360,000.00. The
sale will be subject to higher bids, including the right of Trustar
Bank to credit bid, provided that Trustar Bank agrees to pay costs
of sale, including realtors commissions and US Trustee fees, and
the Z Flats Reserve. Any bids must be received within 10 days after
the Confirmation Date, and provide for at least $1,365,000.00 in
consideration, and provide at least a $25,000 deposition.
In the event a higher and better bid is received, bidding will
proceed in $5,000 increments at an auction to be conducted within
30 days of the Confirmation Date. The Confirmation Order will
authorize the sale to Buyer. The tenants have no rights under the
Tenant Opportunity to Purchase Act ("TOPA") because this is a sale
through a Chapter 11 bankruptcy process and plan.
A full-text copy of the Disclosure Statement dated May 2, 2023 is
available at https://bit.ly/416Ds39 from PacerMonitor.com at no
charge.
Counsel for the Debtors:
Janet M. Nesse, Esq.
Justin P. Fasano, Esq.
McNamee Hosea, P.A.
6411 Ivy Lane, Suite 200
Greenbelt, MD 20770
Phone: 301-441-2420
Email: jnesse@mhlawyers.com
jfasano@mhlawyers.com
About 1716 R Street Flats
1716 R Street Flats, LLC, and affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.D.C. Lead Case No.
23-00017) on Jan. 16, 2023. In the petition signed by Richard
Cunningham, managing member, 1716 R Street Flats disclosed up to $1
million in assets and up to $10 million in liabilities.
Judge Elizabeth L. Gunn oversees the cases.
McNamee Hosea, PA, represents the Debtor as legal counsel.
1716 R STREET: Property Sale Proceeds to Fund Plan
--------------------------------------------------
1605 17th Street Flats LLC and 1601 17th Place Flats LLC,
affiliates of 1716 R Street Flats LLC, filed with the U.S.
Bankruptcy Court for the District of Columbia a Disclosure
Statement with respect to First Amended Joint Plan of Liquidation
dated May 2, 2023.
1605 17th Street Flats LLC and 1605 17th Street Flats LLC are
single asset real estate limited liability companies organized
under the laws of the District of Columbia with a principal place
of business located in the District of Columbia.
The sole significant tangible asset of each Debtor is Debtor's real
property located at:
* For 1605 17th Street Flats LLC, the 1605 Property: that
certain real property located at 1605 17th Street, SE Washington,
DC 20020, Lot 0033, Square 5596, and all improvements thereon.
* For 1605 17th Street Flats LLC: the 1601 Property: 1601 17th
Street, SE Washington, DC 20020, Lot 0033, Square 5596, and all
improvements thereon.
The events precipitating the Chapter 11 filing are the foreclosure
filings scheduled by WCP on the Debtors' properties.
The Plan proposes the sale of the 1601 Property pursuant to the
Contract attached to the Plan, subject to higher and better bids.
Unless higher and better bids are received, the sales proceeds will
not exceed the first lien of FVCBank, and administrative and
general unsecured creditors will receive a distribution of $7,000
(the "1601 Reserve").
The Plan proposes to sell the 1605 Property to WCP in exchange for
a $7,500 reserve (the "1605 WCP Reserve").
Class 1C consists of the Unsecured Claims against 1601 17th Place
Flats LLC. On the Distribution Date, 1601 17th Place Flats LLC
shall pay any amounts left over from the 1601 Reserve after payment
of Administrative and Priority Tax Claims, to holders of General
Unsecured Claims in full and complete satisfaction of General
Unsecured Claims. The Class 1C Claim is impaired. Holders of
Allowed Class 1C Claims are entitled to vote to accept or reject
the Plan.
Class 2C consists of the Unsecured Claims against 1605 17th Place
Flats LLC. On the Distribution Date, 1605 17th Place Flats LLC
shall pay any amounts left over from the 1605 Reserve after payment
of Administrative and Priority Tax Claims, to holders of General
Unsecured Claims in full and complete satisfaction of General
Unsecured Claims. The Class 2C Claim is impaired. Holders of
Allowed Class 2C Claims are entitled to vote to accept or reject
the Plan.
Holders of Class 3 Interests shall retain their interests under the
Plan. Holders of Class 3 Interests will not receive any payments
unless and until all Holders of Allowed Class 1 and Class 2 Claims
are paid in full. Class 3 Interests are unimpaired under the Plan.
The Holders of Class 3 Interests are not entitled to vote to accept
or reject the Plan.
To generate sufficient funds to assist in consummating this Plan,
1601 17th Place Flats LLC will sell the 1601 Property to Buyer
within 60 days of confirmation free and clear of liens (the "1601
Sale") pursuant to the contract attached to the Disclosure
Statement. The sales price will be not less than 780,000.00. The
sale will be subject to higher bids, including the right of FVCBank
to credit bid, provided that FVCBank agrees to pay costs of sale,
including realtors commissions and US Trustee fees, and the 1601
Reserve
Any bids must be received within 10 days after the Confirmation
Date, and provide for at least $785,000.00 in consideration, and
provide at least a $15,000 deposition. In the event a higher and
better bid is received, bidding will proceed in $5,000 increments
at an auction to be conducted within 30 days of the Confirmation
Date. The Confirmation Order will authorize the sale to Buyer.
At any time of WCP Fund I's choosing, 1605 17th Place Flats LLC
shall convey the 1605 Property to WCP Fund I, LLC or any other
entity to which WCP Fund I directs that 1605 17th Place Flats LLC
makes such transfer. WCP Fund I, LLC shall be responsible for all
costs of effectuating such transfer, including payment of all
required taxes and any required US Trustee fees.
A full-text copy of the Disclosure Statement dated May 2, 2023 is
available at https://bit.ly/416n0QA from PacerMonitor.com at no
charge.
Counsel for the Debtors:
Janet M. Nesse, Esq.
Justin P. Fasano, Esq.
McNamee Hosea, P.A.
6411 Ivy Lane, Suite 200
Greenbelt, MD 20770
Phone: 301-441-2420
Email: jnesse@mhlawyers.com
jfasano@mhlawyers.com
About 1716 R Street Flats
1716 R Street Flats, LLC and affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.D.C. Lead Case No.
23-00017) on Jan. 16, 2023. In the petition signed by Richard
Cunningham, managing member, 1716 R Street Flats disclosed up to $1
million in assets and up to $10 million in liabilities.
Judge Elizabeth L. Gunn oversees the cases.
McNamee Hosea, PA, represents the Debtor as legal counsel.
26 GLOBAL: Seeks Approval to Hire Ensafi Law as Bankruptcy Counsel
------------------------------------------------------------------
26 Global Development, Inc. seeks approval from the U.S. Bankruptcy
Court for the Central District of California to employ Ensafi Law,
PC as its bankruptcy counsel.
The firm will render these services:
a. give advice with respect to its power and duties as Debtor
in Possession;
b. negotiate with creditors in working out a plan, take legal
steps in order to confirm said plan;
c. appear before the court to negotiate a settlement with its
major creditors, and make appearance where necessary;
d. prepare necessary applications, answers, orders, reports
and other legal papers;
e. appear and protect the interest of the Debtor before the
bankruptcy judge; and
f. perform other legal services.
The firm will charge $350 per hour for attorney time.
The firm received a retainer in the amount of $10,000, plus the
filing fee of $1,738.
Laleh Ensafi, Esq., principal of Ensafi Law, assured the court that
the firm is a "disinterested person" within the meaning of 11
U.S.C. 101(14).
The firm can be reached through:
Laleh Ensafi, Esq.
Ensafi Law, PC
5121 Van Nuys Boulevard ste.203a
Sherman Oaks, CA
Phone: 888-503-2123
Email: ensafilaw@gmail.com
About 26 Global Development
26 Global Development, Inc. sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
23-12031) on April 4, 2023, listing up to $50,000 in both assets
and liabilities. Laleh Ensafi, Esq. at Ensafi Law, PC represents
the Debtor as counsel.
476 GATES REALTY: Property Sale Proceeds to Fund Plan
-----------------------------------------------------
476 Gates Realty LLC filed with the U.S. Bankruptcy Court for the
Eastern District of New York a Disclosure Statement describing Plan
of Reorganization dated May 2, 2023.
The Debtor owns the real property at 476 Gates Avenue, Brooklyn,
New York 11216, (the "Property"). The Property is an eight-unit
apartment building.
The Property is encumbered by a $3,820,000 first mortgage held by
Normandy Capital Trust ("Lender"). The Property is also encumbered
by a disputed $950,000 collateral second mortgage held by Sachem
Capital Corp. The second mortgage was placed on the Property as
additional collateral to secure a loan on another property owned by
the Debtor's principal. There is also a disputed $600,000
mechanic's lien filed against the Property which the Debtor
disputes.
Since the Debtor believes the Property value is less than the
secured debt encumbering the Property, the Debtor filed this case
to either restructure the debt or sell the Property on an arm's
length basis to maximize the return to creditors.
Class 6 consists of General Unsecured Claims. Claims total
approximately $32,000. Payment of sale proceeds up to amount of
Allowed Amount of Claims after payment of Administrative Claims,
unclassified Priority tax Claims, and Class 1, Class 2, Class 3,
Class 4 and Class 5 Claims. This Class is Impaired and entitled to
vote to accept or reject the Plan.
Class 7 consists of Interests Holders. Payment of available cash
after payment of Administration claims, unclassified Priority tax
Claims, and Class 1, 2, 3, 4, 5 and 6 Claims. This Class is
Impaired and entitled to vote to accept or reject the Plan.
Payments under the Plan will be paid from the Property sale
proceeds. Prior to or on the Effective Date, the Property shall be
sold to Purchaser free and clear of all Liens, Claims, and
encumbrances, with any such Liens, Claims, and encumbrances to
attach to the Property Sale Proceeds, and disbursed in accordance
with the provisions of this Plan.
Notwithstanding anything to the Contrary in the Plan each Secured
Creditor including the First and Second Mortgagees retains the
right to credit bid under the Plan to the extent of its Allowed
Secured Claim, but in addition to its credit bid, to ensure Plan
feasibility, any bid by a Secured Creditor must include a cash
component to cover the costs of sale, Senior Lien Claims,
Administrative Claims, Priority Claims, and a $25,000 reserve fund
for the costs of wrapping up the case.
A full-text copy of the Disclosure Statement dated May 2, 2023 is
available at https://bit.ly/3B2idEU from PacerMonitor.com at no
charge.
Attorney for the Debtor:
Mark A. Frankel, Esq.
Backenroth Frankel & Krinsky, LLP
800 Third Avenue
New York, NY 10022
Telephone: (212) 593-1100
Facsimile: (212) 644-0544
Email: mfrankel@bfklaw.com
About 476 Gates Realty
476 Gates Realty, LLC, is engaged in activities related to real
estate. The Debtor is the fee simple owner of a property located
at 476 Gates Ave., Brooklyn, N.Y., valued at $4.1 million.
476 Gates Realty filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-40351) on Feb. 1,
2023, with $1 million and $10 million in both assets and
liabilities. Theordore Feldheim, member, signed the petition.
Judge Jil Mazer-Marino oversees the case.
The Debtor is represented by Mark A. Frankel, Esq., at Backenroth
Frankel & Krinsky, LLP.
634 WILSON: Seeks to Hire Kirby Aisner as Bankruptcy Counsel
------------------------------------------------------------
634 Wilson Ave LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the Eastern District of New York to hire Kirby
Aisner & Curley LLP as their bankruptcy counsel.
The firm will render these services:
(a) advise the Debtor with respect to its powers, duties, and
responsibilities in the continued management of its property and
affairs;
(b) negotiate with creditors of the Debtor and work out a plan
of reorganization and take the necessary legal steps to effectuate
such a plan;
(c) prepare legal papers;
(d) appear before the Bankruptcy Court to protect the interest
of the Debtor and to represent the Debtor in all matters pending
before the court;
(e) attend meetings and negotiate with representatives of
creditors and other parties in interest;
(f) advise the Debtor in connection with any potential
refinancing of secured debt, if necessary, and any potential sale
of its assets;
(g) represent the Debtor in connection with obtaining
post-petition financing, if necessary;
(h) take any necessary action to obtain approval of a
disclosure statement and confirmation of a plan of reorganization;
and
(i) perform all other legal services for the Debtor.
The hourly rates of the firm are as follows:
Partners $450
Associates $295
Paraprofessionals $150
In addition, the firm will seek reimbursement for expenses
incurred.
The firm received third-party pre-petition retainer payments
totaling $65,000.
Erica Feynman Aisner, Esq., an attorney at Kirby Aisner & Curley,
disclosed in a court filing that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Erica Feynman Aisner, Esq.
Kirby Aisner & Curley LLP
221 Himrod Street
Brooklyn, NY 11237
Tel: (914) 401-9500
Email: jcurley@kacllp.com
About 634 Wilson Ave
634 Wilson Ave LLC, et al., own multi-family properties in
Brooklyn, New York,
634 Wilson Ave LLC, along with affiliates 221 Himrod ST LLC,
867-871 Knickerbocker LLC, 299 Throop Ave LLC, 1427 43 ST LLC,
sought Chapter 11 protection (Bankr. E.D.N.Y. Lead Case No.
23-41156) on April 4, 2023. In the petition filed by Zalmen
Wagschal, as sole member, the Debtor reported assets and
liabilities between $1 million and $10 million each.
The Honorable Bankruptcy Judge Jil Mazer-Marino handles the cases.
The Debtors are represented by Erica Feynman Aisner, Esq. at Kirby
Aisner & Curley LLP.
ACJK INC: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------
The U.S. Trustee for Region 11 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of ACJK Inc.
About ACJK Inc.
ACJK Inc. -- https://granitecity.medicap.com/ -- doing business as
Medicap Pharmacy, is a local pharmacy that offers services such as
immunizations, medication therapy management, multi-dose packaging,
medication synchronization, important health screenings, and expert
care.
ACJK filed a petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. S.D. Ill. Case No. 23-30045) on January 30, 2023. In
the petition filed by Mark Allen, manager, the Debtor reported $1
million to $10 million in both assets and liabilities.
Judge Laura K. Grandy oversees the case.
The Debtor tapped Michael J Benson, Esq., at A Bankruptcy Law Firm,
LLC as bankruptcy counsel and Mark Cuker, Esq., at Jacobs Law
Group, PC and Keith Short, Esq., at Keith Short & Associates as
litigation counsel.
AKORN INC: Recalls Products Nationwide After Filing Bankruptcy
--------------------------------------------------------------
Zoey Becker of Fierce Pharma reports that after declaring
bankruptcy two months ago and closing all production sites, Akorn
is yanking its products from the market.
Akorn on Wednesday, April 26, 2023, put out a voluntary recall of
both its human and animal products, a list that includes more than
70 medications. When the company shut down in February 2023, so too
did its quality program, so Akorn can no longer ensure the products
work as intended or are safe, it said in a statement.
The company is notifying distributors and asking them to notify
customers about the recall. It's also requesting that the recalled
products be destroyed.
Akorn called it quits back in February 2023 after several years of
turmoil. The company tried to sell itself to Fresenius back in
2018, but that deal ended in a courtroom fight and Fresenius
walked.
After that, Akorn weathered a series of FDA warning letters,
citations and Form 483 filings.
By the time the company closed its doors, it had been “running at
a loss for some time” and was unable to secure the financing
needed to continue operations, CEO Douglas Boothe wrote in a letter
to employees earlier this 2023.
With the bankruptcy, Akorn laid off all of its staffers.
About Akorn, Inc.
Akorn, Inc. (Nasdaq: AKRX) -- http://www.akorn.com/-- is a
specialty pharmaceutical company that develops, manufactures, and
markets generic and branded prescription pharmaceuticals, branded
as well as private-label over-the-counter consumer health products,
and animal health pharmaceuticals. Akorn is headquartered in Lake
Forest, Illinois, and maintains a global manufacturing presence,
with pharmaceutical manufacturing facilities located in Illinois,
New Jersey, New York, Switzerland, and India.
Akorn, Inc. and its affiliates sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 20-11178) on May 20, 2020.
As of March 31, 2020, the Debtors disclosed total assets of
$1,032,275,000 and total liabilities of $1,051,769,000.
Previously, the cases were assigned to Judge John T. Dorsey, but
Judge Karen B. Owens now oversees the Debtors' case. The Debtors
tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP
as their general bankruptcy counsel. Richards, Layton & Finger,
P.A., is the Debtors' local counsel. AlixPartners, LLP, serves as
the Debtors' restructuring advisor, and PJT Partners LP is the
financial advisor and investment banker. Kurtzman Carson
Consultants, LLC, is the notice and claims agent.
AL NGPL: $90MM Incremental Loan No Impact on Moody's 'Ba3' Rating
-----------------------------------------------------------------
Moody's Investors Service said AL NGPL Holdings, LLC's (AL NGPL,
Ba3 stable) ratings and outlook are not affected by the
announcement the company is seeking a $90 million incremental term
loan B. The $90 million increase in term loan balance will bring
the term loan balance to $477 million as of year-end 2022, on a pro
forma basis. The proceeds from the incremental term loan will be
used to fund a distribution to its owner. The increase in leverage
is credit negative, but the metrics remain consistent with the
ratings. The incremental term loan funding is subject to obtaining
lender commitments and obtaining the necessary approval from
existing credit facility lenders.
AL NGPL Holdings LLC is a holding company established in connection
with the March 2021 purchase by ArcLight of a 25 percent stake in
NGPL PipeCo LLC.
ALL ACTION SECURITY: Court OKs Deal on Cash Collateral Access
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
San Fernando Valley Division, authorized All Action Security
Consulting Group, Inc. to use cash collateral on an interim basis
in accordance with its agreement with JP Morgan Chase Bank NA.
The parties agreed to these material terms:
1. JP Morgan consents to the Debtor's use of cash collateral
until entry of an order confirming the Debtor's Chapter 11 plan of
reorganization contingent upon the Debtor's compliance with the
terms of the Stipulation.
2. The Debtor may use cash collateral consistent with the
terms of the proposed Budget. JP Morgan reserves its right to
object to any expenses listed in the Budget.
3. The Debtor will segregate all cash collateral in a separate
DIP bank account and file monthly operating reports reflecting
income and expenses as required by the Bankruptcy Code.
4. JP Morgan will be granted postpetition replacement lien(s)
on the Collateral, to the same extent and priority as any duly
perfected and unavoidable liens in cash collateral held by JP
Morgan as of the Petition Date.
5. Commencing April 1, 2023, the Debtor will tender monthly
adequate protection payments of $5,703 to JP Morgan. Adequate
Protection Payments will continue on the first 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. JP Morgan may apply the Adequate Protection
Payments to the account consistent with the terms of the Subject
Loan and Bankruptcy Law.
6. The Debtor will maintain all required insurance for the
business and Collateral.
7. The Debtor will file a motion and revised budget with the
Court to extend the use of cash collateral or file an Amended
Stipulation with JP Morgan for the continued use of cash
collateral.
8. In the event the Debtor defaults on any of the provisions
contained in the Stipulation, JP Morgan will provide the Debtor and
the Debtor's counsel with written notice of said default. In the
event the Debtor fails to cure the default amount after the passage
of 14-calendar days from the date of service of the first default
notice, JP Morgan may upload a declaration of default and proposed
order terminating the automatic stay providing interested parties
with an opportunity object and request a hearing on the proposed
order pursuant to LBR 9013-1(o)]. In the alternative, JP Morgan may
file a motion to dismiss or convert the case.
9. JP Morgan's legal, equitable, and contractual rights shall
remain unchanged with respect to its security interest in the
Collateral except as noted.
10. JP Morgan reserves all rights to object to confirmation of
the plan, file a motion for relief from the automatic stay, file a
motion to dismiss or convert the Debtor's case, or take any other
action permitted by the provisions of the Bankruptcy Code.
11. Nothing in the Stipulation will be construed as
modification or a consent to a modification of JP Morgan's claim in
the Debtor's proposed Chapter 11 plan.
12. The Debtor and all other parties in interest, reserve any
and all rights that they may have to object to JP Morgan's claims,
and to object to the validity, priority and extent of the bank's
liens, if any, encumbering the Debtor's assets.
13. In the event the Debtor's case is dismissed or converted to
any other chapter under the Bankruptcy Code, the terms of the
Stipulation will be void.
A copy of the stipulation is available at https://bit.ly/3Lleo2H
from PacerMonitor.com.
A copy of the order is available at https://bit.ly/3LIa8eJ from
PacerMonitor.com.
About All Action Security Consulting Group, Inc.
All Action Security Consulting Group, Inc. is a service company and
provides security guard services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-11429) on December
12, 2022. In the petition signed by John Ayam, chief executive
officer, the Debtor disclosed up to $1 million in both assets and
liabilities.
Judge Victoria S. Kaufman oversees the case.
Matthew D. Resnik, Esq., at RHM Law, LLP, is the Debtor's legal
counsel.
ALL AMERICAN BLACK: Court OKs Cash Collateral Access Thru Oct 31
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia,
Alexandria Division, authorized All American Black Car Service,
Inc. to use the cash collateral of Swift Financial on an interim
basis, with a 10% variance, through October 31, 2023.
With the exclusion of a motor vehicles, Swift Financial has a lien
against the Debtor's assets by reason of a UCC-1 Financing
Statement filed with the Clerk of the State Corporation Commission.
As a result, Swift Financial holds a security interest in the
Debtor's cash collateral -- its cash in hand, accounts receivable,
and proceeds -- pursuant to 11 U.S.C. section 363.
The Debtor will use cash collateral to fund operations.
As adequate protection to Swift Financial for the Debtor's use of
the cash collateral, the Debtor will make weekly payments to Swift
Financial beginning on the second business day after entry of the
order and then on the same day of each week thereafter until the
first to occur of (a) further Court order; or (b) entry of an order
confirming a plan of reorganization; converting the matter to
Chapter 7; or dismissing the matter.
As adequate protection for the use or diminution of the interests
of Swift Financial in the cash collateral, pursuant to 11 U.S.C.
section 361, Swift Financial will have replacement liens on all of
the Debtor's post-petition assets and the proceeds thereof, which
replacement liens will be limited solely to any diminution in value
of any interest in the cash collateral from and after the Petition
Date.
These events constitute an "Event of Default":
(a) Conversion of the case to a case under Chapter 7 of the
Bankruptcy Code;
(b) The appointment of a Trustee in the bankruptcy case; or
(c) The dismissal of the bankruptcy case.
The Court order provides that any party-in-interest may file, no
later than June 12, 2023, any objection to contest whether Swift
Financial has a perfected lien in any collateral of the Debtor. Any
findings or relief granted will be subject to any ruling the Court
may make in the event of an objection.
A copy of the Court's order and the Debtor's is available at
https://bit.ly/3naVP9n from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$33,757 for May 2023;
$33,757 for June 2023;
$36,507 for July 2023;
$39,007 for August 2023;
$36,407 for September 2023; and
$39,007 for October 2023.
About All American Black Car Service, Inc.
All American Black Car Service, Inc. designs, builds, and installs
custom closet packages.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Va. Case No. 23-10468) on March 23,
2023. In the petition signed by Sohail Cheema, president, the
Debtor disclosed up to $500,000 in both assets and liabilities.
Judge Brian F. Kenney oversees the case.
John P. Forest, II, Esq., at the Law Office of John P. Forest, II,
represents the Debtor as legal counsel.
ALL DAY ACQUISITIONCO: $200M Bank Debt Trades at 85% Discount
-------------------------------------------------------------
Participations in a syndicated loan under which All Day
AcquisitionCo LLC is a borrower were trading in the secondary
market around 15.5 cents-on-the-dollar during the week ended
Friday, May 5, 2023, according to Bloomberg's Evaluated Pricing
service data.
The $200 million facility is a Term loan that is scheduled to
mature on December 29, 2025. The amount is fully drawn and
outstanding.
All Day AcquisitionCo LLC does business as Reorganized 24 Hour
Fitness Worldwide Inc., an operator of fitness centers in the US.
ALTERRA MOUNTAIN: Moody's Rates New $500MM 1st Lien Revolver 'B1'
-----------------------------------------------------------------
Moody's Investors Service assigned B1 ratings to Alterra Mountain
Company's proposed new $500 million senior secured first lien
revolver that expires in 2028 and a new $500 million senior secured
first lien term loan due 2030. Proceeds from new first lien term
loan will be used to repay the remaining $310 million balance on
the existing first lien term loan due 2024 as well as add $190
million of cash to the balance sheet to fund general corporate uses
including purchase of management incentive program. The company's
existing ratings including the B1 Corporate Family Rating, B1-PD
Probability of Default Rating, the B1 ratings for its senior
secured first lien credit facilities (revolver and term loans) and
stable outlook are not affected.
Pro forma for the transaction, Alterra's Moody's adjusted
debt-to-EBITDA leverage is in the low 5x for the LTM period ended
January 31, 2023. Moody's expects leverage will decline through
earnings growth to the mid 4x range by the end of fiscal year ended
July 2024, which is within the range Moody's expects for Alterra at
the B1 rating level given its operating profile. Alterra has very
good pricing power. The company delivered strong operating
performance over the last year and Moody's expects ski demand to
remain stable over the next year. Additionally, Moody's expects the
company to maintain very good liquidity over the next year. The
company had about $1.1 billion of cash at January 31 (prior to the
proposed financing) with access to its newly proposed undrawn $500
million revolver providing additional liquidity support. Alterra is
expected to increase growth capital spending over the next couple
of years to upgrade facilities to provide more amenities and
further improve the guest experience. The investments will be
mostly funded with operating cash flow with any remaining amount
funded from its large cash balance.
Moody's expects to withdraw the B1 rating on the existing revolver
and term loan (both due 2024) at the close of the refinancing
transaction if they are retired as anticipated.
Moody's took the following rating actions:
Issuer: Alterra Mountain Company
Proposed new senior secured first lien revolver and term loan,
assigned B1
RATINGS RATIONALE
Alterra's B1 CFR reflects moderate financial leverage with Moody's
adjusted debt-to-EBITDA in the low 5x as of the 12 months ended
January 31, 2023 and pro forma for the proposed refinancing.
Barring a deep recession, Moody's expects stable demand for ski and
outdoor leisure activities over the next 12 to 18 months and
expects debt-to-EBITDA leverage will decline to the mid 4x through
earnings growth. The rating also reflects that Alterra's operating
results are highly seasonal and exposed to varying weather
conditions and discretionary consumer spending. Reinvestment needs
are significant to maintain the ski facilities, continually improve
the guest experience and sustain the competitive position and
ability to charge premium prices. Governance factors primarily
relate to the company's aggressive financial policies under private
equity ownership and acquisition strategy.
However, the rating is supported by Alterra's strong position as
one of the largest operators in the North American ski industry,
operating 16 ski resorts in the US and Canada. Alterra benefits
from its good geographic diversification, and high local skier
customer mix given its mostly regional portfolio of ski properties.
The growing penetration of the Ikon pass provides a stable revenue
stream that helps mitigate weather exposure. The North American ski
industry has high barriers to entry and has exhibited resiliency
even during weak economic periods, including the 2007-2009
recession. The company's very good liquidity reflects its material
cash balance of $1.1 billion as of January 2023 ($1.3 billion pro
forma for the proposed financing) and access to an undrawn new $500
million revolver facility due 2028. The company expects to increase
its growth capital spending over the next year, which will be
funded with operating cash flow as well as the large cash balance.
Alterra has flexibility to adjust capital spending depending on
operating performance to preserve cash if necessary.
Alterra's ESG credit impact score is highly negative (CIS-4).
Alterra's highly negative governance risk exposure is the primary
driver of the CIS-4 reflecting its concentrated ownership and
decision making by private equity financial sponsors and aggressive
financial strategy that includes operating with high financial
leverage in an industry that is capital intensive and reliant on
discretionary consumer spending. Moderately negative social risk
exposure a lesser factor. Although Alterra has highly negative
environmental risk exposure that requires investment to manage, the
company is focused on protecting natural resources and water
sustainability.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that debt-to-EBITDA
leverage will decline to the mid 4x range by the end of the July
2024 fiscal year through earnings growth. The stable outlook also
reflects that the company's very good liquidity provides
considerable flexibility to reinvest and manage operations should
earnings be weaker than expected.
The ratings could be upgraded if Alterra continues to grow
organically while sustaining debt-to-EBITDA below 4.0x, retained
cash flow (RCF)-to-net debt exceeds 17.5%, and the company
maintains very good liquidity. The company would also need to
sustain good reinvestment in operations to maintain strong consumer
demand to be considered for an upgrade.
The ratings could be downgraded if debt-to-EBITDA is sustained
above 5.0x, or RCF-to-net debt falls below 7.5%. Weak reinvestment,
visitation declines, or margin deterioration could also lead to a
downgrade. In addition, if there is a material weakening of
liquidity for any reason, or the company's financial policies
become more aggressive, including undertaking a large debt-funded
acquisition or the payment of dividends, the ratings could be
downgraded.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Headquartered in Denver, Colorado, Alterra Mountain Company
("Alterra") is owned and controlled by an investor group comprised
of private equity firm KSL Capital Partners and a minority position
held by family office/investment firm Henry Crown & Company.
Through its subsidiaries, Alterra is one of North America's premier
mountain resort and adventure companies, operating 16 destinations
in the US and Canada. The company also owns Canadian Mountain
Holidays, a heli-skiing operator and aviation business. Alterra is
private and does not publicly disclose its financials. For the
twelve months ended January 31, 2023, the company generated revenue
of about $1.7 billion.
ALTERRA MOUNTAIN: S&P Rates New $500MM Term Loan B 'B+'
-------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating and '3'
recovery rating to Alterra Mountain Co.'s proposed $500 million
term loan B and revolving credit facility. The '3' recovery rating
indicates its expectation for average (50%-70%; rounded estimate:
50%) recovery for lenders in the event of a payment default.
S&P said, "While the proposed facilities modestly reduce the
recovery prospects for the company's existing term loan lenders,
the change is not significant enough for us to lower our 'B+'
issue-level rating or revise our '3' recovery rating on its secured
debt. Alterra will use the proceeds from the proposed facilities to
refinance approximately $310 million of existing term loans due in
2024, as well as for general corporate purposes, including payments
associated with its management incentive program that have accrued
over the past six years. Because of the additional secured debt, we
modestly revised our rounded recovery estimate for its existing
lenders to 50% from 60%.
"Our 'B+' issuer credit rating and stable outlook on the company
are unchanged. We expect Alterra will generate S&P Global
Ratings-adjusted EBITDA of $525 million-$550 million in fiscal year
2023 (ending July 31, 2023). We also expect it will maintain
leverage of about 5x through fiscal year 2024. The stable outlook
reflects our expectation that Alterra will maintain leverage below
our 6x downgrade threshold despite the modest incremental
leveraging stemming from the proposed transaction. We also expect
its leverage would remain below our 6x threshold even if skier
visitation and its revenue moderate toward pre-pandemic levels
while its EBITDA margin declines modestly due to increased labor
and other costs."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- Pro forma for the proposed transaction, the company's
first-lien debt comprises the new $500 million revolving credit
facility due in 2028, approximately $2 billion of outstanding term
loans due 2028, and $500 million term loan B due 2030.
-- The '3' recovery rating on the company's first-lien facilities
indicates S&P's expectation for average (50%-70%; rounded estimate:
50%) recovery for lenders in the event of a payment default.
-- S&P's simulated default scenario contemplates a payment default
occurring by 2027 due to the combination of a prolonged economic
downturn and unfavorable ski conditions at the company's resorts.
-- S&P assumes the company would reorganize following a default
and use an emergence EBITDA multiple of 7x to value it.
Simplified default assumptions
-- Year of default: 2027
-- EBITDA at emergence: $240 million
-- EBITDA multiple: 7x
-- Revolving credit facility: 85% drawn at default
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $1.6
billion
-- Obligor/nonobligor split: 80%/20%
-- Estimated first-lien debt claims: $2.9 billion
-- Value available for first-lien claims: $1.5 billion
--Recovery expectations: 50%-70% (rounded estimate: 50%)
Note: All debt amounts include six months of prepetition interest.
AMERICANAS S.A.: Minority Shareholders Name New Board
-----------------------------------------------------
Daniel Cancel of Bloomberg News reports that shareholders of
embattled Brazilian retailer Americanas SA voted to ratify most of
the names proposed for its board of directors, after the firm sank
into bankruptcy in January 2023 following the revelation of a
massive accounting error. At a general meeting held Saturday,
April 29, 2023, Carlos Sicupira, one of the billionaire founders of
3G Capital Inc. that's also among Americanas' largest shareholders,
was reelected to the board. Minority shareholders managed to elect
Pierre Moreau. He was proposed by shareholders that include
Bonsucex Holding, Silvio Tini de Araujo, and EWZ Brasil Fundo.
Reuters reported May 1, 2023, that Americanas SA announced the
resignation of former chief executive officer Jose Timotheo de
Barros, who was relieved of most of his duties earlier this year
amid investigations over accounting "inconsistencies." Barros has
resigned from his position as head of Americanas' "brick and
mortar," logistics and technology, the company said in a filing.
Americanas, backed by the billionaire trio that founded investment
firm 3G Capital, entered bankruptcy protection last month after
disclosing "inconsistencies" in its accounting worth 20 billion
reais ($3.8 billion).
About Americanas SA
Americanas was one of the largest diversified retail chains in
Brazil, with a wide platform of physical stores, robust e-commerce,
fintech, and has just entered into the niche food retail. It is
listed on B3, being indirectly controlled by billionaire Jorge
Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles.
The retailer nosedived in January 2023 after becoming mired in an
accounting scandal. The firm filed for bankruptcy at a court in Rio
de Janeiro on Jan. 19, 2023.
Americanas sought protection under Chapter 15 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-10092) on Jan. 25,
2023. White & Case LLP, led by John K. Cunningham, is the U.S.
counsel.
ANCHOR GLASS: $647M Bank Debt Trades at 25% Discount
----------------------------------------------------
Participations in a syndicated loan under which Anchor Glass
Container Corp is a borrower were trading in the secondary market
around 74.7 cents-on-the-dollar during the week ended Friday, May
5, 2023, according to Bloomberg's Evaluated Pricing service data.
The $647 million facility is a Term loan that is scheduled to
mature on December 7, 2023. About $609.8 million of the loan is
withdrawn and outstanding.
Anchor Glass Container Corporation manufactures containers. The
Company produces glass containers for the food, beverage, beer,
liquor, and consumer product industries.
ARCHDIOCESE OF NEW ORLEANS: Guidry Recuses Over Donations Scandal
-----------------------------------------------------------------
Ramon Antonio Vargas of The Guardian reports that a federal judge
overseeing a bankruptcy filing from the US’s second-oldest Roman
Catholic archdiocese has recused himself from the case amid
scrutiny of his donations to the church as well as his close
professional relationship with an attorney representing
archdiocesan affiliates in insurance disputes.
Greg Guidry, who was appointed to the judicial bench at New
Orleans's federal courthouse by the Donald Trump White House in
2019, issued an order after 8pm on Friday, April 28, 2023, recusing
himself from a role handling appeals in a contentious bankruptcy
involving nearly 500 clergy sexual abuse victims.
It came a week after the Associated Press reported that he had
donated tens of thousands of dollars to the archdiocese before
consistently ruling in favor of New Orleans's Catholic church
during its Chapter 11 bankruptcy filing. And Guidry's ruling came
hours after the Guardian had joined the AP in asking questions
about a lawyer who was involved in making those donations while his
firm defended archdiocesan-related ministries – such as assisted
living homes – and the church itself as an employer in medical
malpractice lawsuits.
"I do not believe [recusal] is mandated, and no party has filed a
motion to [recuse] me," Guidry's order read. "However, balancing my
duty to decide the case with my duty to consider self-recusal if
appropriate, I have decided to recuse myself from this matter in
order to avoid any possible appearance of personal bias or
prejudice."
Guidry's order on Friday, April 28, 2023, marked a stark reversal
of course from just a week earlier, when he told attorneys involved
in the bankruptcy case that a federal judiciary committee on codes
of conduct had approved his continuing to handle appeals related to
the case despite his giving nearly $50,000 to New Orleans-area
Catholic charities from leftover contributions he received after
serving 10 years in the elected position of Louisiana state supreme
court justice.
It also seems likely to throw a bankruptcy case which has been
ongoing since May 1, 2020 into disarray because of a federal legal
precedent subjecting every ruling in a matter by a recused judge to
be potentially reviewed and nullified.
Bankruptcy court records show that the campaign finance committee
chairperson who greenlighted Guidry's donations to the New Orleans
archdiocese which serves a half-million Catholics – a prominent
local attorney named John Litchfield – had been paid at least
$80,000 directly from the local church. Litchfield told the
Guardian late Friday morning that an associate at his firm had
landed his office work defending some archdiocesan affiliates –
mainly nursing homes or other senior living centers – from
medical malpractice claims.
But Litchfield insisted his firm had steered well clear of the most
contentious claims at the center of the bankruptcy: those of many
people who claimed to have been molested as children by Catholic
priests and deacons. And he argued that Guidry could retain the
impartiality required of federal judges despite his support of the
archdiocese and Litchfield's business with the church.
"If Greg didn't think he'd be fair, he'd recuse himself," said
Litchfield, who acknowledged on Friday in his interview with the
Guardian that the AP had also just contacted him about his
relationship with Guidry. "I know Greg Guidry. I know him well. And
he’s as straight as they come."
Late Friday, April 26, 2023, morning, University of Richmond law
professor Carl Tobias said he believed Guidry should recuse himself
when Litchfield's relationship to Guidry was described to him,
citing a law requiring federal judges to avoid even the appearance
of a conflict of interest.
"It does sound to me like there are enough connections between the
judge and the church and the counsel … to at least ask that
question" about whether Guidry should recuse himself, Tobias said.
"That's a legitimate question to ask."
Meanwhile, legal ethics professor Kathleen Clark told the AP:
“The public shouldn’t have to rely on a judge’s personal
certainty about his own rectitude.” She added that Guidry’s
initial resistance to recusal was “misguided and ethically
blind”.
Most of the gifts to the church by Guidry which the AP first
reported last week – $36,000 – came in the months after the
archdiocese asked New Orleans's federal bankruptcy court for
protection from creditors while it reorganized its financial books
as it was faced with a wave of sexual abuse lawsuits as well as
activity restrictions associated with the Covid-19 pandemic.
Newsletters issued by the archdiocese’s charitable arm even
recognized Guidry and his wife among its donors for separate,
private and unspecified contributions in 2017.
Once assigned to handle appeals in the bankruptcy case, Guidry
denied a request to unseal some secret church documents outlining
how archdiocesan officials handled clerics suspected of sexually
abusing children, including more than 80 priests and deacons who
the local church itself acknowledges are strongly suspected of
preying on minors.
Guidry recently upheld a financially ruinous $400,000 fine against
local lawyer Richard Trahant, who represents clergy abuse victims
and was accused of violating a confidentiality order when he warned
a local principal that his school was employing a priest who
admitted to previously sexually molesting a teenage girl. He also
upheld the expulsions of four of Trahant's clients from a committee
of clerical sexual abuse survivors who are involved in the
bankruptcy after word of his warning to the local school principal
– who, coincidentally, is Trahant's cousin – made the news.
Furthermore, in addition to the opinion from the judiciary
committee which Guidry cited when he initially indicated he would
not recuse himself, the judge said in writing that he would stay on
the case after seeking informal advice from federal appellate court
judge Jennifer Walker Elrod about what to do. Elrod, meanwhile, is
scheduled next week to hear an appeal from one of the expelled
committee members who was represented by Trahant.
Guidry at one point provided pro bono services and served as a
board member for the New Orleans archdiocese's charitable arm,
which was involved in at least one multimillion-dollar settlement
to victims beaten and sexually abused at two local Catholic
orphanages. Two of Trahant's clients who were ousted from the
committee at the center of the appeal which Elrod is scheduled to
hear were abused at one of those archdiocesan orphanages in
Marrero, a suburban area of New Orleans.
Guidry joins several of his colleagues in New Orleans's federal
judiciary who have recused themselves from the bankruptcy or
related litigation, illustrating the multitude of links shared by
the region’s legal establishment and the local archdiocese.
One of those judges previously worked as the archdiocese's general
counsel and is married to a former US senator, David Vitter. A
second has served on a nonprofit which supports numerous
archdiocesan ministries, and another has acknowledged a role in
behind-the-scenes media relations campaigns that executives of the
National Football League's New Orleans Saints team helped the
archdiocese mount after prominent media reporting on church sexual
abuse cases in 2018 and 2019.
The Guardian asked Guidry, through a US federal courts
spokesperson, whether he had told the judiciary committee about
either his role with the orphanages or his relationship with
Litchfield. The spokesperson replied with Guidry's motion to recuse
himself.
Guidry's recusal comes as federal judges' relationships with
parties who have business before their courts are being examined
even at the highest levels.
ProPublica recently reported the close friendship between Clarence
Thomas, the senior conservative on the US supreme court, and the
Republican megadonor Harlan Crow.
Without declaring them, Thomas received from Crow extensive gifts
including luxury travel and resort stays. Crow also bought a home
in which Thomas's mother lives and donated money to groups
connected to Ginni Thomas, the justice's far-right activist wife.
Thomas and Crow have denied wrongdoing.
On Tuesday, April 24, 2023, Politico reported that another
conservative supreme court justice, Neil Gorsuch, pocketed up to
$500,000 from a property sale shortly after joining the court but
did not disclose that the buyer was the chief executive of a law
firm with business before the court.
Gorsuch has not commented while the executive at the law firm has
denied wrongdoing.
About The Roman Catholic Church of
the Archdiocese of New Orleans
The Roman Catholic Church of the Archdiocese of New Orleans --
https://www.nolacatholic.org/ -- is a non-profit religious
corporation incorporated under the laws of the State of Louisiana.
Created as a diocese in 1793, and established as an archdiocese in
1850, the Archdiocese of New Orleans has educated hundreds of
thousands in its schools, provided religious services to its
churches and provided charitable assistance to individuals in need,
including those affected by hurricanes, floods, natural disasters,
war, civil unrest, plagues, epidemics, and illness. Currently, the
archdiocese's geographic footprint occupies over 4,200 square miles
in southeast Louisiana and includes eight civil parishes:
Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. John
the Baptist, St. Tammany, and Washington.
The Roman Catholic Church for the Archdiocese of New Orleans sought
Chapter 11 protection (Bankr. E.D. La. Case No. 20-10846) on May 1,
2020. The archdiocese was estimated to have $100 million to $500
million in assets and liabilities as of the bankruptcy filing.
Judge Meredith S. Grabill oversees the case.
Jones Walker, LLP and Blank Rome, LLP, serve as the archdiocese's
bankruptcy counsel and special counsel, respectively. Donlin,
Recano & Company, Inc., is the claims agent.
The U.S. Trustee for Region 5 appointed an official committee of
unsecured creditors on May 20, 2020. The committee is represented
by the law firms of Pachulski Stang Ziehl & Jones, LLP and Locke
Lord, LLP. Berkeley Research Group, LLC is the committee's
financial advisor.
AVENTIS SYSTEMS: Seeks to Extend Exclusivity Period to September 5
------------------------------------------------------------------
Aventis Systems, Inc. and Cortavo, Inc. ask the U.S. Bankruptcy
Court for the Northern District of Georgia to extend the
exclusive periods during which they may propose and file a plan
of reorganization and solicit acceptances thereof to September 5,
2023 and November 5, 2023, respectively.
The Debtors explained that they, with their accountants and their
counsel need additional time to analyze their business
operations, income/expenses, and prepare projections, in order to
work on their joint plan.
The Debtors also hope to propose the assumption/rejection of
their non-residential real property leases, in conjunction with
a proposed joint chapter 11 plan.
The Debtors exclusive filing and solicitation periods are
currently set to expire on June 6, 2023 and August 7, 2023,
respectively.
Aventis Systems, Inc. and Cortavo, Inc. are represented by:
Gus H. Small, Esq.
Anna M. Humnicky, Esq.
Benjamin S. Klehr, Esq.
SMALL HERRIN, LLP
100 Galleria Parkway, Suite 350
Atlanta, GA 30339
Tel: (770) 783-1800
Email: gsmall@smallherrin.com
ahumnicky@smallherrin.com
bklehr@smallherrin.com
About Aventis Systems
Aventis Systems, Inc., a company in Atlanta, offers custom IT
solutions to build and operate complete physical and virtual
infrastructures. The comprehensive solutions include refurbished
and new hardware, system and application software, and an array
of in-depth managed services including infrastructure
consultation, cloud hosting and migration, virtualization
deployment, data and disaster recovery, security consultation,
hardware relocation, and equipment buyback.
Aventis Systems and affiliate, Cortavo, Inc., sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga.
Lead Case No. 23-51162) on Feb. 6, 2023. In the petition signed
by its chief executive officer, Hessam Lamei, Aventis Systems
disclosed up to $50 million in assets and up to $10 million in
liabilities.
Judge Lisa Ritchey Craig oversees the cases.
The Debtors tapped Anna Humnicky, Esq., at Small Herrin, LLP as
bankruptcy counsel; AI Law as special counsel; and Nichols,
Cauley & Associates, LLC as accountant.
AVENTIV TECHNOLOGIES: $282.5M Bank Debt Trades at 21% Discount
--------------------------------------------------------------
Participations in a syndicated loan under which Aventiv
Technologies LLC is a borrower were trading in the secondary market
around 79.2 cents-on-the-dollar during the week ended Friday, May
5, 2023, according to Bloomberg's Evaluated Pricing service data.
The $282.5 million facility is a Term loan that is scheduled to
mature on November 1, 2025. The amount is fully drawn and
outstanding.
Aventiv Technologies is a diversified technology company that
provides innovative solutions to customers in the corrections and
government services sectors.
BANYAN CAY RESORT: U.S. Trustee Unable to Appoint Committee
-----------------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of Banyan Cay Resort & Golf, LLC, according to court
dockets.
About Banyan Cay Resort & Golf
Banyan Cay Resort & Golf, LLC, a company in West Palm Beach, Fla.
and its affiliates operate resorts and golf clubs.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 23-12386) on March
29, 2023. In the petition signed by its chief restructuring
officer, Gerard A. McHale, Banyan Cay disclosed $100 million to
$500 million in both assets and liabilities.
Judge Erik P. Kimball oversees the cases.
The Debtors tapped Joseph A. Pack, Esq., at Pack Law as legal
counsel; Mr. McHale of McHale, P.A. as CRO; and Keen-Summit Capital
Partners, LLC as marketing agent and broker.
BELLAIRE IN SPRING: Taps Ernie Garcia as Special Counsel
--------------------------------------------------------
The Bellaire in Spring, LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of Texas to employ The Law Firm of
Ernie Garcia as its special counsel.
The firm will represent the Debtor in all matters arising in or
related to State Court case # 21410067855 The Bellaire in Spring,
LLC d/b/a The Bellaire Senior Lodges vs. Liliane B. Vo.
The firm will be paid at these rates:
Ernie Garcia $325 per hour
Other Attorneys $225 per hour
Paralegals $150 per hour
The firm requires a retainer in the amount of $2,000.
As disclosed in the court filings, Ernie Garcia is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Ernie Garcia, Esq.
The Law Firm of Ernie Garcia
2626 S Loop W # 630
Houston, TX 77054
Phone: +1 832-305-7694
About The Bellaire in Spring
The Bellaire in Spring, LLC owns a senior living facility in
Spring, Texas.
Bellaire in Spring filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. S.D. Texas Case No. 23-30431) on
Feb. 7, 2023, with $10 million to $50 million in assets and $1
million to $10 million in liabilities. Melissa A. Haselden has been
appointed as Subchapter V trustee.
Judge Jeffrey P. Norman oversees the case.
The Debtor is represented by Reese Baker, Esq., at Baker &
Associates.
BENZRENT 7: Seeks to Extend Exclusivity Period to August 5
----------------------------------------------------------
Benzrent 7, LLC asks the U.S. Bankruptcy Court of the Southern
District of Florida to extend its exclusive period to file a plan
and disclosure statement and to solicit acceptances to August 5,
2023 and November 5, 2023, respectively.
Unless extended, the Debtor's exclusivity period ends on May 4,
2023. The Debtor explained that more time is needed to resolve
issues in this case.
Benzrent 7, LLC is represented by:
Joel M. Aresty, Esq.
JOEL M. ARESTY, P.A.
309 1st Ave S
Tierra Verde, FL 33715
Tel: (305) 904-1903
Email: Aresty@Mac.com
About Benzrent 7
Benzrent 7, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-15165) on July 5,
2022, with as much as $1 million in both assets and liabilities.
Judge Robert A. Mark oversees the case.
Joel M. Aresty, Esq., at Joel M. Aresty, PA serves as the
Debtor's legal counsel.
BEVERLY COMMUNITY: Court OKs Cash Collateral Access Thru May 12
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Los Angeles Division, authorized Beverly Community Hospital
Association, dba Beverly Hospital, and its debtor-affiliates to use
cash collateral on an interim basis, through May 12, 2023.
The Indenture Trustee is granted a replacement lien on Gross
Receivables, which for clarity, includes any insurance or utility
refunds received by the Debtors.
The Indenture Trustee is also granted a superpriority
administrative claim under 11 U.S.C. Section 364(c) for any
diminution in value of its collateral.
As additional adequate protection, the Indenture Trustee is granted
adequate protection payments in the form of its fees and expenses
-- and the fees and expenses of its professionals -- in amounts to
be agreed upon and set forth in the final budget approved by the
Court; provided, however, that the payment of the fees and expenses
is subject to the debtor-in-possession stipulation -- which the
parties addressed during the April 26, 2023 hearing but has not yet
been filed -- that addresses fees and expenses of the professionals
engaged by the Debtors.
A final hearing on the matter is set for May 17, 2023 at 9 a.m.
A copy of the order is available at https://bit.ly/3LKUsru from
PacerMonitor.com.
About Beverly Community Hospital Association
Beverly Community Hospital Association and affiliates operate
general medical and surgical hospitals. The Debtors sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
C.D. Cal. Lead Case No. 23-12359) on April 19, 2023. In the
petition signed by Alice Cheng, its chief executive officer, the
Debtor disclosed up to $10 million in assets and up to $500 million
in liabilities.
Judge Sandra R. Klein oversees the case.
The Debtors tapped Sheppard, Mullin, Richter, and Hampton LLP as
legal counsel.
BIGHORN RESTAURANTS: Case Summary & 20 Top Unsecured Creditors
--------------------------------------------------------------
Six affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Bighorn Restaurants, LLC 23-11919
7490 Clubhouse Road, Second Floor
Boulder, CO 80301
Summit Restaurant Holdings, LLC 23-11921
Empire Restaurants, LLC 23-11922
Heartland Restaurants, LLC 23-11924
Atlantic Star Foods, LLC 23-11925
Summit Restaurant Development, LLC 23-11926
Business Description: The Debtors are owners and operators of
restaurants.
Chapter 11 Petition Date: May 4, 2023
Court: United States Bankruptcy Court
District of Colorado
Judge: Hon. Michael E. Romero
Debtors' Counsel: James T. Markus, Esq.
MARKUS WILLIAMS YOUNG & HUNSICKER
1775 Sherman Street, Suite 1950
Denver, CO 80203
Tel: (303) 830-0800
Email: jmarcus@markuswilliams.com
Debtors'
Investment
Banker: BROOKWOOD ASSOCIATES, LLC
Debtors'
Financial
Advisor: MORRISANDERSON & ASSOCIATES, LTD.
Debtors'
Noticing
Agent: BMC GROUP, INC.
Bighorn Restaurants'
Estimated Assets: $1 million to $10 million
Bighorn Restaurants'
Estimated Liabilities: $10 million to $50 million
The petitions were signed by Dewey R. Brown as CEO.
A Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/LEPW3TA/Bighorn_Restaurants_LLC__cobke-23-11919__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/6ITXQZA/Summit_Restaurant_Holdings_LLC__cobke-23-11921__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/6UPHRZQ/Empire_Restaurants_LLC__cobke-23-11922__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/MNP3WNI/Heartland_Restaurants_LLC__cobke-23-11924__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/MTTJF5A/Atlantic_Star_Foods_LLC__cobke-23-11925__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/M6VBZHI/Summit_Restaurant_Development__cobke-23-11926__0001.0.pdf?mcid=tGE4TAMA
List of Bighorn Restaurants' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. BBBillings, LLC $39,463
1494 Vistazo W
Tiburon, CA 94920
2. Cambridge Investors One, LP $28,224
c/o Stephen W. Reed, Inc.
9030 North Hess Street #353
Hayden, ID 83835
3. Cigna Health $2,014
5445 DTC Parkway
Suite 400
Greenwood Village,
CO 80111
4. Hardee's Food Systems $7,670
PO Box 841237
Los Angeles, CA
90084-1237
5. Hardee's Food Systems $34,276
PO Box 604020
Charlotte, NC
28260-4020
6. KDM Pop Solutions Group $1,812
PO Box 640654
Pittsburgh, PA
15264-0654
7. Lewis Advertising, Inc. $1,639
1050 Country Club Rd
Rocky Mount, NC 27804
8. Lundy Center $20,790
c/o Millennium Real
Estate & Mgmt
PO Box 7856
Helena, MT 59604
9. MBM Corporation $22,973
PO Box 800
Rocky Mount, NC
27802-0800
10. MBM Corporation-BIG $73,057
PO Box 800
Rocky Mount, NC
27802-0800
11. MegaPath $3,074
PO Box 51538
Los Angeles, CA
90051-5838
12. Modakco, LLC $8,897
PO Box 640
Rapid City, SD
57709-0640
13. NuCo2 $1,525
PO Box 417902
Boston, MA
02241-7902
14. RMG, Inc. $3,000
Laurette Murphy/Sue Lucas
5348 Green Teal Dr
Billings, MT 59106
15. Rocky Road Farms, LLC $31,611
1063 Crosspoint Court
c/o Leo & April Pursley
San Jose, CA 85120
16. Sawtooth Center, LLC $36,879
Attn: Mike O'Neal
PO Box 1570
Ketchum, ID 83340
17. Sicom Systems, Inc. $1,613
PO Box 930157
Atlanta, CA
31193-0157
18. Wachs Capital Limited $31,611
Partnership
PO Box 704
Woodland, WA 98674
19. Westfield Insurance $6,305
PO Box 9001566
Louisville, KY
40290-1566
20. Woodward-Smith Rev Trust $35,750
PO Box 3911
Carmel, CA 93921
BLACKHAWK NETWORK: S&P Rates New Sec. First-Lien Term Loan 'B'
--------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '3'
recovery rating to Blackhawk Network Holdings Inc.'s proposed $1.75
billion senior secured first-lien term loan due in 2030. The
company intends to use the proceeds from the term loan, along with
cash from its balance sheet, to repay its existing $1.38 billion
first-lien term loan due in 2025, $400 million second-lien term
loan due in 2026, and pay transaction fees and expenses. Blackhawk
is also extending the maturity of its $400 million revolving credit
facility to 2028 from 2025. S&P said, "The '3' recovery rating on
the proposed term loan indicates our expectation for meaningful
(50%-70%; rounded estimate: 55%) recovery for lenders in the event
of a default. Our rounded recovery estimate for the new debt is
moderately lower than it was for the existing first-lien debt
because of the significantly larger proposed facility."
S&P said, "Our 'B' issuer credit rating and stable outlook on the
company are unchanged. We view the transaction as approximately
leverage neutral and forecast Blackhawk's S&P Global
Ratings-adjusted leverage will remain in the 5x-6x range through
2024. Although we expect the interest margin on its proposed
first-lien term loan will be higher than on its existing first-lien
term loan, its total interest expense will likely remain relatively
unchanged because of the absence of the higher interest second-lien
term loan. We believe the company's decision to refinance its debt
well in advance of their maturities and hedge a significant portion
of its floating rate-exposure demonstrates prudent risk management
relative to other companies we rate at a similar level."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- The company's proposed debt capital structure comprises a $400
million first-lien senior secured revolving credit facility due in
2028 and a proposed $1.75 billion first-lien senior secured term
loan due in 2030.
-- The '3' recovery rating on Blackhawk's first-lien credit
facilities indicates S&P's expectation for meaningful (50%-70%;
rounded estimate: 55%) recovery for lenders in the event of a
payment default.
-- S&P values the company as a going concern using a 6.5x multiple
of its projected emergence EBITDA.
-- S&P's simulated scenario assumes a default in 2026 due to
intensified pricing pressure and lower consumer demand for gift
cards in the core U.S. retail market and customer losses in its
incentives business. This reduces its profitability, causes it to
generate negative cash flow, and constrains its liquidity.
Simulated default assumptions
-- Year of default: 2026
-- Revolver draw: 85%
-- Minimum capital expenditure: 1% of revenue
-- Cyclicality adjustment factor: 5% (standard sector assumption
for software and services)
-- Emergence EBITDA: $199 million
-- EBITDA multiple: 6.5x
-- Jurisdiction: U.S.
Simplified waterfall
-- Gross recovery value: $1.3 billion
-- Net recovery value after administrative expenses: $1.2 billion
-- Obligor/nonobligor valuation split: 80%/20%
-- Value available to senior secured debt claims: $1.1 billion
-- Senior secured first-lien debt claims: $2.1 billion
-- Recovery expectations: 50%-70% (rounded estimate: 55%)
Note: All debt amounts include six months of prepetition interest.
BRIDGE COMMUNICATIONS: Court OKs Cash Collateral Access Thru Aug 1
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia,
Alexandria Division, authorized Bridge Communications, LLC to use
cash collateral on a continued interim basis in accordance with the
budget, with a 10% variance, through August 1, 2023.
The Debtor requires the use of cash collateral to fund its
operations.
Truist Bank and Wilmington Savings Fund Society, FSB assert an
interest in the Debtor's cash collateral.
As adequate protection for the use or diminution of the Lenders'
interests in the cash collateral, pursuant to 11 U.S.C. section
361, the Lenders will have a perfected post-petition lien against
cash collateral to the same extent and with the same validity and
priority as its respective prepetition lien, including on all of
the Debtor's post-petition assets and the proceeds thereof, without
the need to file or execute any documents as may otherwise be
required under applicable non-bankruptcy law. Each Replacement Lien
granted will secure all obligations owing from the Debtor to Truist
Bank and Wilmington Savings Fund, as the case may be.
The Replacement Liens do not alter the priority of the Truist Bank
and Wilmington Savings Fund's prepetition indebtedness as of the
Petition Date. Truist Bank maintains its first priority senior lien
over the accounts, inventory, and equipment of the Debtor, via the
Replacement Lien, and Wilmington Savings Fund maintains its second
priority senior lien over the accounts, inventory, and equipment of
the Debtor, via the Replacement Lien.
Wilmington Savings Fund and the Debtor stipulate and acknowledge
that the Pre-Petition Indebtedness is valid, existing and legally
enforceable and is evidenced by documents executed and delivered
by the Debtor to the Wilmington Savings Fund including, without
limitation, a Note dated April 17, 2020, evidencing a loan in the
original principal amount of $306,900; a Note dated April 17, 2020,
evidencing a loan in the original principal amount of $350,000; and
Security Agreement dated April 17, 2020.
Wilmington Savings Fund asserts -- and the Debtor stipulates and
acknowledges -- that the Lender holds valid, enforceable, and
allowable claims against the Debtor. The Debtor was indebted to
Wilmington Savings Fund under the Loan Documents in the amount of
at least $529,413, together with any other obligations of the
Debtor to Wilmington Savings Fund to the extent provided under the
Loan Documents.
These events constitute an "Event of Default":
(a) Conversion of the case to a case under Chapter 7 of the
Bankruptcy Code;
(b) The appointment of a Trustee in the bankruptcy case; or
(c) The dismissal of the bankruptcy case.
A final hearing on the matter is set for August 1, 2023 at 11 a.m.
A copy of the order is available at https://bit.ly/448Rbcq from
PacerMonitor.com.
About Bridge Communications LLC
Bridge Communications is a video production and communications
company.
Bridge Communications LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No.
23-10467) on March 23, 2023. The petition was signed by Edward
Tropeano as owner. At the time of filing, the Debtor estimated
$100,000 to $500,000 in assets and $1 million to $10 million in
liabilities.
Judge Brian F. Kenney oversees the case.
Ashvin Pandurangi, Esq., at Vivona Pandurangi, PLC represents the
Debtor as counsel.
BROOKLYN PARK: Seeks to Tap Leech Tishman Robinson Brog as Counsel
------------------------------------------------------------------
Brooklyn Park Slope Fitness, LLC seeks approval from the U.S.
Bankruptcy Court for the Eastern District of New York to hire Leech
Tishman Robinson Brog PLLC as its counsel.
The firm's services include:
a. providing legal advice with respect to the Debtor's powers
and duties under the Bankruptcy Code in the continued operation of
its business and the management of its property;
b. negotiating, drafting, and pursuing all documentation
necessary in this Chapter 11 case, including, without limitation,
any debtor-in-possession financing arrangements and the disposition
of the Debtor's assets, by sale or otherwise;
c. preparing legal papers;
d. negotiating with creditors of the Debtor, preparing a plan
of reorganization and taking the necessary legal steps to
consummate a plan, including, if necessary, negotiations with
respect to financing a plan;
e. appearing in court;
f. attending meetings and negotiating with representatives of
creditors, the United States Trustee, and other parties in
interest;
g. providing legal advice to the Debtor regarding bankruptcy
law, corporate law, corporate governance, tax, litigation, and
other issues attendant to the Debtor's business operations;
h. taking all necessary actions to protect and preserve the
Debtor's estate including prosecuting actions on the Debtor's
behalf, defending any action commenced against the Debtor, and
representing the Debtor in negotiations concerning litigation in
which the Debtor is involved, including objections to claims filed
against the Debtor's estate; and
i. other legal services.
The firm will be paid at these rates:
Shareholders $500 to $800 per hour
Counsel $495 to $600 per hour
Associates $325 to $475 per hour
Legal Assistants/Paralegals $120 to $250 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received from the Debtor a retainer of $50,000.
As disclosed in court filings, Leech Tishman Robinson Brog is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Fred Ringel, Esq.
Leech Tishman Robinson Brog, PLLC
875 Third Avenue, 9th Floor
New York, NY 10022
Phone: 212-603-6300
Fax: 212-956-2164
Email: fringel@leechtishman.com
About Brooklyn Park Slope Fitness
Brooklyn Park Slope Fitness, LLC operates the Retro Fitness of
Brooklyn Park Slope in New York.
Brooklyn Park Slope Fitness filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
23-41129) on March 31, 2023, with $438,845 in assets and $1,521,906
in liabilities. The petition was signed by Fidelia Perez as
manager.
Judge Elizabeth S. Stong presides over the case.
The Debtor tapped Fred B. Ringel, Esq., at Leech Tishman Robinson
Brog, PLLC as bankruptcy counsel; the Law Office of Joseph J.
Schwartz, P.C. as special litigation counsel; and El Kady, CPA, PC
as accountant.
C&L AUTOMOTIVE: Wins Interim Cash Collateral Access
---------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Jacksonville Division, authorized C&L Automotive & Towing, Inc. to
use cash collateral on an interim basis in accordance with the
budget.
The Debtor requires the use of cash collateral to continue
operating the business and pay salaries.
As of the Petition Date, the Debtor was indebted to On Deck
Capital, Inc. in the approximate amount of $85,000. The Debtor's
obligation is evidenced by a Promissory Note, Security Agreement,
Financing Statement, and Chattel Mortgage executed July 9, 2019, to
On Deck, pursuant to which the Lender provided funds to the
Debtor.
As adequate protection, the Debtor will pay only expenses necessary
for the operation of the business and not any pre-petition
expenses, officer salaries, professional fees, or insiders without
further Court order.
As additional adequate protection of the Lender's interest and the
estate's interest in cash collateral, On Deck is granted a
replacement lien to the same nature, priority, and extent that On
Deck may have had immediately prior to the date that this case was
commenced nunc pro tunc to the Petition Date. Further, On Deck is
granted a replacement lien and security interest on property of the
bankruptcy estate to the same extent and priority as that which
existed pre-petition on all of the cash accounts, accounts
receivable and other assets and property acquired by the Debtor's
estate or by the Debtor on or after the Petition. The replacement
lien in the Post-Petition Collateral will be deemed effective,
valid and perfected as of the Petition Date.
The Debtor is ordered to pay Adequate Protection payments of $500
to On Deck commencing April 1, 2023, and on the first of the month
thereafter or further Court order.
The Debtor's authority to use cash collateral will terminate
immediately and upon the earlier of (a) a Court order; (b) the
conversion of the case to a Chapter 7 case or the appointment of a
Chapter 11 trustee without On Deck's consent; (c) the entry of an
Order that alters the validity or priority of the replacement liens
granted therein to the Bank; (d) the Debtor ceasing to operate all
or substantially all of its business; (e) the entry of an order
granting relief from the automatic stay that allows any entity to
proceed against any material assets of the Debtor that constitute
Cash Collateral; (f) the entry of an Order authorizing a security
interest under section 364(c) or 364(d) of the Bankruptcy Code in
the collateral to secure any credit obtained or debt incurred that
would be senior to or equal to the replacement lien; or (g) the
dismissal of the Chapter 11 case.
A further hearing on the matter is set for July 30, 2023 at 9:30
a.m.
A copy of the order is available at https://bit.ly/3nnSGmC from
PacerMonitor.com.
About C&L Automotive & Towing, Inc.
C&L Automotive & Towing, Inc. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00437) on
March 1, 2023. In the petition signed by Lisa Hood, its president,
secretary and director, the Debtor disclosed up to $500,000 in both
assets and liabilities.
Judge Jason A. Burgess oversees the case.
Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler,
LLP, represents the Debtor as legal counsel.
CALIFORNIA RESOURCES: Fitch Assigns 'B+' First-Time LongTerm IDR
----------------------------------------------------------------
Fitch Ratings has assigned a 'B+' First-Time Long-Term Issuer
Default Rating (IDR) to California Resources Corporation (CRC).
Fitch has also assigned a 'BB+'/'RR1' rating to the company's
secured reserve-based lending credit facility (RBL) and a
'BB-'/'RR3' rating to the company's senior unsecured notes. The
Rating Outlook is Stable.
CRC's ratings reflect its large, low-decline asset base with
exposure to Brent pricing, conservative capital structure, forecast
sub-1.5x leverage, expectations of positive FCF through the rating
horizon, strong liquidity and proactive hedging program that limits
downside risks. These factors are partially offset by the company's
high cost structure, which limits economic drilling prospects and
exposure to California's stringent regulatory environment that
could disrupt permitting, drilling and financing options in the
medium and long term.
KEY RATING DRIVERS
Large, Low Decline Asset Base: CRC operates exclusively in
California and is the largest producer in the state with 1Q23
production averaging 89 thousand barrels of oil equivalent per day
(Mboe/d) (62% oil). The company controls approximately 1.9 million
net mineral acres with net revenue interest of approximately 85%,
operates integrated midstream assets which include 543 million
cubic feet per day (MMcf/d) of gas processing capacity and manages
643 megawatts (MW) of electricity generation capacity. CRC's wells
have low-teen decline rates, which allow for reduced drilling
expenditures during periods of low oil prices and enhanced
liquidity without severely affecting production.
Modest Near-Term Production Declines: Management's $200
million-$245 million capital plan for 2023 includes reducing its
total rig count to 1.5 rigs and increasing maintenance and workover
activity to de-risk uncertainty around Kern County litigation and
permitting. The program targets development of the highest return
projects with permits in hand, particularly in the Wilmington
field, and management of the expected 5%-7% total production
declines in 2023.
Fitch expects the company could return back to a three-rig program
by mid-2024 and believes it also has the ability to secure
individual field-level permits, although the process can be slower
and more burdensome. Fitch believes the company's large, multi-play
asset base does provide capital and operational optionality to
navigate regulatory disruptions.
Strong Correlation to Brent: Demand for oil is strong in
California, but with minimal pipeline capacity from the east, the
state is dependent on imports, which allows CRC to benefit from
Brent-type pricing, which is typically higher than WTI. Fitch's
current price deck assumes Brent at $85.00/bbl and WTI at
$80.00/bbl in 2023, but the higher Brent pricing is partially
offset by CRC's higher operating costs compared with peers.
High Cost, Low Netback Producer: CRC's cost structure is higher
than most Fitch-rated U.S. onshore E&P peers. Fitch-calculated 2022
total cash operating costs (which includes operating costs,
transportation expenses, G&A and production taxes) of $36.0 per
barrel of oil equivalent (boe) remain at the higher-end of Fitch's
aggregate E&P peer group and lead to lower unhedged cash netbacks.
Near-Term Hedging Protection: Fitch believes CRC is likely to
reduce its hedge coverage in the medium-term given its low leverage
metrics and continued FCF generation. The company is currently
hedging approximately 65% of its 2023 oil production with a total
weighted average effective price of approximately $73 WTI and has
no natural gas hedges in place. CRC switched to leverage-based
hedging requirements with its April 2022 amendment to its credit
facility, which requires minimum hedging of 50% to 0% with leverage
above 2.0x or below 1.5x, respectively.
Fitch believes the company will still hedge its future production,
albeit at lower levels, given forecast sub-1.5x leverage metrics,
which could leave the company susceptible to weakened commodity
prices.
Positive FCF; Sub-1.5x Leverage: Fitch forecasts positive
post-dividend FCF generation of approximately $450 million in 2023
and $125 million in 2024, at Fitch's base case prices of $80/bbl
and $70/bbl, respectively. CRC will reduce annual upstream capex
spend to approximately $200 million in 2023 as it drops to 1.5
rigs, but should increase back toward three rigs in 2024 and
thereafter after permitting is secured.
Fitch-calculated gross debt/EBITDA is forecast to remain below 1.0x
in 2023 and 1.5x through the remainder of the forecast given the
company's conservative capital structure. Fitch does not expect
incremental draws on the RBL and believes FCF will be allocated
towards the company's Carbon Management (CM) initiatives,
shareholders via dividends and incremental share repurchases.
Carbon Management Initiatives: CRC continues to advance its Carbon
Management businesses, driving management's goal of reliable, safe
and ESG-driven operations. The company's strategic JV with
Brookfield Renewable helps advance CRC's energy transition
strategy, substantially de-risks its CM funding needs and should
help reach the JV's goals of first CO2 injection by the end of 2025
and five million metric tons of CO2 storage per annum (200 million
metric tons of total CO2 storage capacity) by the end of 2027.
Fitch views the JV favorably given its focus on reducing carbon
emissions, Brookfield's significant expertise and investment with
CM projects, and the potential cash flow streams and tax credits
the segment could provide in the medium and long term. Fitch's base
case scenario includes the company's expected capital investments,
but does not include any revenues from CRC's CM businesses given
the uncertainty around timing and magnitude of cash flows along
with the potential for separation of the E&P and CM businesses.
California Regulatory Considerations: California has adopted some
of the most restrictive regulations on in-state produced energy as
the state shifts toward cleaner, more renewable forms of energy.
The state has established limits on greenhouse gas (GHG) emissions,
which decline annually to a target of at least 40% below the 1990
level by 2030. This is in addition to the established policy toward
becoming carbon neutral by 2045. While there is a need to drill in
California to meet the excess demand for oil and gasoline in the
state, Fitch cautions that regulatory and legislative actions in
the state could disrupt drilling, permitting and financing options
for the company.
DERIVATION SUMMARY
CRC is a mid-sized operator with 1Q23 average daily production of
89 Mboepd (62% oil). The company is of similar size to Canadian
producer MEG Energy Corp. (B+/Stable; 95.3 Mboepd in 2022), larger
than Earthstone Energy, Inc. (B+/Stable; 78.2Mboepd in 2022) and
Canadian operator Baytex Energy Corp. (B+/Positive; 83.5 Mboepd in
2022), but smaller than Permian operators Matador Resources Company
(BB-/Stable; pro forma production profile will approach
140-145Mboepd by YE23) and SM Energy Company (BB-/Stable; 145.1
Mboepd in 2022). CRC's capital structure is lean with only $600
million of gross debt outstanding leading to peer-leading mid-cycle
leverage metrics of sub-1.0x.
CRC's realized prices are typically higher than peers given the
exposure to premium Brent pricing and the low-decline asset base
leads to lower capital intensity versus peers. This is partially
offset by the company's high cost structure which results in lower
Fitch-calculated unhedged cash netbacks compared to Fitch's
aggregate peer average.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
- Brent oil prices of $85/bbl in 2023, $75/bbl in 2024, $65/bbl in
2025 and $53/bbl thereafter;
- Henry Hub prices of $3.50/mcf in 2023, $3.50/mcf in 2024,
$3.00/mcf in 2025 and $2.75/mcf thereafter;
- Average production of 88 Mboepd in 2023, followed by relatively
flat growth thereafter;
- Upstream Capex of $225 million in 2023 with growth-linked
spending thereafter;
- Measured increases to shareholder returns;
- No material M&A activity.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Diversification through meaningful EBITDA generation from Carbon
Management or other non-E&P business lines;
- E&P diversification outside of California that leads to total
production approaching 150 Mboepd;
- FCF generation that supports the liquidity profile and limited
borrowings under the RBL;
- Commitment to conservative financial policy resulting in
mid-cycle EBITDA leverage sustained below 1.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Unfavorable regulatory actions that reduce permitting
availability and/or drilling prospects leading to production
sustained below 75 Mboepd;
- Deteriorating liquidity profile, including material revolver
borrowings and inability to generate positive FCF;
- Mid-cycle EBITDA leverage sustained above 2.0x.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: As of March 31, 2023, CRC had $477 million of
cash on its balance sheet and $454 million of borrowing capacity
under the $602 million RBL, net of approximately $148 million of
outstanding letters of credit. The RBL is subject to a semi-annual
borrowing base redetermination in addition to financial covenants
including a maximum total net leverage ratio of below 3.0x and a
minimum current ratio of at least 1.0x. Fitch believes CRC's
forecast FCF generation supports the liquidity profile and does not
expect incremental RBL borrowings throughout the base case.
Clear Maturity Profile: CRC's maturity schedule remains light with
no maturities until the senior unsecured notes and recently amended
and restated RBL come due in 2026 and 2027, respectively.
RECOVERY ANALYSIS
KEY RECOVERY RATING ASSUMPTIONS
- The recovery analysis assumes that CRC would be reorganized as a
going-concern in bankruptcy rather than liquidated;
- Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
Fitch's projections under a stressed case price desk, which assumes
Brent oil prices of $70 in 2023, $45 in 2024, $35 in 2025, $45 in
2026 and $48 in the long-term.
The GC EBITDA assumption reflects Fitch's view of a sustainable,
post-reorganization EBITDA level, upon which the agency bases the
enterprise valuation, which reflects the decline from current
pricing levels to stressed levels and then a partial recovery
coming out of a troughed pricing environment. Fitch believes a
weakened pricing environment would lead to production declines and
materially erode the liquidity profile.
An EV multiple of 3.25x EBITDA is applied to the GC EBITDA to
calculate a post-reorganization enterprise value. The choice of
this multiple considered the following factors:
The historical bankruptcy case study exit-multiples for peer
companies ranged from 2.8x-7.0x, with an average of 5.2 and a
median of 5.4x;
The multiple reflects the expectation that the value of CRC's oil
producing properties will decline given the company's high cost
structure and reduction in capex to preserve liquidity. The
multiple considers the stringent California regulatory environment
and highly concentrated market, which severely limits the number of
potential buyers and valuation for the assets. The multiple also
incorporates the company's highly valued and sought-after
Huntington Beach acreage, which Fitch believes the company would be
able to sell for considerable value in a distressed scenario.
Liquidation Approach
The liquidation estimate reflects Fitch's view of the value of
balance sheet assets that can be realized in sale or liquidation
processes conducted during a bankruptcy or insolvency proceeding
and distributed to creditors.
The RBL is assumed to be fully drawn upon default. The allocation
of value in the liability waterfall results in recovery
corresponding to 'RR1' recovery for the first-lien RBL credit
facility and a recovery corresponding to 'RR3' for the senior
unsecured notes.
ISSUER PROFILE
California Resources Corporation is an integrated public E&P
company that operates solely in California. The company is the
largest producer in California, has a large asset position covering
1.9 million net mineral acres, 543 million MMcf/d processing
capacity and 643 MW of electricity generation capacity.
ESG CONSIDERATIONS
CRC has an ESG Relevance Score of '4' for Exposure to Social
Impacts due to the oil and gas sector regulatory environment in
California and its exposure to social resistance, which has a
negative impact on the credit profile, and is relevant to the
rating in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery
----------- ------ --------
California
Resources
Corporation LT IDR B+ New Rating
senior
unsecured LT BB- New Rating RR3
senior secured LT BB+ New Rating RR1
CALLON PETROLEUM: Moody's Puts 'B2' CFR on Review for Upgrade
-------------------------------------------------------------
Moody's Investors Service placed the ratings of Callon Petroleum
Company on review for upgrade, including its B2 corporate family
rating, B2-PD probability of default rating and B3 rating on its
senior unsecured notes. The review was initiated following the
announcement that Callon reached an agreement to acquire
Permian-based Percussion Petroleum Operating II, LLC and
concomitantly sell its producing assets in the Eagle Ford basin to
Ridgemar Energy Operating, LLC. Callon's SGL-2 speculative grade
liquidity (SGL) rating remains unchanged. The outlook is changed to
rating under review from stable.
Moody's expects to conclude the review following the closing of the
transactions, which is expected in July 2023 and subject to
regulatory approval and customary closing conditions.
"The expected reduction in balance sheet debt and focus on the
prolific Permian Basin should enhance Callon's credit profile,"
said Thomas Le Guay, Moody's Vice President and Senior Analyst.
"The review of the ratings will focus on sizing capital efficiency
and operating synergies gains, debt reduction and future leverage
profile, as well as Callon's financial policy."
On Review for Upgrade:
Issuer: Callon Petroleum Company
Corporate Family Rating, Placed on Review for Upgrade, currently
B2
Probability of Default Rating, Placed on Review for Upgrade,
currently B2-PD
Senior Unsecured Regular Bond/Debenture, Placed on Review for
Upgrade, currently B3
Outlook Actions:
Issuer: Callon Petroleum Company
Outlook, Changed To Rating Under Review From Stable
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
The review of Callon's ratings for upgrade reflects Moody's
expectation that a successful closing of the announced transactions
and the planned reduction in debt will strengthen Callon's credit
profile.
Callon agreed to acquire Percussion in a cash and stock transaction
valued at approximately $475 million, to be funded with $265
million of cash and 6.46 million in Callon's new common shares
issued to Percussion. Callon may also need to pay future contingent
payments of up to $62.5 million, depending on future WTI prices. In
a separate agreement, Callon agreed to sell concurrently all of its
Eagle Ford Shale assets to Ridgemar for $655 million in cash, in
addition to receiving future contingent payments of up to $45
million, depending on future WTI prices.
Callon announced that it will use the remaining proceeds from the
sale of assets to repay around $300 million of debt upon the
closing of the transactions, such that its total debt will decline
to below $1.9 billion. The company also announced a new $300
million share buyback program over a two-year period, contingent
upon the closing of the transactions.
The review of the ratings for upgrade will focus on the assessment
of changes in the business and financial risks and will include:
(a) review of the projected capital efficiency gains and operating
synergies, expected by Callon; (b) assessment of debt capacity and
leverage profile, including debt reduction at closing, as well as
future funding needs; and (c) reassessment of Callon's financial
policy, including its plans for shareholder returns and its ability
to fund these distributions from free cash flow generation. Moody's
will also review the final post-transaction capital structure,
execution risks arising from the announced transactions, as well as
cash generation and deleveraging capacity of the newly acquired
assets.
Callon's SGL-2 rating reflects its good liquidity, supported by
cash flow from operations as well as significant unused capacity
under its revolving credit facility. As of March 31, 2023, Callon
had $465 million of borrowings and letters of credit outstanding on
the revolver against a $1.5 billion elected commitment. The
revolver has two financial covenants – a minimum current ratio of
1x and a maximum leverage ratio of 3.5x. Moody's expect the company
to remain in compliance with the covenants through 2024. The
revolver matures in December 2027. Callon's next maturity of notes
will be in July 2025, which are callable at par in July of this
year.
The principal methodology used in these ratings was Independent
Exploration and Production published in December 2022.
Callon Petroleum Company, headquartered in Houston, TX, is an
exploration and production company with operations in the Permian
Basin and Eagle Ford Shale in Texas. Average daily production was
100 Mboe/d in Q1 2023. The company had proved reserves of 479 MMboe
(57% oil) as of year-end 2022.
CARVANA CO: Creditors Offer Debt-for-Equity Swap
------------------------------------------------
Rachel Butt, Erin Hudson and Eliza Ronalds-Hannon of Bloomberg News
report that creditors holding about 90% of Carvana Co.'s bonds have
been pitching the beleaguered used-car company on ways to pare down
debt and improve liquidity, including a proposal for a
debt-for-equity swap, according to people with knowledge of the
situation.
The group, represented by White & Case and PJT Partners, recently
offered to swap a substantial amount of unsecured notes for equity
in Carvana, the people said, asking not to be named discussing a
private matter.
About Carvana Co.
Founded in 2012 and based in Tempe, Arizona, Carvana Co. --
http://www.carvana.com/-- is an e-commerce platform for buying and
selling used cars.
Carvana Co. reported a net loss of $2.89 billion for the year ended
Dec. 31, 2022, compared to a net loss of $287 million for the year
ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $8.70
billion in total assets, $9.75 billion in total liabilities, and a
total stockholders' deficit of $1.05 billion.
* * *
As reported by the TCR on Nov. 14, 2022, S&P Global Ratings revised
its outlook on Carvana Co. to negative from stable and affirmed its
'CCC+' issuer credit rating. S&P said, "The negative outlook
reflects Carvana's weak operating performance and continuing
macroeconomic headwinds which could extend weaker profitability and
sustain or increase negative cashflows."
Moody's Investors Service changed Carvana Co.'s outlook to negative
from stable and at the same time affirmed Carvana's Caa1 corporate
family rating. Moody's said, "The change in outlook to negative
from stable reflects Carvana's persistent lack of profitability and
negative free cash flow generation that has consistently fallen
short of Moody's expectations," as reported by the TCR on Nov. 25,
2022.
CEDIPROF INC: Seeks to Extend Exclusivity Period to July 3
----------------------------------------------------------
Cediprof, Inc. asks the U.S. Bankruptcy Court for the District
of Puerto Rico to extend its exclusive period to file its plan
of reorganization and disclosure statement to July 3, 2023. The
Debtor also asks the Court to extend the deadline to procure the
votes under the plan for a term of 60 days after the order
granting the approval of the disclosure statement is entered.
This is the Debtor's second request for extension of its
exclusivity periods. The Court previously granted the Debtor
until May 4, 2023 to file the disclosure statement and plan and
a term of 60 days after the approval of the disclosure statement
to procure the votes.
The Debtor stated that it already has a draft of the disclosure
statement and plan of reorganization that has been approved by
its board of directors. Nevertheless, the same contemplates, as
part of the treatment of the claim filed by Sandoz, Inc. on
account of an arbitration award in AAA Case No. 01-20-00010-0588,
the indemnification by Lannet Company Inc. of a portion of the
arbitration award amounting to $10,945,819.00 which is for profit
loss damages due to the early termination of the distribution
agreement. The Debtor further stated that the plan of
reorganization also contemplates the revenue generated by the
distribution agreement executed with Lannet as part of the
means to fund the plan.
However, Lannett has issued a press release in which it advised
that it entered into a Restructuring Support Agreement with its
secured creditors in order to be able to file a pre-packed
Chapter 11 bankruptcy petition. The Debtor is concerned that
this course of action by Lannett, which was unknown by the
Debtor, may impact the terms the Debtor contemplates in its
disclosure statement and plan of reorganization.
The Debtor explained that it needs time to discuss with both
Lannett and Sandoz the implications of Lannett's Chapter 11
petition and the impact such petition may have on both, the claim
held by the Debtor against Lannett under their Indemnification
Agreement, as well as the assumption and/or rejection by Lannett
of the distribution agreement with the Debtor.
Cediprof, Inc. is represented by:
Carmen D. Conde Torres, Esq.
Luisa S. Valle Castro, Esq.
William J. Alemany, Esq.
C. CONDE & ASSOC.
De San Jose Street #254, 5th Floor
San Juan, PR 00901-1253
Tel: (787) 729-2900
Email: condecarmen@condelaw.com
About Cediprof Inc.
Cediprof, Inc. is a company in Caguas, P.R., which develops,
manufactures, supplies and distributes finished dosage forms of
pharmaceutical products.
Cediprof filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. D.P.R. Case No. 22-03198) on Nov.
4, 2022, with $10 million to $50 million in both assets and
liabilities.
Carmen D. Conde Torres, Esq., at the Law Offices of C. Conde &
Assoc. and RSM Puerto Rico as legal counsel and accountant,
respectively.
CENTURION PIPELINE: Moody's Withdraws 'B1' CFR on Debt Repayment
----------------------------------------------------------------
Moody's Investors Service withdrew all of Centurion Pipeline
Company LLC's ratings, including its B1 Corporate Family Rating,
B1-PD Probability of Default Rating, B1 senior secured revolving
credit facility rating and B1 senior secured term loan rating. The
outlook was changed to rating withdrawn from rating under review.
These withdrawals follow repayment of its outstanding revolver and
term loan debt in conjunction with the closing of the acquisition
of Centurion's owner Lotus Midstream Operations, LLC (Lotus) by
Energy Transfer LP (Energy Transfer, Baa3 positive).
Withdrawals:
Issuer: Centurion Pipeline Company LLC
Corporate Family Rating, Withdrawn, previously rated B1,
Placed on Review for Upgrade
Probability of Default Rating, Withdrawn, previously
rated B1-PD, Placed on Review for Upgrade
Senior Secured Bank Credit Facility, Withdrawn, previously
rated B1, Placed on Review for Upgrade
Outlook Actions:
Issuer: Centurion Pipeline Company LLC
Outlook, Changed To Rating Withdrawn From Rating Under Review
RATINGS RATIONALE
Centurion has fully repaid its outstanding senior secured revolver
and term loan debt in conjunction with the closing of the
acquisition of Centurion's owner Lotus by Energy Transfer. All of
Centurion's ratings have been withdrawn since all of its rated debt
is no longer outstanding.
Centurion Pipeline Company LLC is owned by Lotus Midstream
Operations, LLC, and is comprised of a network of approximately
3,000 miles of crude oil gathering and transportation pipelines
that extends from southeast New Mexico across the Permian Basin of
West Texas to Cushing, Oklahoma.
CHECKERS HOLDINGS: Moody's Cuts CFR to Ca & Alters Outlook to Neg.
------------------------------------------------------------------
Moody's Investors Service downgraded Checkers Holdings, Inc.'s
probability of default rating to Ca-PD/LD, its corporate family
rating to Ca from Caa2 and its senior secured bank credit facility
to Caa3 from Caa1. The downgrades follow the expiration of the
grace period related to Checkers missed principal payments on its
$19.9 million restatement date senior secured first lien term loan
and $5.1 million senior secured first lien revolving credit
facility that were due April 25, 2023. The limited default "LD"
designation appended to Checkers' PDR reflect that the missed
payments constitute a default under Moody's definition, despite
Checkers entering into a forebearance agreement. The limited
default designation will remain until the company resolves the
missed payments. Concurrently, the outlook was changed to negative
from stable.
The downgrades reflects governance considerations including the
company's unsustainable capital structure and high likelihood of a
restructuring as they seek a resolution to the missed principal
payments during the agreed upon forebearance period which currently
expires June 1, 2023 and seek to address their other debt
maturities. In addition to the currently due restatement date term
loan and revolver, Checkers also needs to refinance a first lien
term loan due April 2024 and a second lien term due April 2025. At
the same time, Checkers needs to improve operating performance in a
very competitive hamburger quick-service restaurant sector against
a weakening macro-economic backdrop. The downgrade of the senior
secured bank credit facility to Caa3 from Caa1 reflects Moody's
recovery estimates of approximately 60-70%.
The negative outlook reflects Checkers' diminished liquidity with
currently due term loan maturities and approaching 2024 maturity,
as well as very high leverage.
Downgrades:
Issuer: Checkers Holdings, Inc.
Corporate Family Rating, Downgraded to Ca from Caa2
Probability of Default Rating, Downgraded to Ca-PD /LD (/LD
appended) from Caa2-PD
Backed Senior Secured Bank Credit Facility, Downgraded to Caa3
from Caa1
Senior Secured Bank Credit Facility, Downgraded to Caa3 from Caa1
Outlook Actions:
Issuer: Checkers Holdings, Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Checker's credit profile is constrained by its very high leverage
and weak coverage with debt to EBITDA of about 9.4x and EBIT to
interest coverage of around 0.4x for the last twelve month period
ending Sept. 12, 2022. The company is also constrained by its weak
liquidity and currently due maturities that were due on April 25,
2023 with uncertainty around its ability to refinance. Checkers'
operates in the highly competitive hamburger quick service
restaurant segment, which has been hampered by high beef prices as
the industry deals with higher wages and a weakening target
consumer demographic. The overall environment has contributed to
Checkers' weakened operating performance, including negative same
store sales and pressure on margins. Some positive credit
consideration is given to the company's off-premise focused
business model, high level of brand awareness and reasonable
scale.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A downgrade would occur should Checkers' default on the remaining
debt in its capital structure, if recovery estimates on the first
lien are less than currently expected or if the company pursued a
formal bankruptcy under US bankruptcy code.
An upgrade would require a timely and economical refinancing of the
company's debt maturities, positive free cash flow, as well as
significantly reduced debt.
Checkers Holdings, Inc. is the parent holding company of Checkers
Drive-In Restaurants, Inc. which owns, operates and franchises
hamburger quick service restaurants under the brand names Checkers
and Rally's Hamburgers. Revenue was $328 million for the last 12
months ended September 12, 2022. Checkers is majority owned by Oak
Hill Capital Partners and management.
The principal methodology used in these ratings was Restaurants
published in August 2021.
CHEM-WAY CORPORATION: Unsecureds to be Paid in Full in Plan
-----------------------------------------------------------
Chem-Way Corporation filed with the U.S. Bankruptcy Court for the
Western District of North Carolina a Subchapter V Plan dated May 2,
2023.
The Debtor was incorporated in 1971 and for many decades
distributed dry chemicals out of its facility located in Charlotte,
North Carolina. The Debtor's sole shareholder and president is now
Timothy Swain.
The Debtor ceased distributing chemicals prior to the outbreak of
the Covid-19 pandemic. At that time, the Debtor owned real property
located at 1816 Parker Drive in Charlotte, North Carolina ("Parker
Drive"), scrap metal, trailers, trucks, and equipment used in the
packaging and distribution of dry chemicals. When the Debtor ceased
operations, it intended to engage in an orderly wind down that
included selling its personal property, ensuring no environmental
hazards existed at Parker Drive, and the sale of the same.
While Parker Drive is a very valuable and unique property in a
transitioning part of Charlotte, a pending county ad valorem tax
foreclosure proceeding and litigation with its contractor chilled
buyer interest. To stay and resolve the tax foreclosure and the
litigation, the Debtor filed for relief under Chapter 11 of the
Bankruptcy Code on February 1, 2023. Through this Plan, the Debtor
intends to sell its remaining assets and distribute the proceeds to
its creditors. The Debtor projects that all creditors that filed
timely Allowed Claims will be paid in full through this Plan.
Class 1 consists of all Allowed Secured Tax Claims. These Claims
shall be treated as secured obligations of the Reorganized Debtor.
Each holder of an Allowed Secured Tax Claim shall be paid the
Allowed Amount of its Allowed Secured Tax Claim, in full, in Cash,
on the Distribution Date with interest at such rate as required by
section 511 of the Bankruptcy Code or otherwise as required by
section l129(a)(9)(C) or (D) of the Bankruptcy Code.
Class 2 consists of the Allowed General Unsecured Claims. On the
Distribution Date, holders of Allowed General Unsecured Claims
shall receive a Pro Rata Share of the Sale Proceeds remaining after
payment of all higher priority Allowed Claims. The Debtor estimates
that holders of Allowed General Unsecured Claims will be paid in
full. To the extent sufficient surplus funds exist on the
Distribution Date, holders of allowed General Unsecured Claims
shall be paid interest from and after the Petition Date at the
annual fixed rate of 5.00%. Class 2 is impaired by the Plan.
Class 3 consists of consists of the Equity Interests in the Debtor.
All Equity Interests held prior to the Petition Date shall be
retained. Class 3 is not impaired by the Plan.
The Plan contemplates that distributions will be funded by the sale
of the Debtor's assets.
The Trustee shall make all payments due under this Plan on the
Distribution Date. The Distribution Date shall occur thirty days
after the later of (i) the expiration of the deadline to object to
Claims, (ii) the date on which all objections to Claims have been
resolved by Final Order, (iii) the closing of the sale of Parker
Drive.
The Debtor or Reorganized Debtor shall market Parker Drive for
sale. Any sale of Parker Drive shall be subject to Bankruptcy Court
approval after case wide notice and hearing on a no-protest basis.
Upon reaching terms with a prospective buyer, the Debtor or
Reorganized Debtor shall file a motion to sell Parker Drive
pursuant to Section 363(f) of the Bankruptcy Code whereby Parker
Drive will be conveyed free and clear of liens, claims, and
encumbrances with any such interests attaching to the proceeds of
the sale of Parker Drive. The proceeds of the sale of Parker Drive
shall be deposited into the trust account of the Trustee.
Prior to filing this Plan, the Debtor liquidated the bulk of its
personal property via Iron Horse Auction Company. The Debtor's
counsel was ordered to hold the proceeds from the auction pending
further order from the Court. The Debtor anticipates that the bulk
of these funds will be used to pay Chapter 11 administrative fees,
including attorney fees, Trustee fees, property maintenance, and
accounting/tax preparation fees. In addition to the assets sold by
Iron Horse Auction Company, the Debtor/Reorganized Debtor may have
other miscellaneous assets to sell, including scrap metal.
A full-text copy of the Subchapter V Plan dated May 2, 2023 is
available at https://bit.ly/3Ly34Al from PacerMonitor.com at no
charge.
Counsel for the Debtor:
Cole Hayes, Esq.
COLE HAYES
601 S. Kings Drive
Suite F – PMB # 411
Charlotte, NC 28204
E-mail: cole@colehayeslaw.com
About Chem-Way Corporation
Chem-Way Corporation was incorporated in 1971 and for many decades
distributed dry chemicals out of its facility located in Charlotte,
North Carolina. The Debtor filed Chapter 11 Petition (Bankr.
W.D.N.C. Case No. 23-30084) on February 1, 2023. The Debtor is
represented by Cole Hayes, Esq. of COLE HAYES.
CHRISTMAS TREE: Case Summary & 30 Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: Christmas Tree Shops, LLC
64 Leona Drive
Middleborough, MA 02346
Business Description: CTS operates a chain of brick-and-mortar
home goods retail stores that specializes in
year-round seasonal goods at value pricing.
CTS stores offer a variety of products
including home decor, bed and bath products,
kitchen and dining products, furniture, food
and seasonal products.
Chapter 11 Petition Date: May 5, 2023
Court: United States Bankruptcy Court
District of Delaware
Five affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Christmas Tree Shops, LLC (Lead Case) 23-10576
Handil, LLC 23-10574
Handil Holdings, LLC 23-10575
Salkovitz Family Trust 2, LLC 23-10578
Nantucket Distributing Co., LLC 23-10579
Judge: Hon. Thomas M. Horan
Debtors' Counsel: Evelyn J. Meltzer, Esq.
Marcy J. McLaughlin Smith, Esq.
TROUTMAN PEPPER HAMILTON SANDERS LLP
Hercules Plaza, Suite 5100
1313 Market Street
Wilmington, Delaware 19801
Tel: (302) 777-6500
Fax: (302) 421-8390
Email: evelyn.meltzer@troutman.com
marcy.smith@troutman.com
- and -
Harold B. Murphy, Esq.
Christopher M. Condon, Esq.
MURPHY & KING, PROFESSIONAL CORPORATION
28 State Street, Suite 3101
Boston, Massachusetts 02109
Tel: (617) 423-0400
Email: hmurphy@murphyking.com
ccondon@murphyking.com
Debtors'
Claims &
Noticing
Agent: KURTZMAN CARSON CONSULTANTS, LLC
Christmas Tree's
Estimated Assets: $50 million to $100 million
Christmas Tree's
Estimated Liabilities: $100 million to $500 million
The petitions were signed by Marc Salkovitz as executive chairman.
A full-text copy of Christmas Tree's petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/RHJFYHY/Christmas_Tree_Shops_LLC__debke-23-10576__0001.0.pdf?mcid=tGE4TAMA
List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Pedone & Partners, Inc. Operating $1,928,161
DBA Luxe Collective Group Expense
Lissette Lopez
112 West 27th Street, 7th Floor
New York, NY 10001
Tel: 212-488-5157
Email: lissettel@luxecg.com
2. Everstar Merchandise Co. Merchandise $1,627,675
Limited
Joe Lincoln
11F Harbour Centre, Tower 1
No. 1, Hok Cheung St.
Hung Hom
Kowloon, Hong Kong
Tel: 720-936-4981
Fax: 852-23567308
Email: joelincoln@evertar.biz
3. Metropolitan Trucking Inc. Freight $1,148,489
Heather Maurer
6675 Low Street
Bloomsburg, PA 17815
Tel: 570-832-4714
Fax: 570-389-8977
Email: heathermaurer@mtrk.com
4. Pacific Supreme Merchandise $1,111,830
Benny Huang
29/4 M00 1 Soi Onnuch 62
Sukhumvit 77, Suanluang
Bangkok 0,
Thailand
Tel: 66-2322712830
Email: psthai@pacificsupreme.net
5. The Commercial Traffic Freight $1,054,223
Company/CT Logistics
Amy Bernard
12487 Plaza Drive
Cleveland, OH 44130
Tel: 216-267-2000 x2126
Email: abernard@ctlogistics.com
6. Taizhou Sunny Coast/ Merchandise $1,012,493
Jack Tom
Eric Chu
9th 285 Nanking East Road, Sec. 3
Taipei
Taipei City, 105
Taiwan
Tel: 86 576-84274638
Fax: 86 576-84274633
Email: erick@jack-tom.com
7. 64 Leona Property Owner LLC Landlord $998,000
Alec Roberts
2000 Mckinney Ave
Suite 1000
Dallas, TX 75201
Tel: 617-951-4117
Email: Aroberts@lpc.com
8. Workday Inc. Operating $916,473
Joe Conroy Expense
6110 Stonebridge Mall Road
Pleasanton, CA 94588
Tel: 801-384-5024
Email: joe.conroy@workday.com
9. Creative Converting Merchandise $848,413
Laura Writt
255 Spring Street
Clintonville, WI 54929
Tel: 800-826-0418 X5279
Fax: 800-848-1421
Email: laura.writt@creativeconverting.com
10. Plus Mark Inc. Merchandise $842,330
Gregg Manternach
One American Boulevard
Cleveland, OH 44145
Tel: 216-252-7300
Fax: 216-252-4155
Email: Gregg.manternach@amgreetings.com
11. Mainstream International/ Merchandise $840,213
Mainstream
Robert Howard
115 Newfield Avenue
Edison, NJ 08837
Tel: 718-649-7800 X 103
Fax: 86-862-164338595
Email: rhoward@mainstreamintl.com
12. PeopleReady Inc. Operating $823,345
Angela Kruse Expense
1015 A Street
Tacoma, WA 98402
Tel: 253-680-8309
Fax: 253-274-3777
Email: akruse@trueblue.com
13. Pacific Island Creations Merchandise $752,092
Co., Ltd.
Vicky Hsu
9F, No. 135 Dunhua N. Rd.
Songshan Dist
Taipei City, 114
Taiwan
Tel: 886-2-26577566
Fax: 886-2-26576399
Email: picc@ms6.hinet.net
14. UTZ Quality Foods LLC Merchandise $682,858
Arlona Campos
900 High Street
Hanover, PA 17331
Tel: 800-367-7629
Fax: 717-633-5102
Email: acampos@utzsnacks.com
15. Crown Lift Trucks Operating $628,087
Susan King Expense
15 Forge Parkway
Franklin, MA 02038
Tel: 614-308-2116
Email: susan.king@crown.com
16. Crown King Ent. Merchandise $608,354
Julia Liu
Flat D, 3/F, Cheong Yiu Bldg.
No. 169 Castle Peak Road
Tsuen Wan
Hong Kong
Email: julia.liu@leapak.com
17. Samsonico USA LLC Merchandise $601,043
Steve Carpenter
4925 Westin Park Drive
Conway, AR 72034
Tel: 501-472-6503
Fax: 501-329-1345
Email: steve@samsonico.com.tw
18. Solaray, LLC DBA Swibco Inc. Merchandise $562,725
Tony Abbott
4535 34th Street
Orlando, FL 32811
Tel: 315-382-8114
Fax: 407-513-9898
Email: anthony.abbott@srpcompanies.com
19. FTI Capital Advisors Operating $560,854
Jamie Belcher Expense
79 Wellington Street West
Suite 2010
PO Box 104
Toronto, ON M5K1G8
Canada
Tel: 416-649-8081
Email: jamie.belcher@fticonsulting.com
20. Create A Treat Merchandise $532,901
Sharon Guo
15 Marmac Unit 200
Toronto, ON M9W 1E7
Canada
Tel: 416-675-0114
Fax: 416-675-0155
Email: sguo@giveandgo.com
21. Olde Thompson LLC Merchandise $489,319
Anjli Shah
Attn: Accounts Receivable
3250 Camino Del Sol
Oxnard, CA 93030-8998
Tel: 800-827-1565
Fax: 805-983-1849
Email: anjli.s@ofi.com
22. Imperial Distributors Inc. Merchandise $482,493
Joy Keller
150 Blackstone River Road
Worcester, MA 01607
Tel: 508-713-6233
Email: jkeller@imperialdistributors.com
23. Sino Agro Enterprise/ Merchandise $476,113
AC Ben
Guangdong General Corp 2 Yi Rd
Liangtian Indus Pk
Zhongluotan
Guangzhou
0 Sichuan, China
Tel: 86 20-22019088
Fax: 86 20-22019038
Email: ben@ihandwork.com
24. Prestige Patio Co. Ltd./ Merchandise $467,084
Prestige
Steve Kenger
42 W 38 Street, Suite 802
New York, NY 10018
Tel: 212-763-5151
Email: skenger@prestigeglobalcoltd.com
25. American Express Co. Operating $462,591
Jeff Kolodjay Expense
P.O. Box 981535
El Paso, TX 79998-1535
Tel: 413-854-3638
Email: jeffrey.r.kolodjay@aexp.com
26. Pillow Perfect Inc. Merchandise $444,791
Paul Ratner
318 Bell Park Drive
Woodstock, GA 30188
Tel: 770-926-1122
Email: pratner@pillowperfect.com
27. Ningbo Kosda/AC Jing Merchandise $422,450
25 Pingle Xiang Road
Daxie Development Zone
Beilun Dist. Ningbo
Zhejiang, 315812
China
Tel: 86 139-67818265
Email: jing@kosd.com.cn
Ningbo Kosda/AC Jing
No 1036 Cidong Avenue
Binhai Economic Development Zone
Cixi City, Zhejiang, 315300
China
28. Hostess Brands LLC Merchandise $399,233
Shayla Shannon
7905 Quivira Road
Lenexas, KS 66215
Tel: 816-701-4643
Fax: 866-712-7748
Email: sshannon@hostessbrands.com
29. Zeta Global Corp Operating $398,246
Donna McLaughlin Expense
3 Park Ave, 33rd Floor
New York, NY 10016
Tel: 631-851-5209
Email: dmclaughlin@zetaglobal.com
30. Cardlytics Inc. Operating $389,133
Taylor Zacks Expense
75 Remittance Dr Dept 3247
Chicago, IL 60675-3247
Tel: 404-936-4445
Email: tzacks@cardlytics.com
COINBASE GLOBAL: Hires Scalia, Ex-Fed Enforces to Help in SEC Fight
-------------------------------------------------------------------
Justin Wise of Bloomberg Law reports that Coinbase Global Inc.,
which pledged Thursday, April 27, 2023, to "exhaust all avenues" in
countering the SEC, is staffing up legally with an ex-Trump Cabinet
member and two former federal enforcers.
Coinbase's outside legal team includes former US Labor Secretary
Eugene Scalia, who is a Gibson Dunn partner, and two former
enforcement directors—Steven Peikin of the Securities and
Exchange Commission and James McDonald of the Commodity Futures
Trading Commission. Both are Sullivan & Cromwell partners.
The crypto exchange "is coming out of the gates swinging—it’s
really because it has the depth of the resources that it can
afford," said Carol Goforth, a University of Arkansas law
professor. "If Coinbase did not feel comfortable, it would not have
been so public in its response."
The high-powered legal help, revealed in public disclosures this
week, shows Coinbase is pulling out all the legal stops in
countering the SEC. The legal positioning aligns with the way some
other firms in the crypto industry have bullishly responded to
increased SEC scrutiny.
Coinbase issued a response to a Wells notice the SEC made last
March 2023 in signaling plans to bring an enforcement action. The
crypto exchange said it will be "a well-resourced adversary that
will necessarily be motivated to exhaust all avenues."
A Sullivan & Cromwell team, including partners Peikin, McDonald and
Kathleen McArthur, filed the response on behalf of Coinbase. Each
of the three charges clients more than $2,100 per hour, based on
filings the firm made as part of its representation of FTX in the
collapsed crypto exchange's bankruptcy.
Coinbase hasn't disclosed what it is spending, or what it is
willing to spend, in legal battles with the SEC. Crypto payments
firm Ripple has said it has spent $100 million on Big Law firms in
its long-running dispute with the agency over its XRP digital
asset.
Sullivan & Cromwell is one of Wall Street's priciest and best-known
law firms. Jay Clayton, the former SEC chair, is of counsel at the
firm.
Coinbase spokeswoman Lisa Johnson confirmed Sullivan & Cromwell is
the exchange's outside counsel in the SEC investigation but that
she has "nothing to add beyond that."
Scalia Role
Two days before Coinbase made its response to the Wells notice,
Gibson Dunn separately filed a lawsuit on the crypto exchange’s
behalf. The suit is an attempt to compel the SEC to respond to a
rulemaking petition Coinbase filed last 2022.
Led by Scalia, who served as Labor Secretary from 2019 to 2021, the
firm argued to the Third Circuit that the SEC is violating the
Administrative Procedure Act by failing to respond within a
reasonable time.
Coinbase, whose legal chief, Paul Grewal, is a former magistrate
judge and Facebook deputy general counsel, has long lobbied for a
clearer regulatory framework while vowing to fight any SEC action
brought against it.
Coinbase has said that none of the digital tokens traded on its
exchange are securities. SEC chair Gary Gensler has, meanwhile,
argued that most digital assets are securities that must be
registered before the commission.
The SEC in its Wells notice last month pointed to a range of
alleged securities law violations, including claims that Coinbase
operates an unregistered exchange, clearing agency and broker.
While Coinbase's response to the SEC's Wells notice was designed to
dissuade the agency from bringing an enforcement action, the SEC is
unlikely to back down at this stage, Goforth said.
Coinbase Firms
Coinbase, the largest crypto exchange in the US by trading volume,
has relied on a mix of Big Law firms in recent years in US courts.
In the last three years, firms have made 40 appearances on
Coinbase’s behalf, according to Bloomberg Law litigation
analytics. DLA Piper and Keker Van Nest & Peters have represented
the exchange in more than a quarter of those disputes.
Skadden recently helped win a dismissal in New York federal court
of an investor class-action claiming 79 digital assets offered on
Coinbase’s platform were unregistered securities. The matter,
which was dismissed in February 2023, is now on appeal.
The SEC, besides investigating Coinbase, has ramped up its
enforcement of the industry, filing actions against FTX, crypto
asset trading platform Bittrex and crypto lenders Genesis and
Gemini.
The suits come as the SEC and Ripple await a decision on the
agency's 2020 lawsuit claiming that the firm raised more than $1.3
billion through an unregistered token offering.
Ripple has turned to law firms Debevoise & Plimpton and Cleary
Gottlieb Steen & Hamilton, along with former SEC chair Mary Jo
White and her former deputy, Andrew Ceresney, for litigation that
has now run for more than two years.
About Coinbase Global
Coinbase Global, Inc. (NASDAQ: COIN), branded Coinbase, is an
American publicly traded company that operates a cryptocurrency
exchange platform. Coinbase is a distributed company; all
employees operate via remote work and the company lacks a physical
headquarters. The company started in 2012 with the radical idea
that anyone, anywhere, should be able to easily and securely send
and receive Bitcoin.
CONCRETE SOLUTIONS: Court OKs Cash Collateral Access Thru May 30
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Northern Division, authorized Concrete Solutions & Supply to use
cash collateral on an interim basis in accordance with the budget,
through May 30, 2023.
CSS needs to use cash collateral to operate its business.
As previously reported by the Troubled Company Reporter, Union
Bank, which loaned funds to CSS prior to its first bankruptcy case,
and the Small Business Administration appear to be the only two
parties holding security interests in the cash collateral.
Union Bank extended an SBA-guaranteed loan to CSS. The SBA
provided an EIDL loan. Union Bank is owed approximately $329,254
and the SBA is owed $150,000 plus any accruing interest. Union Bank
may be fully secured but it may not be.
Unsecured claims exceed $401,553 without considering the unsecured
portions of Union Bank and the SBA.
As adequate protection, the Secured Creditors are granted
replacement liens in all post-petition assets of the Debtor, other
than avoidance power actions and recoveries. The replacement liens
do not include any avoidances under Chapter 5 of the Bankruptcy
Code.
The replacement liens granted will have the same validity, extent
and liens held in prepetition collateral.
A copy of the order is available at https://bit.ly/44nKYcU from
PacerMonitor.com.
About Concrete Solutions and Supply
Concrete Solutions and Supply sells and rents concrete restoration
equipment and related supplies and products from two locations:
Newbury Park and Fullerton, California.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-10314) on April 25,
2023.
In the petition signed by Alton Anderson, its president, the Debtor
disclosed up to $500,000 in assets and up to $1 million in
liabilities.
Judge Ronald A. Clifford III oversees the case.
Steven R. Fox, Esq., at The Fox Law Corporation Inc., represents
the Debtor as legal counsel.
CORPORATION SERVICE: Fitch Affirms BB LongTerm IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) of Corporation Service Company (CSC) and WMB Holdings, Inc.
at 'BB'. The Rating Outlook is Stable. Fitch has also affirmed
CSC's senior secured term loan B at 'BBB-'/'RR1'.
CSC's ratings reflect the company's strong and stable positioning
in the business services arena, strong EBITDA margins historically,
high mix of recurring revenue, and solid FCF dynamics. Offsetting
some of these attributes are the ongoing integration of Intertrust
(acquisition closed 2022) and financial leverage that will be
elevated in the coming years relative to historical levels.
KEY RATING DRIVERS
Strong Market Presence: Fitch believes CSC has a meaningful market
presence in the areas in which it competes for corporate business
services. It was a market leader in North America prior to the
acquisition of Intertrust, and now post acquisition, has a strong
market presence in EMEA and APAC as well. Its corporate customer
base includes 90% of the Fortune 500. Its tax software is used by
more than 55% of the Fortune 500. It is the largest manager of
internet domains for corporate clients. It has meaningful presence
among law firms and financial market participants. The Intertrust
fund management and capital markets business was strong and
complementary to CSC's service offerings.
Solid Profitability: CSC executed well over the past decade and has
consistently operated with relatively high EBITDA margins that
Fitch calculates in the mid-30% range (high-40% on net revenue).
Fitch views its consistent profitability historically as a function
of the niche nature of its services combined with strong market
presence, particularly in certain areas including registered agent
and uniform commercial code (UCCs) services. CSC is also a market
leader in digital brand services and corporate tax software used by
U.S. corporations, which also supports profitability. Margins were
relatively stable historically, but Fitch projects the lower-margin
Intertrust business will reduce the overall margin profile at least
for the next year or two as the integration work proceeds.
High Mix of Recurring Revenues: Fitch views CSC's high mix of
recurring revenue as a positive rating factor. The company has a
mix of annual and multi-year contracts, and the niche nature of the
services it provides combined with its strong market position has
led to high retention historically. Approximately 70% of CSC's
revenue is recurring, and this has the potential to increase as the
Intertrust contracts transition to CSC contracts over time.
Consistent FCF Generation: CSC benefits from a fairly stable and
predictable business that generated meaningful FCF historically,
even post dividends. These dividends have been in the range of 40%
to 50% of OCF for the past several years, and Fitch expects this
will remain company policy going forward, because the shareholders
are taxed individually due to the company's S Corp status.
Combining the dividend with the higher interest payments (due to
increased debt and higher interest rates) will lead to an FCF
margin below 10% compared with a low-teens percentage
historically.
Increased Leverage: CSC will likely end 2023 with Fitch-calculated
leverage at or above 5.0x, although the company is targeting a
ratio below 5.0x by year end. This is well above the range that the
company has maintained in the past, which was typically below 2.5x.
Fitch views this elevated leverage as a key risk factor that weighs
against the rating, but the leverage is manageable at the rating
category given the stable nature of its business and solid
profitability. Management has targeted reducing leverage back to
2.0x-2.5x within a few years following the closing, and they have
already made some debt payments in excess of the required
amortization. Based on its history of voluntary debt paydown after
previous transactions, Fitch expects the company to trace a
consistent path towards its lower leverage targets.
Intertrust Acquisition: Fitch believes the acquisition is a credit
positive over the long term, but there are significant integration
and execution risks in the near term. This is the largest deal CSC
has completed historically, and Intertrust has had margin
challenges in recent quarters. The increased diversification and
scale should eventually allow CSC to expand its EBITDA margin, but
this may not materialize in the next year or two as the company
combines its technology systems and streamlines processes.
DERIVATION SUMMARY
CSC has a strong U.S. market presence in certain of its key product
offerings, particularly corporate registered agent and UCC
search/filing services as well as corporate tax software solutions.
With the addition of Intertrust, the company has a much stronger
presence in EMEA and APAC. Fitch reviews the issuer versus other
business service companies and considers a range of qualitative and
financial factors in deriving the rating. Relative to Fitch-rated
industry peers, CSC is well positioned in terms of its market
presence, diversity of offerings, and stability of its business.
However, lower margins versus certain business services peers, high
leverage following the Intertrust acquisition and M&A risk weigh
against the rating in the near term.
CSC has a reasonably high mix of recurring revenue but does not
benefit from long-term contracts unlike certain other business
services providers. With EBITDA below $700 million on a combined
basis with Intertrust, the company has much lower scale than
certain Fitch-rated business services peers including S&P Global
Inc. (A-/Stable), Moody's Corporation (BBB+/Stable) and Verisk
Analytics, Inc. (BBB+/Stable). Its scale is comparable to FactSet
Research Systems Inc. (BBB/Positive), but CSC will have materially
higher gross debt/EBITDA following its 2022 Intertrust acquisition.
Fitch believes CSC has less of a competitive moat than other
Fitch-rated business services firms. Its margin profile positions
the issuer strongly and potentially at a higher rating category
over time as leverage returns to historical levels.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Revenue growth slows in 2024 due to macro concerns returning to
the mid-single digit percentage range organically in 2025.
- EBITDA margins remain relatively stable for CSC at 33% with
modest improvement in 2024 and 2025 from cost synergies.
- FCF remains reasonably strong but reduced due to materially
higher leverage.
- Capital allocation priorities include modest dividend growth and
debt reduction.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch-defined leverage (debt to EBITDA) sustained below 4.0x.
- Greater than expected debt reduction following the Intertrust
acquisition.
- Fitch-defined EBITDA approaching $750 million or higher while
sustaining EBITDA margins.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Leverage is sustained above 4.5x within 18 months of the
Intertrust acquisition.
- Material issues with Intertrust acquisition that leads to margin
degradation, prolonged debt reduction plans and/or cash flow
challenges.
- (CFO - capex) to total debt with equity credit sustained below
5%.
- Shift to a more aggressive financial policy including
debt-financed M&A and/or greater shareholder capital returns.
LIQUIDITY AND DEBT STRUCTURE
Liquidity: CSC has a reasonable amount of liquidity, supported by:
(i) $249 million of cash on its balance sheet at YE 2022, (ii) a
$250 million revolver put in place with the Intertrust financing,
and (iii) positive post-dividend FCF generation that was more than
$100 million per year from 2018-2021. FCF is supported by the
company's highly recurring revenue base, limited capital intensity,
and low working capital needs.
Debt Profile: The company has a fairly simple capital structure
following its Intertrust acquisition, including a $250 million
senior secured revolver (5-year term) and $3.3 billion in senior
secured term loans.
ISSUER PROFILE
CSC provides various business services solutions for areas
including: business formation (legal & administration services),
digital brand management (largest corporate domain registrar
globally), corporate taxes (tax software provider for companies)
and capital markets administration. It acquired Intertrust N.V. in
2022.
ESG CONSIDERATIONS
WMB Holdings, Inc. has an ESG Relevance Score of '4' for Governance
Structure due to its private, concentrated ownership, which has an
impact on the credit profile, and is relevant to the ratings in
conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Corporation Service
Company LT IDR BB Affirmed BB
senior secured LT BBB- Affirmed RR1 BBB-
WMB Holdings, Inc. LT IDR BB Affirmed BB
CRESCENT ENERGY: Eagle Ford Deal No Impact on Moody's 'Ba3' CFR
---------------------------------------------------------------
Moody's Investors Service commented that Crescent Energy Finance
LLC's acquisition of assets in the Eagle Ford Shale does not affect
ratings, including the Ba3 Corporate Family Rating and B1 senior
unsecured notes ratings. The transaction will enhance the company's
position in the Eagle Ford, adding about 20 Mboe/d of production
(of which approximately 70% is liquids). Moody's expects the
acquisition will be modestly leveraging initially but that a
portion of incremental positive free cash flow will be applied
toward revolver repayment and restoring available liquidity.
Moody's expects Crescent to continue returning capital to
shareholders, but in a disciplined manner that maintains the
company's strong balance sheet and liquidity. The company has a
publicly articulated long-term leverage target of 1x but could
temporarily go up to 1.5x in conjunction with the financing of
acquisitions.
Crescent will acquire the operatorship and additional working
interest in existing Eagle Ford assets for $600 million (subject to
customary purchase price adjustments) from Mesquite Energy, Inc.
(unrated). The company expects to close the acquisition early in
the third quarter. Crescent's rating incorporates the company's
strategy of using acquisitions to drive growth and that these could
be debt-funded and temporarily raise leverage. Most recently, the
company acquired assets in the Uinta Basin early in 2022. The Eagle
Ford transaction is consistent with Crescent's strategy to pursue
acquisitions focused on producing assets complementary to the
existing portfolio.
Pro forma for the acquisition, Crescent will continue to have
relatively low leverage, strong interest coverage and solid
retained cash flow to debt. The company has meaningful scale and is
diversified across regions, including Texas and the Rockies. The
vast majority of Crescent's reserves are proved developed, and the
company is focused on producing assets with low decline rates.
The company hedges a portion of its production, increasing
visibility into cash flow that supports capital spending, debt
service needs and dividends. Crescent has equity ownership
interests in some midstream infrastructure that it uses, which
provide additional value to the company.
Crescent Energy Finance LLC, headquartered in Houston, Texas, is a
subsidiary of publicly traded Crescent Energy Company, an
independent exploration and production company, with assets in
several regions, including Texas and the Rockies. During the fourth
quarter of 2022, the company produced 139 Mboe/d (45% oil, 42%
natural gas and 13% NGLs). KKR has an ownership interest in
Crescent, manages some funds with ownership stakes in Crescent, and
also manages Crescent.
CYXTERA TECHNOLOGIES: Skips Interest Payment Amid Debt Talks
------------------------------------------------------------
Reshmi Basu of Bloomberg News reports that Cyxtera Technologies
Inc. skipped an interest payment on its loan earlier this week as
the company continues talks with lenders on how to address nearly
$870 million of debt that comes due next 2024, according to people
with knowledge of the matter.
The company informed lenders that it plans to make the overdue
payment within a five-day grace period, said the people, who asked
not to be identified because the matter is private.
The missed interest payment comes as the struggling data-center
operator is pursuing a potential sale and a possible capital raise
to tackle its 2024 debt wall, Bloomberg reports.
About Cyxtera Technologies
Headquartered in Coral Gables, FL, Cyxtera Technologies, Inc. --
https://www.cyxtera.com -- is a global data center company
providing retail colocation and interconnection services. The
Company provides an innovative suite of deeply connected and
intelligently automated infrastructure and interconnection
solutions to more than 2,300 leading enterprises, service providers
and government agencies around the world - enabling them to scale
faster, meet rising consumer expectations and gain a competitive
edge.
Cyxtera reported a net loss of $355.1 million for the year ended
Dec. 31, 2022, compared to a net loss of $257.9 million for the
year ended Dec. 31, 2021.
* * *
As reported by the TCR on Dec. 23, 2022, S&P Global Ratings lowered
its issuer credit rating on U.S.-based data center operator Cyxtera
Technologies Inc. by two notches to 'CCC' from 'B-'. The negative
outlook reflects Cyxtera's diminishing liquidity position and the
potential for a default or debt restructuring over the next 12
months.
DAWG'S SPORTS: Amends Unsecured Claims Pay Details
--------------------------------------------------
Dawg's Sports Bar and Grill, LLC, submitted an Amended Chapter 11
Plan of Reorganization for Small Business dated May 1, 2023.
The Plan proposes to pay administrative and priority claims in full
unless otherwise agreed. The Debtor estimates approximately 6% will
be paid on account of general unsecured claims pursuant to the
Plan. The Plan term is 60 months.
Class 4 consists of General Unsecured Claims. Payment to be made
annually. Each creditor to receive 1.2% of allowed claim amount
prior to December 31, 2024 and each subsequent year by December
31st through December 31, 2028. The Debtor intends to commit its
disposable income to the payment of the general unsecured
creditors. The minimum total distribution under this Plan is 6%.
This percentage will be increased if Debtor's disposable income is
greater than estimated under this Plan.
Equity Interest Holder Martin Sivic shall retain 100% interest.
Debtor incorporates into this Plan as if fully stated herein all of
the terms of the Stipulation and Order entered on April 13, 2023
with NFS Leasing, Inc. (the "NFS Stipulation"). The terms of the
NFS Stipulation as amending the Amended Chapter 11 Plan of
Reorganization Dated March 27, 2023 shall, to the extent necessary
to effectuate the intent under the NFS Stipulation, amend this
Plan. To the extent of any conflict between the terms of the NFS
Stipulation and this Plan, the NFS Stipulation shall control.
Debtor incorporates the Stipulation and Order entered on April 13,
2023 with Gustine BV Associates, LTD.
The Debtor will implement and fund the plan from its continued
operation of the restaurant and bar over the life of the plan.
The Debtor's financial projections demonstrate the Debtor's ability
to make all future Plan payments in the aggregate amount of
$904,976.00 during the Plan term (the "Plan Funding"). Plan Funding
is in an amount equal to the Debtor's disposable income as defined
in Section 1191(d) of the Bankruptcy Code.
The final Plan payment is expected to be paid on April 30, 2028.
A full-text copy of the Amended Plan dated May 1, 2023 is available
at https://bit.ly/3p66LW9 from PacerMonitor.com at no charge.
The Debtor is represented by:
Corey J. Sacca, Esq.
Bononi & Company, P.C.
20 N. Pennsylvania Ave, Ste. 201
Greensburg, PA 15601
Tel: (724) 832-2499
Fax: (724) 836-0370
Email: csacca@bononilaw.com
About Dawg's Sports Bar and Grill
Dawg's Sports Bar and Grill, LLC, is a Pennsylvania Limited
Liability Company and operates a bar and restaurant to generate
income. The Debtor filed a Chapter 11 bankruptcy petition (Bankr.
W.D. Pa. Case No. 22-22322) on Nov. 22, 2022, with as much as $1
million in both assets and liabilities. The Debtor is represented
by Corey J. Sacca, Esq., at Bononi & Company, P.C.
DAWN ACQUISITIONS: $550M Bank Debt Trades at 48% Discount
---------------------------------------------------------
Participations in a syndicated loan under which Dawn Acquisitions
LLC is a borrower were trading in the secondary market around 51.6
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $550 million facility is a Term loan that is scheduled to
mature on December 31, 2025. The amount is fully drawn and
outstanding.
Dawn Acquisitions LLC, doing business as Evoque Data Center
Solutions, provides digital infrastructure and data center
solutions. The Company offers multi-generational infrastructure,
colocation, connectivity, build-to-suit, and cloud engineering
solutions.
DIEBOLD NIXDORF: Five Proposals Passed at Annual Meeting
--------------------------------------------------------
At the Diebold Nixdorf, Inc.'s Annual Meeting of Shareholders, the
Company's shareholders:
(1) elected Arthur F. Anton, William A. Borden, Marjorie L.
Bowen, Matthew Goldfarb, Octavio Marquez, Emanuel R. Pearlman, and
Kent M. Stahl as directors to serve one-year terms or until the
election and qualification of a successor;
(2) ratified the appointment of KPMG LLP as the Company's
independent registered public accounting firm for the year 2023;
(3) approved, on an advisory basis, the Company's named executive
officer compensation;
(4) recommended a frequency of "every year" for conducting a
shareholder advisory vote on the Company's named executive officer
compensation;
(5) approved an amendment to the Company's Amended and Restated
Articles of Incorporation to increase the authorized common shares
to 250,000,000; and
(6) did not approve an amendment to the Company's Amended and
Restated Articles of Incorporation to eliminate supermajority
voting requirements for matters requiring shareholder approval
under the Ohio Revised Code.
At a meeting of the Board of Directors of the Company held on April
27, 2023, the directors confirmed that the shareholder advisory
vote on the compensation of the Company's named executive officers
would be held every year, as recommended by the Company's
shareholders.
About Diebold Nixdorf
Diebold Nixdorf, Incorporated -- http://www.DieboldNixdorf.com/--
automates, digitizes and transforms the way people bank and shop.
As a partner to the majority of the world's top 100 financial
institutions and top 25 global retailers, the Company's integrated
solutions connect digital and physical channels conveniently,
securely and efficiently for millions of consumers each day. The
Company has a presence in more than 100 countries with
approximately 21,000 employees worldwide.
Diebold Nixdorf reported a net loss of $585.6 million for the year
ended Dec. 31, 2022, a net loss of $78.1 million for the year ended
Dec. 31, 2021, a net loss of $267.8 million for the year ended Dec.
31, 2020, and a net loss of $344.6 million for the year ended Dec.
31, 2019. As of Dec. 31, 2022, the Company had $3.06 billion in
total assets, $1.60 billion in total current liabilities, $2.58
billion in long-term debt, $245.4 million in long-term liabilities,
and a total deficit of $1.37 billion.
Cleveland, Ohio-based KPMG LLP, the Company's auditor since 1965,
issued a "going concern" qualification in its report dated March
16, 2023, citing that the Company projects that it will not
generate sufficient cash from operations to meet its obligations as
they become due over the next twelve months. The Company is also
required to raise equity capital to pay any outstanding principal
amount of 8.50% Senior Notes due 2024 in excess of $20 million.
These conditions raise substantial doubt about its ability to
continue as a going concern.
* * *
As reported by the TCR on March 24, 2023, S&P Global Ratings
lowered its issuer credit rating on Diebold Nixdorf Inc. to 'CCC'
from 'CCC+' and placed all of the ratings on CreditWatch with
negative implications. S&P said the negative CreditWatch reflects
the uncertainty around the company's ability to address its
upcoming debt maturities in 2024, the sustainability of its
capital structure over the longer term, and its belief that a debt
restructuring is likely.
DNP EATS: Seeks to Hire Lindemann Law as Bankruptcy Counsel
-----------------------------------------------------------
DNP Eats, LLC asks the U.S. Bankruptcy Court for the Central
District of California to hire Lindemann Law Firm, APC as its
counsel.
The firm will render these services:
(a) advising Debtor with respect to its powers and duties
as Debtor in possession;
(b) preparing, on behalf of Debtor all necessary motions,
applications, orders, reports and papers in connection with the
administration of the bankruptcy estate;
(c) representing Debtor at all critical hearings on matters
pertaining to its affairs as a debtor-in-possession;
(d) presenting and implementing a plan of reorganization and
related documents;
(e) negotiating appropriate transactions and preparing any
necessary documentation and closing any such transactions;
(f) performing all other legal services that are desirable and
necessary for the efficient
and economic administration of this chapter 11 case.
The firm has received a pre-petition $25,000 for this engagement
plus the chapter 11 filing fee in the amount of $1,738.
Blake Lindemann, Esq., managing member of the Firm, assures the
Court that the Firm represents no creditor or other party in this
Chapter 11 case, and the the Firm does not represent any affiliates
or other related entities, principal members or officers of the
Debtor.
The Firm can be reached at:
Blake J. Lindemann, Esq.
Lindemann Law Firm, APC
433 N. Camden Drive, 4th Floor
Beverly Hills, CA 90210
Tel: (310) 279-5269
Fax: (310) 300-0267
E-mail: Blake@lawbl.com
About DNP Eats
DNP Eats, LLC is part of the food service industry. The Debtor
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. C.D. Cal. Case No. 23-12093) on April 6, 2023. In the
petition signed by Dan Pham, managing member, the Debtor disclosed
up to $500,000 in assets and up to $10 million in liabilities.
Blake J. Lindemann, Esq., at Lindemann Law, APC, represents the
Debtor as legal counsel.
EARTH.COM: Seeks Chapter 11 Bankruptcy, Owes $5Mil. for Domain Name
-------------------------------------------------------------------
Andrew Allemann of Domain Name Wire reports that Earth.com has
filed for bankruptcy in Colorado, leaving domain investor
Innovation HQ waiting for a resolution on a long-term domain deal.
According to the filing, Earth.com owes Innovation HQ, Inc., $5
million for a "rent to own domain name sales agreement."
The company has been operating at earth.com for many years, so it's
not clear if the $5 million number was the total amount agreed to
in the rent-to-own agreement.
Most rent-to-own agreements use an escrow agent or third party that
immediately reverts control of the domain if the lessee is
delinquent on payments. Alternatively, the lessor holds onto the
domain itself, only changing nameservers at the lessee’s
request.
Business Den, a publication in Colorado, notes that the owner has
been sued multiple times.
According to the bankruptcy filing (pdf), Innovation HQ is the
biggest creditor by far. ContentIQ Marketing is the second biggest
at just $230,000.
About Earth.com
Earth.com is the premier internet destination for those who care
about our planet and environment and want to make a difference.
Earth.com sought relief under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Colo. Case No. 23-11621) on April 19, 2023. In the
petition filed by Eric Ralls, as CEO, the Debtor reports estimated
assets between $10 million and $50 million and estimated
liabilities between $1 million and $10 million.
The Debtor is represented by:
Jeffrey S. Brinen, Esq.
Kutner Brinen Dickey Riley, P.C.
473 West Colorado Ave., #3740
Telluride, CO 81435-3740
Tel: 303-832-2400
Email: jsb@kutnerlaw.com
EFS PARLIN: Hits Chapter 11 Bankruptcy Protection
-------------------------------------------------
Jonathan Randles of Bloomberg Law reports that EFS Parlin Holdings,
a General Electric Co. subsidiary that owns a New Jersey power
plant, has filed bankruptcy amid a dispute with the operator of a
vast electric grid that is seeking financial penalties against
generators for failing to produce electricity during Winter Storm
Elliott.
GE subsidiary EFS Parlin Holdings filed Chapter 11 in Wilmington,
Delaware, listing assets of more than $9.4 million and more than
$12.5 million in liabilities as of Feb. 28, 2023.
About EFS Parlin Holdings
EFS Parlin Holdings is categorized under public utility holding
companies.
EFS Parlin Holdings sought protection under Subchapter V of the
U.S. Bankruptcy Code (Bankr. D. Del. Case No. 23-10539) on April
28, 2023. In the petition filed by Michael Whitworth, as
authorized representative, the Debtor estimated assets and
liabilities between $1 million and $10 million.
The Debtor is represented by:
Justin Cory Falgowski. Esq.
Burr & Forman LLP
901 Main Avenue
Norwalk, CT 06851
EMERALD DEBT: Fitch Gives 'BB+(EXP)' Rating on Senior Secured Notes
-------------------------------------------------------------------
Fitch Ratings has published the 'BB+(EXP)'/'RR2' rating for the
proposed senior secured notes issued by Emerald Debt Merger Sub
L.L.C. (Emerald, BB(EXP)/Stable). Emerald is an affiliate of
Blackstone Capital Partners VIII L.P., formed for the purpose of
acquiring Emerson Electric Co.'s (Emerson) Climate Technologies
business (dba Copeland).
The senior secured notes are rated at the same level as the
previously-announced Term Loan B and one notch above Emerald's
expected Issuer Default Rating (IDR) of 'BB(EXP)'. Proceeds from
the term loan and the notes will be used to cover a portion of the
acquisition costs for Copeland.
The issuer is expected to become EMRLD Borrower LP, a newly formed
entity owned by Blackstone and Emerson Electric Co., after the
acquisition is completed. Conversion of the expected ratings to
final ratings is contingent on the transactions closing as
contemplated and receipt of final documents conforming materially
to preliminary documentation reviewed, including sizing of the new
debt instruments.
KEY RATING DRIVERS
Ratings Overview: Emerald's IDR reflects Fitch's expected pro forma
post-acquisition credit profile of Copeland. Copeland's credit
profile is supported by its leading market position in Heating,
Ventilation, Air Conditioning and Refrigeration (HVACR) compressors
and a cash-flow risk profile that is comparable to 'BBB' category
peers. The ratings are mainly constrained by the company's
financial profile, with Fitch-calculated EBITDA leverage of
mid/low-4x through FYE 2024, consistent with 'BB' rating
tolerances.
Blackstone Acquisition: In October 2022, Blackstone and Emerson
entered into a definitive agreement whereby Blackstone would
acquire a majority stake in Copeland. The deal valued Copeland at
an enterprise value of $14 billion. Emerson will receive upfront
pre-tax cash proceeds of approximately $9.5 billion while retaining
significant preferred equity and minority common equity stakes.
Large Scale, Market Leader: Copeland's credit profile is
underpinned by its strong market position and large scale, with
annual revenues of more than $5 billion and EBITDA of more than $1
billion. The company is the clear market leader in HVACR
compressors and related solutions, with a well-recognized brand,
technological leadership and a global presence. Compressors are a
mission-critical component of HVAC systems, consuming the vast
majority of system power but accounting for just a small portion of
overall HVAC unit cost.
Stable Demand, Secular Tailwinds: Copeland has a long track record
of resilient operating performance through economic cycles. Its
revenues are supported by a large global installed base and
non-discretionary demand, with 80% of revenues tied to replacement
and aftermarket sales. At the same time, the company benefits from
secular growth drivers including sustainability and energy
efficiency, particularly in Europe where regulatory changes are
likely to accelerate the adoption of hydronic heat pumps in lieu of
boilers.
Strong Profitability: Copeland's strong and stable margin profile
reflects its technological leadership, market position and pricing
power. The company generates EBITDA margins in the low twenties and
FCF margins in the high single-digits to low teens, which is strong
even compared to investment-grade peers, and gives the company
significant financial flexibility. The company has undertaken some
restructuring initiatives in recent years and management has
identified additional cost savings opportunities, with potential to
further improve profitability by $200 million-$300 million per
year.
Improving Leverage Metrics Forecasted: Copeland's credit profile is
mainly constrained by elevated post-acquisition leverage in the
near term. Following its majority stake sale to Blackstone, Fitch
expects EBITDA leverage of about 4.7x at FYE 2023, which is
relatively high compared to 'BB' rated peers. This is mitigated by
Copeland's earnings stability and consistent FCF of more than $300
million per year that gives the company capacity to reduce EBITDA
leverage to around 3.5x by FYE 2025, which is more in-line with
'BB+' rating tolerances.
Incentives to Prioritize Deleveraging: Despite the 55% private
equity ownership and lack of a stated leverage target, Fitch
believes that management is incentivized to prioritize debt
reduction over equity distributions in the near term in order to
facilitate the three- to five-year target for an IPO. Emerson, the
seller, retains a significant minority stake (45%), which Fitch
views as credit supportive. Under the joint venture (JV) agreement,
Emerson will have influence over certain key financial policies and
decisions, including acquisitions and debt incurrence over certain
thresholds. Management does not expect large-scale acquisitions in
the near term, though small bolt-on deals are possible.
PIK Instruments Treated as Equity: Fitch treats the PIK-only
(paid-in-kind) instruments held by Blackstone and Emerson as equity
in accordance with Fitch's criteria for rating Holdco PIK
Shareholder Loans. Both securities are issued outside of the
restricted group, subordinated to third-party debt, and are
PIK-only with no cash payment. Both securities have longer-dated
final maturity compared to third-party debt.
DERIVATION SUMMARY
Copeland's ratings are supported by its leading market position in
the HVAC compressor market, large scale, stable earnings driven by
replacement and aftermarket sales, and strong free cash flow
generation.
Copeland's business profile is comparable with 'BBB' category peers
in the industrials sector, such as Carrier (BBB-/Stable), Regal
Rexnord (BBB-/Stable), and Vontier (BBB-/Negative). However,
Copeland will have higher leverage, with projected EBITDA leverage
of mid/low-4x through FYE 2024.
There are few close peers in the 'BB' category. Compared to WESCO
(BB/Positive), a distributor of electrical products, Copeland has
comparable EBITDA scale, better margins and cash flow stability but
slightly higher leverage in the near term. Copeland's leverage is
much higher than Atkore (BB+/Stable), a manufacturer of electrical
and tubular products, but generates more stable EBITDA and FCF and
is exposed to less cyclical end markets.
KEY ASSUMPTIONS
- Low single digit revenue decline in FY 2023, followed by
low-to-mid-single digit growth in FY 2024-2026.
- EBITDA margins to expand to over 25% in FY 2025, from around 22%
in FY 2022, which reflects normalization of supply chain pressures
in 2022, lagged contract price recovery, the impact of prior year
restructuring, and around 50% of the cost saving opportunities
projected by management.
- Capex is forecast to be 5%-7% of revenues in FY 2023-2024, driven
by investments in new manufacturing facilities, stabilizing at
around 3% of revenues thereafter.
- Effective interest rate of approximately 8% over the forecast
period.
- FCF to be used mainly to repay debt. No common dividends or major
acquisitions are expected.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Adherence to stated capital allocation priorities and financial
policy that lead to gross debt reduction and EBITDA Leverage
sustained below 3.75x;
- Demonstrated progress towards executing cost savings and growth
initiatives.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Opportunistic financial policy or operational challenges that
leads to EBITDA leverage sustained above 4.25x;
- Shifting ownership and governance structure which results in a
change in capital allocation priorities.
LIQUIDITY AND DEBT STRUCTURE
Under the proposed capital structure, Copeland's debt structure
will mainly consist of a $700 million ABL revolver and $5.5 billion
in secured debt that matures in five to seven years. The company
expects to have ~$625 million of availability under the ABL
revolver at the closing of the acquisition, after accounting for
~$25 million of letters of credit and $50 million of borrowings.
Copeland's liquidity profile is comfortable, with no expected
near-term debt maturities and capex needs that are well-covered by
operating cash flows.
ISSUER PROFILE
Copeland is a leading provider of compression products,
electronics, software and solutions across many applications within
Heating, Ventilation, Air Conditioning and Refrigeration (HVACR),
other heating applications, food service, retail, transportation,
and healthcare/life sciences.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery
----------- ------ --------
Emerald Debt
Merger Sub L.L.C.
senior secured LT BB+(EXP) Publish RR2
EMERALD DEBT: Moody's Rates New $2.75BB Senior Secured Notes 'Ba3'
------------------------------------------------------------------
Moody's Investors Service assigned Ba3 instrument ratings to a new,
$2.75 billion equivalent backed senior secured notes issuance by
Emerald Debt Merger Sub L.L.C. (dba "Copeland") and a direct
subsidiary of Copeland, Emerald Co-Issuer Inc. The company's B1
corporate family rating, B1-PD probability of default rating and
Ba3 rating on its company's senior secured first lien term loan B
remain unchanged. The ratings outlook is stable.
The assignment of the Ba3 rating to the new secured notes issuance
represents effectively no change to Copeland's existing secured
debt ratings, which are one notch above Copeland's CFR. Similar to
the senior secured bank debt, the notes benefit from their
seniority position to the company's senior unsecured liabilities
and sizable $2.25 billion of PIK seller financing. The bank
facility and senior secured notes are secured by a first-lien
pledge of assets.
Proceeds from the senior secured notes (potentially a combination
of US dollar and Euro denominated debt) and from a first-lien
senior secured term loan launched last week will be used to
partially fund Blackstone's acquisition of an approximately 55%
stake in the Climate Technologies business of Emerson Electric
Company ("Emerson", A2 stable). The new joint venture between
Blackstone and Emerson will be called Copeland. Emerson will
receive upfront, pre-tax cash proceeds of approximately $9.5
billion and a note of $2.25 billion at close while retaining 45%
common equity ownership of Copeland. The total transaction value
approximates $14 billion.
Assignments:
Issuer: Emerald Debt Merger Sub L.L.C.
BACKED Senior Secured Regular Bond/Debenture, Assigned Ba3
RATINGS RATIONALE
The B1 CFR reflects Copeland's high financial leverage as a result
of the acquisition of a 55% stake by Blackstone. Pro forma adjusted
debt/EBITDA approximates 6.7x as of December 31, 2022, including
$2.25 billion of PIK seller note financing. Moody's expects that
debt/EBITDA will improve to around 5.5x by the end of 2025. Moody's
expects this improvement to emanate from both voluntary debt
repayment and EBITDA growth. Moody's anticipates aggressive
financial policies that not only reflect the aforementioned high
financial leverage, but also the debt structure associated with
this transaction. The terms of the bank financing, including
restricted payments baskets and incremental leverage that can be
incurred, are representative of terms commonly seen across the
single-B rating universe. Uncertainty regarding how long Emerson
will retain an ownership stake in Copeland is also an important
credit consideration.
The B1 CFR is supported by the company's strong market position in
the global heating, ventilation, air conditioning and refrigeration
("HVACR") compressor market. Moody's also considers the company's
strong business profile as well as the 45% ownership stake by
Emerson, a highly rated entity. The company benefits from a sizable
$5 billion revenue base, strong brand recognition in the compressor
end market, a high EBITDA margin that exceeds 20%, geographic
diversity and strong cash generation. Strength in the commercial
and refrigeration end markets will offset the normalization in the
residential market from record levels during the coronavirus
pandemic. The company will also benefit from positive
sustainability-related secular tailwinds in the HVACR sector.
The stable outlook reflects Moody's expectation that the company
will use its strong free cash generation to proactively repay debt
such that debt/EBITDA improves by 1.5 turns to around 5.5x over the
next 18-24 months.
Moody's expects that the company will have very good liquidity,
supported by strong cash generation that Moody's expects will
exceed $300 million in 2023 with further improvement thereafter.
Moody's also expects that the company will maintain ample capacity
under a $700 million undrawn ABL revolver. Moody's anticipates that
the company will have a springing covenant under its ABL facility
that is unlikely to be tested. There will be no financial
maintenance covenants under the company's term loan B credit
agreement.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could cause upward ratings pressure include if the
company successfully separates from Emerson without business
disruption while maintaining strong operating performance.
Meaningful deleveraging, with sustained debt/EBITDA below 4.5x
(inclusive of seller financing) could also cause upwards ratings
pressure. The realization of cost saving initiatives that translate
to higher prospective EBITDA margins would also be considered.
Conversely, factors that could pressure ratings downward include if
the company experiences challenges separating from Emerson, or if
operating performance or cash generation weakens. Ratings could
also be pressured downward due to an inability or unwillingness to
reduce leverage to below 5.5x (inclusive of seller financing) in
the 24-months following the separation transaction.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
Copeland, expected to be based in St. Louis, Missouri, is an entity
under Emerald Debt Merger Sub L.L.C., is a joint venture being
formed by Blackstone and Emerson with 55% and 45% ownership,
respectively. Copeland is the Climate Technologies business of
Emerson and a manufacturer of heating, ventilation, air
conditioning, and refrigeration ("HVACR") components globally.
Products include compressors, comfort control and cold chain
related products. Revenue for the fiscal year ended December 31,
2022 approximate $5 billion.
EMPLOYBRIDGE: $925M Bank Debt Trades at 15% Discount
----------------------------------------------------
Participations in a syndicated loan under which Employbridge LLC is
a borrower were trading in the secondary market around 85.3
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $925 million facility is a Term loan that is scheduled to
mature on July 19, 2028. The amount is fully drawn and
outstanding.
Employbridge, LLC operates as an industrial staffing company. The
Company offers temporary associates in manufacturing, logistics,
warehousing, and contact centers.
EMRLD BORROWER: S&P Rates New $2.75BB Senior Secured Notes 'BB-'
----------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating and '3'
recovery rating to EMRLD Borrower LP's (doing business as Copeland)
proposed $2.75 billion senior secured notes due 2030. The proposed
amount includes $2.25 billion of U.S.-dollar-denominated notes and
the equivalent of $500 million in Euro-denominated notes. The '3'
recovery rating reflects its expectation for meaningful (50%-70%;
rounded estimate: 55%) recovery in the event of a default.
EMRLD Borrower LP intends to use the proceeds to help fund the
purchase of Emerson's climate technologies business (Copeland). The
notes will be pari passu with the company's previously launched
senior secured term loan B facility.
Copeland (formerly Emerson Climate Technologies), designs,
manufactures, and sells HVAC/R components globally, including fixed
& modulating scroll compressors, cold chain products, including
refrigeration management and monitoring solutions, and comfort
controls, including HVAC management and monitoring solutions.
Copeland's primary customers include global HVAC/R OEMs, and the
company has a presence on a large installed base of about 150
million global residential and commercial HVAC systems. Sales are
the highest in the Americas (about 70% of last-12-months ended Dec.
31, 2022, revenues), followed by AMEA (20%) and Europe (10%). Pro
forma for the completion of the transaction, Copeland will be owned
by private equity sponsor Blackstone and co-investors (55%
ownership stake), and Emerson Electric Co. (remaining 45% ownership
stake).
ISSUE RATINGS - RECOVERY ANALYSIS
Key analytical factors
-- S&P expects Copeland's debt structure will consist of $5.5
billion in senior secured debt, including $2.75 billion of term
loans, $2.75 billion of notes, and a $700 million asset-based
lending (ABL) facility.
-- S&P assigned its 'BB-' issue-level and '3' recovery ratings to
the proposed senior secured notes.
-- S&P's rating on the proposed term loan B facility remains
unchanged at 'BB-' and the recovery rating remains '3'.
-- S&P's simulated default scenario contemplates a default
occurring in 2027 stemming from weakness in the global economy and
increasing competitive pressures, which results in reduced demand
for the company's products and compresses margins. This leads to
Copeland funding its fixed charges with its ABL facility and
precipitates a payment default, debt restructuring, or bankruptcy
filing.
-- S&P's recovery analysis assumes that, in a hypothetical default
scenario, Copeland's ABL facility would be 60% drawn.
Simulated default assumptions
-- Simulated year of default: 2027
-- EBITDA at emergence: $696 million
-- EBITDA multiple: 5.5x
-- Jurisdiction: U.S.
Simplified waterfall
-- Gross enterprise value: $3.83 billion
-- Net enterprise value (after 5% administration expenses): $3.64
billion
-- Valuation split (obligors/nonobligors): 57%/43%
-- Total priority claims (ABL): $428 million
-- Value available to senior secured debt claims from collateral
and pro rata share of noncollateral claims: $3.2 billion
-- Senior secured claims: $5.55 billion
--Recovery expectations: 50%-70% (rounded estimate: 55%)
ENTEGRIS INC: Fitch Affirms LongTerm IDR at 'BB', Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed Entegris, Inc.'s Long-Term Issuer
Default Rating (IDR) at 'BB'. In addition, Fitch has affirmed
Entegris' senior unsecured ratings at 'BB'/'RR4' and senior secured
ratings at 'BBB-'/'RR1'. The Rating Outlook is Stable.
The ratings and Outlook reflect Fitch's expectation for solid
performance over the rating horizon, despite current demand
headwinds and Entegris' relatively weak position in the
semiconductor equipment supply chain. Fitch expects Entegris will
use FCF and net proceeds from divestitures for debt reduction
following the partly debt funded acquisition of CMC Materials, Inc.
until leverage metrics return to levels in line with the rating.
KEY RATING DRIVERS
Reduced Cyclicality: CMC should reduce cyclicality for Entegris, as
exposure to semiconductor capital equipment demand declined to
roughly 20% of revenue from 31% prior to the acquisition.
Cyclicality for semiconductor capital equipment demand, as measured
by aggregate semiconductor industry capex, has been significant,
with two-year declines of roughly 50% in 2001-2002 and 2008-2009,
and mid-teen declines during more moderate downcycles. CMC
increases exposure to approximately 80% of semiconductor
manufacturing unit volumes, which experience less cyclicality than
capex.
Customer Concentration: Similar to most suppliers to semicap and
foundry markets, which are largely consolidated, customer
concentration is high for Entegris. Fitch estimates revenue
exposure to the top three customers will remain near 30% due to an
overlapping customer base with CMC. Fitch typically views material
customer concentration as representative of the 'BB' rating
category. However, Fitch believes risks of material revenue loss
are mitigated due to deepening partnerships with clients as
Entegris fills an essential role in technology roadmaps.
Strengthening FCF: Fitch expects Entegris' FCF margins to
strengthen through the forecast period and return to the mid-teens
after troughing at -5.2% in 2022 on elevated capital spending and
higher acquisition-related cash interest expense. Elevated capital
intensity, as Entegris invests in Asia-Pacific R&D centers to
support its largest customers, will constrain FCF in 2023 before
moderating in 2024. However, Fitch believes additional investment
may be required to support the U.S.-based capacity expansion and
geographic realignment plans announced by foundry customers.
Financial Policies: The company has demonstrated a willingness to
fund strategic acquisitions with debt, but management historically
also prioritized subsequent FCF for debt repayment to quickly
reduce leverage metrics. Over the longer term, management is
targeting EBITDA leverage of 3.0x. Pro forma for a full year's
contribution from CMC, Fitch estimates EBITDA leverage just above
5.0x (which trails initial expectations for 4.7x), but still
assumes the company will dedicate FCF and net proceeds from
divestitures toward debt repayment, reducing leverage to 3.3x by
2025.
Secular Tailwinds: Entegris benefits from strong secular tailwinds
as leading-edge development in the semiconductor industry faces
increasing costs and complexity of new design architectures,
requiring advanced materials with higher-quality structural and
electrical properties. Larger suppliers to foundries and capital
equipment manufacturers such as Entegris are extending their
competitive advantage as scale becomes increasingly critical to
fund R&D and refine production standards and capabilities to
fulfill client technology roadmaps.
CMC Acquisition: CMC added scale to fund investments in technology
advancement as the cost and complexity of producing leading-edge
semiconductors increases. The combination has also enabled greater
capture of spending as it vertically integrates the capability set
and positions Entegris as a leader in CMP, a critical step in
preparing wafers for manufacturing. CMC addresses customer
challenges such as use of new materials, growing complexity of
architectures and increasing sensitivity to contamination. The
synergies in the companies' product portfolios should also
accelerate time to market by disintermediating third parties in
technological development.
DERIVATION SUMMARY
Peers Fitch evaluates Entegris pending the CMC acquisition and
compares the combined company against MKS Instruments, Inc.
(BB+/Stable), Amkor Technology, Inc. (BB/Positive), TTM
Technologies, Inc. (BB/Stable), and II-VI Incorporated (BB/Stable),
given similar product segments, operating profiles or underlying
secular trends.
Fitch believes Entegris' technological capabilities in consumable
inputs and process control equipment positions the company to
extend its leadership as one of the few suppliers capable of
leveraging R&D scale and a global footprint to serve the
increasingly complex demands of fabrication and semiconductor
equipment customers. Despite strong technological capability,
Entegris has been challenged by elevated cyclicality and
constrained pricing power, similar to peers, due to highly cyclical
end-market demand and weaker bargaining positions with customers.
Also similar to peers, Fitch believes Entegris benefits from
secular trends, including growing complexity of circuit
architectures, challenges in sustaining Moore's Law, use of new
materials and increasing sensitivity to contamination. These enable
scaled companies, such as the combined Entegris-CMC, to extend
technology leadership, increase product differentiation and deepen
partnerships with customers, benefiting the credit profile over
time.
Entegris has mixed results across operating metrics. Fitch expects
the constructive demand environment to result in consistent EBITDA
margins of 28%-32% over the rating horizon, which compares well to
the 23% peer median. FCF margins below 10% are close to the peer
median of 7%, but below the mid-teen levels of peers in the 'BB+'
rating due to elevated capital intensity.
EBITDA and FCF margins are consistent with the 'A' rating category.
However, Fitch believes the overall credit profile is weighed down
by potential profit volatility and a high fixed cost burden, given
a limited ability to reduce R&D and capital spending even
temporarily. Entegris has demonstrated a pattern of debt-funded
strategic acquisitions, although management historically
prioritized rapid debt repayment with subsequent FCF. However,
Fitch believes the company has the capacity to accelerate debt
reduction through potential sales of non-strategic segments
belonging to CMC, which Fitch expects would provide additional
funds for debt repayment.
Fitch believes factors consistent with the 'BB' rating include
leverage in line with similarly rated peers, mixed operating
metrics, growing competitive advantages, historical profit
volatility, customer concentration and a debt-funded acquisition
strategy. Fitch believes the company's elevated leverage, lack of
explicit commitment on debt repayment or timeframe for achieving
leverage reduction to 3.0x, aggressive capital spending plan, high
fixed cost base and acquisitive strategy, leave it weakly
positioned relative to more highly rated peers to weather a
potential downturn amid increased global conflict, rising interest
rates and the potential for rapid semiconductor manufacturing
capacity growth.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer:
- Positive Net sales growth in the high-single digits in 2023 with
high-single digit negative net sales growth on an
acquisition-adjusted basis;
- High single digit positive net sales growth in 2024 before
returning to more normalized low- to mid-single digit net sales
growth through the remainder of the forecast period;
- EBITDA margins contract to the high 20s and expand to the low-30s
through the forecast due to realization of $75 million in cost
synergies;
- Capital spending is $495 million in 2023 and declines to 9%, in
line with its historical average;
- No material acquisitions through the forecast period;
- Dividends of $60 million annually and share repurchases paused
until gross leverage reaches 3.0x;
- Debt repayment with FCF and net proceeds from divestitures over
the next two years.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- EBITDA leverage sustained below 3.25x;
- CFO-Capex/Total Debt sustained below 10%;
- FCF margins sustained above 15%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- EBITDA leverage averaging above 3.75x through a cycle;
- FCF margin sustained below 5%;
- CFO-Capex/Total Debt sustained below 7.5%.
LIQUIDITY AND DEBT STRUCTURE
Solid Liquidity: Fitch expects Entegris to have solid liquidity
over the rating horizon and, as of Dec. 31, 2022, consisted of $562
million of readily available cash and an undrawn $575 million
senior secured revolving credit facility due 2027. Fitch's
expectation for $250 million to $500 million of annual FCF over the
rating horizon also supports liquidity, which may be bolstered by
sales of non-strategic assets.
ISSUER PROFILE
Entegris is a leading supplier of advanced materials and process
control solutions for the semiconductor manufacturing and capital
equipment industries.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Entegris, Inc. LT IDR BB Affirmed BB
senior
unsecured LT BB Affirmed RR4 BB
senior secured LT BBB- Affirmed RR1 BBB-
ENVISION HEALTHCARE: $300M Bank Debt Trades at 20% Discount
-----------------------------------------------------------
Participations in a syndicated loan under which Envision Healthcare
Corp is a borrower were trading in the secondary market around 79.6
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $300 million facility is a Term loan that is scheduled to
mature on March 31, 2027. The amount is fully drawn and
outstanding.
Envision Healthcare Corporation provides health care services. The
Hospital offers surgery, pharmacy, medical imaging, emergency care,
and other related health care services. Envision Healthcare serves
patients in the United States.
ESCO LTD: Court OKs $1.5MM DIP Loan from Truist
-----------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland, Baltimore
Division, authorized ESCO, Ltd. to use cash collateral and obtain
secured postpetition financing pursuant to the Senior Secured,
Super-Priority Debtor-in-Possession Credit Facility with Truist
Bank as lender, on an interim basis.
The DIP Facility matures on May 13, 2023, and will consist of a
revolving credit line of up to $4.1 million at any one time
outstanding, inclusive of any amounts outstanding under the
revolving credit line under the Debtor's pre-petition credit
agreement with Truist.
The advances under the Budget for the interim period will be no
greater than $1.5 million.
All new advances under the DIP Credit Facility will be limited by
the Budget.
The Debtor is required to comply with these milestones:
(a) On the Petition Date or such later date to which Truist
consents in writing in its sole discretion, the Debtor will file a
motion requesting entry of an order approving the form, notice and
procedure for a going-out-of-business sale.
(b) Not later than April 18, 2023, a final, non-appealable
order approving the GOB Sale procedures will have been entered.
(c) Not later than May 31, 2023, the DIP Facility will be
indefeasibly paid in full.
The Debtor requires access to the funding available under the DIP
Credit Facility and the DIP Credit Facility Documents in order to
satisfy administrative expenses associated with the operation of
its business as a going concern and other costs relating to the
administration of the Chapter 11 case.
As of the Petition Date, the Debtor was a party to a Loan Agreement
dated as of September 9, 2017, by and among the Debtor and Truist
Bank, and all other documents, instruments, and agreements executed
in connection with the Pre-Petition Credit Agreement.
As of March 28, 2023, the Debtor owed approximately $3.164 million
under the Pre-Petition Credit Agreement, exclusive of prepetition
interest, fees, expenses, and other amounts owed to the
Pre-Petition Lender. The Pre-Petition Obligations are secured by
liens encumbering substantially all of the Debtor's personal
property.
As security for the use of cash collateral, Interim DIP Advances
and other postpetition costs payable under the DIP Credit Facility
Documents, the Debtor will provide the DIP Lender with a valid,
binding and enforceable lien, mortgage or security interest in all
of the Debtor's presently owned or hereafter acquired property and
assets.
A final hearing on the matter is set for May 15 at 11 a.m.
A copy of the order is available at https://bit.ly/3oY6Zi7 from
Stretto, the claims agent.
About ESCO, Ltd.
ESCO, Ltd. retails apparel and footwear. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Md. Case No. 23-12237) on March 31, 2023. In the petition signed by
Stanley W. Mastil, chief restructuring officer, the Debtor
disclosed up to $50 million in both assets and liabilities.
Judge David E. Rice presides over the case.
Daniel Jack Blum, Esq., at Polsinelli PC, represents the Debtor as
legal counsel.
EVERYTHING BLOCKCHAIN: Swings to $9.4M Net Loss in FY Ended Jan. 31
-------------------------------------------------------------------
Everything Blockchain, Inc. has filed with the Securities and
Exchange Commission its Annual Report on Form 10-K disclosing a net
loss of $9.44 million on $2.61 million of revenue for the year
ended Jan. 31, 2023, compared to net income of $2.32 million on
$2.48 million of revenue for the year ended Jan. 31, 2022.
As of Jan. 31, 2023, the Company had $25.67 million in total
assets, $2.12 million in total liabilities, and $23.55 million in
total stockholders' equity.
Mitzpe Netofa, Israel-based Elkana Amitai CPA, the Company's
auditor since 2022, issued a "going concern" qualification in its
report dated May 1, 2023, citing that the Company suffered losses
from operations in all years since inception, except for the year
ended Jan. 31, 2022. These and other factors raise substantial
doubt about the Company's ability to continue as a going concern.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1730869/000147793223003007/ebi_10k.htm
About Everything Blockchain
Headquartered in Fleming Island, Florida, Everything Blockchain,
Inc. (fka OBITX, Inc.) is primarily engaged in the business of
consulting and developing blockchain and cybersecurity related
solutions. Everything Blockchain is a technology company that is
blending blockchain, zero-trust, and database management technology
to create a platform to solve real world, practical business
problems.
EVOKE PHARMA: GIMOTI Nasal Spray Patent Listed in FDA Orange Book
-----------------------------------------------------------------
Evoke Pharma, Inc. announced that the Company's recently issued
patent entitled "Nasal Formulations of Metoclopramide" (U.S. patent
No. 11,628,150), which covers GIMOTI nasal spray, has been listed
in the U.S. Food and Drug Administration's publication, "Approved
Drug Products with Therapeutic Equivalence Evaluations," commonly
known as the Orange Book.
The listed patent covers a collection of nasal solutions of
metoclopramide and its characteristics when formulated. The issued
patent is expected to expire in 2029.
About Evoke Pharma
Headquartered in Solana Beach, California, Evoke Pharma, Inc. --
http://www.evokepharma.com-- is a specialty pharmaceutical
company
focused primarily on the development of drugs to treat GI disorders
and diseases. The Company is developing Gimoti, a nasal spray
formulation of metoclopramide, for the relief of symptoms
associated with acute and recurrent diabetic gastroparesis in
adult
women.
Evoke Pharma reported a net loss of $8.22 million for the year
ended Dec. 31, 2022, compared to a net loss of $8.54 million for
the year ended Dec. 31, 2021.
San Diego, California-based BDO USA, LLP, the Company's auditor
since 2014, issued a "going concern" qualification in its report
dated March 21, 2023, citing that the Company has suffered
recurring losses and negative cash flows from operations since
inception. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
FIRST REPUBLIC BANK: Fitch Lowers & Withdraws 'D' LongTerm IDR
--------------------------------------------------------------
Fitch Ratings has downgraded First Republic Bank's (FRC) Long-Term
Issuer Default Rating (IDR) to 'D' from 'B'/Rating Watch Negative
following the May 1, 2023 announcement of its closure by the
California Department of Financial Protection and Innovation, and
appointment of the Federal Deposit Insurance Corporation (FDIC) as
receiver.
As part of the aforementioned announcement, JPMorgan Chase Bank,
National Association, Columbus, Ohio (JPMNA) entered into a
purchase and assumption agreement with the FDIC to assume all of
the deposits and substantially all of the assets of First Republic
Bank.
In addition, Fitch has upgraded and withdrawn FRC's Long- and
Short-term Deposit Ratings to 'AA+' from 'BB' and to 'F1+' from
'B', respectively, and removed them from Rating Watch Negative.
Subsequent to the ratings actions listed in this release, Fitch is
withdrawing all the ratings as First Republic has entered
receivership. Accordingly, Fitch Ratings will no longer provide
ratings or analytical coverage for First Republic Bank.
KEY RATING DRIVERS
IDRs, VR
The Long- and Short-Term IDRs have been downgraded to 'D', in
accordance with Fitch's Bank Rating Criteria, which deems a default
rating to be appropriate when an issuer has entered into bankruptcy
filings, administration, receivership, liquidity or other formal
winding-up procedure. Similarly, FRC's Viability Rating (VR) has
been downgraded to 'f' from 'b' indicating the institution has
failed.
LONG AND SHORT-TERM DEPOSITS
Fitch has upgraded FRC's long-term deposits to 'AA+' from 'B' and
removed them from Rating Watch Negative. Similarly, Fitch has
upgraded the Short-Term Deposit Rating to 'F1+' from 'B' and
removed them from Rating Watch Negative. Both deposits ratings were
upgraded to be in line with JPMNA and reflect the acquisition.
As part of the purchase and assumption transaction between JPMNA
and the FDIC, First Republic Bank's 84 offices in eight states
reopened on May 1 as branches of JPMNA and all depositors of FRC
became depositors of JPMNA.
SUBORDINATED DEBT AND PREFERRED STOCK
Fitch has affirmed the preferred stock rating at 'C' as well as the
recovery rating of 'RR6', reflecting Fitch's view of poor recovery
prospects for these instruments. JPMNA did not assume any remaining
corporate debt obligations of First Republic, and the FDIC
estimates that the cost to the Deposit Insurance Fund as a result
of the failure would be about $13 billion under the transaction.
Fitch has downgraded the subordinated debt rating to 'C' from
'CCC+', and removed the rating from Rating Watch Negative. Fitch
has also assigned a recovery rating of 'RR6', reflecting its view
of poor recovery prospects for these instruments.
GOVERNMENT SUPPORT RARTING
FRC's Government Support Rating of 'ns' remains unchanged and has
been affirmed and withdrawn.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Rating Sensitivities are no longer relevant as the ratings have
been withdrawn.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
See above.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
First Republic
Bank LT IDR D Downgrade B
LT IDR WD Withdrawn D
ST IDR D Downgrade B
ST IDR WD Withdrawn D
Viability f Downgrade b
Viability WD Withdrawn f
Government Support ns Affirmed ns
Government Support WD Withdrawn ns
Subordinated LT WD Withdrawn C
subordinated LT C Downgrade RR6 CCC+
long-term
deposits LT WD Withdrawn AA+
long-term
deposits LT AA+ Upgrade BB
preferred LT WD Withdrawn C
preferred LT C Affirmed RR6 C
short-term
deposits ST WD Withdrawn F1+
short-term
deposits ST F1+ Upgrade B
FIRST REPUBLIC BANK: Shut by Regulators; JPM Assumes Deposits
-------------------------------------------------------------
The Federal Deposit Insurance Corporation announced May 1, 2023,
that First Republic Bank, San Francisco, California, was closed by
the California Department of Financial Protection and Innovation,
which appointed the FDIC as receiver. To protect depositors, the
FDIC is entering into a purchase and assumption agreement with
JPMorgan Chase Bank, National Association, Columbus, Ohio, to
assume all of the deposits and substantially all of the assets of
First Republic Bank.
JPMorgan Chase Bank, National Association submitted a bid for all
of First Republic Bank’s deposits. As part of the transaction,
First Republic Bank’s 84 offices in eight states will reopen as
branches of JPMorgan Chase Bank, National Association, today during
normal business hours. All depositors of First Republic Bank will
become depositors of JPMorgan Chase Bank, National Association, and
will have full access to all of their deposits.
Deposits will continue to be insured by the FDIC, and customers do
not need to change their banking relationship in order to retain
their deposit insurance coverage up to applicable limits.
Customers of First Republic Bank should continue to use their
existing branch until they receive notice from JPMorgan Chase Bank,
National Association, that it has completed systems changes to
allow other JPMorgan Chase Bank, National Association, branches to
process their accounts as well.
As of April 13, 2023, First Republic Bank had approximately $229.1
billion in total assets and $103.9 billion in total deposits. In
addition to assuming all of the deposits, JPMorgan Chase Bank,
National Association, agreed to purchase substantially all of First
Republic Bank’s assets.
The FDIC and JPMorgan Chase Bank, National Association, are also
entering into a loss-share transaction on single family,
residential and commercial loans it purchased of the former First
Republic Bank. The FDIC as receiver and JPMorgan Chase Bank,
National Association, will share in the losses and potential
recoveries on the loans covered by the loss–share agreement. The
loss–share transaction is projected to maximize recoveries on the
assets by keeping them in the private sector. The transaction is
also expected to minimize disruptions for loan customers. In
addition, JPMorgan Chase Bank, National Association, will assume
all Qualified Financial Contracts.
The resolution of First Republic Bank involved a highly competitive
bidding process and resulted in a transaction consistent with the
least-cost requirements of the Federal Deposit Insurance Act.
The FDIC estimates that the cost to the Deposit Insurance Fund will
be about $13 billion. This is an estimate and the final cost will
be determined when the FDIC terminates the receivership.
About First Republic
First Republic Bank is a commercial bank and provider of wealth
management services headquartered in San Francisco. It caters to
high-net-worth individuals. It operates 93 offices in 11 states
primarily in New York, California, Massachusetts, and Florida.
CBS News reports that the sudden collapse of Silicon Valley Bank
(SVB) on March 10, 2023, along with New York's Signature Bank two
days later, has shaken investor confidence in regional lenders like
$213 billion First Republic. In particular, concern has focused
on
such lenders' uninsured deposits, or account funds exceeding the
Federal Deposit Insurance Corp.'s $250,000 cap.
First Republic Bank on March 16, 2023, received a $30 billion
rescue package from 11 of the biggest U.S. banks in an effort to
prevent its collapse. JPMorgan Chase, Bank of America, Citigroup
and Wells Fargo have agreed to each put $5 billion in uninsured
deposits into First Republic. Meanwhile Morgan Stanley and Goldman
Sachs would deposit $2.5 billion each into the bank. The remaining
$5 billion would consist of $1 billion contributions from BNY
Mellon, State Street, PNC Bank, Truist and US Bank.
The bank's credit rating on March 17, 2023, was downgraded by S&P
Global Ratings, which said the rescue package should ease near-term
liquidity pressures, but "may not solve the substantial business,
liquidity, funding and profitability challenges" that it believes
the San Francisco-based bank is now likely facing.
First Republic has tapped investment bank Lazard Ltd to help it
explore strategic options, the Wall Street Journal reported, citing
people familiar with the matter.
FIRST STUDENT: Moody's Lowers CFR & Senior Secured Debt to B1
-------------------------------------------------------------
Moody's Investors Service downgraded the ratings of First Student
Bidco Inc., including the Corporate Family Rating to B1 from Ba3
and the Probability of Default Rating to B1-PD from Ba3-PD. Moody's
also downgraded the ratings of First Student's senior secured bank
credit facilities and guaranteed senior secured global notes to B1
from Ba3. The outlook is stable.
The ratings downgrade reflects First Student's inability to
deleverage since the July 2022 acquisition of Total Transportation.
Moody's estimates First Student's adjusted debt/EBITDA, pro forma
for recent acquisitions and the First Transit divestiture, to be
around 6 times at December 24, 2022. This leverage figure includes
the benefit of a material amount of continued add-backs to EBITDA
dating back to the depths of the COVID-19 pandemic that have
declined meaningfully, albeit at a slower pace than Moody's
expected. While the vast majority of First Student's business has
recovered post-pandemic, these add-backs specifically address bus
routes for existing customers that First Student has not been able
to effectively service due to a lack of available labor, and
increased recruiting, retention, relocation, and training costs for
bus drivers. Moody's projects that First Student's adjusted
debt/EBITDA will decline to around 5.5 times for the fiscal year
ending June 29, 2024 and not reflect any benefits from the
aforementioned add-backs.
Downgrades:
Issuer: First Student Bidco Inc.
Corporate Family Rating, Downgraded to B1 from Ba3
Probability of Default Rating, Downgraded to B1-PD from Ba3-PD
Senior Secured Bank Credit Facility, Downgraded to B1 from Ba3
Senior Secured Regular Bond/Debenture, Downgraded to B1 from Ba3
Outlook Actions:
Issuer: First Student Bidco Inc.
Outlook, Remains Stable
RATINGS RATIONALE
The B1 CFR is supported by the company's position as a leading
provider of contracted bus transportation services for school
districts, municipalities, and transit authorities in North America
and its high contract retention rates. Even amidst severe drops in
ridership during the peak of the Covid-19 pandemic, the company
continued to receive some level of payment from its customers,
which mitigated the impact to earnings and cash flow. The rating is
also supported by Moody's expectation that First Student will
benefit from strong contract renewals with favorable price
increases. The CFR is constrained by risks including wage
inflation, driver shortages, and elevated fuel costs, as well as
the implementation of longer-term vehicle electrification efforts.
Similarly, the company is also impacted by rising insurance costs
that have led to higher than expected payouts for claims in recent
years and a large self-insurance liability approximating $426
million (for continuing operations). These factors will constrain
margins in the near term, but are mitigated by the company's
ability to pass on some of these costs to customers through
inflation-indexed contracts and customer negotiations. Lastly, the
rating is also constrained by the company's high financial
leverage.
The company's operations face exposures to both carbon transition
risk and human capital risk. Further, governance risk remains
relevant, given the company's ownership by private equity and the
fragmented nature of the student transportation provider market,
which is likely to translate into continued acquisitions of small
to medium sized providers.
The stable outlook reflects Moody's expectation for continued
normalization of business conditions in the school transportation
end market.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if First Student Bidco Inc.
demonstrates improved free cash flow stability and earnings quality
without the benefit of significant add-backs while sustaining
debt/EBITDA below 5.0 times.
The ratings could be downgraded if operating performance does not
improve. A downgrade could also be precipitated by debt/EBITDA
being sustained above 6.0 times, or by the inability to generate
positive free cash flow. Finally, weakened liquidity, including an
increased reliance on the revolver, could also result in a ratings
downgrade.
First Student Bidco Inc. is a leading provider of student
transportation services in North America through long-term
contracts with school districts. The company is owned by EQT
Infrastructure. Pro forma revenue for the year ended December 24,
2022 was approximately $3.9 billion.
The principal methodology used in these ratings was Passenger
Railways and Bus Companies published in December 2021.
FOCUS FINANCIAL: Moody's Cuts CFR to 'B1', Outlook Stable
---------------------------------------------------------
Moody's Investors Service has downgraded Focus Financial Partners,
LLC's corporate family rating and senior secured debt ratings to B1
from Ba3, and its probability of default rating to B1-PD from
Ba3-PD. Concurrently, Moody's assigned a B1 rating to the proposed
$500 million senior secured term loan issuance which will be used
in connection with Focus' pending acquisition by affiliates of
Clayton, Dubilier & Rice, LLC. Funds managed by Stone Point Capital
LLC will retain a portion of their stake in Focus and provide new
equity financing. The announced all cash transaction valued Focus
at an enterprise value of over $7 billion. The outlook remains
stable.
The new term loan tranche will rank pari passu with the company's
existing term loans and go towards funding a portion of the
acquisition purchase price and pay transaction related fees and
expenses. Focus' existing debt will remain in place and the total
capacity of its revolving credit facility is expected to increase
from $650 million to $890 million at the close of the transaction.
Upon closing, total debt is estimated to be about 42% of the new
capital structure.
RATINGS RATIONALE
The downgrade reflects the impact the new LBO-related debt will
have on Focus' leverage ratio (debt/EBITDA including Moody's
standard adjustments), which will rise to 6x from its current level
of 5.1x as of year-end 2022. Moody's expects the company's leverage
ratio (debt/EBITDA including Moody's standard adjustments) to
remain elevated over the next couple of quarters as higher market
volatility and tighter financial conditions slow revenue growth at
Focus' existing partner firms and acquisitions of new partner
firms.
The rating action also incorporates Moody's view that the LBO
transaction increases governance risk because the company's
ownership will be highly concentrated among two private equity
firms and will have limited representation of independent directors
on its board. Moody's also expects private equity ownership will
increase Focus' tolerance for financial risk and debt leverage.
Focus' B1 CFR reflects its diverse group of independent wealth
management firms, resilient asset base, growing scale and improving
profitability. However, constraining the company's rating is its
high financial leverage and aggressive growth strategy of acquiring
wealth management firms.
The stable rating outlook reflects Moody's expectations that Focus'
operating performance would support a steady pace of deleveraging
despite challenging operating conditions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Focus' ratings could be upgraded if: 1) debt-to-EBITDA, as
calculated by Moody's, is sustained below 5x; or 2) sustained
growth and demand for fiduciary wealth management services drive
meaningful improvement to the company's scale; or 3) profitability
as measured by GAAP pretax income margins are sustained above 5%
annually.
Conversely, factors that would lead to a downgrade of Focus'
ratings include: 1) debt-to-EBITDA, as calculated by Moody's, is
sustained above 6x; or 2) the company is unable to execute its
acquisition strategy successfully; or 3) a deterioration in the
demand for wealth management services or meaningful loss of pricing
power.
The principal methodology used in these ratings was Asset Managers
Methodology published in November 2019.
FOCUS FINANCIAL: S&P Lowers Long-Term ICR to 'B+', Outlook Stable
-----------------------------------------------------------------
On May 4, 2023, S&P Global Ratings lowered its long-term issuer
credit rating on Focus Financial Partners Inc. (Focus) to 'B+' from
'BB-'.
The outlook is stable. S&P said, "At the same time, we assigned a
'B+' issue rating to its proposed term loan and lowered the issue
rating on its existing term loans to 'B+' from 'BB-'. The recovery
rating on Focus's secured debt is '3', indicating our view that
lenders can expect meaningful recovery of principal in the event of
payment default (approximately 50%)."
In February 2023, Focus announced a definitive agreement to be
taken private by CD&R. Funds of Stone Point will retain part of
their current investment in Focus and provide new equity financing.
The transaction is expected to close in Q3 2023, subject to
shareholder and regulatory approvals. Focus will issue a $500
million term loan B due June 2028 to supplement the financing of
the transaction, bringing pro forma reported debt to $3.2 billion.
The revolving credit facility is expected to be upsized to $890
million from $650 million.
S&P said, "As a result of the proposed incremental debt and the
increasing competition for attractive RIA acquisitions, we expect
Focus to operate with weighted average adjusted debt to EBITDA of
above 5.0x in the next 12 months. The wealth management industry
has been consolidating rapidly in recent years, a trend that we
expect to continue. As competition for RIA acquisitions and all-in
purchase price multiples have increased, peers such as Hightower,
Mariner, and CI Financial have employed greater leverage to scale
quickly. Focus's leverage has also increased in recent years with
heightened acquisitions, though to a lesser extent than peers. We
expect that as a private company, Focus will continue its
aggressive acquisition strategy and operate with higher leverage
than the 3.5x-4.5x range it had committed to as a public company.
"In our calculation of adjusted debt to EBITDA, we include as debt
the company's term loan (including the proposed $500 million new
term loan), amounts drawn on the revolving credit facility,
reported operating leases, contingent considerations, and tax
receivable agreement liabilities. We don't net surplus cash against
debt when we calculate leverage, given the company's financial
sponsor ownership. Though we expect debt to EBITDA to rise, EBITDA
interest coverage is solid at 3x-4x, supported by interest rate
hedges on a significant portion of the company's debt.
"Despite increasing competition in the industry, Focus has
significantly greater scale than other wealth managers we rate. The
company also has preferred interest in the earnings of its partner
firms, creating some downside protection for its own earnings, and
about a quarter of its revenue is not correlated to markets. We
therefore regard Focus as well positioned in volatile markets
relative to peers.
"As a private firm, Focus may operate with more volatile leverage
and potentially large episodic draws on the revolver. Focus will
also no longer have access to the public equity market. That said,
the sizable revolving credit facility, cash on balance sheet, and
cash flows adequately cover forecasted liquidity needs. We also
think that Focus has good relationships with banks and generally
prudent risk management."
Environmental, Social, And Governance
ESG credit indicators: E-2, S-2, G-3
As a result of Focus's acquisition by a financial sponsor, S&P
revised its governance score to 'G-3' from 'G-2'.
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis of Focus, as they are
for most rated entities owned by private-equity sponsors. We
believe the company's high leverage points to corporate
decision-making that prioritizes the interests of controlling
owners. This also reflects private-equity sponsors' generally
finite holding periods and focus on maximizing shareholder
returns."
FORMING MACHINING: $260M Bank Debt Trades at 22% Discount
---------------------------------------------------------
Participations in a syndicated loan under which Forming Machining
Industries Holdings LLC is a borrower were trading in the secondary
market around 78.2 cents-on-the-dollar during the week ended
Friday, May 5, 2023, according to Bloomberg's Evaluated Pricing
service data.
The $260 million facility is a Term loan that is scheduled to
mature on October 9, 2025. The amount is fully drawn and
outstanding.
Forming Machining Industries Holdings, LLC is a supplier of
specialized components, primarily for the aerospace industry. The
Company specializes in large scale parts and complex subassemblies.
Its products include door, nacelle and wing structures.
FORREST CONCRETE: Court OKs Interim Cash Collateral Access
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of South Carolina
authorized Forrest Concrete, 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 for the continued
operation of its business.
Funding Metrics, LLC, RDM Capital Funding, LLC, and PIRS Capital,
LLC assert or may assert, a security interest and lien in the cash
collateral.
Metrics, RDM, and PIRS each assert blanket liens in and to
substantially all of the Debtor's accounts, receivables, or payment
rights:
* Metrics asserts a secured claim in the approximate amount of
$192,000;
* RDM asserts a secured claim in the approximate amount of
$178,517; and
* PIRS asserts a secured claim in the approximate amount of
$389,717.
As adequate protection for the use of cash collateral, the Debtor
agrees to provide Metrics, RDM, and PIRS Capital, LLC with
replacement liens on post-petition cash collateral to the same
extent and in the same priority as their pre-petition liens, for
any postpetition diminution in the pre-petition cash collateral as
well as replacement liens on all other property that may be
acquired post-petition by the Debtor with the replacement liens
having the same extent and priority as their prepetition liens on
such property.
A final hearing on the matter is set for May 24, 2023 at 10:30
a.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3Ls9Pn0 from PacerMonitor.com.
The Debtor projects, total disbursements, on a weekly basis, as
follows:
$13,702 for the week ending May 5, 2023;
$16,413 for the week ending May 12, 2023; and
$12,576 for the week ending May 19, 2023.
About Forrest Concrete, LLC
Forrest Concrete, LLC is a concrete contractor specializing in
residential and commercial polished concrete, pervious concrete,
and stamped concrete. The Debtor sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D.S.C. Case No. 3-01171) on
April 24, 2023. In the petition signed by Michael P. Forrest, its
managing member, the Debtor disclosed $724,975 in assets and
$2,987,912 in liabilities.
Judge Elisabetta G. Gasparini oversees the case.
W. Harrison Penn, Esq., at McCarthy, Reynolds, Penn, LLC,
represents the Debtor as legal counsel.
FRANCO'S PAVING: Court OKs Cash Collateral Access Thru July 31
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Corpus Christi Division, authorized Franco's Paving, LLC, to use
cash collateral on a final basis in accordance with the budget,
with a 10% variance, through July 31, 2023.
The Debtor requires the use of the cash collateral of Charter Bank
and the Small Business Association in order to continue its
ordinary course business operations and maintain the value of its
bankruptcy estate.
As adequate protection, the Secured Lenders are granted valid and
perfected additional and replacement security interests in, and
liens upon all of the relevant Debtor's assets.
To the extent of the aggregate Diminution of Value of their
respective interests in the cash collateral, the Secured Lenders
are granted an allowed superpriority administrative expense claim
pursuant to 11 U.S.C section 507(b).
The Debtor will provide adequate protection payments as provided in
the Budget to Charter Bank to be paid no later than 10 days from
the entry of the Order, and on the same day of each succeeding
month thereafter and in accordance with the Budget, until further
Court order or plan confirmation.
The Adequate Protection Liens are subject and subordinate to a
carve-out of funds for all fees required to be paid to: (i) the
Clerk of the Bankruptcy Court, (ii) the Office of the United States
Trustee, if any, (iii) all reasonable fees and expenses incurred by
a trustee in an amount not exceeding $15,000, and (iv) all fees and
expenses of the Subchapter V Trustee approved by the Court.
A copy of the order is available at https://bit.ly/42fNtfl from
PacerMonitor.com.
About Franco's Paving LLC
Franco's Paving LLC owns and manages a ready-mix cement production
company in Corpus Christi, Texas. Franco's Paving LLC also
generates income from the sale from gravel mined from its property
located in Duval County, Texas.
Franco's Paving LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-20069) on March 17,
2023. In the petition signed by Isaias Franco, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge David R. Jones oversees the case.
Susan Tran Adams, Esq., at Tran Singh, LLP, represents the Debtor
as legal counsel.
FREE SPEECH: Wins Continued Cash Collateral Access
--------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Victoria Division, authorized Free Speech Systems, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 20% variance.
The Court directed the Debtor to maintain debtor-in-possession
accounts at Axos Bank, which accounts will contain all operating
revenues and any other source of cash constituting cash collateral,
which is (or has been) generated by and is attributable to the
Debtor's business.
Other than as provided for in the Budget, the Debtor will not make
any payment to or for the benefit of any insider of the Debtor,
either directly or indirectly, as that term is defined in section
101(31) of the Bankruptcy Code. In addition, no payments to any
insider during the Interim Period will exceed $10,000.
The Debtor will reserve $5,000 per week during the Interim Period
for adequate protection to PQPR, but will not pay the reserved
amount to PQPR unless authorized by further orders of the Court.
Nothing will constitute an admission that PQPR is or is not
entitled to receive any adequate protection payment on account of
its claims. Moreover, nothing will prejudice the rights of any
party-in-interest, including but not limited to the Debtor, any
creditor, or PQPR to challenge or assert PQPR's entitlement to
receive an adequate protection payment.
According to a CNN Business report, Free Speech has claimed it owes
nearly $54 million to a company called PQPR that is owned by the
parents of Alex Jones, the owner of Free Speech.
A further hearing on the matter is set for May 25, 2023 at 2 p.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3HwYtNk from PacerMonitor.com.
The budget provides for total operating expenses, on a weekly
basis, as follows:
$561,660 for the week ending May 7, 2023;
$79,050 for the week ending May 14, 2023;
$265,560 for the week ending May 21, 2023; and
$34,310 for the week ending May 28, 2023.
About Free Speech Systems
Free Speech Systems LLC is a broadcast media production and
distribution company that provides broadcasting aural programs by
radio to the public. Free Speech Systems is a family-run business
founded by Alex Jones.
FSS is engaged in the business of producing and syndicating Jones'
radio and video talk shows and selling products targeted to Jones'
loyal fan base via the Internet. FSS
produces Alex Jones' syndicated news/talk show (The Alex Jones
Show) from Austin, Texas, which airs via the Genesis Communications
Network on over 100 radio stations across the United States and via
the internet through websites including Infowars.com.
Due to the content of Alex Jones' shows, Jones and FSS have faced
an all-out ban of Infowars from mainstream online spaces. Shunning
from financial institutions and banning Jones and FSS from major
tech companies began in 2018.
Jones, a conspiracy theorist, has been sued by victims' family
members over Jones' lies that the 2012 Sandy Hook Elementary School
shooting was a hoax.
Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet
TV, LLC, filed petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 22-60020) on April
18, 2022.
The Debtors agreed to the dismissal of the Chapter 11 cases in June
2022 after the Sandy Hook victim families dismissed the three
bankrupt companies from their lawsuits.
Free Speech Systems filed a voluntary petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex.
Case No. 22-60043) on July 29, 2022. In the petition filed by W.
Marc Schwartz, as chief restructuring officer, the Debtor reported
assets and liabilities between $50 million and $100 million.
Melissa A. Haselden has been appointed as Subchapter V trustee.
Alexander E. Jones filed for personal bankruptcy under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-60043) on Dec.
2, 2022, listing $1 million to $10 million in assets against
liabilities of $1 billion to $10 billion in liabilities.
Raymond William Battaglia, Esq., at the Law Offices of Ray
Battaglia, PLLC, is FSS's counsel. Raymond W. Battaglia and Crowe
& Dunlevy, P.C., led by Vickie L. Driver, Christina W. Stephenson,
Shelby A. Jordan, and Antonio Ortiz are representing Alex Jones.
Judge Christopher Lopez oversees the FSS Chapter 11 case.
FXI HOLDINGS: Moody's Affirms Caa2 CFR & Rates New Sec. Notes Caa2
------------------------------------------------------------------
Moody's Investors Service assigned a Caa2 rating to FXI Holdings,
Inc.'s new $470.2 million 12.25% senior secured notes due 2026 that
were issued in exchange for the company's existing senior 7.875%
secured notes due 2024. Moody's also affirmed the company's Caa2
Corporate Family Fating. Moody's views the exchange transaction as
a distressed exchange and affirmed the Probability of Default
Rating at Caa2-PD/LD with the "/LD" appended to reflect the limited
default. The Caa2 rating on the existing $775 million 12.25% senior
secured notes due 2026 was affirmed. The rating on the remaining
$4.5 million of 7.875% secured notes due 2024 that were not
exchanged was downgraded to Ca. Subsequent to this action, Moody's
will withdraw the rating on the secured notes due 2024 for business
reasons. The outlook was changed to stable from negative.
The rating affirmation reflects Moody's expectations that FXI will
see stabilization of the EBITDA margin and free cash flow over the
next two years but that ongoing uncertainty affecting FXI's end
markets and the company's high leverage and weak free cash flow
limits financial flexibility. Extending the maturity provides
additional time to execute on the company's growth strategies and
for end markets to recover. However, Moody's anticipates that the
company will need to grow earnings meaningfully to generate
sustainably positive free cash flow and reduce default risk given
the higher interest burden resulting from the exchange offer.
Moody's anticipates that Moody's adjusted debt-to-EBITDA will
improve to around 7.5x by calendar year-end 2023 from 8.0x for the
twelve months ended January 1, 2023 and for FXI to generate $15 to
$25 million of free cash flow in calendar 2024 as the company sees
stabilization in order volumes and continues to benefit from
further pricing and moderation in cost inflation.
The change in the outlook to stable from negative captures that the
exchange offer improves liquidity by addressing the bulk of the
2024 maturity. The transaction provides some flexibility and time
to navigate the challenges brought about by the adverse current
market conditions and execute strategies to improve operating
performance and cash flow generation.
Overall, free cash flow is expected to remain under pressure as FXI
continues to face material volume declines that are impacting the
mattress and furniture industry and higher costs. Moody's expect
free cash flow will be up to $15 million negative for the year
ending December 31, 2023 despite expected EBITDA margin improvement
during the year as FXI's volumes begin to stabilize and recent
pricing and cost saving initiatives offset the impact of
inflationary pressures on costs. The company has adequate liquidity
due to available capacity on the undrawn $235 million asset-backed
loan facility, which Moody's sees as ample to fund seasonal working
capital outlays and large semiannual interest rate payments.
Balance sheet cash is currently minimal, and the company will
likely be reliant on the ABL to fund cash needs.
Exchanging lenders received for each $1,000 of 2024 note principal
at par a $60 cash payment and $940 of new 12.25% senior secured
notes due 2026. The new notes have the same collateral package as
the existing 2026 notes and have a tighter covenant package
including more constraints on restricted payments and restrictions
on intellectual property transfers to unrestricted subsidiaries.
The company's consent solicitation was approved and removed most
covenant and default protections and releases the collateral on the
existing 2024 notes. Consenting lenders received a $40 consent
solicitation fee. FXI's private equity owners injected $50 million
through a preferred stock investment to fund the cash payment to
noteholders as well as the $40 per note consent solicitation fee.
The equity contribution is credit positive because it demonstrates
equity holder support and will fund modest debt reduction. Moody's
views the exchange transaction as a distressed exchange because it
delays the period it would take for lenders to receive principal
repayment. The company's trading levels on the existing 2026 notes
indicate the increase in the interest rate does not fully
compensate for the maturity extension. FXI's negative free cash
flow and end market weakness also limited the company's ability to
address the maturity without a distressed exchange transaction.
Moody's downgraded the existing 2024 notes to Ca from Caa2 due to
the removal of default and collateral protection and the new rating
reflects their effective subordination to a material amount of
secured debt that would weaken recovery in a default scenario.
Moody's will be withdrawing the rating on the small remaining
amount of 2024 notes for business reasons.
Affirmations:
Issuer: FXI Holdings, Inc.
Corporate Family Rating, Affirmed Caa2
Probability of Default Rating, Affirmed Caa2-PD /LD (/LD
appended)
Senior Secured Global Notes, Affirmed Caa2
Downgrades:
Issuer: FXI Holdings, Inc.
Senior Secured Global Notes, Downgraded to Ca from Caa2
Assignmens:
Issuer: FXI Holdings, Inc.
Senior Secured Global Notes, Assigned Caa2
Outlook Actions:
Issuer: FXI Holdings, Inc.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
FXI's Caa2 CFR reflects the company's unsustainably high leverage,
weak free cash flow, and declining profitability. Moody's sees
liquidity as adequate to address cash needs over the next year
following the April 2023 exchange offer mainly due to ample
external capacity on the revolver. Internal cash and cash
generation is minimal including the burden from higher interest
expense on the new 2026 exchange notes. FXI operates in cyclical
automotive, mattress, and furniture markets, and profitability is
sensitive to downturns in the economic cycle as consumers reduce
spending on discretionary goods. Leverage is very high with Moody's
adjusted debt-to-EBITDA of 8.0x for the 12 months ended January 1,
2023 as a result of the large debt funded acquisition of Innocor
Inc. in 2020 and recent earnings pressure. Moody's expects leverage
to decline to 7.5x by calendar year-end 2023 as the EBITDA margin
improves due to stabilization to order volumes and further pricing
offsets moderating cost inflation. Aggressive financial policy and
strategies employed by FXI's private equity owners creates
substantial negative governance risk. Positive factors include the
company's large scale, strong market position in the U.S. foam
manufacturing industry and good end market diversity through its
retail bedding, OEM bedding and furniture, transportation and
medical & technical segments. FXI partially mitigates earnings
volatility associated with chemical prices with its 'pass-through'
contracts.
Moody's has decided to withdraw the ratings for its own business
reasons.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that operating
performance will stabilize toward the end of 2023 and into 2024
though weakness in bedding and furniture market, and moderating but
high costs will pressure profitability and cash flow for much of
2023 as will the step-up in interest. Moody's expects recovery to
the EBITDA margin will drive debt-to-EBITDA to around 7.5x by
year-end 2023. The outlook also reflects Moody's expectations that
free cash flow will be negative in 2023 and then turn modestly
positive, around $15-25 million, in calendar year 2024 and that the
company will maintain at least adequate liquidity.
An upgrade would require improvement to operating performance
including consistent positive free cash flow generation, organic
revenue growth and margin accretion and a reduction of very high
financial leverage. An upgrade would also require the company to
maintain at least good liquidity.
The ratings could be downgraded if end market demand weakens,
earnings do not improve, free cash flow remains weak, or liquidity
deteriorates, which could further increase the likelihood of a
default. A decline in recovery expectations could also lead to a
downgrade.
ENVIRONMENTAL SOCIAL AND GOVERNANCE CONSIDERATIONS
FXI's CIS-5 score reflects that ESG considerations have a very
highly negative impact on FXI's ratings. ESG attributes mainly
reflect the governance considerations associated with concentrated
decision making and aggressive financial strategy and risk
management under private equity ownership as well as risk of a
distressed exchange to address FXI's high leverage. The score also
reflects moderately negative exposure to environmental and social
risks.
The principal methodology used in these ratings was Consumer
Durables published in September 2021.
Headquartered in Radnor, Pennsylvania, FXI is a North American
comfort technologies provider serving multiple end-markets at
scale. End-markets and applications include bedding, furniture,
comfort and acoustic applications in transportation, surgical
applicators, and filtration and industrial acoustic management. One
Rock Capital Partners LLC acquired FXI for approximately $700
million in 2017 and the company acquired Innocor Inc. for roughly
$950 million in February 2020. Following the merger, One Rock owns
approximately 73% and Bain Capital Private Equity, LP owns
approximately 26% of the company. Revenue was approximately $1.42
billion for the twelve months ended January 1, 2023.
G & G TOWERING: Court OKs Interim Cash Collateral Access
--------------------------------------------------------
G & G Towering Investments, Inc. sought and obtained authority from
the U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, to use cash collateral on an interim basis in
accordance with the budget.
The Debtor requires the use of cash collateral to pay its payroll,
office and administrative expenses, and insurance.
The Debtor is indebted to the Internal Revenue Service, the Small
Business Administration and G.H. Reid Enterprises, LLC, a former
landlord. There are three notices of federal tax lien, a UCC filed
by the Small Business Administration and a UCC filed by G.H. Reid
Enterprises, LLC., all filed with the Texas Secretary of State.
The cash collateral at issue is income from the Debtor's regular
business. The Debtor is requesting authorization to access cash
collateral for 14 days in the amount of $10,000.
The Debtor consents to giving the IRS, the SBA and G.H. Reid
replacement liens.
As adequate protection, the SBA and G. H. Reid are granted
replacement liens encumbering all property of the Debtor's estate
acquired or generated after the petition date to the same extent,
validity, and priority to which their liens attached before the
petition pursuant to sections 361 and 363 of the Bankruptcy Code.
The Replacement Liens willbe deemed automatically valid and
perfected with such priority as provided in this Order without any
further notice or act by any party that may otherwise be required
under any other law.
The prepetition liens and the Replacement Liens will be subject and
subordinate to payment of a carve-out. The Carve-Out means: (a)
statutory fees required to be paid pursuant to 28 U.S.C. section
1930(a)(6) plus interest at the statutory rate pursuant to 31
U.S.C. section 3717; (b) the reasonable fees and expenses incurred
by a trustee under 11 U.S.C. section 726(b); and (c) the aggregate
amount of any fees and expenses of any estate professionals, but
only to the extent such fees and expenses have been approved by the
Court.
A hearing on the matter is set for May 11 at 11 a.m.
A copy of the Debtor's motion is available at
https://bit.ly/3Vgck0p from PacerMonitor.com.
A copy of the order is available at https://bit.ly/3VyLUXN from
PacerMonitor.com.
About G & G Towering Investments Inc.
G & G Towering Investments Inc. sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. E.D. Tex. Case No. 23-31458) on
April 25, 2023. In the petition signed by Evan D. Gentry,
president, the Debtor disclosed up to $1 million in assets and up
to $10 million in liabilities.
Judge Eduardo V. Rodriguez oversees the case.
Margaret M. McClure, Esq., at the Law Office of Margaret M.
McClure, represents the Debtor as legal counsel.
GENESIS GLOBAL: Creditors Walk Away from Previous Restructuring Pla
-------------------------------------------------------------------
Chayanika Deka of Crypto Potato reports that the creditors of
Genesis allegedly 'walk away' from the previously agreed bankruptcy
restructuring plan.
Digital Currency Group (DCG) alleged that a group of Genesis
Capital creditors has "reneged and raised" new demands more than
two months after agreeing to a comprehensive settlement.
The bankruptcy case seemed to be on its way to being resolved, but
the latest rejection is expected to prolong the court process,
according to the Barry Silbert-led crypto conglomerate.
Genesis Filing Motion for Mediation
Genesis is among a slew of crypto companies that were hit by last
year's turmoil in the market, along with rivals such as Celsius
Network and Vault. The subsequent bankruptcy filing by Sam
Bankman-Fried's FTX was the final straw for Genesis, which was soon
destabilized by a series of redemption requests. The company filed
for bankruptcy soon after its lending arm paused withdrawals.
It owes $2.4 billion to its main creditors out of nearly $3.4
billion in liabilities, the firm mentioned in its bankruptcy
filing. Its main creditors and parent company agreed to an initial
restructuring plan.
DCG statement read,
"More than two months after all parties agreed to a comprehensive
settlement that was submitted by Genesis Capital to the bankruptcy
court, a group of Genesis Capital's creditors has reneged and
raised all new demands. We do not know if the hundreds of thousands
of individual creditors are aware of this development, but the
latest maneuver will prolong the court process."
The bankrupt crypto lender is now seeking a mediator to assist the
involved parties in reaching a resolution as the DCG deal hit a
roadblock. A new court filing stated that the Debtors believe "the
mediation should be scheduled immediately" since "DCG owes GGC
approximately $630 million pursuant to certain fixed term loans due
during the second week of May 2023."
The Deal
As reported by CryptoPotato, Genesis and its parent firm, DCG,
reached an agreement that detailed shutting down the former’s
loan book and the sale of its bankrupt entities.
It also mentioned that DCG would be tasked with refinancing its
existing 2023 term loans through a new, junior secured term loan in
two tranches made payable to creditors in the aggregate total value
of approximately $500 million.
About Genesis Global
Genesis Global Holdco, LLC, through its subsidiaries, and Global
Trading, Inc., provide lending and borrowing, spot trading,
derivatives and custody services for digital assets and fiat
currency.
Genesis Global Capital, LLC (GGC) and Genesis Asia Pacific PTE.
LTD. (GAP) provide lending and borrowing, spot trading, derivatives
and custody services for digital assets and fiat currency. Genesis
Global Holdco, LLC owns 100% of GGC and GAP.
Genesis Global Holdco, LLC, GGC and GAP each filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 23-10063) on Jan. 19, 2023. The cases are
pending before the Honorable Sean H. Lane.
At the time of the filing, Genesis Holdco reported $100 million to
$500 million in both assets and liabilities.
Genesis Holdco is a sister company of Genesis Global Trading, Inc.
("GGT") and 100% owned by Digital Currency Group, Inc. ("DCG").
GGT, DCG and certain of the Holdco subsidiaries are not included in
the Chapter 11 filings. The non-debtor subsidiaries include Genesis
UK Holdco Limited, Genesis Global Assets, LLC, Genesis Asia (Hong
Kong) Limited, Genesis Bermuda Holdco Limited, Genesis Custody
Limited ("GCL"), GGC International Limited ("GGCI"), GGA
International Limited, Genesis Global Markets Limited, GSB 2022 II
LLC, GSB 2022 III LLC and GSB 2022 I LLC.
The Debtors tapped Cleary Gottlieb Steen & Hamilton, LLP as
bankruptcy counsel; Morrison Cohen, LLP as special counsel; Alvarez
& Marsal Holdings, LLC as financial advisor; and Moelis & Company,
LLC as investment banker. Kroll Restructuring Administration is
the
claims agent.
The ad hoc group of creditors is represented by Kirkland & Ellis,
LLP and Kirkland & Ellis International, LLP. The ad hoc group of
Genesis lenders is represented by Proskauer Rose, LLP.
GENESIS GLOBAL: Panel Taps Seward & Kissel as Litigation Counsel
----------------------------------------------------------------
The official committee of unsecured creditors of Genesis Global
Holdco, LLC and its affiliates seeks approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Seward &
Kissel LLP as its special litigation counsel.
The firm will provide legal services to and perform tasks for the
Committee in fulfilling its duties and powers as set forth in
section 1103(c) of the Bankruptcy Code, to the extent of a conflict
of interest or potential conflict of interest for White & Case.
The firm will be paid at these hourly rates:
John R. Ashmead, Partner $1,625
Mark D. Kotwick, Partner $1,450
Catherine V. LoTempio, Associate $975
Andrew J. Matott, Associate $925
John Patouhas, Law Clerk $750
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, Seward &
Kissel 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
As disclosed in the court filings, Seward & Kissel is a
"disinterested person," as the term to be defined, within the
meaning of section 101(14) of the Bankruptcy Code, as modified by
section 1103(b) of the Bankruptcy Code.
The firm can be reached through:
John R. Ashmead, Esq.
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Phone: (212) 574-1200
Fax: (212) 480-8421
Email: ashmead@sewkis.com
About Genesis Global Holdco
Genesis Global Holdco, LLC, through its subsidiaries, and Global
Trading, Inc., provide lending and borrowing, spot trading,
derivatives and custody services for digital assets and fiat
currency.
Genesis Global Capital, LLC (GGC) and Genesis Asia Pacific PTE.
LTD. (GAP) provide lending and borrowing, spot trading, derivatives
and custody services for digital assets and fiat currency. Genesis
Global Holdco, LLC owns 100% of GGC and GAP.
Genesis Global Holdco, LLC, GGC and GAP each filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 23-10063) on Jan. 19, 2023. The cases are
pending before the Honorable Sean H. Lane.
At the time of the filing, Genesis Holdco reported $100 million to
$500 million in both assets and liabilities.
Genesis Holdco is a sister company of Genesis Global Trading, Inc.
("GGT") and 100% owned by Digital Currency Group, Inc. ("DCG").
GGT, DCG and certain of the Holdco subsidiaries are not included in
the Chapter 11 filings. The non-debtor subsidiaries include Genesis
UK Holdco Limited, Genesis Global Assets, LLC, Genesis Asia (Hong
Kong) Limited, Genesis Bermuda Holdco Limited, Genesis Custody
Limited ("GCL"), GGC International Limited ("GGCI"), GGA
International Limited, Genesis Global Markets Limited, GSB 2022 II
LLC, GSB 2022 III LLC and GSB 2022 I LLC.
The Debtors tapped Cleary Gottlieb Steen & Hamilton, LLP as
bankruptcy counsel; Morrison Cohen, LLP as special counsel; Alvarez
& Marsal Holdings, LLC as financial advisor; and Moelis & Company,
LLC as investment banker. Kroll Restructuring Administration, LLC
is the Debtors' claims and noticing agent and administrative
advisor.
The ad hoc group of creditors is represented by Kirkland & Ellis,
LLP and Kirkland & Ellis International, LLP. The ad hoc group of
Genesis lenders is represented by Proskauer Rose, LLP.
The U.S. Trustee for Region 2 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee tapped White & Case, LLP as bankruptcy counsel; Houlihan
Lokey Capital, Inc. as investment banker; Berkeley Research Group,
LLC as financial advisor; and Kroll as information agent.
GWG HOLDINGS: Solicitation Exclusivity Period Extended
------------------------------------------------------
Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern
District of Texas extended GWG Holdings, Inc. and its affiliates'
exclusive periods to solicit acceptances of a chapter 11 plan for
each Debtor through the earlier of the confirmation hearing,
presently scheduled for June 15, 2023 or June 23, 2023.
About GWG Holdings
Headquartered in Dallas Texas, GWG Holdings, Inc. (NASDAQ: GWGH)
conducts its life insurance secondary market business through a
wholly-owned subsidiary, GWG Life, LLC, and GWG Life's wholly
owned subsidiaries.
GWG Holdings Inc. and affiliates sought Chapter 11 bankruptcy
protection (Bankr. S.D. Texas Lead Case No. 22-90032) on April
20, 2022. In the petition filed by Murray Holland, president and
chief executive officer, GWG Holdings disclosed between $1
billion and $10 billion in both assets and liabilities.
Judge Marvin Isgur oversees the cases.
The Debtors tapped Mayer Brown, LLP and Jackson Walker, LLP as
bankruptcy counsels; Tran Singh, LLP as special conflicts
counsel; FTI Consulting, Inc. as financial advisor; and PJT
Partners, LP as investment banker. Donlin Recano & Company is the
Debtors' notice and claims agent.
National Founders LP, a debtor-in-possession (DIP) lender, is
represented by Michael Fishel, Esq., Matthew A. Clemente, Esq.,
and William E. Curtin, Esq., at Sidley Austin, LLP.
The U.S. Trustee for Region 7 appointed an official committee to
represent bondholders in the Debtors' cases. The committee tapped
Akin Gump Strauss Hauer & Feld, LLP and Porter Hedges, LLP as
legal counsels; Piper Sandler & Co. as investment banker; and
AlixPartners, LLP as financial advisor.
H-FOOD HOLDINGS: $1.15B Bank Debt Trades at 17% Discount
--------------------------------------------------------
Participations in a syndicated loan under which H-Food Holdings LLC
is a borrower were trading in the secondary market around 82.9
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $1.15 billion facility is a Term loan that is scheduled to
mature on May 31, 2025. About $1.09 billion of the loan is
withdrawn and outstanding.
H-Food Holdings, LLC manufactures and distributes packaged food
products. The Company serves customers in the State of Illinois.
H-FOOD HOLDINGS: $415M Bank Debt Trades at 17% Discount
-------------------------------------------------------
Participations in a syndicated loan under which H-Food Holdings LLC
is a borrower were trading in the secondary market around 83.4
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $415 million facility is a Term loan that is scheduled to
mature on May 31, 2025. About $409.8 million of the loan is
withdrawn and outstanding.
H-Food Holdings, LLC manufactures and distributes packaged food
products. The Company serves customers in the State of Illinois.
H-FOOD HOLDINGS: $515M Bank Debt Trades at 17% Discount
-------------------------------------------------------
Participations in a syndicated loan under which H-Food Holdings LLC
is a borrower were trading in the secondary market around 83.2
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $515 million facility is a Term loan that is scheduled to
mature on May 31, 2025. About $493.1 million of the loan is
withdrawn and outstanding.
H-Food Holdings, LLC manufactures and distributes packaged food
products. The Company serves customers in the State of Illinois.
HCC CATERERS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: HCC Caterers Inc.
71 Water Grant Street
Yonkers, NY 10701
Case No.: 23-22341
Chapter 11 Petition Date: May 5, 2023
Court: United States Bankruptcy Court
Southern District of New York
Judge: Hon. Sean H. Lane
Debtor's Counsel: Scott B. Ugell, Esq.
UGELL LAW FIRM, P.C.
151 North Main Street
Suite 202
New City, NY 10956
Tel: 845-639-7011
Fax: 845-639-7004
Email: scott@ugelllaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Peter X. Kelly as authorized
representative of the Debtor.
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/ZGBKS5A/HCC_Caterers_Inc__nysbke-23-22341__0001.0.pdf?mcid=tGE4TAMA
HOLLY ENERGY: S&P Places 'BB+' ICR on CreditWatch Positive
----------------------------------------------------------
S&P Global Ratings placed all of its ratings on Holly Energy
Partners L.P. (HEP), including the 'BB+' issuer credit rating, on
CreditWatch with positive implications.
The CreditWatch placement reflects that S&P expects to raise its
ratings on the company to align them with its ratings on DINO. S&P
expects to resolve the CreditWatch after the close of the proposed
merger.
HF Sinclair Corp. (DINO) announced that it intends to acquire all
of HEP publicly held common units that it does not already own in
exchange for common stock of DINO.
DINO announced a proposed transaction to acquire all HEP's publicly
held common units that it does not already directly or indirectly
own with equity. DINO owns approximately 47% of HEP's common units
as of May 4, 2023. S&P said, "We would view this transaction as
supportive of the company's credit quality because it will
streamline its corporate structure and reduce some cash leakage at
HEP associated with its status as a public entity. Our rating on
DINO is unchanged because it reflects our view of the enterprise on
a consolidated basis, including HEP. As such, it is our expectation
at transaction close that we would raise our ratings on HEP to
equalize them with our ratings on DINO."
CreditWatch
S&P said, "The CreditWatch positive placement reflects that we
expect to raise our ratings on HEP to equalize them with our
ratings on DINO. We expect to resolve the CreditWatch listing when
the transaction closes."
ESG credit indicators: E-3, S-2, G-2
HOUGHTON MIFFLIN: Fitch Affirms LongTerm IDR at 'B', Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed the 'B' Long-Term Issuer Default Ratings
(LT IDR) of Harbor Holdings Corp. and Houghton Mifflin Harcourt
Company (Houghton Mifflin Harcourt) following its acquisition of
NWEA. Fitch also affirmed Houghton Mifflin Harcourt's first lien
credit facilities rating at 'B+'/'RR3' and assigned a 'B+'/'RR3'
issue rating to its new term loan B. The Rating Outlook is Stable.
On April 28, 2023, Houghton Mifflin Harcourt acquired NWEA, a U.S.
not-for profit provider of interim and summative student
assessments and professional learning and school improvement
services. Houghton Mifflin Harcourt did not publicly disclose
either the purchase price or financing sources.
Fitch views NWEA's acquisition positively as it expands Houghton
Mifflin Harcourt's K-12 instructional and assessment content,
accelerates its transformation into a digital subscription provider
and provides cross-sell opportunities through the company's broader
sales force and customer base. NWEA also presents expense synergy
opportunities as it converts from a not-for-profit organization.
KEY RATING DRIVERS
Veritas Capital Acquisition: On April 7, 2022, the private equity
firm Veritas Capital completed its acquisition of Houghton Mifflin
Harcourt for $3.2 billion, or 14x Fitch-calculated adjusted LTM
ended March 31, 2022 EBITDA of $229 million (Fitch's EBITDA is
after pre-publication costs). The transaction was financed with
$1.87 billion of debt and $1.25 billion in sponsor equity. The
resultant increase in Fitch-calculated FO adjusted leverage to 6.0x
from 1.4x resulted in Fitch downgrading the LT IDR to 'B' from
'B+'.
Margin Improvement: EBITDA margins are expected to improve over the
rating horizon due to top line improvements and the realization of
cost savings from reduced standalone costs after Veritas' take
private transaction, a significant portion of which have already
been realized, and NWEA's transition from a not-for-profit
organization. Fitch expects the company will realize more than 90%
of the mid-point of total expected aggregate cost savings from both
transactions and additional margin improvement from the continued
roll-out of Houghton Mifflin Harcourt's incremental content
investment policy and digital conversion strategy.
Elevated Leverage: While Fitch-calculated leverage is expected to
decline over the rating horizon, the decline will be driven by
EBITDA improvement as Fitch does not believe debt prepayment will
be a priority at Houghton Mifflin Harcourt under new ownership.
Coronavirus Impact and Post-Pandemic Outlook: The pandemic's effect
on state budgets was muted by several rounds of direct and indirect
federal stimulus injections, with more than $235 billion directly
allocated to education during 2020 and 2021. The American Rescue
Plan (ARP) provides $350 billion of direct aid to both state and
local governments, including $130 billion for K-12 schools, easing
the burden on both state and local governments. Fitch notes that
during prior periods of economic stress, K-12 adoptions were rarely
cancelled or even delayed (if they were delayed, it was only for
one year).
State governments typically fund approximately 45% of local K-12
education content purchases and depend on sales and/or income tax
for revenue. While local governments were less affected by the
pandemic's economic dislocation as they derive varying portions of
their revenues from property taxes, they were responsible for
funding school safety measures, including establishing and
maintaining remote learning infrastructure.
Midcycle Adoption Calendar: K-12 educational spending is primarily
funded by state and local governments. The current adoption
calendar is more in line with a midcycle adoption level over the
next few years. 2018 was a cyclical trough for K-12 adoptions in
the U.S., leading to a material reduction in earnings for that
period, 2019 marked the start of a stronger adoption calendar.
Digital Transition: Houghton Mifflin Harcourt is experiencing
increased customer usage of its digital core curriculum platform as
teachers and students pivot to virtual learning as a result of the
pandemic, which accelerated K-12 education's pre-existing trend of
digitization. This accelerated transition to digital, or a "digital
first" approach by schools and districts, should foster improved
gross margins as the reliance on annual production and distribution
of printed materials decreases. In addition, the shift to digital
has increased the number of computers per student closer to a
one-to-one ratio while simultaneously increasing recurring revenue
streams given required annual repurchases.
NWEA's K-12 student assessment product set is specifically suited
to this digital transition and is in line with Houghton Mifflin
Harcourt's efforts to increase its exposure to digital revenue
streams. As such, Houghton Mifflin Harcourt's digital billings,
which comprised 41% of LTM billings prior to the acquisition,
increase with NWEA's inclusion along with the resultant recurring
revenue streams.
Competitive Market: Houghton Mifflin Harcourt competes with various
other publishers across the K-12 education core instruction market,
which the company estimates to total approximately $10 billion, and
offers a broad portfolio of core, supplemental, intervention and
services instructional material. The company, together with Savvas
Learning and McGraw-Hill, are the largest core curriculum
providers, and Fitch believes all three collectively hold more than
80% of the core market. However, operational missteps, such as
failure to gain state approval, can leave publishers open to losses
in market share in any given adoption cycle.
Fitch notes Houghton Mifflin Harcourt has made several positive
changes to its credit profile, most notably the switch to an
incremental content investment policy that reduces volatility in
FCF generation.
DERIVATION SUMMARY
Houghton Mifflin is well positioned in the domestic K-12 core
education and supplemental learning markets and is one of the top
three K-12 textbook market publishers. Houghton Mifflin has
completed re-investment in its core textbook educational material
following a period of operational weakness that has resulted in
improved market share, as evidenced by recent state adoptions.
Fitch expects K-12 education publishers to benefit from the
adoption market in 2024-2026, including opportunities in Florida,
California and Texas, which represent the largest adoption states
and drive a significant portion of the adoption cycle.
McGraw-Hill Education, Inc (MHE), Houghton Mifflin's closest
Fitch-rated peer has greater scale and marketplace positioning.
Additionally, MHE has enhanced revenue diversity, owing to MHE's
focus on both the K-12 and higher education markets compared with
Houghton Mifflin's focus on the K-12 market.
KEY ASSUMPTIONS
The Fitch Rating Case Incorporates the Following Assumptions:
- For 2022, low-single-digit revenue declines driven primarily by a
change in literacy content requirements as the company is in the
process of updating its literacy content offering. Thereafter,
revenues grow by mid-single digits driven by upcoming adoptions,
continued growth in supplemental revenues and successful
implementation of new literacy content;
- NWEA acquisition closed on May 1, 2023. Revenues grow at an
annual organic growth rate in the mid-to-high single digits,
- EBITDA margins are expected to continue to improve over the
rating horizon due to the top line improvements and the realization
of cost savings from a reduction in Houghton Mifflin Harcourt's
post acquisition standalone costs and the NWEA acquisition. Fitch
expects Houghton Mifflin Harcourt will realize more than 90% of the
mid-point of total expected aggregate cost savings from both
transactions. Fitch also includes the continued roll-out of
Houghton Mifflin Harcourt's incremental content investment policy
and digital conversion strategy resulting in an improved cost
structure (versus printed services) and better EBITDA margins over
the long term;
- Mid-single-digit annual capital intensity percentage;
- Annual tuck-in acquisitions;
- Slight growth in changes in deferred revenues per year to reflect
a more stable digital adoption and cost structure;
- No additional debt prepayments beyond required amortization.
KEY RECOVERY RATING ASSUMPTIONS
The recovery analysis assumes Houghton Mifflin Harcourt would be
reorganized as a going-concern in bankruptcy rather than
liquidated. Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
Houghton Mifflin Harcourt's recovery analysis assumes significant
K-12 adoption delays followed by market share loss, driven by an
inability to win enough upcoming adoptions, pressuring margins. The
post-reorganization GC EBITDA of $250 million is based on Fitch's
estimate of Houghton Mifflin Harcourt's average EBITDA over a
normal cycle as adjusted for post-acquisitions synergies and the
ongoing digital transformation that offers an improved margin
(versus its printed business), which have permanently reset the
company's cost structure.
The enterprise value (EV) multiple of 6.0x incorporates the
following information:
- The median TMT multiple of reorganization EV/forward EBITDA was
6.0x for the 60 cases for which there was adequate information to
make an estimate. Most (62%) were in the 4.0x-7.0x range. However,
17 companies were reorganized at multiples of 7.1x or higher, and
six below 4.0x. The broadcasting and media sector median multiple
was 6.2x, compared with 5.3x and 5.2x for small samples of
Technology and Telecom cases, respectively;
- Following the global financial crisis and economic downturn in
2008, Houghton Mifflin Harcourt filed for Chapter 11 Bankruptcy on
May 21, 2012 and eventually emerged at a 4.9x multiple. Fitch's GC
multiple estimate of 6.0x is influenced by Fitch's belief that
Houghton Mifflin Harcourt has made significant strides in reducing
cyclicality in its business model though its transition to a more
digital model and reduced volatility in plate capex spend;
- Veritas Capital acquired Houghton Mifflin Harcourt in 2022 for
total consideration of $3.2 billion, or 14x Fitch-calculated
adjusted LTM ended March 31, 2022 EBITDA of $229 million. Fitch's
EBITDA is after pre-publication costs.
- The closest Fitch-rated peer to Houghton Mifflin Harcourt is
McGraw-Hill, which incorporates a multiple of 7.0x into its
recovery. Fitch believes McGraw-Hill benefits from higher revenue
diversity and greater scale, warranting the higher multiple.
Fitch assumes a full draw on Houghton Mifflin Harcourt's $250
million asset-backed revolving credit facility as well as existing
first lien term loans, new first lien term loans funding a portion
of NWEA's acquisition and existing second lien term loans. Assuming
$250 million in recovery EBITDA and a 6.0x emergence multiple leads
to a recovery of 'RR3' on the first lien debt. Applying standard
notching criteria to the 'B' LT IDR leads to a 'B+' first lien
rating. Fitch does not rate the second lien facility.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch-calculated FFO total leverage below 5.5x with the
expectation it can be sustained at that level through cyclical
adoption troughs;
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Fitch-calculated FFO Leverage exceeds 7.0x without a commitment
to reduce leverage within 18-24 months;
- Sustained negative FCF with the expectation of negative cash flow
into cyclical industry improvement.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Houghton Mifflin Harcourt's liquidity is
adequate, with $270 million in cash and full availability under its
$250 million revolver, which matures in April 2027, as of Sept. 30,
2022. Except for $19 million of annual bank amortization, the
company's maturities are its $375 million first lien term loan B in
April 2028, its $1.5 billion first lien term loan in August 2029
and its $390 million second lien term loan in August 2030.
ISSUER PROFILE
Houghton Mifflin Harcourt Company (Houghton Mifflin) is a leading
global provider of K-12 core curriculum, supplemental and
intervention solutions and professional learning services. The
company serves more than 50 million students and three million
educators in 150 countries.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Harbor
Holding Corp. LT IDR B Affirmed B
Houghton Mifflin
Harcourt Company LT IDR B Affirmed B
senior secured LT B+ New Rating RR3
senior secured LT B+ Affirmed RR3 B+
HYLAND SOFTWARE: Moody's Cuts CFR to B3 & Alters Outlook to Neg.
----------------------------------------------------------------
Moody's Investors Service downgraded the corporate family rating
for Hyland Software, Inc. to B3 from B2 and the probability of
default rating to B3-PD from B2-PD. Concurrently, Moody's
downgraded the senior secured first lien bank credit facilities
rating to B2 from B1 and the second lien term loan rating to Caa2
from Caa1. The outlook was changed to negative from stable.
Downgrades:
Issuer: Hyland Software, Inc.
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to
B3-PD from B2-PD
Senior Secured 1st Lien Bank Credit Facility,
Downgraded to B2 from B1
Senior Secured 2nd Lien Bank Credit Facility,
Downgraded to Caa2 from Caa1
Outlook Actions:
Issuer: Hyland Software, Inc.
Outlook, Changed To Negative From Stable
The ratings downgrade reflects Hyland's elevated leverage,
increasing refinancing risk, and weakening liquidity as the
company's first lien term loan matures in July 2024. Additionally,
while Hyland has not relied upon its revolving credit facility in
several years, the recently extended revolver expires on April 1,
2024.
RATINGS RATIONALE
The B3 CFR reflects Hyland's very high leverage, increased
refinancing risk, and near term negative free cash flow. This is
balanced by the company's meaningful scale with revenues in excess
of $1.1 billion, a high degree of recurring revenue, solid content
services platform (CSP) software market position, and well-regarded
vertical market focused product offerings.
Hyland's debt/EBITDA (Moody's adjusted) rose to 12.1x as of
December 31, 2022 (10.9x on a cash adjusted basis, adding back the
change in deferred revenue). Free cash flow to debt was
approximately negative 1% in 2022. Hyland's EBITDA margin (Moody's
adjusted) declined to about 24% in 2022 from about 29% a year
earlier, and well below the mid- to high-30 percent range in years
prior as the company has invested in its SaaS transition while
continuing to support legacy products.
Moody's anticipates Hyland's margin will improve to around 30% in
2023 as the company completes the majority of its 20% reduction in
workforce, announced in early April. Moody's believes Hyland's
margin can improve to mid-30s beyond 2023 assuming successful
completion of the restructuring and at least low-single digit
revenue growth.
However, leverage will remain around 9x in 2023 without any
incremental debt to fund acquisitions or distributions, which are
likely over the long term given the company's private equity
ownership. Hyland has made several acquisitions and about $900
million in buybacks and distributions since 2017. Additionally,
free cash flow to debt will remain negative in 2023 given interest
expense rising to more than $300 million from just over $200
million in 2022. Hyland may face higher spreads if it ultimately
refinances, potentially further pressuring cash flow.
The negative outlook reflects Hyland's upcoming debt maturities and
weakened liquidity profile given free cash flow deficits that will
extend through this year. The company's restructuring plan entails
a degree of operational risk given the potential disruption to the
organization based on the size of the reduction. The outlook could
be stabilized if Hyland successfully refinances its credit
facilities on economically favorable terms and completes its
restructuring without operational missteps.
Moody's considers Hyland's liquidity to be weak. The company does
not have sufficient internal sources to repay the approximately
$2.6 billion senior first lien secured term loan maturing July
2024, thereby requiring external financing over the next year.
Moody's expects Hyland's free cash flow to be negative in 2023 due
to cash restructuring costs and elevated interest expense. Hyland
will rely on its cash balances (approximately $168 million
excluding restricted cash at December 31, 2022) to cover
operational deficits.
Access to Hyland's $121 million revolving credit facility (undrawn
as of December 31, 2022) is constrained by its upcoming expiry
extended to April, 2024. Moody's anticipates Hyland will remain in
compliance with its first lien leverage covenant of 6.5x (per the
credit agreement definition) in effect upon 30% or greater
utilization of the revolver.
The B2 ratings on Hyland's senior secured first lien credit
facilities including the $121 million revolver expiring April 1,
2024, and approximately $2.5 billion outstanding first lien term
loan maturing July 1, 2024, reflect the secured debt's senior
position in the capital structure and the loss absorption provided
by the second lien term loan rated Caa2. The instrument ratings
also consider the B3-PD probability of default rating (PDR) and an
expected average family recovery rate of 50% at default. The credit
facilities benefit from secured guarantees of substantially all of
Hyland's assets.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
While an upgrade is not anticipated in the next 12 months, ratings
could be upgraded over the medium term if debt/EBITDA (Moody's
adjusted) is expected to approach 6.5x with free cash flow to debt
of 5%. The ratings could be downgraded if Hyland does not refinance
its credit facilities on economically favorable terms. The ratings
could also be downgraded if Hyland's free cash flow is expected to
be negative beyond 2023 or if leverage is expected to be sustained
at 8x or higher.
The principal methodology used in these ratings was Software
published in June 2022.
Headquartered in Westlake, OH, Hyland Software, Inc. provides
content services platform software that combines document
management, business process management, records management and
digital asset management solutions. The company is owned by
financial sponsor Thoma Bravo. Hyland generated approximately $1.1
billion of revenue in the year ended December 31, 2022.
HYLIFE FOODS WINDOM: Seeks Chapter 11 Bankruptcy in Delaware
------------------------------------------------------------
Krissa Welshans and Ann Hess of Feedstuffs report that HyLife Foods
Windom, as well as two other U.S. subsidiaries of HyLife Foods,
filed for Chapter 11 bankruptcy in Delaware. HyLife Foods Windom,
along with Tritek International Inc. and Canwin Farms LLC, cited
several factors as the reason for the filing, court documents
showed. The three entities were part of an integrated pork
operation for Canadian-based HyLife Foods.
"Debtors have been experiencing significant operating losses over
the past approximately two years due to a confluence of factors,
including, among other things, COVID related disruptions,
unfavorable commodity pricing dynamics, and unfavorable foreign
exchange pricing in connection with international sales, resulting
in a significant impairment of debtors' anticipated export
revenues," court documents stated.
The companies filed Chapter 11 "to pursue a restructuring of their
balance sheets and operations and are actively marketing the
business and assets to potential going-concern buyers."
The Chapter 11 filing revealed a range of 200 to 999 creditors are
owed, with estimated liabilities in the range of $100 million to
500 million.
The Minnesota Department of Agriculture recently hosted a meeting
to discuss possible options for the HyLife Foods Windom pork
production plant. Earlier in April, the company notified state
officials that the plant was facing closure in June unless a new
buyer could be secured.
The pork plant processes approximately 1.2 million hogs annually,
just over 1% of U.S. pork production, and employees over 1,000
people.
About Hylife Foods Windom
Hylife Foods Windom is a pork processing plant in Windom,
Minnesota.
Hylife Foods Windowm sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-10521) on April 27,
2023. In the petition filed by Grant Lazaruk, as chief executive
officer, the Debtor reports assets and liabilities between $100
million and $500 million each.
The Debtor is represented by:
Jeremy William Ryan, Esq.
Potter Anderson & Corroon LLP
2850 Highway 60 E.
Windom, MN 56101
IEH AUTO PARTS: Unsecureds to Recover 10% in Liquidating Plan
-------------------------------------------------------------
IEH Auto Parts Holding LLC and its Debtor Affiliates filed with the
U.S. Bankruptcy Court a First Amended Combined Disclosure Statement
and Joint Plan of Liquidation dated May 2, 2023.
The Debtors are a leading automotive aftermarket parts distributor
in the United States. The Auto Plus brand was launched in the
United States in 2010.
The Debtors' headquarters are located in Kennesaw, Georgia. The
Debtors operate 304 store locations across 26 states, as well as 21
distribution centers—all of which are leased. For the Debtors to
serve their core customers effectively, the Debtors have
distribution centers in strategically located regions and near
their stores to ensure a continuous supply of products.
To provide the Debtors with the liquidity needed to preserve and
stabilize operations and conduct a value-maximizing sale process,
the Debtors negotiated the DIP Facility, which provided the Debtors
with a priming superpriority administrative claim debtors
in-possession credit facility in an aggregate maximum principal
amount of up to $75 million. No alternative source of funding to
satisfy the Debtors' critical liquidation objectives was available.
Prior to the Petition Date, the Debtors and the DIP Lender (and
their respective advisors) engaged in arm's-length negotiations
regarding the terms and conditions of the DIP Facility.
The Plan is a liquidating plan. The Debtors are selling
substantially all of their Assets.
Class 1 consists of all Priority Claims. On the applicable
Distribution Date, each Holder of an Allowed Priority Claim shall
receive, at the option of the Debtors (prior to the Effective Date)
or the Plan Agent (on or after the Effective Date), up to the full
amount of its Allowed Priority Claim: (i) payment in full in Cash;
or (ii) such other treatment as is necessary to render such Claim
Unimpaired.
Class 2 consists of all General Unsecured Claims. On the applicable
Distribution Date, each Holder of an Allowed General Unsecured
Claim shall receive, up to the full amount of its Allowed General
Unsecured Claim its Pro Rata share of the GUC Pool. Claims in Class
2 are Impaired. The allowed unsecured claims total $170 million.
This Class will receive a distribution of 10% of their allowed
claims.
Class 3 consists of all Equity Interests in the Debtors. On the
Effective Date, all Equity Interests in the Debtors shall be
canceled. No Distribution shall be made on account of Equity
Interests in the Debtors. Class 3 is conclusively deemed to have
rejected the Plan pursuant to section 1126(g) of the Bankruptcy
Code. Class 3 is not entitled to vote to accept or reject the
Plan.
On and after the Effective Date, the Wind-Down Debtors shall
continue in existence for purposes of (a) resolving Claims that are
not General Unsecured Claims, (b) making distributions on account
of Allowed Non-GUC Claims, (c) establishing and funding the
Disputed Claims Reserve, GUC Claim Reconciliation Fund,
Professional Fee Escrow Account, and any other similar amounts in
accordance with the terms of this Plan, (d) filing appropriate Tax
returns, (e) liquidating all Assets of the Debtors and winding down
the Estates, and (f) otherwise administering the Plan.
Except as otherwise provided in the Plan, or any agreement,
instrument, on the Effective Date, the Assets shall revest in the
Estates for the purpose of liquidating the Estates, free and clear
of all Liens, Claims, charges, or other encumbrances. On and after
the Effective Date, the Wind-Down Debtors may, at the direction of
the Plan Agent, and subject to the Confirmation Order, use,
acquire, or dispose of property, and compromise or settle any
Non-GUC Claims, Interests, or Causes of Action without supervision
or approval by the Bankruptcy Court and free of any restrictions of
the Bankruptcy Code or Bankruptcy Rules.
On the Effective Date, a Plan Agent will be appointed by the
Debtors to administer the Plan and wind down the Debtors' Estates.
As of the Effective Date of the Plan, the Plan Agent will be
responsible for all payments and distributions to be made under the
Plan to the Holders of Non-GUC Claims and the GUC Administrator
will be responsible for all payments and distributions to be made
under the Plan to the Holders of Allowed General Unsecured Claims.
Each Executory Contract and Unexpired Lease to which the Debtors
are a party shall be deemed rejected unless the Debtors expressly
assume such agreements before the Effective Date.
A full-text copy of the First Amended Combined Disclosure Statement
and Plan dated May 2, 2023 is available at https://bit.ly/42pqGOj
from Kurtzman Carson Consultants LLC, claims agent.
Counsel for the Debtors:
Matthew D. Cavenaugh, Esq.
Veronica A. Polnick, Esq.
Vienna F. Anaya, Esq.
Emily Meraia, Esq.
Jackson Walker LLP
1401 McKinney Street, Suite 1900
Houston, TX 77010
Tel: (713) 752-4200
Fax: (713) 752-4221
Email: mcavenaugh@jw.com
Email: vpolnick@jw.com
Email: vanaya@jw.com
Email: emeraia@jw.com
Co-Counsel and Conflicts Counsel for the Debtors:
Elizabeth C. Freeman, Esq.
Law Office of Liz Freeman, PLLC
P.O. Box 61209 700 Smith St.
Houston, TX 77208
Tel: (832) 779-3580
Email: liz@lizfreemanlaw.com
About IEH Auto Parts Holding
IEH Auto Parts Holding, LLC -- https://autoplusap.com/ --
distributes automotive products. It offers equipment, tools,
accessories, paint, and related products in the automotive
aftermarket. The company serves customers in the United States.
IEH Auto Parts Holding and its affiliates filed a petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas
Lead Case No. 23-90054) on Feb. 1, 2023. In the petition filed by
their chief executive officer, John Michael Neyrey, the Debtors
reported between $100 million and $500 million in both assets and
liabilities.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Jackson Walker, LLP and The Law Office of Liz
Freeman, PLLC as legal counsels; Lincoln International, LLC as
investment banker; Portage Point Partners, LLC as restructuring
advisor; and B. Riley Real Estate, LLC as real estate advisor.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
Kane Russell Coleman Logan, PC is the committee's legal counsel.
INFOW LLC: Court Approves Rejected Firms' Fee Deal in Ch.11 Case
----------------------------------------------------------------
Vince Sullivan of Law360 reports that lawyers and restructuring
advisers used by the bankrupt parent company of Alex Jones'
InfoWars podcast business will be able to retain their prepetition
fee deposits after a Texas federal judge approved a settlement of
their fee claims Friday, April 28, 2023.
Following a hearing on April 28, 2023, the Court ordered that:
* In full satisfaction of any and all claims or rights to
payment from the Debtor and its estate, Shannon & Lee LLP ("S&L")
shall receive the $50,822.68 prepetition retainer held by S&L from
the Debtor (the "S&L Retainer"). S&L is authorized to take
possession of the S&L
Retainer.
* In full satisfaction of any and all claims or rights to
payment from the Debtor and its estate, Schwartz Associates LLC
("SALLC") shall receive the $75,000.00 prepetition retainer held by
SALLC (the "SALLC Retainer"). SALLC is authorized to take
possession of the SALLC Retainer.
About Free Speech Systems
Free Speech Systems LLC is a broadcast media production and
distribution company that provides broadcasting aural programs by
radio to the public. Free Speech Systems is a family-run business
founded by Alex Jones.
FSS is presently engaged in the business of producing and
syndicating Jones' radio and video talk shows and selling products
targeted to Jones' loyal fan base via the Internet. Today, FSS
produces Alex Jones' syndicated news/talk show (The Alex Jones
Show) from Austin, Texas, which airs via the Genesis Communications
Network on over 100 radio stations across the United States and via
the internet through websites including Infowars.com.
Due to the content of Alex Jones' shows, Jones and FSS have faced
an all-out ban of Infowars from mainstream online spaces. Shunning
from financial institutions and banning Jones and FSS from major
tech companies began in 2018.
Conspiracy theorist Alex Jones has been sued by victims' family
members over Jones' lies that the 2012 Sandy Hook Elementary School
shooting was a hoax.
Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet
TV, LLC, filed petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-60020) on April
18, 2022.
The Debtors agreed to the dismissal of the Chapter 11 cases in June
2022 after the Sandy Hook victim families dismissed the three
bankrupt companies from their lawsuits.
Free Speech Systems filed a voluntary petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex.
Case No. 22-60043) on July 29, 2022. In the petition filed by W.
Marc Schwartz, as chief restructuring officer, the Debtor reported
assets and liabilities between $50 million and $100 million.
Melissa A Haselden has been appointed as Subchapter V trustee.
Alexander E. Jones filed for personal bankruptcy under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 4:22-bk-60043) on
Dec. 2, 2022, listing $1 million to $10 million in assets against
liabilities of $1 billion to $10 billion in liabilities.
Raymond William Battaglia, of Law Offices of Ray Battaglia, PLLC,
is FSS's counsel. Raymond W. Battaglia and Crowe & Dunlevy, P.C.,
led by Vickie L. Driver, Christina W. Stephenson, Shelby A. Jordan,
and Antonio Ortiz are representing Alex Jones.
INTERNAP HOLDING: Seeks Chapter 11 Bankruptcy for 2nd Time
----------------------------------------------------------
Amelia Pollard and Reshmi Basu of Bloomberg News report that
Internap Holding LLC, a data center and cloud computing company
doing business as Inap, filed for bankruptcy a second time on
Friday, April 28, 2023, after selling off most of its data centers
late last year failed to keep it afloat.
The company listed as much as $500 million in assets and up to the
same in liabilities in a Chapter 11 petition filed in Delaware.
Through bankruptcy, Inap plans to pivot to a "stand-alone cloud
business," according to a statement. By declaring bankruptcy, the
company plans to reduce debt by more than 80% and improve
liquidity.
About Internap Holdings LLC
Internap Holdings LLC and affiliates provide compute resources
(i.e., an IT industry term referring to the ability to process
data) and storage services on demand via an integrated platform.
The Debtors' services include: (a) bare metal which are dedicated,
single-tenant servers utilizing Intel and AMD processors enabling
high-performance compute with rapid deployment, increased control,
enhanced security, and flexible configurations); (b)hosted private
cloud environments; (c) cloud computing backup services; and (d)
managed security to keep customer data secure and in alignment with
compliance requirements.
On March 16, 2020, Internap Technology Solutions Inc. and six
affiliated debtors, including INAP Corporation each filed a
voluntary petition for relief under Chapter 11 of the United States
Bankruptcy Code (Bankr. S.D.N.Y. Leasd Case No. 20-22393).
Internap Corporation, now INAP, and its U.S. subsidiaries
successfully emerged from Chapter 11 bankruptcy protection in May
2020. The court-approved bankruptcy exit plan significantly
strengthened the Company's financial position by reducing debt,
extending maturities and enhancing liquidity substantially.
Internap Holdings LLC and three affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10529) on April 28, 2023. In the petition filed by Michael
T. Sicoli, as chief executive officer, the Debtor reports estimated
assets and liabilities between $100 million and $500 million.
The new cases are overseen by Honorable Bankruptcy Judge Craig T.
Goldblatt.
Internap tapped SAUL EWING LLP as counsel; and FTI CONSULTING as
financial advisor. STRETTO, INC., is the claims agent.
INVACARE CORP: Court Approves Chapter 11 Plan
---------------------------------------------
Rick Archer of Law360 reports that a Texas bankruptcy judge on
Friday approved a Chapter 11 plan for Ohio-based Invacare Corp.
that the company's counsel said reflected a global settlement with
nearly all of the company's creditors.
Invacare Corporation, et al., filed a First Amended Joint Chapter
11 Plan.
The Debtors and their advisors continued comprehensive
restructuring negotiations with their major creditor
constituencies, including Highbridge Capital Management, LLC, the
ABL Lenders, and an ad hoc group of certain holders of Unsecured
Notes. Extensive negotiations and discussions culminated in the
prearranged deal memorialized in the restructuring support
agreement agreed to by Highbridge, the ABL Lenders, the Ad Hoc
Committee of Noteholders (which consists of holders of over 66.67%
in aggregate outstanding principal amount of the Unsecured Notes),
and Azurite Management LLC (in its capacity as an Unsecured
Noteholder). The Restructuring Support Agreement provides the
Debtors with a clear roadmap for the Chapter 11 Cases, a commitment
for $60 million of new capital through an equity rights offering
(which amount has since been increased to $75 million), and an
actionable plan for deleveraging Invacare's balance sheet by
approximately $240 million.
Since the Petition Date, the Debtors have developed the
Restructuring Support Agreement into the Plan.
Under the Plan, Class 5 Unsecured Notes Claims total $222.957
million and will recover 3.6% to 3.9% of their claims. Each Holder
of an Allowed Unsecured Notes Claim will receive its Pro Rata share
of: (x) the Unsecured Noteholder Rights, in accordance with the
Rights Offering Procedures; (y) with respect to any Residual
Unsecured Notes Claims, its share (on a Pro Rata basis with other
Holders of Allowed Unsecured Notes Claims and Holders of Allowed
General Unsecured Claims that select the Class 6 Equity Option) of
100% of the New Common Equity after the distribution of the New
Common Equity on account of the Backstop Commitment Premium
(subject to dilution on account of the Exit Secured Convertible
Notes, the New Convertible Preferred Equity, and the Management
Incentive Plan); and (z) the distributions in respect of its
Litigation Trust Interests. Class 5 is impaired.
Class 6 General Unsecured Claims total $60 million and will recover
3.6% to 5% of their claims. General Unsecured Creditors can choose
between two options. The first option provides a 5% cash
distribution on the amount of such creditor's Allowed Claim, plus
pro rata distributions from a Litigation Trust to the extent of
available proceeds. The second option provides New Common Equity
in the Reorganized Debtors with a value (based on the Debtors'
current estimate of total enterprise value and other assumptions
regarding the Reorganized Debtor's post re-organization capital
structure) of approximately 3.6% of the amount of such creditor's
Allowed Claim, plus pro rata distributions from a Litigation Trust
to the extent of available proceeds.
Co-Counsel to the Debtors:
Matthew D. Cavenaugh, Esq.
Jennifer F. Wertz, Esq.
J. Machir Stull, Esq.
Victoria N. Argeroplos, Esq.
JACKSON WALKER LLP
1401 McKinney Street, Suite 1900
Houston, TX 77010
Telephone: (713) 752-4200
Facsimile: (713) 752-4221
E-mail: mcavenaugh@jw.com
jwertz@jw.com
mstull@jw.com
vargeroplos@jw.com
- and -
Shawn M. Riley, Esq.
David A. Agay, Esq.
Scott N. Opincar, Esq.
MCDONALD HOPKINS LLC
600 Superior Avenue, E., Suite 2100
Cleveland, OH 44114
Telephone: (216) 348-5400
Facsimile: (216) 348-5474
E-mail: sriley@mcdonaldhopkins.com
dagay@mcdonaldhopkins.com
nmiller@mcdonaldhopkins.com
sopincar@mcdonaldhopkins.com
Co-Counsel to the Debtors:
Ryan Blaine Bennett, Esq.
Yusuf Salloum, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North LaSalle Street
Chicago, IL 60654
Telephone: (312) 862-2000
Facsimile: (312) 862-2200
E-mail: ryan.bennett@kirkland.com
yusuf.salloum@kirkland.com
- and -
Erica D. Clark, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, NY 10022
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
E-mail: erica.clark@kirkland.com
A copy of the Disclosure Statement dated March 29, 2023, is
available at https://bit.ly/40y4gK2 from PacerMonitor.com.
About Invacare Corporation
Headquartered in Elyria, Ohio, Invacare Corporation (IVC) is a
leading manufacturer and distributor in its markets for medical
equipment used in non-acute care settings. The company provides
clinically complex medical device solutions for congenital (e.g.,
cerebral palsy, muscular dystrophy, spina bifida), acquired (e.g.,
stroke, spinal cord injury, traumatic brain injury, post-acute
recovery, pressure ulcers) and degenerative (e.g., ALS, multiple
sclerosis, elderly, bariatric) ailments. Invacare employs
approximately 3,400 associates and markets its products in more
than 100 countries around the world.
Invacare Corp. and 2 U.S. subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case
No. 23-90068) on January 31, 2023. In the petition signed by
Kathleen Leneghan, senior vice president and chief financial
officer, the Debtor disclosed up to $1 billion in both assets and
liabilities.
The Debtors tapped Kirkland and Ellis, LLP and Kirkland and
International LLP as bankruptcy counsel, McDonald Hopkins, LLC as
bankruptcy co-counsel, Huron Consulting Group as restructuring
advisor, Miller Buckfire and Co. as financial advisor and
investment banker, and Epiq Corporate Restructuring, LLC, as
claims, noticing, and solicitation agent and administrative
advisor. Street Advisory Group, LLC is serving as strategic
communications advisor to the company.
Judge Christopher M. Lopez oversees the cases.
The DIP Term Loan Lenders led by Cantor Fitzgerald Securities, as
administrative agent, and GLAS Trust Corporation Limited, as
collateral agent, have retained Davis Polk & Wardwell LLP, Ducera
Partners, Porter Hedges LLP, Baker & McKenzie LLP, McDermott Will &
Emery LLP, Shipman & Goodwin LLP as advisors.
PNC Bank, National Association, and the ABL DIP Lenders, have
retained Blank Rome LLP, and B. Riley Advisory Services as
advisors.
Brown Rudnick LLP is serving as legal counsel and GLC Advisors &
Co., LLC is serving as investment banker to the ad hoc committee of
unsecured notes.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
The committee is represented by Kilpatrick Townsend & Stockton,
LLP.
INW MANUFACTURING: $340M Bank Debt Trades at 17% Discount
---------------------------------------------------------
Participations in a syndicated loan under which INW Manufacturing
LLC is a borrower were trading in the secondary market around 83.1
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $340 million facility is a Term loan that is scheduled to
mature on May 7, 2027. The amount is fully drawn and outstanding.
INW Manufacturing, LLC is in the Vitamin, Nutrient, and Hematinic
Preparations for Human Use business.
IQVIA INC: Moody's Hikes CFR to Ba1 & Senior Unsecured Bond to Ba2
------------------------------------------------------------------
Moody's Investors Service upgraded the ratings of IQVIA Inc.,
including the corporate family rating to Ba1 from Ba2 and the
probability of default rating to Ba1-PD from Ba2-PD. Concurrently
Moody's upgraded the senior secured credit facility ratings to Baa3
from Ba1, and unsecured ratings to Ba2 from Ba3. There is no change
to IQVIA's SGL-1 Speculative Grade Liquidity Rating. The outlook
remains stable.
"The ratings upgrade reflects material growth of IQVIA's scale and
service offering coupled with ongoing improvement in the company's
credit metrics, as well as healthy growth in new business bookings
and the company's backlog," stated Vladimir Ronin, Moody's lead
analyst for the company. "The upgrade also reflects Moody's
expectation that while IQVIA will continue to pursue a moderately
aggressive financial policy, it will maintain adjusted debt/EBITDA
in the range of 3.5 and 4.5 times," continued Ronin.
Upgrades:
Issuer: IQVIA Inc.
Corporate Family Rating, Upgraded to Ba1 from Ba2
Probability of Default Rating, Upgraded to Ba1-PD from Ba2-PD
Senior Secured Bank Credit Facility, Upgraded to Baa3 from Ba1
Backed Senior Secured Revolving Credit Facility, Upgraded to Baa3
from Ba1
Senior Unsecured Regular Bond/Debentures, Upgraded to Ba2 from
Ba3
Issuer: IQVIA RDS Inc.
Backed Senior Secured Bank Credit Facility, Upgraded to Baa3 from
Ba1
Outlook Actions:
Issuer: IQVIA Inc.
Outlook, Remains Stable
Issuer: IQVIA RDS Inc.
Outlook, Remains Stable
RATINGS RATIONALE
IQVIA's Ba1 Corporate Family Rating reflects the company's
considerable size, scale, and strong market position as both a
pharmaceutical contract research organization (CRO) and
pharmaceutical data and analytics provider. The ratings are also
supported by the company's strong operating cash flow and very good
liquidity. Market dynamics within IQVIA's CRO and data providing
businesses are stable which in Moody's view, will be contributing
to relatively low earnings volatility and predictable free cash
flow over the next few years. Despite Moody's expectation that
IQVIA will generate healthy earnings over the intermediate-term,
Moody's believes debt/EBITDA will generally be maintained between
3.5 times and 4.5 times. IQVIA's ratings are constrained by its
moderately aggressive financial policies as Moody's believes that
free cash flow, will continue to be prioritized for share
repurchases and acquisitions.
The SGL-1 Speculative Grade Liquidity Rating reflects Moody's
expectation that IQVIA will maintain very good liquidity over the
next 12 months. Cash and other investments at March 31, 2023 were
approximately $1.5 billion. Moody's expects IQVIA to generate free
cash flow of over $1.7 billion in 2023. Liquidity is also supported
by a $2.0 billion revolving credit facility that expires in 2026.
There was approximately $800 million drawn on revolver as of March
31, 2023. The revolver and term loans contain financial maintenance
covenants including a maximum secured net leverage test of 4.0
times, and a minimum interest coverage test of 3.5 times. Moody's
expect that the company will maintain ample cushion over the next
12 months.
IQVIA's CIS-3 indicates that ESG considerations have a limited
impact on the current rating with potential for greater negative
impact over time. Social risk considerations relate to
pharmaceutical drug pricing, which could have both positive and
negative effects for IQVIA. Drug pricing pressure in the US may
spur the need for IQVIA's customers to invest more heavily in R&D,
which would be a benefit. However, potential legislation to curb
pharmaceutical drug prices such as the recently passed US Inflation
Reduction Act could also have a negative impact for IQVIA if pharma
customers look to trim expenses or reduce the scope of existing
projects. Additionally, large mergers could result in customer
consolidation/pricing pressure. Governance risk considerations
include IQVIA's history of debt-funded share buybacks and lack of a
publicly articulated leverage target.
The stable rating outlook reflects Moody's expectation that IQVIA
will grow earnings in the mid-single digits over the next 12 to 18
months and that debt/EBITDA will generally be maintained between
3.5 and 4.5 times.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade the ratings if IQVIA can deliver revenue
growth and maintain profitability such that adjusted debt to EBITDA
is sustained below 3.5 times. Additionally, the company would need
to maintain a conservative financial policy, including a public
commitment to a financial leverage consistent with an investment
grade rating, for Moody's to consider an upgrade.
Moody's could downgrade IQVIA's ratings if the company's operating
performance weakens significantly or if it executes material
debt-funded acquisition and/or share repurchases that result in
debt to EBITDA sustained above 4.5 times.
IQVIA, headquartered in Durham, North Carolina, is a leading global
provider of outsourced contract research and contract sales
services to pharmaceutical, biotechnology and medical device
companies. The company is also a leading provider of sales and
other market intelligence primarily to the pharmaceutical and
biotech industries. Reported revenues for the twelve months ended
March 31, 2023, were $14.5 billion.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
IVANTI SOFTWARE: $545M Bank Debt Trades at 40% Discount
-------------------------------------------------------
Participations in a syndicated loan under which Ivanti Software Inc
is a borrower were trading in the secondary market around 60.1
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $545 million facility is a Term loan that is scheduled to
mature on December 1, 2028. The amount is fully drawn and
outstanding.
Ivanti Software, Inc. provides information technology services. The
Company offers IT asset management, security, endpoint, and supply
chain solutions.
JUMBA LLC: Files Amendment to Disclosure Statement
--------------------------------------------------
The Jumba, LLC, submitted a First Amended Disclosure Statement for
the Chapter 11 Plan of Reorganization dated May 2, 2023.
As of April 24, 2023, the Debtor had approximately $1.3 million in
total debt obligations due to a paydown of the C&G Realty E, LLC
mortgage from the 6 homes built in Johnson County pursuant to the
joint venture. The remaining 2 home sales have been approved by the
Court, and it is anticipated that they will be closed prior to the
Effective Date and the guarantor will pay the balance.
If they have not, or the claim of C&G has not been fully paid, C&G
shall participate in voting on this plan. Additionally, the Debtor
sold 10.75 acres of vacant land in Parker County which provided for
full payment of the Little first mortgage on that property and
substantial payment of real estate taxes to Parker County. Thus,
Mr. Little no longer holds a claim in this Estate.
The Debtor anticipates that it will either sell the Jack County
parcel consisting of approximately 90 acres to pay the Chuyhan
note, or pay the same from a capital contribution by owner, Mrs.
Vernon. The remaining debts will be satisfied by the consummation
of sales by the Debtor of portions of its real estate and note
income to fully-satisfy the mortgage and current tax obligations
secured by said properties.
To implement a comprehensive financial restructuring of its
remaining funded debt, the Debtor commenced a chapter 11 case in
the United States Bankruptcy Court for the Northern District of
Texas Dallas Division.
* Each Holder of an Undisputed Secured Claim will be paid 100%
of their Allowed Claim which is still outstanding, if any, with
interest pursuant to the terms of each such obligation;
* All unpaid Priority Tax Claims will receive post
confirmation interest at the rate of 5% per annum. The Estate will
pay the Priority Tax Claims not satisfied in the previously court
approved real estate closings, within 12 months of the Effective
Date with interest at the rate of 5% per annum. The Estate will pay
any and all post-petition sales and ad valorem taxes when due and
in the ordinary course of business;
* All Administrative Claims and Other Secured Claims will be
paid in full in Cash or receive such other treatment that renders
such Claims unimpaired;
* Each Holder of unliquidated secured claims will continue to
hold secured status and thus their collateral, if any, and the
amount of the secured portion of their claim, will need to be
determined by agreement or the Court for purposes of allowance.
Substantial progress has been made in the past 6 months. First, 6
houses were completed and sold in Johnson County pursuant to the
Debtor's joint venture with the builder which has reduced the C&G
mortgage obligation from approx. $3.8 mil. down to approx. $1.3 mil
and the court has approved the completion and sale of the last two
homes on the Johnson County property to pay off this secured
obligation. Due to lost sales, drastic changes in interest rates
and available mortgages since the filing, the initial 6 homes were
not sufficient alone to satisfy the C&G mortgage. Taxes have been
paid with each parcel and no other mortgages encumber the Johnson
County Land.
Secondly, the sale of the 10.75 acres in Parker County cured the
disputed real property tax debts and paid off the sole mortgage on
that land due to Mr. Little so it is now free and clear other than
current taxes. The Plan contemplates completion of the pending land
sales to fully satisfy the tax and mortgage obligations on both the
Johnson County and Parker County parcels and payment of the
mortgage on the Jack County property either by a cash contribution
of the Debtor's principal to pay off the allowed Cunningham secured
lien or a sale of all or part of the Jack County property to pay
off the Cunningham lien once the amount is determined.
* As sales are completed, all secured creditors will be paid
in full once their payoffs have been reviewed and confirmed. In the
case of the Cunningham mortgage on the Jack County land, contested
proceedings will need to address the allowed amount and extent of
her claim before it can be paid.
* all Administrative Claims, Priority Tax Claims, and
Unsecured Claims will be paid in full in Cash.
* The Debtor shall obtain a new loan sufficient to pay
Effective Date obligations as well as the Cunningham mortgage in
connection with funds from the Debtor's sole member.
The Debtor's original plan was to refinance the Jack County
property to pay all Effective Date obligations and to pay off the
allowed amount of Mrs. Cunningham's secured claim; however, the
Debtor's inquiries indicate that the raw land lenders are not
making loans at this time. So, the Debtor intends to either obtain
funds from Andrea Vernon, the owner, or to list the approx. 90
acres of land in Jack County to pay off the Cunningham secure claim
and all administrative claims. The Debtor has not yet identified
the realtor to be used as listing agent; however, that realtor and
the terms of such listing will be filed in a Plan Supplement.
The Debtor or Reorganized Debtor, as applicable, shall use Cash on
hand to fund distributions to certain Holders of Claims, including
the payment of Allowed General Unsecured Claims.
A full-text copy of the First Amended Disclosure Statement dated
May 2, 2023 is available at https://bit.ly/3nvJkoP from
PacerMonitor.com at no charge.
Attorney for Debtor:
Lyndel Anne Vargas, Esq.
Cavazos Hendricks Poirot, P.C.
Suite 570, Founders Square
900 Jackson Street
Dallas, TX 75202
Phone: (214) 573-7322
Fax: (214) 573-7399
Email: LVargas@chfirm.com
About Jumba LLC
The Jumba LLC was originally formed by Andrea Vernon in May of 2017
as a land acquisition and development company.
The Jumba LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 22-31740) on Sept. 23,
2022. In the petition filed by Andrea Vernon, as manager, the
Debtor reported assets between $10 million and $50 million and
liabilities between $1 million and $10 million.
The Debtor is represented by Lyndel Anne Vargas of Cavazos
Hendricks Poirot, P.C.
KALERA INC: Court OKs $2.13MM DIP Loan from Sandton
---------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Kalera, Inc. to use cash collateral
and obtain postpetition secured financing, on an interim basis.
The Debtor is permitted to borrow additional money from Sandton
Capital Solutions Master Fund V, L.P., under the terms of the
Interim Order, on a further interim basis, with the additional
borrowing up to an aggregate principal amount not to exceed $2.13
million, including $1.13 million borrowed under the Interim Order,
as set forth in the Budget, provided that, pending and subject to
entry of the Final Order, for each $1 drawn by the Debtor under the
DIP Facility, $1 of a Bridge Loan will convert or "roll up" into
DIP Obligations.
These events consist an "Event of Default" under the DIP Facility:
a. The failure by the Debtor to comply with any material
provision of the Interim Order, except where such failure would not
materially and adversely affect the DIP Lender;
b. Dismissal of the Chapter 11 Case or conversion of the
Chapter 11 Case to a case under Chapter 7 of the Bankruptcy Code;
c. Appointment of a Chapter 11 trustee or examiner with
enlarged powers relating to the operation of the business of the
Debtor or the Debtor will file a motion or other pleading seeking
such appointment;
d. The sale of all or substantially all assets of the Debtor
pursuant to section 363 of the Bankruptcy Code, unless such sale is
conducted in accordance with the Bid Procedures and consented to by
the DIP Lender; and
e. The failure to meet an Interim Milestone, unless extended
or waived pursuant to the prior written consent of the DIP Lender;
provided, however, to the extent the Debtor will fail to meet an
Interim Milestone despite good faith efforts, the DIP Lender will,
in its reasonable discretion, consider extending the Milestone and
amending the Budget accordingly.
The Debtor is required to comply with these Milestones:
a. No later than five business days after the Petition Date,
the Bankruptcy Court will have entered the Interim Order;
b. No later than 10 business days after the Petition Date, the
Debtor will have filed a motion seeking bid procedures for the sale
of its assets and operations under an asset purchase agreement with
the Senior Secured Lender as the stalking horse bidder with
customary stalking horse protections; and
c. No later than 25 calendar days after the Petition Date, the
Bankruptcy Court will have entered the Final Order.
Additionally, the DIP Loan Documents are expected to contain
further milestones, which are not incorporated into the Interim
Order, including:
d. The deadline for the submission of binding bids will be no
later than 60 calendar days after the Petition Date;
e. No later than 65 calendar days after the Petition Date, the
Borrower will commence an auction for the Acquired Assets in
accordance with the bid procedures;
f. No later than 70 calendar days after the Petition Date, the
Bankruptcy Court will have entered an order (which will be in form
and substance acceptable to Lender and the Prepetition Lender)
approving the winning bid resulting from the auction of the
Acquired Assets or, if no auction is held, approving a sale
pursuant to the stalking horse bid(s); and
g. No later than 75 calendar days after the Petition Date, the
Debtor will consummate a sale transaction for the Acquired Assets.
The Debtor requires immediate access to funding to maintain
existing operations and preserve assets pending a sale or exit from
the Chapter 11 Case.
As of the Petition Date, the Debtor was indebted and liable to
Sandton under (a) the Loan and Security Agreement, dated as of
April 14, 2022, in the aggregate principal amount of approximately
$30 million between Sandton, as successor-in-trust to Farm Credit,
and the Debtor and (b) all other agreements, documents, and
instruments executed and/or delivered with, to or in favor of the
Prepetition Lender.
On May 13, 2022, Farm Credit perfected a security interest in
certain assets of the Debtor through the filing of a UCC Financing
Statement. Farm Credit assigned its rights under the Farm Credit
UCC to Sandton in March 2023.
On March 17, 2023, Farm Credit assigned to Sandton all of its
rights and interest in the Prepetition Facility and any collateral
for the security interest, including its rights under the
Prepetition Facility, Bridge Loan, and BofA DACA.
On March 20, 2023, Sandton and the Debtor entered into an amendment
to the Prepetition Facility to increase the Revolving Credit
Facility from $10 million to $11 million—providing an additional
$1 million in available funding to the Debtor. The amendment and
additional $1 million under the Revolving Credit Facility may
referred to as the "Bridge Loan". The Bridge Loan is secured by a
lien on the assets of the Debtor to the same extent as the
Revolving Credit Facility. As of the Petition Date, the Debtor is
informed and believes the Debtor has drawn approximately $500,000
under the Bridge Loan.
The Debtors are in the midst of an extreme liquidity crisis. As of
the Petition Date, the Debtor had 551,743 in unrestricted cash on
hand in the Bank Accounts. Aside from the proposed DIP Facility,
the Debtor does not have access to funds for operational expenses
through existing credit facilities as such facilities are either
fully drawn or the Debtor is unable to satisfy certain
prerequisites to obtain additional extensions.
As adequate protection, the Prepetition Secured Parties are granted
a valid, binding, continuing, enforceable, fully perfected
replacement security interest in and lien on the DIP Collateral.
As additional adequate protection, the Prepetition Secured Parties
are granted an allowed administrative expense claim against the
Debtor on a joint and several basis with priority over all other
administrative claims in the Chapter 11 Case.
A further hearing on the matter is set for May 10, 2023 at 2:30
p.m.
A copy of the motion is available at https://bit.ly/3LsKWrD from
BMC Group, the claims agent.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3NwlyUy (Docket No. 99) also from BMC.
The Debtor projects $467,900 in total receipts and $2,463,000 in
total operating disbursements for the six-weeks ending May 13,
2023.
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.
Judge David R. Jones oversees the case.
The Debtor tapped Baker & Hostetler, LLP as bankruptcy counsel and
BMC Group, Inc. as the claims agent.
KINGS 828 TRUCKING: Seeks to Hire Eric A. Liepins as Legal Counsel
------------------------------------------------------------------
Kings 828 Trucking, LLC seeks approval from the U.S. Bankruptcy
Court for the Northern District of Texas to employ Eric A. Liepins,
PC as its bankruptcy counsel.
The Debtor requires legal assistance to liquidate its assets,
reorganize the claims of the estate, and determine the validity of
claims asserted in the estate.
The firm will be paid at these rates:
Eric A. Liepins $275 per hour
Paralegals and Legal Assistants $30 to $50 per hour
In addition, the firm will seek reimbursement for expenses
incurred.
The firm received a retainer of $5,000, plus filing fee.
Mr. Liepins, the sole shareholder of the 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:
Eric A. Liepins, Esq.
Eric A. Liepins, PC
12770 Coit Road, Suite 850
Dallas, TX 75251
Telephone: (972) 991-5591
Facsimile: (972) 991-5788
Email: eric@ealpc.com
About Kings 828 Trucking
Kings 828 Trucking, LLC filed a Chapter 11 bankruptcy petition
(Bankr. N.D. Texas Case No. 23-41110) on April 19, 2023, with
$100,001 to $500,000 in both assets and liabilities. Judge Edward
L. Morris oversees the case.
The Debtor is represented by Eric A. Liepins, PC.
LEAR CAPITAL: Contribution & Ongoing Operations to Fund Plan
------------------------------------------------------------
Lear Capital, Inc., filed with the U.S. Bankruptcy Court for the
District of Delaware a Small Business Plan of Reorganization dated
May 1, 2023.
The Debtor was founded in 1997 and is a seller of gold and other
precious metals. The Debtor, in short, is a retail seller (and
buyer) of precious metals.
The Plan is the culmination of extensive negotiations between the
Debtor and various parties, including the Committee and the
Participating States, to address a number of concerns primarily
with respect to what customers will receive under the Plan. In
order to avoid lengthy and costly litigation, the Debtor and the
Committee reached a resolution whereby the Class 3 Creditors
(customers who filed Proofs of Claims) will receive a distribution
based on the Recovery Calculation that was negotiated between the
Debtor and the Committee. In addition, the Unfiled Customers, who
would otherwise receive no distribution in this case, will receive
a distribution pursuant to the terms set forth herein.
The Plan will be funded with available Cash on hand on the
Effective Date, a contribution to be made by Kevin DeMeritt (the
"Insider Contribution"), and if necessary, revenue from ongoing
operations of the Debtor. On the Effective Date, Mr. DeMeritt will
contribute an amount sufficient, when combined with the Cash on
hand, to provide a total of $5.5 million (the "Customer Fund") to
pay Allowed Class 3 Claims and Unfiled Customers. The Customer Fund
will be used to fund distributions to Allowed Class 3 Claims and
Unfiled Customers only, such that the distribution to Allowed Class
3 Claims and to Unfiled Customers in the aggregate will total $5.5
million, exclusive of the costs of administration.
Allowed Class 3 Claims will receive a one-time payment, calculated
using the Recovery Calculation, within 30 days of the Effective
Date. The Unfiled Customers will receive a Pro Rata share of the
Customer Fund remaining after Allowed Class 3 Claims receive the
amount provided for in this Plan. Allowed General Unsecured Claims
of Ongoing Vendors will receive payment in full within 30 days of
the Effective Date or if not yet due, when due according to
ordinary business practices.
Class 3 consists of Allowed General Unsecured Claims that are being
resolved or settled as part of the Plan process, including but not
limited to customers of the Debtor that filed Proofs of Claim by
the Bar Date. Each Holder of an Allowed Class 3 Claim will receive
an amount calculated as follows: the difference between the total
spread charged on the transaction that is the subject of their
proof of claim and a hypothetical 12% spread. Total filed claims
are approximately $6,300,000.00. Estimated total payments to be
made to Class 3 Creditors shall be $1,900,000.00. This Class is
impaired.
Class 4 consists of all Allowed General Unsecured Claims that are
held by vendors that are continuing to do business with the Debtor.
Except to the extent previously paid, in full and final
satisfaction, settlement, release and discharge of and in exchange
for each such Allowed General Unsecured Claim of Ongoing Vendors,
each holder of an Allowed Class 4 Claim will be paid in full within
30 days of the Effective Date (or, if not then due, when such
Allowed General Unsecured Claim of Ongoing Vendors is due in the
ordinary course of business). The amount of claim in this Class
total $10,000.00.
Class 5 consists of Equity Interest Holder Kevin DeMerit. Mr.
DeMeritt will retain his equity ownership interest in the Debtor.
The Plan will be funded with Cash on hand on the Effective Date,
the Insider Contribution and, if necessary, revenue from the
Debtor's post-Effective Date operations. Not counting the Insider
Contribution, the Debtor expects to have approximately $2.8 million
in Cash on hand on the Effective Date. The Debtor or the
Reorganized Debtor, as applicable, will have all the rights and
duties to implement the provisions of the Plan, including the right
to make Distributions to Class 2, Class 3 and Class 4 Creditors,
other than with respect to distributions to Unfiled Customers which
will be made by the Reorganized Debtor or the Third-Party
Administrator at the Debtor's option.
A full-text copy of the Plan of Reorganization dated May 1, 2023 is
available at https://bit.ly/3nxOyAA from BMC Group, Inc., claims
agent.
Attorneys for Debtor:
Jeffrey R. Waxman, Esq.
Morris James, LLP
500 Delaware Avenue, Suite 1500
Wilmington, DE 19801
Tel: 302-888-5842
Email: jwaxman@morrisjames.com
-and-
Alan J. Friedman, Esq.
Shulman Bastian Friedman & Bui LLP
100 Spectrum Center Dr Ste 600
Irvine, CA 92618
Phone: 949-340-3400
Fax: 949-340-3000
About Lear Capital
Lear Capital, Inc. is a silver and gold coin dealer based in Los
Angeles, Calif.
Lear Capital filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Del. Case No. 22-10165) on March 2,
2022, to weather possible future legal claims associated with its
sales practices as well as customer disclosures. Jami B. Nimeroff
serves as Subchapter V trustee.
As of Feb. 28, 2022, Lear Capital had assets of $34,449,619 against
liabilities of $22,355,066.
Judge Brendan Linehan Shannon oversees the case.
The Debtor tapped Shulman Bastian Friedman & Bui, LLP as general
bankruptcy counsel; Morris James, LLP as local counsel; Mitchell
Silberberg & Knupp, LLP, The Cook Law Firm, P.C. and Fernald Law
Group, APC as special counsels; Paladin Management Group as
financial advisor; and Baker Tilly US, LLP as accountant. BMC
Group, Inc., is the claims, noticing and administrative agent.
On July 13, 2022, the U.S. Trustee appointed the committee of
customers in this Chapter 11 case. The committee tapped Potter
Anderson & Corroon, LLP, as legal counsel and Dundon Advisors, LLC,
as financial advisor.
LIFESCAN GLOBAL: $1.48B Bank Debt Trades at 21% Discount
--------------------------------------------------------
Participations in a syndicated loan under which LifeScan Global
Corp is a borrower were trading in the secondary market around 79.2
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $1.48 billion facility is a Term loan that is scheduled to
mature on October 1, 2024. The amount is fully drawn and
outstanding.
Lifescan Global Corporation is a provider of blood glucose
monitoring systems for home and hospital use.
LIGADO NETWORKS: $117.6M Bank Debt Trades at 44% Discount
---------------------------------------------------------
Participations in a syndicated loan under which Ligado Networks LLC
is a borrower were trading in the secondary market around 56.1
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $117.6 million facility is a Term loan that is scheduled to
mature on May 27, 2023. The amount is fully drawn and
outstanding.
Ligado Networks LLC operates as a special purpose entity. The
Company provides mobile satellite coverage, as well as develops
innovative solutions that will accelerate 5G and IoT network
deployments.
LLM INTERNET: Unsecureds Will Get 100% of Claims in Plan
--------------------------------------------------------
LLM Internet, Inc., filed with the U.S. Bankruptcy Court for the
Eastern District of New York a Disclosure Statement describing Plan
of Reorganization dated May 2, 2023.
On or around October 1998, the Debtor acquired a commercial, real
property located at 2112 Coney Island Avenue, Brooklyn, NY 11223
(the "Property"). The Debtor acquired the Property to be used as an
investment vehicle.
On December 28, 2006, in an attempt to refinance the Property, the
Debtor duly executed a mortgage in the amount of $705,000.00 with
an interest rate of 7.25%, with U.S. Bank National Association, as
Trustee of the Lehman Brothers Small Balance Commercial Mortgage
Pass-Through Certificates, 2007-2 (the "Lender"), successor in
interest to the original lender, and current holder of the
mortgage.
In 2008, the Debtor fell behind on its obligations due to the
financial crisis of 2008 and lost many of its original tenants. On
May 12, 2009, the Lender initiated a foreclosure action (the
"Foreclosure Action") against the Debtor. After more attempts of
the Debtor to resolve the issue with the Lender, a foreclosure sale
of the Property was scheduled for February 2, 2023. The Debtor
therefore filed the instant Chapter 11 case on February 2, 2023, to
preserve its equity in the Property, give it a reasonable
opportunity to refinance the Property, adjudicate the current
amount due to the Lender under the judgment, and compel the Lender
to accept a satisfaction of the judgment/mortgage.
During the Chapter 11 Case, the Debtor has been seeking out various
sources of capital as well as talking to potential brokers and
purchasers to either refinance or sell the Property.
The Plan will be funded with the net proceeds from (a) the sale or
refinance of the Property. The sale or refinance of the Property,
as applicable, following Confirmation of the Plan, shall not be
subject to any stamp or similar transfer or mortgage recording tax
pursuant to section 1146(a) of the Code because they be refinanced
or sold under the Plan and after the Effective Date.
The Class 1 Secured Tax Claims in the approximate amount of $6,200,
together with any unpaid statutory interest accrued thereon through
the Sale Closing, shall be paid in full, in Cash, from the
Distribution Fund upon the Sale Closing. Class 1 is unimpaired and
deemed to accept the Plan.
The Lender Class 2 Secured Claim in the Disputed approximate amount
of $2,138,635.96, together with accrued interest on the unpaid
principal amount of $705,000 at a statutory interest rate of 9%
accrued thereon through the Sale Closing Date, shall be paid up to
100% of its Allowed claim or in such other amount as may be agreed
to, in Cash, from the Distribution Fund upon the earlier of a
post-Effective Date refinance of the Property or the Sale Closing.
Class 2 is impaired and entitled to vote to accept or reject the
Plan.
The Class 3 General Unsecured Claims in the approximate amount of
$228,749.43, together with any unpaid statutory interest, costs and
reasonable attorneys' fees accrued thereon through the Sale
Closing, shall be paid up to 100% of their claims, in Cash, from
the Distribution Fund upon the earlier of a post-Effective Date
refinance or the Sale Closing, after the payment of all
Unclassified Claims, and Class 1 and Class 2 Claims in full. Class
3 is impaired and entitled to accept or reject the Plan.
The holders of Class 4 interests shall continue to retain their
interests in the Debtor after the Effective Date, and shall receive
any net proceeds after payment in full to all Allowed classified
and unclassified Claims. Class 4 interests are unimpaired under the
Plan and are deemed to accept the Plan.
The Debtor shall continue to market the Property post-confirmation
and may engage a real estate broker and/or mortgage broker to
assist in such efforts, in order to refinance or sell and liquidate
the Property for the highest and best price on or before the
respective Sale Closing Dates. Upon Closing, the proceeds of
refinance or sale shall be distributed to holders of Claims and
Interests.
A full-text copy of the Disclosure Statement dated May 2, 2023 is
available at https://bit.ly/3AY5iUQ from PacerMonitor.com at no
charge.
Attorneys for the Debtor:
Robert L. Rattet, Esq.
Davidoff Hutcher & Citron, LLP
120 Bloomingdale Road
White Plains, NY 10605
Tel: (914) 381-7400
Fax: 212-286-1884
Email: rlr@dhclegal.com
About LLM Internet
LLM Internet, Inc., a company in Brooklyn, N.Y., filed its
voluntary petition for Chapter 11 protection (Bankr. E.D.N.Y. Case
No. 23-40371) on Feb. 2, 2023, with as much as $1 million to $10
million in both assets and liabilities. Haim Pinhas, vice president
of LLM Internet, signed the petition.
Judge Jil Mazer-Marino oversees the case.
Robert L. Rattet, Esq., at Davidoff Hutcher & Citron, LLP, serves
as the Debtor's legal counsel.
LONGRUN PBC: Unsecureds Will Get 8% of Claims in 3 Years
--------------------------------------------------------
Longrun, P.B.C. d/b/a Keto & Co., filed with the U.S. Bankruptcy
Court for the District of Massachusetts a Subchapter V Plan of
Reorganization dated May 1, 2023.
The Debtor is a Delaware corporation established in 2014 with its
main office in Belmont, Massachusetts. The company sells low carb
and keto foods wholesale to retailers via amazon.com, and via its
own ecommerce websites; it has no physical store location.
The Plan contemplates that the Debtor will stay in business and
return to positive cash flow. Under the Plam: (i) Allowed Secured
Claims are paid in full based on the value of the security; (ii)
Allowed Administrative and Priority Claims are paid in full; and
(iii) the Debtor's projected disposable income is submitted to the
payment of Allowed General Unsecured Claims over a 36-month period
from the effective date of the Plan. Based upon the projections,
there will be a minimum distribution of approximately 5% to holders
of allowed unsecured claims; additionally, the Debtor will
distribute annually 50% of the cash reserves in excess of the sum
of the minimum distribution after leaving a cash surplus of
$200,000.00.
Class 4 is comprised of all holders of Allowed General Unsecured
Claims against the Debtor. Based upon the Proofs of Claim that have
been filed and the Debtor's Schedules, the Debtor estimates that
there will be approximately $969,000 in Allowed Class 2 Claims plus
the undersecured portion of the SBA's Class 1C Claim and a balance
of approximately $4,000.00 for the Class 1D claim, for a total of
approximately $1,357,500.
In full and complete settlement, satisfaction and release of all
Allowed Class 2 Claims, each holder of an Allowed Class 3 Claim
shall receive its pro rata share of all of the Debtor's projected
net disposable income over the three-year period following the
effective date. Under this Plan, the Debtor will make the following
disbursements: 12 months after the effective date, the Debtor will
distribute a minimum of $21,000.00 to holders of allowed unsecured
claims; 24 months after the effective date the Debtor will
distribute a minimum of $51,000.00 to holders of allowed unsecured
claims; 36 months after the effective date the Debtor will
distribute a minimum of $36,000.00 to holders of allowed unsecured
claims. These shall be referred as the "Minimum Distributions".
In addition to the Minimum Distributions and to the extent that the
Debtor's cash on hand exceeds that year's Minimum Distribution and
an operating cash reserve of $200,000.00 (the "Cash Surplus"), the
Debtor shall make an additional distribution equal to one-half of
the Cash Surplus to holders of allowed unsecured claims. Based on
the Budget, the Debtor projects that the Minimum Distributions to
Class 2 Claimants will be approximately 8% of the allowed amount of
such claims.
Class 3 consists of Equity Interests. Holders of Class 3 claims
shall receive no distribution under the Plan on account of such
interests, but will retain unaltered, the legal, equitable and
contractual rights to which such interests were entitled as of the
petition date. Class 3 is unimpaired.
The Plan will be funded from the Debtor's future earnings and
income.
A full-text copy of the Subchapter V Plan dated May 1, 2023 is
available at https://bit.ly/3VyGw6S from PacerMonitor.com at no
charge.
Counsel for the Debtor:
Steven Weiss, Esq.
Shatz Schwartz and Fentin, P.C.
1441 Main Street
Springfield, MA 01103
Tel: (413) 737-1131
Fax: (413) 736 0375
Email: sweiss@ssfpc.com
About LongRun P.B.C.
LongRun P.B.C., doing business as LongRun LLC and Keto & Co., make
low carb food for keto dieters, diabetics, and anyone trying to eat
healthier. It is based in Belmont, Mass.
LongRun P.B.C. filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No.
23-10140) on Feb. 1, 2023, with $1 million and $10 million in both
assets and liabilities. Richard Tieken, president and chief
executive officer, signed the petition.
Judge Christopher J. Panos oversees the case.
The Debtor tapped Steven Weiss, Esq., at Shatz, Schwartz and
Fentin, P.C. as legal counsel and Verdolino & Lowey, P.C. as
accountant.
LUCIRA HEALTH: Bought by Pfizer for $36.4M at Bankruptcy Auction
----------------------------------------------------------------
GenomeWeb reports that Lucira Health, which broke new ground in
2020 with the first rapid at-home COVID-19 test but filed for
bankruptcy this year, said in a recent US Securities and Exchange
Commission filing that it has been acquired by Pfizer for $36.4
million through a bankruptcy auction.
According to the SEC document, the asset sale closed on April 20.
The Emeryville, California-based firm filed for bankruptcy on Feb.
22, just two days before receiving US Food and Drug Administration
Emergency Use Authorization for the first over-the-counter at-home
molecular test to differentiate SARS-CoV-2 and influenza A and B.
The firm said in its bankruptcy petition that the business had $146
million in assets and $85 million in debts as of December 31, 2022.
In the SEC filing, it said Pfizer entered the winning bid in an
April 6 auction for Lucira's assets.
Lucira had received the first FDA EUA for an at-home rapid
self-test, the Lucira COVID-19 All-in-One Test Kit, in November
2020, and the firm announced in April 2021 that it had nabbed
over-the-counter EUA for its Lucira Check It test kit for
SARS-CoV-2. The firm's tests use a handheld battery-powered
real-time testing instrument with nasal swab samples and
loop-mediated isothermal amplification to provide results in 30
minutes.
In November 2022, the FDA granted the firm EUA for point-of-care
use of its RT-LAMP-based COVID-19 and flu test. While Lucira posted
its first net positive revenues in the first quarter of 2022, it
posted losses later in the year and announced plans to lay off 150
of its 225 employees.
The firm was among the companies that emerged in the pandemic only
to struggle to keep the lights on as COVID-19 testing volumes
plummeted. Industry watchers have predicted a tough road ahead for
the COVID-19-focused firms that have not been expanding their
menus.
In announcing its Chapter 11 plans, Lucira said a protracted EUA
process for its COVID-19 and influenza test had been costly,
leading to the bankruptcy filing and sale process. The firm also
said in a previous SEC filing that a lack of clinical data had
forced it to limit its combination test to point-of-care use until
it could obtain more prospective clinical data.
FDA officials responded to the statements about a perceived lengthy
EUA process with a statement that the agency had found Lucira's
COVID-19 and flu test had contained a toxic substance in one of the
test components, making it unsuitable for home use and delaying the
EUA process. After the redesign, the EUA request included only nine
positive influenza A clinical samples, which was too few to assess
the test's performance.
About Lucira Health
Founded in 2013, Lucira is a medical technology company focused on
the development and commercialization of transformative and
innovative infectious disease test kits.
Lucira Health filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Del., Case No. 23-10242) on
Feb. 22, 2023. As of Dec. 31 2022, the Debtor posted total assets
of $145,897,301 and total debt of $84,720,814.
Judge Mary F. Walrath oversees the case.
The Debtor tapped Young Conaway Stargatt & Taylor, LLP and Cooley,
LLP as legal counsels; Armanino, LLP as financial advisor; and
Donlin, Recano & Company, Inc. as claims and noticing agent and
administrative advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtor's Chapter
11 case. The committee is represented by Brya Michele Keilson,
Esq.
M & S TRUCKING: Taps Southwest Arkansas Accounting Services
-----------------------------------------------------------
M & S Trucking of Lockesburg, LLC seeks approval from the U.S.
Bankruptcy Court for the Western District of Arkansas to employ
Southwest Arkansas Accounting Services, LLC as its accountants.
The firm will provide accounting services, preparation taxes for
the Debtor, payroll services, and preparation of monthly operating
reports and for them to serve as an expert witness at the
confirmation hearing if necessary.
The firm will bill as follows:
Tax Services-Monthly $410
Payroll Services: $35 per pay period
plus $3.25 per check
Additional ad hoc work: $75 per hour
As disclosed in the court filings, Southwest Arkansas Accounting
Services holds or represents any interest adverse to the Debtor or
the estate in the matters upon which it is to be engaged.
The firm can be reached though:
Fernando Balderas
Southwest Arkansas Accounting Services, LLC
990 E. Collin Raye Dr.
De Queen, AR 71832
Phone: +1 870-204-7772
About M & S Trucking of Lockesburg
M & S Trucking of Lockesburg, LLC is in the freight car loading and
unloading business. The company is based in Lockesburg, Ark.
M & S Trucking of Lockesburg filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. W.D. Ark.
Case No. 23-70348) on March 17, 2023, with $1,196,698 in assets and
$1,722,521 in liabilities. Shari Sherman has been appointed as
Subchapter V trustee.
Judge Richard D. Taylor oversees the case.
The Debtor is represented by Stanley V. Bond, Esq., at Bond Law
Office.
MANNINGTON: $261.3M Bank Debt Trades at 16% Discount
----------------------------------------------------
Participations in a syndicated loan under which Mannington Mills
Inc is a borrower were trading in the secondary market around 83.9
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $261.3 million facility is a Term loan that is scheduled to
mature on August 6, 2026. About $256 million of the loan is
withdrawn and outstanding.
Mannington Mills Inc. manufactures residential and commercial
flooring products. The Company offers laminate, hardwood, vinyl,
porcelain, carpet, rubber flooring, and composite flooring
products. Mannington Mills serves the healthcare, education,
corporate, and retail sectors.
MARYLAND ECONOMIC: S&P Alters Outlook to Pos, Affirms 'BB+' LT ICR
------------------------------------------------------------------
S&P Global Ratings revised the outlook to positive from negative
and affirmed its 'BB+' long-term rating on Maryland Economic
Development Corp.'s (MEDCO) senior student housing revenue bonds
(Towson University Project) series 2012 and senior student housing
project revenue and refunding revenue bonds (Towson University
Project) series 2017, issued for the Towson University project.
"The outlook revision reflects our view of the project's occupancy
recovery in fall 2022 and its current projections of near 100% for
fall 2023 as well as the corresponding expected debt service
coverage of 1.5x or higher in fiscal 2023," said S&P Global Ratings
credit analyst Nicholas Breeding.
"While Towson University has experienced some enrollment pressure,
we expect that occupancy at the project will remain high given the
somewhat limited on-campus housing availability relative to student
enrollment and the near-100% university housing occupancy," he
added.
MATTEL INC: Fitch Affirms 'BB+' LongTerm IDR, Outlook Positive
--------------------------------------------------------------
Fitch Ratings has affirmed Mattel, Inc.'s (Mattel) Long-Term Issuer
Default Rating (IDR) at 'BB+' and its previously guaranteed senior
unsecured notes at 'BB+'/'RR4'. Fitch has also upgraded Mattel's
previously non-guaranteed unsecured notes to 'BB+'/'RR4' from
'BB'/'RR5' and downgraded its unsecured (previously secured)
revolving credit facility to 'BB+'/'RR4' from 'BBB-'/'RR1'. The
Rating Outlook is Positive.
The change in Mattel's instrument ratings reflects Mattel's
transition to an unsecured capital structure following the recent
triggering of fall-away provisions on its previously secured
revolving credit facility and previously guaranteed unsecured
bonds. Mattel's ratings reflect the company's strong portfolio of
owned brands, which together with cost-cutting initiatives, has
supported strong growth and significantly improved credit metrics.
The Positive Outlook reflects Fitch's view that Mattel's improved
competitive positioning and debt reduction over the past few years
could support its ability to navigate near-term macroeconomic
volatility and eventually support an investment-grade rating.
KEY RATING DRIVERS
Strong Brands and Market Share: According to Circana (formerly The
NPD Group), Barbie and Hot Wheels were two of the top five toy
properties across Group of 12 economies in 2022. Mattel also
reports that it gained global share in 2020 and 2021 as well as in
4Q22. Since a leadership change in 2018, Mattel has transitioned to
being more focused on intellectual property (IP), enabling it to
evolve and re-energize several key brands while focusing on keeping
up with the rapid pace of change in children's play patterns.
In Fitch's view, this focus has been one of the key contributors of
the company's ability to stabilize and increase market share.
Mattel's competitive position is supported by its continued focus
on being the partner of choice for key brands, such as recapturing
the Disney Princesses licenses.
The company is also expanding the distribution of its IP through
TV, film and streaming and is developing its e-commerce presence.
Given the potential for changing tastes and shifts in play
patterns, such as increased digitization of toys and play, Fitch
believes Mattel also will need to continue investing in innovation
and re-vitalization of IP to maintain its competitive position.
Operating Pressures in 2023: Mattel's revenue was essentially flat
at around $5.4 billion in 2022, although sales in the second half
declined almost 11% yoy. In Fitch's view, the decline was driven by
lower than expected consumer demand and retailer inventory
destocking. Lower than expected sales also led to the company and
retailers exiting 2022 with excess inventory.
Mattel's revenue could decline modestly in 2023, driven by a
decline in orders from retailers as they work through excess
inventory in the first half of the year, offset by incremental
revenue from Disney Princess and Frozen licenses, which returned to
Mattel starting in 2023. Mattel could return to low-single-digit
top-line growth beginning in 2024, as its focus on scaling brands,
increased product demand driven by TV and theatrical releases of
key owned and licensed brands, and the continued introduction of
innovative products support growth.
Mid-Teens EBITDA Margins: Mattel's EBITDA margins could decline to
around 16% in 2023, from 17.3% in 2022, as elevated promotional
activity to reduce excess inventory could pressure the company's
gross margins in 1H23. Mattel has focused on cost reduction over
the past several years, highlighted by its Optimizing for Growth
program. This focus on cost efficiency, combined with improving
commodity and logistics costs could enable the company to generate
EBITDA margins around 17% in 2024 and beyond, assuming the company
is able to work past the pressures from excess inventory and on
improved top-line growth prospects.
DERIVATION SUMMARY
Mattel, Inc.'s 'BB+' Long-Term IDR and Positive Outlook reflect the
company's strong portfolio of owned brands such as Barbie, Hot
Wheels and Fisher Price, which the company has focused on
revitalizing and re-energizing over the last few years. Together
with cost-cutting initiatives, this has supported strong top-line
and EBITDA growth and significantly improved credit metrics.
Mattel is rated higher than peer consumer products companies ACCO
Brands Corporation (BB/Stable), Central Garden & Pet Company
(BB/Stable) and Newell Brands, Inc. (BB/Negative), in line with
Levi Strauss & Co. (BB+/Stable), and lower than Hasbro, Inc.
(BBB-/Stable).
Hasbro's ratings reflect its position as one of the world's largest
toy companies, its good liquidity and cash flow profiles, and
expectations that gross debt to EBITDA will be in the low-3x range
in 2024, recognizing that it could be elevated in the mid-3x range
in 2023. The company also could use asset sales or FCF to support
deleveraging.
ACCO's rating and Outlook reflect the company's historically
consistent FCF and reasonable EBITDA leverage, which trended around
3.0x prior to operating challenges in 2020 related to the
coronavirus pandemic. The rating and Outlook are constrained by
secular challenges in the office products industry and channel
shifts within the company's customer mix. ACCO's earnings have been
pressured by supply chain challenges, inflation and a stronger
dollar, which lifted leverage into the 4x range in 2022, above
Fitch's negative sensitivity. Although Fitch expects margin
recovery and debt paydown to drive leverage back below 4.0x in
2023, a prolonged downturn could be a rating issue.
Central's rating reflects the company's strong market positions in
the pet and lawn and garden segments, ample liquidity, robust FCF
and moderate leverage, offset by limited scale, with EBITDA in the
low- to mid-$300 million range. Over time, Fitch expects the
company to manage gross debt/EBITDA within its targeted range of
3.0x-3.5x, though leverage could reach the high-3x area in fiscal
2023 (ended September 2023), given the challenging operating
environment. A longer or deeper economic slowdown that results in
leverage exceeding 4.0x for an extended period would be a rating
issue.
Newell's rating reflects the material pressure on top line and
EBITDA beginning in 2H22 that is likely to remain through 2023,
given a significant pullback in retail orders and an overall
slowdown in discretionary consumer spending. Beyond a weakening
macro environment, execution risk is an issue, as Newell realigns
and restructures its business segments and realigns its supply
chain, which could further disrupt operations. Newell's Outlook
could be stabilized on increased visibility around management's
ability to execute on its turnaround strategy and drive top-line
and EBITDA recovery in 2024, which, along with debt reduction,
would bring gross debt/EBITDA to under 4.5x.
Levi's rating considers the company's good execution from a
top-line and a margin standpoint, which support Fitch's longer-term
expectations of low-single-digit revenue and EBITDA growth.
Although operating results could experience some near-term pressure
given ongoing shifts in consumer behavior, difficult comparisons
and global macroeconomic uncertainty, Fitch expects that Levi will
maintain EBITDAR leverage (adjusted debt/EBITDAR, capitalizing
leases at 8x) below 3.5x over time. Levi's ratings reflect its
position as one of the world's largest branded apparel
manufacturers, with broad channel and geographic exposure, while
also considering the company's narrow focus on the Levi brand and
in bottoms.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
Include:
- Revenue in 2023 of around $5.4 billion, down around 1% from 2022,
on slower orders from retailers and partially offset by price
increases and the reintroduction of the Disney Princess line.
Revenue growth starting in 2024 is in the low single digits, in
line with historical global toy sales growth heading into the
pandemic;
- EBITDA declines to the mid to high $800 million range in 2023
from $940 million in 2022, driven by higher promotional activity to
reduce excess inventory and higher advertising spending. EBITDA
could grow modestly in 2024 and beyond, as the company benefits
from cost-savings initiatives, moves past the negative pressure
created by excess inventory and sees growth in the top line;
- FCF of $300 million-$500 million beginning in 2023, higher than
the $256 million in 2022. The significant improvement in FCF in
2023 could be driven by positive working capital as the company
reduces its inventory, and Fitch assumes working capital is
approximately neutral in 2024 and beyond. Fitch's FCF projection
assumes dividends, which were last paid in 2017, continue to be
suspended over the medium term. FCF could be used to resume the
company's share repurchase program and support new growth
initiatives.
- Gross debt/EBITDA, which improved to 2.5x in 2022 from 2.6x in
2021 on debt reduction, remains in the mid 2x range, assuming
EBITDA stabilizes around $900 million and debt is flat. Mattel's
next maturity is its $600 million of unsecured notes due April
2026.
RATING SENSITIVITIES
- Fitch would upgrade Mattel to 'BBB-' on increased confidence in
the sustainability of the company's market share and margin gains,
with strong performance in its core brands and EBITDA leverage
(gross debt/EBITDA) sustaining below 3.5x;
- Weaker than expected operating performance, highlighted by
declining revenue and market share, leading to EBITDA leverage
sustained above 4.0x;
- Fitch could stabilize Mattel's Outlook if the company's top line
or EBITDA declined such that EBITDA leverage remained above 3.5x.
LIQUIDITY AND DEBT STRUCTURE
Solid Liquidity: As of Q1 2023, Mattel's liquidity totaled around
$1.85 billion, including around $462 million of cash and
equivalents and full availability, less $8 million in letters of
credit, on its $1.4 billion unsecured revolving credit facility due
September 2025. Liquidity is further supported by Fitch's
expectation that Mattel could generate FCF of $300 million-$500
million range annually.
On Sept. 15, 2022, Mattel entered into a revolving credit agreement
for a $1.4 billion revolving credit facility due in September 2025,
which replaced its previous asset-based lending revolving lending
facility that would have matured in March 2024. Mattel's revolving
credit agreement and guaranteed notes indenture contain security
fallaway provisions if Mattel achieves a debt rating of
'Baa3'/'BBB-' or higher by two of three selected ratings agencies
and no event of default has occurred.
Mattel's capital structure at March 31, 2023 consisted of an
undrawn $1.4 billion revolving credit facility, $1.8 billion in
guaranteed senior unsecured notes maturing in 2026-2029, and $550
million in unguaranteed senior unsecured notes maturing in
2040-2041. As a result of the fall-away provisions on Mattel's
debts being triggered in April 2023, all of Mattel's outstanding
notes are now unsecured, non-guaranteed and pari-passu.
Fitch has assigned Recovery Ratings (RRs) to various debt tranches
in accordance with its criteria, which allows for the assignment of
RRs for issuers with IDRs in the 'BB' category. Given the distance
to default, RRs in the 'BB' category are not computed by bespoke
analysis. Instead, they serve as a label to reflect an estimate of
the risk of these instruments relative to other instruments in the
entity's capital structure.
Fitch rates Mattel's unsecured revolving credit facility and senior
unsecured notes 'BB+'/'RR4', in line with its 'BB+' IDR and
indicating average recovery prospects in a default scenario.
ISSUER PROFILE
Mattel is a leading global children's entertainment company that
specializes in the design and production of toys and consumer
products. Mattel owns some of the toy industries' leading brands
including Barbie, Hot Wheels and Fisher Price.
SUMMARY OF FINANCIAL ADJUSTMENTS
Historical EBITDA has been adjusted for stock-based compensation,
restructuring costs, asset impairment charges and other items.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Mattel, Inc. LT IDR BB+ Affirmed BB+
senior
unsecured LT BB+ Upgrade RR4 BB
senior
unsecured LT BB+ Affirmed RR4 BB+
senior
unsecured LT BB+ Downgrade RR4 BBB-
MAVENIR SYSTEMS: $145M Bank Debt Trades at 22% Discount
-------------------------------------------------------
Participations in a syndicated loan under which Mavenir Systems Inc
is a borrower were trading in the secondary market around 78
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $145 million facility is a Term loan that is scheduled to
mature on August 18, 2028. About $144.1 million of the loan is
withdrawn and outstanding.
Mavenir Systems, Inc. provides software-based networking solutions.
The Company offers internet protocol based voice, videos,
communication, and messaging services, as well as multimedia
subsystem, evolved packet core, and session border controller.
MAVENIR SYSTEMS: $585M Bank Debt Trades at 22% Discount
-------------------------------------------------------
Participations in a syndicated loan under which Mavenir Systems Inc
is a borrower were trading in the secondary market around 78
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $585 million facility is a Term loan that is scheduled to
mature on August 18, 2028. About $576.2 million of the loan is
withdrawn and outstanding.
Mavenir Systems, Inc. provides software-based networking solutions.
The Company offers internet protocol based voice, videos,
communication, and messaging services, as well as multimedia
subsystem, evolved packet core, and session border controller.
MAXAR TECHNOLOGIES: Moody's Withdraws B2 CFR on Advent Transaction
------------------------------------------------------------------
Moody's Investors Service has withdrawn all the ratings of Maxar
Technologies Inc., including its B2 corporate family rating. At the
time of the withdrawal, the outlook was negative. The ratings
withdrawal follows the company's announcement that it has been
acquired by Advent International [1].
Withdrawals:
Issuer: Maxar Technologies Inc.
Corporate Family Rating, Withdrawn, previously rated B2
Probability of Default Rating, Withdrawn, previously rated B2-PD
Speculative Grade Liquidity Rating, Withdrawn, previously rated
SGL-2
Senior Secured Bank Credit Facility, Withdrawn, previously rated
B2
Senior Secured Regular Bond/Debenture, Withdrawn, previously rated
B2
Outlook Actions:
Issuer: Maxar Technologies Inc.
Outlook, Changed To Rating Withdrawn From Negative
RATINGS RATIONALE
Moody's has withdrawn the ratings because Maxar's previously rated
debt have been fully repaid following the acquisition by Advent.
Headquartered in Westminster, Colorado, Maxar is a space technology
and intelligence company.
MERIDIEN ENERGY: $1.6MM DIP Loan from ICT-DIP Wins Interim OK
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia,
Richmond Division, authorized Meridien Energy, LLC to use cash
collateral and obtain postpetition financing, on an interim basis.
The Debtor requires immediate access to incremental liquidity in
the form of postpetition financing and access to cash collateral.
Meridien Energy contends relief is critical to preserving and
maximizing the value of the Debtor's estate.
The Debtor commenced the Chapter 11 Case with firm commitments for
$1.6 million delayed-draw term loan facility to be provided by
ICT-DIP LLC, to support the Debtor's business.
The Debtor is permitted to obtain $500,000 on an interim basis.
The DIP facility matures through the earliest to occur of (a)
September 4, 2023, (b) the effective date of a confirmed Acceptable
Plan, and (c) the date of acceleration of the Loans or termination
of the Commitment by the DIP Lender following an Event of Default.
The Debtor agrees to comply with these milestones:
(a) On or before the third Business Day after the Petition
Date, the Interim DIP Order will have been entered, and such order
will not have been reversed, modified, amended, stayed or vacated;
(b) On or before the 30th day after the entry of the Interim
DIP Order, the Final DIP Order will have been entered, and such
order will not have been reversed, modified, amended, stayed or
vacated;
(c) On or before July 3, 2023, the Borrower will have filed
with the Bankruptcy Court an Acceptable Plan and Disclosure
Statement;
(d) On or before July 6, 2023, the Borrower will have sourced
supplemental cash flow either from operations, assets or otherwise
in an amount of no less than $350,000;
(e) On or before August 2, 2023, the Disclosure Statement
Order will have been entered;
(f) On or before August 31, 2023, the Confirmation Order will
have been entered; and
(g) On or before September 4, 2023, an Acceptable Plan will
have been substantially consummated.
The combination of the cost associated with the litigation filed by
MarkWest Liberty Midstream & Resources, LLC and the cloud of
uncertainty surrounding that Litigation for the past four years has
severely impaired the Debtor's ability to bid contracts and by
extension its operations as a whole.
As of the Petition Date, the Debtor had approximately $19.5 million
in total debt obligations, inclusive of the disputed Judgment.
Approximately $5.2 million of that debt is secured by substantially
all of the Debtor's assets.
The Debtor is indebted to Bank7 Corporation pursuant to the
Promissory Note in the principal amount of $3.966 million, dated
November 15, 2020 and the Commercial Security Agreement, dated
November 15, 2020. Pursuant to an Extension Agreement between the
parties dated February 9, 2023, the maturity date of the Bank7 Note
was extended to February 15, 2024, and the Debtor agreed to pay
Bank7 a principal payment in the amount of $500,000 on August 15,
2023, and quarterly payments of accrued interest commencing on May
15, 2023.
Additionally, the Debtor is indebted to William C. Schettine in the
amount of approximately $1.160 million pursuant to the Third
Amended and Restated Line of Credit Secured Demand Promissory Note,
dated March 30, 2023 and the Security Agreement, dated January 3,
2023.
The Debtor will provide adequate protection to the Prepetition
Secured Lenders:
-- Bank7 will receive:
(i) the Bank7 Replacement Liens;
(ii) the Bank7 Superpriority Claims; and
(iii) payment of the Bank7 Payments.
-- WCS will receive:
(i) WCS Replacement Liens; and
(ii) the WCS Superpriority Claims.
A final hearing on the matter is set for May 23, 2023 at 2;30 p.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3LLPvhO from PacerMonitor.com.
The Debtor projects total cash outflow, on a weekly basis, as
follows:
$30,300 for the week ending May 1, 2023;
$41,559 for the week ending May 8, 2023;
$154,016 for the week ending May 15, 2023;
$40,300 for the week ending May 22, 2023; and
$60,300 for the week ending May 29, 2023.
About Meridien Energy, LLC
Meridien Energy, LLC is a full-service pipeline construction
company headquartered in New York state with division offices in
Pennsylvania, Virginia, and Florida.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Va. Case No. 23-31377) on April 20,
2023. In the petition signed by John W. Teitz, chief restructuring
officer, the Debtor disclosed up to $10 million in assets and up to
$50 million in liabilities.
Judge Keith L. Phillips oversees the case.
Brandy M. Rapp, Esq., at Whiteford, Taylor and Preston, LLP,
represents the Debtor as legal counsel.
MERIDIEN ENERGY: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
The U.S. Trustee for Region 4 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Meridien Energy, LLC.
About Meridien Energy
Meridien Energy, LLC is a full-service pipeline construction
company headquartered in New York state with division offices in
Pennsylvania, Virginia, and Florida.
Meridien Energy sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Va. Case No. 23-31377) on April 20,
2023. In the petition signed by its chief restructuring officer,
John W. Teitz, the Debtor disclosed up to $10 million in assets and
up to $50 million in liabilities.
Judge Keith L. Phillips oversees the case.
Brandy M. Rapp, Esq., at Whiteford, Taylor and Preston, LLP,
represents the Debtor as legal counsel.
MILLENNIUM URBAN: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Millennium Urban Renewal, LP
600 Fulton Street
Elizabeth, NJ 07206
Chapter 11 Petition Date: May 5, 2023
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 23-13900
Debtor's Counsel: Anthony Sodono, III, Esq.
MCMANIMON, SCOTLAND & BAUMAN, LLC
75 Livingston Avenue
Second Floor
Roseland, NJ 07068
Tel: 973-622-1800
Email: asodono@msbnj.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Luis F. Rodriguez as general partner.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/XS4SHFA/Millennium_Urban_Renewal_LP__njbke-23-13900__0001.0.pdf?mcid=tGE4TAMA
MOVING PROS: Unsecureds to Split $13K in Subchapter V Plan
----------------------------------------------------------
Moving Pros, LLC, filed with the U.S. Bankruptcy Court for the
District of Arizona a Plan of Reorganization under Subchapter V
dated May 1, 2023.
Robert T. Jager and Michael Broyles founded the Debtor in 2019. The
Debtor primarily operated as a local moving company for residential
customers based out of the West Phoenix metropolitan and
surrounding Area.
With the drain caused by the its interstate operations and the
slowing economy, the Debtor could no longer service the expansion
loans. The Debtor eventually defaulted on its MCA agreements
causing the creditors to freeze the Debtor's credit card processing
accounts. Unable to collect on its receivables, the Debtor sought
protection under Chapter 11, Subchapter V to regain access to its
revenue and restructure its significant debt to a manageable
level.
The Debtor's overall operations have improved from the Petition
Date. The Debtor expects continued increase in its net revenue.
Resolving many of the management and expense issues leading to its
reorganization has helped the Debtor reduce costs and refine its
operations. While the Debtor experiences normal seasonal
fluctuations, by reducing its significant debt obligations, the
Debtor will be able to continue to cover ongoing expenses and
service the debt required under this Plan.
Class II consists of all Allowed Unsecured Claims against the
Debtor that are not entitled to classification in any other Class,
currently asserted in a total amount of $298,403.83. The Debtors
will investigate proofs of Claim filed in this Case for
objectionable issues and such objections must be filed in
accordance with this Plan. The Debtor shall pay holders of Allowed
Class II Claims their Pro Rata share of $13,000.
The Debtor shall make the following annual payments beginning one
year from the Effective Date and continuing on the same day each
year thereafter until it has made all payments: (i) one (1) annual
payment of $500 followed by; (ii) one (1) annual payment of $1,000
followed by; (iii) one (1) annual payment of $2,000 followed by
(iv) one (1) payment of $3,500 followed by; (v) one (1) final
payment of $6,000. Class II is impaired.
Class III consists of all Allowed Equity Interests arising by
virtue of a member's ownership interest in the Debtor. Class III
shall retain it Equity Interests in the Debtor to the same extent
and validity and upon the same terms as their prepetition Equity
Interest. Class III is unimpaired.
Upon the Effective Date, the Debtor will begin making payments to
Creditors under the Plan. The Debtor projects that it will have
accumulated sufficient funds over the course of the reorganization
to pay the Administrative Claims of Premiere and the Case Trustee
in full on the Effective Date.
To the extent that the Debtor does not have sufficient funds to pay
AJG in full on the Effective Date, AJG will work with the Debtor to
determine a repayment agreement outside of the Plan terms. The
Debtor's post-confirmation performance will generate the funds
necessary to service the remaining payments due under the term of
the Plan.
A full-text copy of the Subchapter V Plan dated May 1, 2023 is
available at https://bit.ly/3NJaEuI from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Thomas H. Allen, Esq.
David B. Nelson, Esq.
Allen Barnes & Jones, PLC
1850 N. Central Ave., Suite 1150
Phoenix, AZ 85004
Telephone: (602) 256-6000
Facsimile: (602) 252-4712
Email: tallen@allenbarneslaw.com
dnelson@allenbarneslaw.com
About Moving Pros
Moving Pros, LLC, primarily operated as a local moving company for
residential customers based out of the West Phoenix metropolitan
and surrounding Area. Moving Pros sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. 23-00571) on Jan.
30, 2023. In the petition signed by Robert Jeager, member, the
Debtor disclosed under $1 million in both assets and liabilities.
Judge Madeleine C. Wanslee oversees the case.
Allen Barnes & Jones, PLC, serves as the Debtor's counsel.
NAVIENT CORP: Fitch Gives BB-(EXP) Rating on $500MM Unsec. Notes
----------------------------------------------------------------
Fitch Ratings expects to rate Navient Corporation's (Navient)
upcoming long-term $500 million senior unsecured notes issuance
'BB-(EXP)'. Proceeds from the issuance are expected to be used for
general corporate purposes, including the repayment of outstanding
unsecured debt.
KEY RATING DRIVERS
The unsecured debt is expected to rank pari passu with Navient's
existing senior unsecured debt, and therefore, the expected rating
is equalized with its outstanding senior unsecured debt and
long-term Issuer Default Rating (IDR). The equalization reflects
average recovery prospects under a stress scenario given the
availability of unencumbered assets.
Fitch does not expect the debt issuance to have a meaningful impact
on the company's leverage profile as proceeds are expected to
refinance upcoming unsecured debt maturities. Navient's leverage,
calculated as debt to tangible equity, excluding debt and capital
associated with the guaranteed FFELP assets and the mark-to-market
gains/losses on derivatives, was 11.2x at 1Q23, compared with 11.9x
at YE22.
Navient's ratings reflect its scale and position as one of the
largest non-government owners and servicers of student loan assets,
its demonstrated track record (including as part of its predecessor
organization) in the student loan servicing/collection space, the
low credit risk and predictable cash flow nature of its FFELP loan
assets and its adequate liquidity profile.
Rating constraints include Navient's monoline business model with a
concentration on student lending, higher leverage relative to
peers, a reliance on secured, wholesale funding and high levels of
asset encumbrance, long-term strategic uncertainty related to the
success of its growth initiatives, and ongoing regulatory,
legislative and litigation risk related to student lending.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- An increase in Navient's debt to tangible equity ratio (excluding
FFELP and the mark to market on floor income hedges) to over 12x on
a sustained basis;
- A decrease in the unsecured debt mix representing less than 10%
of the company's non-FFELP funding;
- Significant deterioration in credit performance of its private
student loan portfolio leading to materially weaker operating
results;
- An increase in shareholder distributions above Navient's core
earnings;
- An adverse outcome in the pending CFPB actions that significantly
impairs its market position, liquidity and/or future
profitability.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Sustainable growth in core earnings from successful execution on
new loan originations and business processing segment revenues;
- Strong credit performance on the private education loan refi
portfolio through periods of economic stress;
- A meaningful reduction in leverage below 8.0x;
- A demonstrated ability to access the unsecured debt market on
economic terms.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
The equalization of the unsecured debt rating with Navient's IDR
reflects average recovery prospects under a stress scenario given
the availability of unencumbered assets.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The expected unsecured debt rating is equalized with the long-term
IDR and is expected to move in tandem. However, a meaningful
increase in the proportion of secured funding or reduction of the
unencumbered asset pool could result in the unsecured debt rating
being notched down below the IDR.
ESG CONSIDERATIONS
Navient has an ESG Relevance Score of '4' for Exposure to Social
Impacts due to its exposure to shift in social or consumer
preferences as a result of an institution's social positions, or
social and/or political disapproval of core activities, which has a
negative impact on the credit profile, and is relevant to the
rating in conjunction with other factors.
Navient has an ESG Relevance Score of '4' for Customer Welfare -
Fair Messaging, Privacy, and Data Security due to its exposure to
compliance risks including fair lending practices, debt collection
practices and consumer data protection, which has a negative impact
on the credit profile, and is relevant to the rating in conjunction
with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating
----------- ------
Navient Corporation
senior
unsecured LT BB-(EXP) Expected Rating
NEWELL BRANDS: Moody's Affirms Ba1 CFR & Alters Outlook to Negative
-------------------------------------------------------------------
Moody's Investors Service affirmed Newell Brands Inc.'s Ba1
Corporate Family Rating, Ba1-PD Probability of Default Rating, Ba1
senior unsecured debt instrument ratings, and NP (not prime)
commercial paper rating. The outlook was changed to negative from
stable and the speculative grade liquidity rating ("SGL") was
downgraded to SGL-3 from SGL-2.
The affirmation reflects Newell's large scale, well recognized
brands, good geographic diversification, and adequate cash flow
generation ability. However, the company's operating performance
continues to be negatively impacted by high inflationary pressures
on consumers and the curtailment of purchasing by retailers, all of
which have resulted in double digit sales and earnings declines
across all of Newell's operating segments. Additionally, the
company's ability to take pricing actions to offset low volume
demand is limited in Moody's view. The persistent inflationary
environment continues to burden consumers and curtail purchases of
discretionary products such fragrance, food storage, small
appliances, cookware, and recreational goods. Moody's expects
Newell's segments to exhibit some recovery starting in the fourth
quarter of 2023. However, there are downside risks that remain that
a prolonged inflationary environment could put additional pressure
on consumers and derail this recovery. Newell's current aggressive
shareholder distribution policy with a high dividend payout further
detracts from free cash flows and the company's ability to quickly
curtail its high debt-to-EBITDA leverage currently at 6.25x as of
March 31, 2023.
The negative outlook reflects elevated risks over the next 12 to 18
months that inflation will persist and consumers will remained
pressured for the remainder of the year. Newell's financial
performance could remain weak for a prolonged period of time
resulting in weak cash flow and persistent elevated financial
leverage.
On a base case scenario, Moody's expects some recovery in
discretionary consumer purchases starting in 2024 as inflation
moderates and consumer purchasing recovers. Newell's performance
may start to improve by Q4 2023 despite weak demand given that Q4
2022 orders were depressed due to retail inventory destocking.
Moody's also expects Newell to generate about $100 million of
annual free cash flows after dividends largely due to a reduction
in working capital, and financial leverage to moderate to around
4.5x to 4.75x Moody's debt-to-EBITDA over the next 12-18 months.
However, a prolonged recession and the company's continued high
dividend payment could curtail the rapid deleveraging needed to
maintain the current ratings.
The downgrade to SGL-3 reflects that the company's cash flow
generation ability has weakened in this inflationary environment
while it continues to pay a high dividend. This is resulting in
greater reliance on its revolving credit facility to support
seasonal working capital needs and a narrower cushion in the
company's revolver covenant requirement to maintain an EBITDA to
interest expense ratio at above 3.0x over the next four quarters.
Newell's adequate liquidity reflects cash on hand of $271 million
as of March 31, 2023 and unused capacity of $720 million under its
$1.5 billion unsecured revolving credit facility expiring in August
2027 (unrated). The company also has a committed $375 million
receivable securitization facility with borrowings of $90 million
as of March 31, 2023. However this facility is set to expire in
October 2023. The company's next maturity is in December 2024 when
$200 million of notes come due.
The following ratings/assessments are affected by the action:
Affirmations:
Issuer: Newell Brands Inc.
Corporate Family Rating, Affirmed Ba1
Probability of Default Rating, Affirmed Ba1-PD
Senior Unsecured Commercial Paper, Affirmed NP
Senior Unsecured Medium-Term Note Program, Affirmed (P)Ba1
Senior Unsecured Regular Bond/Debenture, Affirmed Ba1
Downgrades:
Issuer: Newell Brands Inc.
Speculative Grade Liquidity Rating, Downgraded to SGL-3 from
SGL-2
Outlook Actions:
Issuer: Newell Brands Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Newell's Ba1 CFR reflects its large scale, well recognized brands,
and good product and geographic diversity. Newell's financial and
operating strategies are positioning the company for more
consistent performance following a period of significant strategy
shifts prior to 2020 that included portfolio reshaping through
acquisitions and divestitures. The rating is constrained by
concerns around the long-term growth prospects of the company's
mature product categories such as small appliances and cookware,
food storage, and writing that require constant investment to spur
growth and retain market share. The rating also reflects the
cyclicality and discretionary nature of its products that have been
negatively impacted during the current weak environment. The high
dividend payout ratio constraints its financial flexibility,
especially during economic weakness, because it weakens free cash
flow. Very high 6.25x debt-to-EBITDA leverage as of March 2023
weakly positions the company in the rating. Moody's believes that
the company's 2.5x net debt-to-EBITDA leverage target (based on the
company's calculation; 5.6x as of March 2023) indicates a focus on
reducing leverage, and the Ba1 rating is based on Moody's view that
leverage will decline once the current slowdown in discretionary
consumer spending subsides.
ESG CONSIDERATIONS
Newell's ESG Credit Impact Score is moderately negative (CIS-3)
with ESG factors having a limited impact on the current rating,
with greater potential for future negative impact. As with most
consumer durables companies, Newell's exposure to environmental
risks is considered moderately negative. Newell's exposure to
social risks is also moderately negative with some exposure to
demographic and social trends, health and safety and responsible
production. The company's moderate governance practices in the
context of the company's business profile positions it below
average and the exposure carries overall moderately negative credit
risks. Governance risk is driven primarily by its aggressive
financial strategy and risk management policies reflected with a
high dividend payout and increasing financial leverage as earnings
are negatively impacted by the inflationary environment. The
company has a reasonably conservative stated net debt to EBITDA
target of 2.5x, although it is far above this target during the
current economic down cycle.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Newell delivers good operating
execution including sustained organic revenue growth with a stable
to higher EBITDA margin while maintaining a financial policy that
results in sustained debt to EBITDA leverage below 3.75x. Newell
would also need to maintain very good liquidity, solid free cash
flow relative to debt, and a consistent strategic direction to be
considered for an upgrade.
Ratings could be downgraded if Newell's revenue or EBITDA margin do
not improve materially, liquidity does not improve, or the company
is not able to restore strong positive free cash. Additionally, the
ratings could be downgraded if Newell's debt-to-EBITDA is sustained
above 4.5x or retained-cash-flow to net debt is below 10%.
The principal methodology used in these ratings was Consumer
Durables published in September 2021.
Newell Brands Inc. is a global marketer of consumer and commercial
products utilized in the home, office, and commercial segments. Key
brands include Rubbermaid, Graco, Oster, Coleman, Sharpie, Mr.
Coffee and Yankee Candle. The publicly-traded company generated
$8.9 billion of revenue for the 12 months ended March 31, 2023.
PACIFICCO INC: Wins Final Cash Collateral Access
------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Pacificco Inc., Catalina Marketing Corporation and their
debtor-affiliates to use cash collateral on a final basis in
accordance with the budget.
The Debtors require the use of cash collateral to fund working
capital obligations, administer the estates, pay operating
expenses, maintain assets, and effectuate the contemplated sale of
the Debtors' Japanese business.
Catalina Marketing Corporation, as borrower, and certain of the
other Debtors, as guarantors, GLAS USA LLC, as administrative
agent, GLAS AMERICAS LLC, as collateral agent, and the lender
parties thereto are parties to a Super Priority Senior Term Loan
Credit Agreement, dated as of February 27, 2023, under which the
Super Priority Lenders agreed to provide to CMC a $20 million term
loan facility. The Super Priority Term Loan matures on June 30,
2023.
On March 23, 2023, the Company and the lenders party to the Super
Priority Term Loan entered into the Amendment No. 1 to Senior Term
Loan Credit Agreement, which provided an incremental $10 million in
term loans on the same terms as the initial Super Priority Term
Loan. The Super Priority Term Loan is secured by a first-priority
lien on, and security interest in, the collateral under a Security
Agreement, dated as of February 27, 2023. As of the Petition Date,
$36 million (plus accrued and unpaid interest) is outstanding under
the Super Priority Term Loan.
CMC, as borrower, and certain of the other Debtors, as guarantors,
GLAS USA LLC, as administrative agent, GLAS Americas LLC, as
collateral agent, the holders of first-out tranche debt, and the
holders of last-out tranche debt are parties to the Senior Term
Loan Credit Agreement, dated as of February 15, 2019 under which
the subordinated First-Out Lenders were deemed to provide to the
borrower a $125 million term loan facility and the Subordinated
Last-Out Lenders were deemed to provide to the borrower a $150
million term loan facility. The Subordinated First-Out Term Loan
matured on February 15, 2023, and the Subordinated Last-Out Term
Loan matures on August 15, 2023. There is significant overlap among
the Subordinated First-Out Lenders and Subordinated Last-Out
Lenders, and all of the Subordinated Term Loan Lenders are party to
the Subordinated Credit Agreement.
The Subordinated Term Loan is secured by a lien on, and security
interest in, the collateral under a Security Agreement, dated as of
February 15, 2019. To the extent the collateral under the
Subordinated Security Agreement is also collateral under the Super
Priority Security Agreement, the liens securing the Subordinated
Term Loan rank junior to the liens securing the Super Priority Term
Loan. The Subordinated Last-Out Term Loan ranks junior to the
Subordinated First-Out Term Loan in right of payment. As of the
Petition Date, approximately $110.4 million is outstanding under
the Subordinated First-Out Term Loan, and approximately $224.0
million is outstanding under the Subordinated Last-Out Term Loan.
As adequate protection for the use of cash collateral, among other
things, the Prepetition Secured Parties are granted:
a. Adequate Protection Liens. To the Prepetition Secured
Parties, an additional and replacement postpetition security
interests in and liens on, subject to limited exceptions, all
present and after-acquired property of the Debtors.
b. Superpriority Claims. To the Super Senior Agent, for the
benefit of the Super Priority Lenders, and the Subordinated Agent,
for the benefit of the Subordinated Term Loan Lenders, an allowed
superpriority administrative expense claim that is junior only to
(i) the Carve Out, and (ii) in the case of Superpriority Claims
granted to the Subordinated Agent, the Superpriority Claims granted
to the Super Senior Agent.
The Debtors' authorization, and the Prepetition Secured Parties'
consent, to use cash collateral will terminate on the earliest to
occur of:
* May 31, 2023, subject to extension.
* The termination or non-consensual modification of the Final
Order or the failure of the Final Order to be in full force and
effect.
* The entry of a Court order terminating the Debtors' right to
use cash collateral.
* The dismissal of the Chapter 11 cases or the conversion of
the Chapter 11 cases to cases under Chapter 7 of the Bankruptcy
Code.
* The appointment of a trustee or an examiner with expanded
powers.
* The delivery of a Termination Date Declaration.
* The consummation of the Plan or an Acceptable Plan
A copy of the order is available at https://bit.ly/3Hz0857 from
PacerMonitor.com.
About Catalina Marketing
Catalina Marketing Corporation provides an extensive network of
in-store, point-of-sale data acquisition and promotional delivery
systems, present in approximately 22,000 retail locations in the
U.S. Catalina is currently party to agreements with approximately
59 retailer partners to utilize Catalina's networked servers and
high-speed printers at multiple POS locations in each of the
retailers' stores.
Catalina Marketing and 14 affiliated entities sought Chapter 11
bankruptcy protection in the U.S. Bankruptcy Court for the Southern
District of New York on March 28, 2023. Affiliate PacificCo Inc.'s
case (Bankr. S.D.N.Y. Case No. 23-10470) is the lead case. The
Debtors listed $100 million to $500 million in estimated assets and
liabilities on a consolidated basis. The petitions were signed by
Michael Huffmaster as chief financial officer.
The Hon. Philip Bentley oversees the 2023 cases. Garty T. Holtzer,
Esq., Kevin Bostel, Esq., and Rachael Foust, Esq., at Weil, Gotshal
& Manges LLP, serve as the Debtors' counsel. FTI Consulting, Inc.,
serves as the Debtors' financial advisor. Houlihan Lokey is the
Debtors' investment banker. Kurtzman Carson Consultants LLC is the
Debtors' claims, noticing and solicitation agent.
Catalina and several affiliates previously sought Chapter 11
bankruptcy protection on Dec. 12, 2018 with a prepackaged plan that
would reduce debt by $1.6 billion. The 2018 lead case was In re
Checkout Holding Corp. (Bankr. D. Del. Case No. 18-12794). In the
2018 petition, Catalina disclosed funded debt of $1.9 billion as of
the bankruptcy filing. Assets were in the range of $1 billion to
$10 billion. On January 31, 2019, the Hon. Kevin Gross confirmed
the company's Plan of Reorganization allowing Catalina to reduce
debt by more than 80% from about $1.9 billion to about $280 million
upon emergence.
In the 2018 Plan, first lien lenders owed $55 million on a first
lien revolver and $1.02 billion on a first lien term loan were
slated to receive their pro rata share of 90% of the equity in the
reorganized Debtors, subject to dilution by a contemplated
management incentive plan. Second Lien Lenders owed $460 million
on a second-lien term loan were to receive their pro rata share of
10% of the New Common Stock, subject to dilution. Allowed general
unsecured claims were paid in the ordinary course and otherwise
unimpaired.
PALASOTA CONTRACTING: Wins Cash Collateral Access Thru May 15
-------------------------------------------------------------
Palasota Contracting, LLC sought and obtained authority from the
U.S. Bankruptcy Court for the Southern District of Texas, Houston
Division, to use cash collateral on an interim basis in accordance
with the budget, through May 15, 2023.
Palasota Contracting told the Court there is immediate and
irreparable harm to the estate absent the emergency consideration
of the relief requested. Palasota Contracting argued that immediate
use of cash collateral is necessary and will stabilize the Debtor's
operations and revenue by paying ordinary, post-petition operating
expenses, as well as any court-approved pre-petition expenses that
may be at issue.
The Debtor's principal, Ricky Palasota, Jr., and certain of his
family members were involved in various business operations through
mid-2022. Following a family dispute regarding operations, the
Debtor was locked out of an equipment yard and certain assets in
which the Debtor asserts an interest were seized by third parties.
This reduction in available equipment impacted the Debtor’s
ability to continue to provide its services at a cost-effective
rate. The decrease in net operating revenue over time impacted the
Debtor's ability to maintain its financial affairs.
On April 22, 2019, the Debtor entered into a promissory note with
Commercial Credit Group, Inc.. The CCG Note is secured by the
Debtor's assets including, but not limited to, all accounts,
accounts receivable, and certain enumerated items of tangible
personal property as evidenced by a UCC-1 Financing Statement filed
under File Number 19-0014504690. Between May 2, 2019, and January
27, 2021, the Debtor entered into seven additional promissory notes
with CCG for the purchase of various pieces of equipment. Each of
these loans was secured by a UCC-1 Financing Statement properly
filed with the Texas Secretary of State’s Office. Each UCC-1
Financing Statement filed by CCG for these additional seven loans
asserts a security interest in the CCG Collateral. The total
outstanding principal balance owed to CCG as of the Petition Date
is approximately $908,690.
On October 29, 2020, the Debtor entered into a promissory note with
Richard Lessner, d/b/a REO Holdings. The Lessner Note is secured by
the Debtor’s assets including, but not limited to, all accounts,
accounts receivable, and certain enumerated items of tangible
personal property as evidenced by a UCC-1 Financing Statement filed
under File Number 20-0054626378. Upon information and belief,
although the UCC-1 has not been released, as of the Petition Date,
the Debtor does not owe any payments on the Lessner Note.
On March 8, 2021, the Debtor entered into a promissory note with
Encore Bank, NA in the principal amount of $750,000. The Encore
Note is secured by the Debtor’s assets including, but not limited
to, all accounts, accounts receivable, and certain enumerated items
of tangible personal property as evidenced by a UCC-1 Financing
Statement filed under File Number 21-0008935503. The outstanding
principal balance owed on the Encore Note as the Petition Date is
approximately $662,456.
From March 2018 through the bankruptcy filing date, the Debtor
entered into several other purchase money loans with creditors
including Kubota, Allegiance Bank, and Simmons Bank. Each of these
loans is secured by specifically identified equipment or other
personal property items. To the best of Debtor's knowledge, only
CCG, Lessner, and Encore have a perfected interest in any of the
Debtor's cash, accounts, or accounts receivable.
The Court said Encore Bank will be granted a senior post-petition
replacement lien on all new accounts, contract rights, and general
intangibles from and after the date of filing of the case, as
further security for the use of cash collateral, but only to the
extent of the Debtor's post-Petition use of the cash collateral.
All liens and security interests granted are deemed effective,
valid, and perfected as of the Petition Date -- to the extent the
original security interests of Encore Bank were valid and perfected
as of the Petition Date -- without the necessity of filing or
recording by or with any entity of any documents or instruments
otherwise required to be filed or recorded under applicable
non-bankruptcy law.
To the extent of any diminution in value of the cash collateral,
Encore Bank will have an administrative expense against the
Debtor's bankruptcy estates for the Debtor's use of cash collateral
to the extent of any diminution in the value of the cash collateral
and these administrative claims will have priority over and above
all other costs and expenses.
The Debtor will permit Encore Bank and its authorized agents and
employees to remain upon the Debtor's premises during business
operating hours. Encore Bank is authorized to conduct audits and
inspections of the cash collateral and the Debtor's books and
records, including all records concerning the cash collateral.
Richard Lessner and Commercial Credit Group will be granted a
post-petition replacement lien junior to Encore Bank on all new
accounts, contract rights, and general intangibles from and after
the bankruptcy filing date, as further security for the use of cash
collateral, but only to the extent of the Debtor's post-petition
use of the cash collateral.
A hearing on the matter is set for May 15 at 3 p.m.
A copy of the motion is available at https://bit.ly/3Lmi9of from
PacerMonitor.com.
A copy of the order is available at https://bit.ly/3nlZ1Pm from
PacerMonitor.com.
About Palasota Contracting, LLC
Palasota Contracting, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-31447) on April
24, 2023. In the petition signed by Ricky Palasota, Jr., president,
the Debtor disclosed up to $50,000 in assets and up to $50 million
in liabilities.
Judge Eduardo V. Rodriguez oversees the case.
Kimberly A. Bartley, Esq., at Waldron and Schneider, LLP,
represents the Debtor as legal counsel.
PANOCHE ENERGY: Moody's Puts 'B1' Rating on Review for Upgrade
--------------------------------------------------------------
Moody's Investors Service placed Panoche Energy Center, LLC's
("Panoche", "PEC" or "Project") B1 rating on review for upgrade for
the Project's senior secured bonds due 2029. Concurrent with this
rating action, the outlook has been revised to rating under review
from stable.
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATING
The review for upgrade of PEC's rating considers the improved
liquidity position of the Project, and considers the improving
credit profile of Pacific Gas & Electric Company's (PG&E) and its
parent company PG&E Corporation (Ba2, Corporate Family Rating,
positive). The Project benefits from a long-term power purchase
agreement (PPA) with PG&E as the offtaker through 2029, under which
PG&E is required to provide natural gas to the Project and make
seasonally adjusted capacity payments based on availability
thresholds and fixed O&M payments.
The rating action further considers the Project's expected improved
ability to successfully manage through its ongoing requirements for
carbon emissions allowances pursuant to California's Greenhouse Gas
(GHG) Cap and Trade Program, which has strained PEC's cash flows
and liquidity in the past. PEC has accumulated a significant
balance of carbon emissions allowances as of year end 2022, based
on a combination of pre purchases of, and including a sizable
member contribution of, carbon emissions allowance balance to
enable Panoche build a sizable cushion with respect to meeting its
future carbon emissions obligations.
PEC's credit profile further reflects the sound project operating
performance of more than a decade of plant operations and reflects
the Project's status as an important intermediate peaking power
generating unit serving PG&E's reliability needs. However, under
the terms of its tolling PPA, PG&E controls PEC's dispatch. As a
result, the Project has limited ability to manage its operational
exposure to carbon emissions when dispatched, exposing the Project
to a high degree of carbon emissions volume and price risks should
dispatch levels exceed expectations. In recent years, the Project
has emitted carbon levels that exceed certain free carbon emissions
allowance thresholds granted to the Project as a qualifying legacy
contract (LC) by the California Air Resources Board (CARB) in 2018,
adding volatility to annual results.
OUTLOOK CHANGE TO RATING UNDER REVIEW
The review will evaluate the Project's dispatch expectations and
further evaluate the upcoming carbon emissions obligations in view
of expected dispatch levels, and the adequacy of the accumulated
carbon allowance balance to meet future emissions obligations
during upcoming compliance periods. The review will further
evaluate upcoming major maintenance requirements of the Project and
consider the sufficiency of liquidity at the Project to meet future
spending requirements.
The rating could be upgraded if the Project demonstrates a
consistent improvement in its financial metrics such that the
Project's debt service coverage ratio (DSCR) exceeds 1.15x on a
consistent basis. An upgrade would be considered if PEC
demonstrates its ability to consistently manage its obligations
related to carbon emissions without straining its liquidity and
demonstrates its ability to sustain improved credit metrics.
PROFILE
Panoche Energy Center, LLC owns an approximate 417 MW natural
gas-fired generating facility operating primarily as an
intermediate and peaking generation power plant. Panoche is a
simple cycle gas fired power plant consisting of four GE LMS100
turbine units and is located 50 miles west of the City of Fresno in
Firebaugh, California. The plant has been operating since 2009.
Panoche is owned by several funds managed by Ares EIF Management
LLC.
The principal methodology used in this rating was Power Generation
Projects Methodology published in January 2022.
PERFORMANCE POWERSPORTS: Creditors to Get Proceeds From Liquidation
-------------------------------------------------------------------
Performance Powersports Group Investor, LLC, and its
debtor-affiliates filed with the U.S. Bankruptcy Court for the
District of Delaware a Disclosure Statement with respect to Joint
Plan of Liquidation dated May 2, 2023.
The Debtors are in the business of adventure, selling dirt bikes,
go-karts, ATVs, golf carts, and the like to retailers throughout
the United States.
The Debtors' financial distress was compounded by delays and costs
in shipping caused by supply chain disruption felt across the
country, increased costs associated with freight, shipping,
demurrage and warehousing of inventory deliveries, and a post
pandemic reduction in demand from customers. Throughout the second
half of 2022, the Company faced continuing pressure from the
vendors that it no longer used as suppliers of product. These
vendors ultimately initiated legal proceedings in December 2021.
And, despite outreach from the Company seeking a business solution
to their dispute, these vendors also threatened an involuntary
bankruptcy filing.
The Plan provides for the wind down of the Debtors' affairs,
continued liquidation of the Debtors' remaining assets to Cash, and
the distribution of the net proceeds realized therefrom, in
addition to Cash on hand on the Effective Date of the Plan, to
holders of Allowed Claims and Interests as of the Record Date in
accordance with the relative priorities established in the
Bankruptcy Code. The Plan does not provide for a distribution to
holders of Intercompany Claims and their votes are not being
solicited as each is deemed to reject the Plan.
The Plan contemplates the appointment of a Litigation Trustee,
selected by the Debtors and Kinderhook, to, among other things,
receive the Litigation Trust Assets, commence, prosecute or settle
the Retained Causes of Action, implement the terms of the Plan
delegated to the Litigation Trust, and make Distributions to
holders of Beneficial Trust Interests in accordance with the
Litigation Trust Agreement. The Plan also contemplates the
appointment of a Plan Administrator to, among other things,
establish and maintain such operating, reserve, and trust accounts
as are necessary and appropriate to carry out the terms of the Plan
delegated to Plan Administrator, and make Distributions to holders
of Allowed Claims and Interests (other than Beneficial Trust
Interests) in accordance with the Plan.
Class 5 consists of General Unsecured Claims. Except to the extent
that a holder of an Allowed General Unsecured Claim agrees to less
favorable treatment, in exchange for full and final satisfaction,
settlement, and release of each Allowed General Unsecured Claim,
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 Litigation Trust Assets. For
the avoidance of doubt, the Kinderhook General Unsecured Claim
shall be allowed as a General Unsecured Claim in the amount of
$1,000,000.00.
Class 6 consists of Intercompany Claims. On the Effective Date, all
Class 6 Intercompany Claims shall be cancelled without any
distribution on account of such Claims.
Class 8 consists of Equity Interests. Each Interest shall be
canceled, released, and extinguished, and will be of no further
force or effect. Following payment in full of all Allowed General
Unsecured Claims and Subordinated Claims, and after funding the
Other Claims Reserve and the Professional Fee Claim Reserve, except
to the extent that a holder of an Allowed Interest agrees to less
favorable treatment, in exchange for full and final satisfaction,
settlement, and release of each Allowed Interest, each holder of
such Allowed Interest shall receive its pro rata share of the
Litigation Trust Assets. The Kinderhook Equity Interests shall be
allowed as an Interest in the amount of $45,000,000.00.
The Plan is a liquidating plan and provides for the liquidation of
the Assets and the payment of the proceeds generated therefrom to
holders of Allowed Claims in accordance with the priorities set
forth in the Bankruptcy Code.
Distributions under the Plan on account of the Beneficial Trust
Interests will be funded by the Litigation Trust Assets. All other
distributions under the Plan, other than distributions on account
of Beneficial Trust Interests, has already been paid by, or will be
paid by the Purchaser (to the extent distributions are on account
of unpaid Allowed Claims under the Asset Purchase Agreement) or
otherwise will be funded by the Other Claims Reserve or the
Professional Fee Claims Reserve, as applicable. On the Effective
Date, the Debtors shall fund the Other Claims Reserve and
Professional Fee Claims Reserve in full in Cash.
A full-text copy of the Disclosure Statement dated May 2, 2023 is
available at https://bit.ly/41acqrR from Omni Agent Solutions,
claims agent.
Counsel for the Debtors:
Domenic E. Pacitti, Esq.
Michael W. Yurkewicz, Esq.
Sally E. Veghte, Esq.
Klehr Harrison Harvey Branzburg LLP
919 North Market Street, Suite 1000
Wilmington, DE 19801
Telephone: (302) 426-1189
Facsimile: (302) 426-9193
Email: dpacitti@klehr.com
myurkewicz@klehr.com
sveghte@klehr.com
About Performance Powersports Group
Performance Powersports Group Investor, LLC and affiliates are in
the business of adventure, selling dirt bikes, go-karts, ATVs, golf
carts, and the like to retailers throughout the US.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-10047) on Jan. 16,
2023. In the petition signed by Ken Vanden Berg, chief financial
officer, the Debtor disclosed up to $500 million in both assets and
liabilities.
Judge Laurie Selber Silverstein oversees the case.
Domenic E. Pacitti, Esq., at Klehr Harrison Harvey Branzburg LLP,
represents the Debtor.
Tankas Funding VI, LLC, as DIP lender, is represented by Kirkland &
Ellis LLP.
PILL CLUB PHARMACY: Court OKs Interim Cash Collateral Access
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas, Fort
Worth Division, authorized The Pill Club Pharmacy Holdings, LLC and
its debtor-affiliates to use cash collateral on an interim basis in
accordance with the budget.
The Debtors require the use of cash collateral in order to meet
their immediate postpetition liquidity needs.
The Debtors have one secured obligation memorialized in the Plain
English Growth Capital Loan and Security Agreement dated December
31, 2021, entered into by Hey Favor, Inc. as borrower and borrower
representative, The Pill Club Pharmacy Holdings, LLC, MedPro
Pharmacy, LLC, MobiMeds, Inc., the lenders from time to time party
thereto and TriplePoint Venture Growth BDC Corp. in its capacity as
collateral agent for the Lenders. Pursuant to the Loan Agreement,
the Prepetition Borrowers granted to TriplePoint a first priority
security interest in all of the Prepetition Borrowers' receivables,
equipment, fixtures, general intangibles, inventory, investment
property, deposit accounts, cash, certain commercial tort claims,
goods and personal property, and all proceeds of each of the
foregoing. As of the Petition Date, the outstanding balance due
under the Loan Agreement is $30 million.
As of and upon the Petition Date, events of default have occurred
under the terms of the Loan Agreement.
The Debtors are authorized to use their cash collateral during the
period from the Petition Date through and including the Termination
Date for:
(a) working capital and general corporate purposes of the
Debtors;
(b) bankruptcy-related costs and expenses; and
(c) costs and expenses related to a sale, all in accordance
with the budget, and upon the terms and conditions set forth in the
Interim Order provided that (i) the principal amount outstanding
under the credit facility provided pursuant to the Loan Agreement
will not increase and (ii) the Prepetition Secured Parties are
granted adequate protection on the terms and conditions set forth
in the Interim Order.
The Permitted Uses will not include costs and expenses of the
Debtor Professionals (x) in excess of $50,000 related to Avoidance
Actions without the express written consent of TriplePoint in its
sole discretion, or (y) in connection with the investigation
(including discovery proceedings), initiation or prosecution of any
claims, causes of action, adversary proceedings or other litigation
against the Prepetition Secured Parties.
To the extent they are ultimately determined to have valid liens,
the Prepetition Secured Parties are entitled to adequate protection
of their respective interests in their Prepetition Collateral,
including cash collateral, in an amount equal to aggregate
diminution in value (if any) of their respective interests in such
collateral occurring on or after the Petition Date. TriplePoint,
for the benefit of the Prepetition Secured Parties, is granted
adequate protection.
To the extent of any Diminution of Value of their interests granted
in the Prepetition Collateral under the Loan Agreement,
TriplePoint, for the benefit of the Prepetition Secured Parties is
granted replacement security interests and liens in all now owned
or hereafter acquired assets and property of the Debtors and each
of their Chapter 11 estates, whether real or personal, tangible or
intangible, foreign or domestic, or otherwise, and any and all
proceeds therefrom.
To the extent of any Diminution of Value of its interests granted
in the Prepetition Collateral under the Loan Agreement,
TriplePoint, for the benefit of the Prepetition Secured Parties, is
granted, in addition to claims under 11 U.S.C. section 503(b), and
subject to the Carve-Out, an allowed superpriority administrative
expense claim, which will at all times be payable from and have
recourse to the Adequate Protection Collateral and proceeds
thereof.
A final hearing on the matter is set for May 15, 2023 at 1:30 p.m.
A copy of the order is available at https://bit.ly/3p1JCUI from
PacerMonitor.com.
About The Pill Club Pharmacy Holdings, LLC
The Pill Club Pharmacy Holdings, LLC is a digital healthcare
platform. The Company says it is "on a mission to empower women
and people who menstruate to lead their healthiest lives." It
combines telemedicine and direct-to-consumer pharmacy.
The Debtor and its affiliates sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 23-41090)
on April 18, 2023. In the petition signed by Elizabeth Meyerdirk,
chief executive officer, the Debtors disclosed up to $50,000 in
assets and up to $50 million in liabilities.
Judge Edward L. Morris oversees the case.
The Debtors tapped Katherine A. Preston, Esq., at Winston and
Strawn LLP as general bankruptcy counsel, Accordion Partners, LLC
as financial advisor, and BMC Group, Inc. as claims and noticing
agent.
PILL CLUB PHARMACY: U.S. Trustee Appoints Creditors' Committee
--------------------------------------------------------------
The U.S. Trustee for Region 6 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of The Pill
Club Pharmacy Holdings, LLC and its affiliates.
The committee members are:
1. Veru Inc.
c/o Phil Greenberg
Deputy General Counsel
2916 North Miami Ave, Suite 1000
Miami, FL 33127
Phone: 305-509-6895
Email: pgreenberg@verupharma.com
2. McKesson Corporation
c/o Ben Carlsen
Managing Lead Counsel
1564 Northeast Expressway
Atlanta, GA 30329
Phone: 404-461-4232
Email: ben.carlsen@mckesson.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 The Pill Club Pharmacy Holdings
The Pill Club Pharmacy Holdings, LLC is a digital healthcare
platform. The company says it is "on a mission to empower women
and people who menstruate to lead their healthiest lives." It
combines telemedicine and direct-to-consumer pharmacy.
Pill Club Pharmacy Holdings and its affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Texas
Lead Case No. 23-41090) on April 18, 2023. In the petition signed
by Elizabeth Meyerdirk, chief executive officer, the Debtors
disclosed up to $50,000 in assets and up to $50 million in
liabilities.
Judge Edward L. Morris oversees the cases.
The Debtors tapped Katherine A. Preston, Esq., at Winston and
Strawn LLP as general bankruptcy counsel; Accordion Partners, LLC
as financial advisor; and BMC Group, Inc. as claims and noticing
agent.
PRECISION DRILLING: Fitch Alters Outlook on 'B+' IDR to Positive
----------------------------------------------------------------
Fitch Ratings has affirmed Precision Drilling Corporation's
(Precision) Long-Term Issuer Default Rating (IDR) at 'B+'. Fitch
has also affirmed Precision's senior secured revolver at
'BB+'/'RR1' and the senior unsecured ratings at 'B+'/'RR4'. The
Rating Outlook has been revised to Positive from Stable.
The Outlook revision to Positive reflects management's track record
of consistent gross debt reduction and Fitch's expectation that
debt reduction will continue in the near term via forecast strong
FCF generation. Fitch will look to resolve the Positive Outlook in
the next 12-24 months following meaningful progress toward the
company's stated CAD500 million debt reduction target between
2022-2025 (of which CAD106 million was already repaid in 2022),
which will strengthen through-the-cycle leverage and credit
metrics.
Precision's rating reflects the company's track record and
execution on debt reduction initiatives, strong liquidity profile,
lack of near-term maturities and favorable industry dynamics which
support the FCF profile. Offsetting factors include uncertainty
around increases in E&P development spending and rig counts and
elevated service and labor costs that will have to be offset by
continued increases in day rates.
KEY RATING DRIVERS
Debt Reduction Continues: Fitch expects continued debt reduction
throughout the forecast and views management's CAD150 million debt
reduction goal for 2023 and their CAD500 million debt reduction
target between 2022 and 2025 as achievable given the positive FCF
forecast. Gross debt reduction totaled CAD106 million in 2022, and
the company has repaid approximately CAD770 million of total debt
since 2018. FCF is expected to be allocated to reduce revolver
borrowings in 2023 and toward reduction of the unsecured notes
thereafter which should help improve through-the-cycle leverage
metrics and further strengthen Precision's ability to withstand
future downturns.
Supportive Dayrates, Rig Counts: Fitch forecasts strong EBITDA and
FCF generation for Precision in 2023, despite relatively stable rig
count, as the company will be able to re-price its existing
contracts at leading-edge dayrates through 2023. 1Q23 dayrates in
the U.S. have moved toward USD35,000 for active rigs and Canadian
dayrates have also moved above CAD30,000, which has supported
margin increases for Precision in 1Q23. U.S. daily operating
margins improved to USD14,692 in 1Q23 and Canadian margins improved
to CAD13,558, an increase of 23% and 10%, respectively, from 4Q22
signaling the company's ability to pass through higher operating
and wage expenses with higher dayrates. Fitch expects these
favorable industry dynamics will continue through 2023 given
overall tightness of super-spec rig supply which supports strong
FCF generation in the near-term.
Strong Near-Term FCF: Management has guided towards a capital
budget of approximately CAD200 million in 2023, (approximately
CAD150 million of maintenance and CAD50 million for upgrade and
expansion spending) up from CAD106 million in 2022, with a focus on
FCF generation. Fitch's base case forecasts approximately CAD200
million-CAD225 million of annual FCF in 2023 and 2024, assuming
relatively stable rig counts and margins similar to 1Q23.
Improving Leverage; Manageable Maturities: Fitch's base case
forecasts leverage at 1.6x in 2023 and remains relatively flat
thereafter through a combination of expected annual gross debt
reduction and modest decreases in pricing and activity levels
in-line with Fitch's commodity price assumptions. The maturity
profile also remains manageable with no significant maturities
until the revolver matures in 2025 and the 7.125% notes mature in
January 2026. Fitch expects debt repayment will largely be aimed at
the credit facility in the near term and believes management will
look to return approximately 10%-20% of FCF to shareholders via
share repurchases.
Leading Canadian Share: Precision has a leading market share in
Canada, with approximately 32% of active rigs in key Canadian
basins. The company's current Canadian fleet consists of 111
drilling rigs and 117 well service rigs. Fitch anticipates 2023
drilling activity will remain relatively flat with 1Q23 levels and
expects modest improvement in day rates as drilling rigs are
repriced at leading-edge day rates. Precision should continue to
maintain market share given its success and growth in digital
leadership through its Alpha Technology services, which are not
exposed to pricing competition and help improve overall utilization
rates.
Volatile, Competitive U.S. Operations: U.S. operations are
historically more volatile than Canadian operations, although both
regions are seeing strong activity levels and dayrates. Fitch
estimates Precision has the fourth-largest market share at
approximately 8% market share, an improvement from approximately 6%
in 2015. Fitch expects some rig and customer churn primarily for
the company's gas-focused rigs, but believes this will be somewhat
offset by rig demand in oil-focused basins. Fitch expects 2023
activity levels in the U.S. will remain consistent with 1Q23,
similar to Canada, and believes higher service costs and wages will
continue to be passed through with higher dayrates.
DERIVATION SUMMARY
Precision's primary peer is Nabors Industries, Ltd. (B-/Stable),
which is also an onshore driller with exposure to U.S. and
international markets. Fitch estimates that Nabors has the third
largest market share in the U.S. at approximately 12% versus
Precision at 8%. Nabors' gross margins in the U.S. are higher than
Precision's and are helped by their offshore and Alaskan rig fleet,
which operate at significantly higher margins. Precision has the
highest market share in Canada at approximately 33%. However,
Nabors has a significant international presence, which typically
means longer-term contracts that partially negate the volatility of
the U.S. market.
Precision has stronger leverage metrics and a much less significant
maturity wall than Nabors. Fitch expects both companies to generate
strong FCF in the near-term given strong industry fundamentals and
utilize the cash to reduce debt.
Precision has slightly higher leverage metrics, but less cash flow
volatility compared to offshore drillers Valaris Limited
(B+/Stable) and Noble Corp plc (BB-/Stable). Precision also has a
stronger track record of debt reduction, maintenance of liquidity
and more successful management of the operational and financial
profiles throughout commodity price cycles.
Compared to Enerflex, Ltd. (BB-/Stable), a global supplier of
natural gas infrastructure and energy transition solutions,
Precision has lower leverage and has consistently generated FCF and
reduced gross debt. Enerflex is larger, more diversified and cash
flows are less susceptible to commodity price cycles through more
stable, recurring revenue streams and long-term take-or-pay
contracts with five to 10-year terms.
KEY ASSUMPTIONS
Key Assumptions within its Rating Case for the issuer:
- WTI oil price of USD80/bbl in 2023, USD70/bbl in 2024, USD60/bbl
in 2025 and USD50/bbl thereafter;
- Henry Hub natural gas price of USD3.50/mcf in 2023, USD3.50/mcf
in 2024, USD3.00/mcf in 2025 and USD2.75/mcf thereafter;
- Revenues increase by 30% in 2023 due to improving rig count and
contract extension at leading-edge day rates;
- Capex of CAD200 million in 2023 given moderate increase in
upgrade and expansion capital;
- FCF to remain positive with proceeds used to reduce debt;
- Modest shareholder returns.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Execution on gross debt targets that leads to mid-cycle EBITDA
Leverage below 3.0x on a sustained basis.
- Ability to maintain a competitive asset base in a
credit-conscious manner;
- Maintenance of liquidity and financial flexibility including low
revolver utilization;
- Increased size, scale and/or diversification.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Failure to generate FCF that negatively affects liquidity and
debt reduction capacity;
- Structural deterioration in rig fundamentals that results in
weaker than expected financial flexibility;
- Mid-cycle EBITDA Leverage above 4.0x on a sustained basis.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: Precision had CAD42 million of cash on hand as of
March 31, 2022, and USD102 million drawn (USD56 million of
outstanding LOCs) on its USD500 million revolver. There are no
significant maturities due until the revolver matures in June 2025
and 7.125% notes mature in January 2026. Fitch anticipates the
company will continue to be FCF positive over the forecast given
currently strong industry dynamics which supports the liquidity
profile.
KEY RECOVERY RATING ASSUMPTIONS
The recovery analysis assumes Precision would be reorganized as a
going-concern (GC) in bankruptcy rather than liquidated. Fitch
assumed a 10% administrative claim.
Going-Concern Approach
Precision's GC EBITDA estimate reflects Fitch's view of a
sustainable, post-reorganization EBITDA on which the enterprise
valuation (EV) is based. The GC EBITDA assumption for commodity
sensitive issuers at a cyclical peak reflects the industry's move
from top-of-the-cycle commodity prices to midcycle conditions and
intensifying competitive dynamics.
The GC EBITDA assumption is relatively in-line with 2026 forecast
EBITDA, which represents emergence from a prolonged commodity price
decline. Fitch assumes a WTI oil price of USD65/bbl in 2023,
USD42/bbl in 2024, USD32/bbl in 2025, USD42/bbl in 2026 and
USD45/bbl over the long term.
The assumption also reflects loss of customers and lower margins,
as E&P companies pressure oilfield service firms to reduce
operating costs. It also reflects corrective measures taken in the
reorganization to offset the adverse conditions that triggered
default, such as cost cutting and optimal deployment of assets.
An EV multiple of 5.0x EBITDA is applied to GC EBITDA to calculate
a post-reorganization EV. The choice of this multiple considered
the following factors:
The historical bankruptcy case study exit multiples for peer energy
oilfield service companies have a wide range with a median of 6.1x.
The oil field service sub-sector ranges from 2.2x to 42.5x due to
the more volatile nature of EBITDA swings in a downturn.
Fitch uses a 5.0x multiple for Precision because of its high mix of
Canadian rigs, weaker competitive position in the U.S. and relative
mix of non-super spec rigs.
Liquidation Approach
The liquidation estimate reflects Fitch's view of the value of
balance sheet assets that can be realized in sale or liquidation
processes conducted during a bankruptcy or insolvency proceeding
and distributed to creditors.
Fitch assigns a liquidation value to each rig based on management
discussions, comparable market transaction values, and upgrade and
new building cost estimates.
Different values were applied to top-of-the-line super spec rigs,
lower value super spec rigs, non-super spec rigs and higher value
international rigs.
Fitch assumes the secured credit facility will be fully drawn upon
default and is super senior in the waterfall. The value allocation
in the liability waterfall results in a recovery corresponding to
'RR1' for the secured credit facility and a recovery corresponding
to 'RR4' for the senior unsecured notes.
ISSUER PROFILE
Precision is an oilfield service (OFS) company that owns and
operates a fleet of 225 onshore drilling rigs that operate in
Canada (111 rigs), the U.S. (101 rigs), and internationally (13
rigs), mainly in the Middle East.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Precision
Drilling
Corporation LT IDR B+ Affirmed B+
senior secured LT BB+ Affirmed RR1 BB+
senior
unsecured LT B+ Affirmed RR4 B+
PRESTON URGENT: Court OKs Interim Cash Collateral Access
--------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of West
Virginia authorized Preston Urgent Care/Family Practice, LLC to use
cash collateral on an interim basis until the earlier of a final
hearing or August 25, 2023.
The Debtor is obligated to Clear Mountain Bank on two loans:
(a) By Promissory Note dated September 25,2020, Preston
Aesthetics and Spa, LLC executed a promissory note in favor of CMB
in the original principal amount of $200,000. The Debtor and Peggy
S. Phillips executed separate guaranty agreements to secure the PAS
Note. The Debtor further executed a Security Agreement in which it
pledged All Assets and Specific Equipment to secure the PAS Note.
The PAS Note was modified by Loan Modification Agreement dated as
of August 25, 2021 which among other things extended the maturity
date to October 7, 2028.
(b) By Promissory Note dated August 30, 2021, Diamond Rental
Properties, LLC and the Debtor executed a promissory note in favor
of CMB in the original principal amount of $363,555. In order to
secure the DR Note, Diamond Rental executed a deed of trust secured
by land in Preston County for the benefit of CMB. Further, the
Debtor executed a Security Agreement in which it pledged All Assets
to secure the DR Loan.
CMB's security interest in All Assets and the Specific Equipment
was perfected by filing a financing statement with the West
Virginia Secretary of State on September 25, 2020 in File #
2020E09250002I. CMB's interest in All Assets was further perfected
by filing a financing statement with the West Virginia Secretary of
Slate on September 30, 2021 in File # 2021E093000047.
The Small Business Administration, by agreement, subordinated its
lien position to CMB; therefore CMB hold a first perfected security
interest in all assets and specific equipment.
The Debtor acknowledges and agrees that, as of the Petition Date:
(a) those agreements between the Debtor and CMB are valid and
binding agreements and obligations of the Debtor;
(b) the Debtor failed to make its payment due April 7, 2021
for the PAS Loan in the amount of $2,297 and its payment due March
30, 2023 for the DR Loan in the amount of $2,846;
(c) the total amount of the pre-petition debt due and payable
to CMB by the Debtor on the PAS Loan is $135.545 as of April 10,
2023;
(d) the total amount of the pre-petition debt due and payable
to CMB by the Debtor on the DR Loan is $339,892 as of April 10,
2023;
(e) CMB is a secured creditor herein and has allowed claim as
of the Petition Date in the amount of at least S475.437;
(f) CMB's security interests in and liens upon the
pre-petition collateral are valid, perfected, enforceable and
non-avoidable; and
(g) the Debtor does not possess and may not assert any claim,
counterclaim, setoff or defense of any kind or nature which would
in any way affect the validity, enforceability and non-avoidability
of the Pre-Petition CMB Debt and CMB's security interests in and
liens upon the Pre-Petition CMB Collateral.
In partial consideration of CMB's consent to the use of the cash
collateral by the Debtor and as part of the adequate protection for
any diminution in the value of CMB's interests in the Pre-Petition
CMB Collateral, other than any payments on the CMB Claims, the
Debtor grants to CMB as of the Petition Date a first priority
security interest in and lien upon all property of the Debtor of
the same type and description as the Pre-Petition CMB Collateral
whether now owned or hereafter acquired, subject only to any prior
valid and enforceable.
The Adequate Protection Claim will further be entitled under 11
U.S.C Section 507(b) to priority over any or all administrative
expenses, but only to the extent of the diminution in the value of
CMB's interests in the Pre-Petition CMB Collateral, other than as
the result of a payment of the CMB Claims. The Replacement Lien and
the super-priority administrative claim granted will be subordinate
to the fees of the United States Trustee in this case. If the case
is converted to one under Chapter 7 of the Bankruptcy Code, the
super-priority administrative claim granted will be subordinate to
the administrative claims of the Chapter 7 estate in accordance
with 11 U.S.C. Section 726(b).
All liens and security interests granted or continued in the Order
will be deemed effective, valid and perfected as of the Petition
Date, without the necessity of the filing or lodging by or with any
entity of any documents or instruments otherwise required to be
filed or lodged under applicable non-bankruptcy law.
These events constitute an "Event of Default":
(i) The Debtor fails to perform in any material respect any of
their obligations pursuant to this Order or the Agreements;
(ii) The Debtor fails to obtain C'MB's consent to any action or
inaction where required in the Order;
(iii) The Debtor fails to timely pay its adequate protection
payments to CMB or any of its post-Petition Date obligations to any
taxing authority;
(iv) The case is converted to a case under Chapter 7 of the
Bankruptcy Code;
(v) The Chapter 11 case is dismissed;
(vi) The Debtor at any time discontinues or is ordered to
discontinue the conduct of its business in the ordinary course; and
(vii) The Court determines after notice and hearing that the
Debtor will not have sufficient cash or cash collateral available
to continue its business.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/41RYsvO from PacerMonitor.com.
The Debtor projects $126,320 in total income and $93,678 in total
expenses.
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, its 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.
PROVIDENT GROUP: Moody's Cuts Rating on Sr. Secured Bonds to Caa3
-----------------------------------------------------------------
Moody's Investors Service has downgraded to Caa3 from Caa2 the
ratings assigned to Provident Group – EMU Properties LLC's
(Provident EMU) senior secured obligations, including the senior
secured revenue bonds following a payment default on the May 1,
2023 debt service payment. The bonds were initially issued by
Arizona Industrial Development Authority, AZ, which lent the
proceeds to Provident EMU. The outlook is negative.
Downgrades:
Issuer: Arizona Industrial Development Authority, AZ
Senior Secured Revenue Bonds, Downgraded to Caa3 from Caa2
Issuer: Provident Group - EMU Properties LLC
Senior Secured Regular Bond/Debenture, Downgraded to Caa3 from
Caa2
Outlook Actions:
Issuer: Provident Group - EMU Properties LLC
Outlook, Remains Negative
RATINGS RATIONALE
The downgrade to Caa3 reflects a default due to only a partial
payment of scheduled debt service on May 1. The borrower owed
$1.222 million of scheduled debt service, consisting of $892,475 of
interest and $330,000 of principal. The trustee will make a partial
payment of $848,778, applied entirely to the interest payment. On
April 20, the successor trustee for the senior bonds disclosed that
it would not follow the supplemental indenture authorizing use of
the Capital Improvement Fund for debt service; sufficient funds
were on hand when including this source, but without it there was a
shortfall.
Moody's expect below sum sufficient debt service coverage over the
next 12 months, as cash flow remains pressured by 1) lower revenues
driven by declining enrollment and a large share of students taking
classes online and 2) liquidity that was eroded by a significant
reduction in activity during the COVID-19 pandemic. Moody's also do
not currently anticipate any extraordinary support from the sponsor
or the university.
The Caa3 rating reflects the project's significant longer term
challenges, with weakened revenue generating potential given
material and ongoing enrollment declines and a high share of
students taking courses online versus on-campus. The project's
ability to grow revenues to meet expenses and rebuild reserves will
be challenged by weak in-state demographics, the university's
modest market position for attracting new enrollment and a more
extensive hybrid course offering than existed pre-COVID. That said,
enrollment declines at the university could stabilize, the project
remains well positioned to serve parking demand at the campus, and
the concession runs for 30 more years, all of which could support
longer-term revenue prospects. The concessionaire has filed
litigation against the university alleging various breaches and
seeking nearly $11 million of damages; depending on the ultimate
resolution, this could entail additional financial support.
The project remains exposed to uncertain actions or exercise of
remedies by the senior trustee following the recent payment
default, and the University has also filed a notice of default
against the project relating to the concession. An uncured
concessionaire event of default could lead to termination of the
concession, with no required compensation to lenders.
RATING OUTLOOK
The negative outlook reflects significant uncertainty as to
Provident EMU's ability to generate sufficient internal cash flow
to support debt service as student enrollment and on-campus
activity remain challenged. The recent payment default also gives
rise to bondholder remedies that include acceleration of debt
service and foreclosure on collateral.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
FACTORS THAT COULD LEAD TO AN UPGRADE
Strong and sustained recovery in parking revenue that enables the
project to cover its annual operating expenses and debt service
obligations from internal sources and over time provides liquidity
to fund depleted reserve balances.
Equity injection, compensation or other actions that improve cash
flow and restore reserves.
Resolution of contract disputes among the project parties
FACTORS THAT COULD LEAD TO A DOWNGRADE
Further decline in revenues or increase in expenses causing
liquidity profile and recovery prospects to weaken further.
Cancellation of the concession by the university
PROFILE
In January 2018, Eastern Michigan University, MI (EMU) entered into
a concession agreement with Preston Hollow Capital, LLC (PHC),
concerning the operation, maintenance and improvement of the EMU
parking system. Pursuant to an assignment and assumption agreement,
PHC has assigned its right, title and interest in and to the
concession agreement to Provident EMU , a single-member special
purpose entity incorporated in Arizona.
Provident EMU is owned by a sole member, Provident Resources Group
Inc., a Georgia 501(c)(3) non-profit corporation that is exempt
from federal income tax. In exchange for an upfront payment of $55
million, which was paid in April 2018, the concession agreement
grants Provident EMU the exclusive and irrevocable right to collect
parking fees and to operate and maintain the parking system for a
term of 35 years.
The parking system consists primarily of surface lots located
within a relatively compact, 1.5 square mile area at the main
campus of EMU in Ypsilanti, Michigan. Provident has retained LAZ
Parking Midwest, LLC, as operator pursuant to an operations and
maintenance agreement and LAZ Parking Realty Investors, LLC, as
asset manager pursuant to an asset management agreement.
The principal methodology used in these ratings was Generic Project
Finance Methodology published in January 2022.
PUERTO RICO: PREPA Bondholders Argue for Lien Appeal
----------------------------------------------------
Robert Slavin of The Bond Buyer reports that Puerto Rico Electric
Power Authority bondholders argued for certification of their
appeal of a ruling against their lien on revenues, saying it would
advance the bankruptcy case and allow an appeals court to address
issues of public importance and novel legal questions.
The Official Committee of Unsecured Creditors filed a separate
reply in the United States District Court for Puerto Rico arguing
for certification. The Ad Hoc Group of PREPA Bondholders, bond
trustee U.S. Bank N.A., Assured Guaranty, and Syncora Guarantee
filed the bondholder reply, which along with the committee's reply,
were responding to arguments filed last week by the Oversight
Board, Fiscal Agency and Financial Advisory Authority, and fuel
line lenders against certification.
While the board and its allies said District Court Judge Laura
Taylor Swain's ruling relied on the application of settled legal
principals, the bondholder parties said there were six "novel or
unsettled" questions of law in the ruling.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States. The chief of state is the President of the
United States of America. The head of government is an elected
Governor. There are two legislative chambers: the House of
Representatives, 51 seats, and the Senate, 27 seats. The
governor-elect is Ricardo Antonio "Ricky" Rossello Nevares, the son
of former governor Pedro Rossello.
In 2016, the U.S. Congress passed PROMESA, which, among other
things, created the Financial Oversight and Management Board and
imposed an automatic stay on creditor lawsuits against the
government, which expired May 1, 2017.
The members of the oversight board are: (i) Andrew G. Biggs, (ii)
Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J.
Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii)
David A. Skeel Jr.
On May 3, 2017, the Commonwealth of Puerto Rico filed a petition
for relief under Title III of the Puerto Rico Oversight,
Management, and Economic Stability Act ("PROMESA"). The case is
pending in the United States District Court for the District of
Puerto Rico under case number 17-cv-01578. A copy of Puerto Rico's
PROMESA petition is available at
http://bankrupt.com/misc/17-01578-00001.pdf
On May 5, 2017, the Puerto Rico Sales Tax Financing Corporation
(COFINA) commenced a case under Title III of PROMESA (D.P.R. Case
No. 17-01599). Joint administration has been sought for the Title
III cases.
On May 21, 2017, two more agencies -- Employees Retirement System
of the Government of the Commonwealth of Puerto Rico and Puerto
Rico Highways and Transportation Authority (Case Nos. 17-01685 and
17-01686) -- commenced Title III cases.
U.S. Chief Justice John Roberts named U.S. District Judge Laura
Taylor Swain to preside over the Title III cases.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose LLP; and Hermann D. Bauer, Esq.,
at O'Neill & Borges LLC are onboard as attorneys.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains the case web site
https://cases.primeclerk.com/puertorico
Jones Day is serving as counsel to certain ERS bondholders.
Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General
Obligation Bondholders.
PUG LLC: $327.5M Bank Debt Trades at 19% Discount
-------------------------------------------------
Participations in a syndicated loan under which Pug LLC is a
borrower were trading in the secondary market around 80.6
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $327.5 million facility is a Term loan that is scheduled to
mature on February 13, 2027. About $321.8 million of the loan is
withdrawn and outstanding.
PUG LLC provides an online marketplace for secondary tickets along
with payment support, logistics, and customer service. It acquired
the StubHub business of eBay Inc.
QAD REALTY: Case Summary & One Unsecured Creditor
-------------------------------------------------
Debtor: QAD Realty, LLC
635 Center Ave.
Attn: Quentin Solano
Mamaroneck, NY 10543
Business Description: The Debtor owns and manages real property.
Business Description: QAD Realty, LLC
Chapter 11 Petition Date: May 4, 2023
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 23-22336
Debtor's Counsel: James J. Rufo, Esq.
LAW OFFICE OF JAMES J. RUFO
1133 Westchester Avenue W N202
West Harrison NY 10604
Tel: (914) 600-7161
Email: jrufo@jamesrufolaw.com
Total Assets: $1,500,866
Total Debts: $1,555,357
The petition was signed by Quentin Solano as sole member.
The Debtor listed Town of Mamaroneck as its only unsecured creditor
holding a claim of $55,357.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/EKLT6PI/QAD_Realty_LLC__nysbke-23-22336__0001.0.pdf?mcid=tGE4TAMA
R&G DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: R&G Development Group, LLC
1145 Baker Heights Loop
Bremerton, WA 98312-2536
Business Description: The Debtor owns land and partially
constructed apartment building located at
2090 Wheaton Way, Bremerton, WA valued at
$5.3 million.
Chapter 11 Petition Date: May 4, 2023
Court: United States Bankruptcy Court
Western District of Washington
Case No.: 23-10817
Debtor's Counsel: Christine M. Tobin-Presser, Esq.
BUSH KORNFELD LLP
601 Union St., Suite 5000
Seattle, WA 98101-2373
Tel: (206) 292-2110
Fax: (206) 292-2104
Email: ctobin@bskd.com
Total Assets: $5,430,876
Total Liabilities: $4,784,404
The petition was signed by Willie Gilbert 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/IHT5T6Y/RG_Development_Group_LLC__wawbke-23-10817__0001.0.pdf?mcid=tGE4TAMA
R2&C LLC: Seeks to Hire Calaiaro Valencik as Bankruptcy Counsel
---------------------------------------------------------------
R2&C, LLC seeks approval from the U.S. Bankruptcy Court for the
Western District of Pennsylvania to hire Calaiaro Valencik as its
counsel.
The firm will render these legal services:
(b) advise the Debtor with regard to its rights and
obligations during the Chapter 11 reorganization;
(b) attend the first meeting of creditors;
(c) represent the Debtor to any motions to convert or dismiss
the Chapter 11 case;
(d) represent the Debtor in relation to any motions for relief
from stay filed by creditors;
(e) prepare a plan of reorganization and disclosure
statement;
(f) prepare any objections to claims; and
(g) represent the Debtor in general.
The hourly rates of the firm's counsel and staff are as follows:
Donald R. Calaiaro $395
David Z. Valencik $350
Mark B. Peduto $300
Andrew K. Pratt $300
Paralegal $100
The general retainer is $3,500.
Donald Calaiaro, Esq., an attorney at Calaiaro Valencik, disclosed
in a court filing that the firm and its members do not represent
interest adverse to the estate.
The firm can be reached through:
Donald R. Calaiaro, Esq.
Calaiaro Valencik
938 Penn Avenue, Suite 501
Pittsburgh, PA 15222
Telephone: (412) 232-0930
Email: dcalaiaro@c-vlaw.com
About R2&C LLC
R2&C, LLC sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Pa. Case No. 23-20851) on April 20,
2022, listing up to $50,000 in assets and $100,001 to $500,000 in
liabilities. Donald R. Calaiaro, Esq. at Calaiaro Valencik
represents the Debtor as counsel.
RECREATIONAL LIVING: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Recreational Living, LLC
9030 Hess Street
Hayden, ID 83835
Chapter 11 Petition Date: May 5, 2023
Court: United States Bankruptcy Court
District of Idaho
Case No.: 23-20121
Debtor's Counsel: Kevin P. Holt, Esq.
HOLT LAW OFFICE, PLLC
223 E. Harrison Avenue, Ste. B
Coeur d'Alene ID 83814
Tel: 208-664-5011
Email: kholt@holtlawoffice.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ron Ayers as manager.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/RRGYCSY/Recreational_Living_LLC__idbke-23-20121__0001.0.pdf?mcid=tGE4TAMA
RESOLUTE INVESTMENT: Moody's Cuts CFR to B2, On Further Review
--------------------------------------------------------------
Moody's Investors Service as downgraded Resolute Investment
Managers, Inc.'s ("RIM") corporate family rating to B2 from B1, its
probability of default rating to B2-PD from B1-PD and its senior
secured first-lien term loan to B1 from Ba3 as well as its senior
secured second-lien term loan to Caa1 from B3. The ratings were
placed on review for further downgrade due to heightened
refinancing risk. The outlook was changed to ratings under review
from stable.
RATINGS RATIONALE
The downgrade and review reflects Moody's expectation that
tightening financial conditions will continue to constrain RIM's
revenue growth and have a negative impact on its profitability and
liquidity. This is in addition to the deterioration in the
company's operating performance in 2022 that increased the
company's leverage and weakened its interest coverage. This
deterioration has had an impact on the company's ability to execute
an extension of its first lien term loan due April 2024.
Management expects reported EBITDA in 2023 to generally be in line
with full-year 2022 results.
Organic AUM decay, which has been in excess of 5% in each of the
past three years, has been a significant constraint on RIM's
revenue growth. Most recently, the company reported a $58 million
impairment charge related to its largest affiliate, American Beacon
Funds. While RIM's management has a number of initiatives in
progress across the platform to jumpstart organic AUM and revenue
growth, the contribution of these initiatives to RIM's operating
performance in 2023 will likely be muted by the increasingly
challenging operating environment.
The review was prompted by the delayed refinancing of the company's
$541.6 million first lien term loan maturing on April 30, 2024.
Moody's expect financial flexibility will remain limited given
RIM's already high leverage and increasing interest burden. As of
year-end 2022, debt-to-EBITDA as adjusted by Moody's stood at 6.5x
and EBITDA covered interest expense by about 2 times. Although RIM
generates sufficient operating cash flow to meet immediate
obligations, it does not have sufficient liquidity sources to
address its near-term maturity. At year-end 2022, the company had
about $46 million of cash on hand, $17 million in marketable
securities, and a $40 million undrawn revolving credit facility due
January 2024.
RIM's B2 corporate family rating reflects its modest scale, weak
asset resiliency, and high financial leverage. These risks are
partially mitigated by RIM's diverse suite of investment funds,
strong distribution platform, and successful track record of
discovering outperforming money managers.
Over the next three months, Moody's review will focus on progress
made towards refinancing RIM's existing credit facility. An upgrade
of RIM's ratings is unlikely given the review for downgrade.
However, the ratings could be confirmed, and the outlook changed to
stable if the company is able to extend its term loan maturity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
RIM's ratings could be upgraded if: 1) financial leverage, as
computed by Moody's, is sustained below 5x debt-to-EBITDA; or 2)
outflows are stemmed such that there is an improvement to the
company's asset resiliency scores; or 3) the aggregate financial
contribution of new affiliates are able to stabilize revenue and
profit margins.
Conversely, RIM's ratings could be downgraded if: 1) financial
leverage, as computed by Moody's, is sustained above 7x
debt-to-EBITDA; or 2) AUM levels continue to decay; or 3) liquidity
sources become insufficient to meet near-term obligations.
RIM is a multi-affiliate asset manager that provides investment
strategies and services to institutions, retirement plans and
retail investors. At year-end 2022, the company had $74 billion of
consolidated assets under management.
The principal methodology used in these ratings was Asset Managers
Methodology published in November 2019.
REVERSE MORTGAGE: Chapter 11 Plan Confirmed by Court on 2nd Try
---------------------------------------------------------------
Jeff Montgomery of Law360 reports that a one-day confirmation delay
did the trick Friday, April 25, 2023, for bankrupt Reverse Mortgage
Investment Trust, allowing the lending company to supplement its
Chapter 11 disclosures and secure a Delaware judge's approval for a
complex, multibillion-dollar business wind-down.
About Reverse Mortgage Investment Trust
Reverse Mortgage Investment Trust Inc. is an originator and
servicer of reverse mortgage loans.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-11225) on November
30, 2022.
In the petition signed by Craig Corn, chief executive officer, the
Debtors disclosed up to $50 billion in both assets and
liabilities.
Judge Mary F. Walrath oversees the case.
The Debtors tapped Sidley Austin LLP as general bankruptcy counsel,
Benesch, Friedlander, Coplan, and Aronoff LLO as local bankruptcy
counsel, FTI Consulting Inc. as financial advisor, and Kroll
Restructuring Administration LLC as noticing and claims agent.
Leadenhall Capital Partners LLP, as agent to the postpetition
secured lenders, is advised by Latham & Watkins LLP and Young,
Conaway Stargatt & Taylor LLP, as counsel; BRG, as financial
advisor; and Moelis as investment banker.
Texas Capital Bank has retained Paul, Weiss, Rifkind, Wharton &
Garrison LLP as counsel.
Longbridge Financial, LLC has retained Weil, Gotshal & Manges LLP,
Lowenstein Sandler LLP, and Richards, Layton & Finger as counsel;
and Houlihan Lokey, Inc., as financial advisor.
REVLON INC: Further Fine-Tunes Plan Documents
---------------------------------------------
Revlon, Inc., et al., submitted a Further Revised Third Amended
Plan dated May 1, 2023.
The Further Revised Third Amended Plan altered this paragraph:
"GUC Trust/PI Fund Operating Reserve" means a reserve to be
established solely to pay the GUC Trust/PI Fund Operating Expenses,
which reserve shall be (a) funded (i) by the Debtors or the
Reorganized Debtors, as applicable, in an amount equal to
$3,391,890.50 (which amount may be increased by up to $1 million by
the Bankruptcy Court for good cause shown by the GUC Administrator)
and (ii) from proceeds of Retained Preference Actions recovered by
the GUC Trust (on its own behalf and as agent for the PI Settlement
Fund); (b) held in a segregated account and administered by the GUC
Administrator for the GUC Trust and as agent for the PI Settlement
Fund on and after the Effective Date, and (c) allocated as between
the GUC Trust and the PI Settlement Fund by the GUC Administrator
and PI Claims Administrator as determined from time to time.
Class 8 consists of all Unsecured Notes Claims. On the Effective
Date, or as soon as reasonably practicable thereafter, each Holder
of an Allowed Unsecured Notes Claim shall receive:
* if Class 8 votes to accept the Plan and the Creditors'
Committee Settlement Conditions are satisfied, in full and final
satisfaction, compromise, settlement, release, and discharge of
such Claim, such Holder's Pro Rata share of the Unsecured Notes
Settlement Distribution plus payment in Cash of $900,000; or
* if Class 8 votes to reject the Plan or the Creditors'
Committee Settlement Conditions are not satisfied, no recovery or
distribution on account of such Claim, and all Unsecured Notes
Claims shall be canceled, released, extinguished, and discharged,
and of no further force or effect; provided that each Consenting
Unsecured Noteholder shall receive such Holder's Consenting
Unsecured Noteholder Recovery; provided, further that if the
Bankruptcy Court finds that such Consenting Unsecured Noteholder
Recovery is improper, there shall be no such distribution to
Consenting Unsecured Noteholders under the Plan.
Class 9(d) consists of all Other General Unsecured Claims. On the
Effective Date, or as soon as reasonably practicable thereafter,
each Holder of an Allowed Other General Unsecured Claim shall
receive:
* if Class 9(d) votes to accept the Plan and the Creditors'
Committee Settlement Conditions are satisfied, in full and final
satisfaction, compromise, settlement, release, and discharge of
such Claim, such Holder’s Pro Rata share of the Other GUC
Settlement Distribution; or
* if Class 9(d) votes to reject the Plan or the Creditors'
Committee Settlement Conditions are not satisfied, no recovery or
distribution on account of such Claim, and all Other General
Unsecured Claims shall be canceled, released, extinguished, and
discharged, and of no further force or effect.
Pursuant to the Restructuring Support Agreement and the Plan, the
Debtors shall conduct an equity rights offering (the "Equity Rights
Offering") in an aggregate amount of $670 million (the "Aggregate
Rights Offering Amount"), subject to the Excess Liquidity Cutback,
at a 30% discount to Plan Equity Value. As set forth in the
Restructuring Term Sheet attached to the Original Restructuring
Support Agreement, 70% of the Aggregate Rights Offering Amount (or
$469 million, subject to the Excess Liquidity Cutback) (the
"Subscription Amount") will be raised by soliciting commitments
from Eligible Holders, while 30% (or $201 million, subject to the
Excess Liquidity Cutback) (the "Direct Allocation Amount") will be
reserved for purchase by the Equity Commitment Parties.
The Reorganized Debtors shall fund distributions under the Plan, as
applicable with: (a) the Exit Facilities; (b) the issuance and
distribution of New Common Stock; (c) the Equity Rights Offering;
(d) the issuance and distribution of New Warrants; and (e) Cash on
hand.
Counsel to the Debtors:
Paul M. Basta, Esq.
Alice Belisle Eaton, Esq.
Kyle J. Kimpler, Esq.
Robert A. Britton, Esq.
Brian Bolin, Esq.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
1285 Avenue of the Americas
New York, NY 10019
Telephone: (212) 373-3000
Facsimile: (212) 757-3990
About Revlon Inc.
Revlon Inc. manufactures, markets and sells an extensive array of
beauty and personal care products worldwide, including color
cosmetics; fragrances; skin care; hair color, hair care and hair
treatments; beauty tools; men's grooming products; antiperspirant
deodorants; and other beauty care products. Today, Revlon's
diversified portfolio of brands is sold in approximately 150
countries around the world in most retail distribution channels,
including prestige, salon, mass, and online.
Since its breakthrough launch of the first opaque nail enamel in
1932, Revlon has provided consumers with high-quality product
innovation, performance and sophisticated glamour. In 2016, Revlon
acquired the iconic Elizabeth Arden company and its portfolio of
brands, including its leading designer, heritage and celebrity
fragrances.
Revlon is among the leading global beauty companies, with some of
the world's most iconic and desired brands and product offerings in
color cosmetics, skin care, hair color, hair care and fragrances
under brands such as Revlon, Revlon Professional, Elizabeth Arden,
Almay, Mitchum, CND, American Crew, Creme of Nature, Cutex, Juicy
Couture, Elizabeth Taylor, Britney Spears, Curve, John Varvatos,
Christina Aguilera and AllSaints.
Revlon sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.
22-10760) on June 15, 2022. Fifty affiliates, including Almay,
Inc, Beautyge Brands USA, Inc., and Elizabeth Arden, Inc., also
sought bankruptcy protection on June 15 and June 16, 2022.
Revlon disclosed total assets of $2,328,093,000 against total
liabilities of $3,689,240,395 as of April 30, 2022.
The Hon. David S. Jones is the case judge.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP as
bankruptcy counsel; Mololamken, LLC as special litigation counsel;
PJT Partners, LP as investment banker; KPMG, LLP as tax services
provider; and Alvarez & Marsal North America, LLC as restructuring
advisor. Robert M. Caruso and Matthew Kvarda of Alvarez & Marsal
serve as the Debtors' chief restructuring officer and interim chief
financial officer, respectively. Meanwhile, Kroll Restructuring
Administration, LLC is the Debtors' claims agent and administrative
advisor.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors on June 24, 2022. Brown Rudnick, LLP, Province,
LLC and Houlihan Lokey Capital, Inc. serve as the committee's legal
counsel, financial advisor and investment banker, respectively.
RIPE INC: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Ripe Inc Restaurant X & Bully Boy Bar
117 North Route 303
Congers, NY 10920
Chapter 11 Petition Date: May 5, 2023
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 23-22342
Judge: Hon. Sean H. Lane
Debtor's Counsel: Scott B. Ugell, Esq.
UGELL LAW FIRM, P.C.
151 North Main Street
Suite 202
New City, NY 10956
Tel: 845-639-7011
Fax: 845-639-7004
Email: SCOTT@UGELLLAW.COM
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Peter Kelly as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/CY5M2VI/Ripe_Inc_Restaurant_X__Bully__nysbke-23-22342__0001.0.pdf?mcid=tGE4TAMA
RJT FOOD: Seeks to Hire Ronald D. Weiss as Bankruptcy Counsel
-------------------------------------------------------------
RJT Food & Restaurant, LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of New York to hire Ronald D. Weiss,
P.C. as counsel.
The firm's services include:
a. legal advice with respect to the powers and duties of the
Debtor in the continued management of its property;
b. representing the Debtor before the bankruptcy court and at
all hearings on matters pertaining to its affairs, including
contested matters that may arise during the Chapter 11 case;
c. advising and assisting the Debtor in the preparation and
negotiation of a plan of reorganization with its creditors;
d. preparing legal papers; and
e. other necessary legal services.
The firm will be paid at these rates:
Attorneys $450 per hour
Paralegals $250 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received from the Debtor a retainer of $8,000.
Ronald Weiss, Esq., a partner at Ronald D. Weiss, 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:
Ronald D Weiss, Esq.
Ronald D. Weiss, P.C.
734 Walt Whitman Road,
Melville NY 11747
Tel: (631) 271-3737
Fax: (631) 271-3784
Email: weiss@ny-bankruptcy.com
About RJT Food & Restaurant
RJT Food & Restaurant, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
23-70447) on Feb. 8, 2023. The petition was signed by Richard J.
Bivona as president. At the time of filing, the Debtor estimated $1
million to $10 million in assets and up to $50,000 in liabilities.
Ronald D. Weiss, Esq. at RONALD D. WEISS, P.C. represents the
Debtor as counsel.
RYMAN HOSPITALITY: S&P Alters Outlook to Pos., Affirms 'B' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook on U.S. lodging REIT Ryman
Hospitality Properties Inc. to positive from stable and affirmed
its 'B' issuer credit rating.
S&P said, "At the same time, we assigned our 'BB-' issue-level
rating and '1' recovery rating (90%-100%; rounded estimate: 95%) to
the proposed revolving credit facility and term loan B. We also
affirmed our 'B+' issue-level rating and '2' recovery rating on
Ryman's senior unsecured debt.
"The positive outlook indicates that we could raise our ratings by
one notch if we believe the company will sustain leverage of less
than 5.0x (our upgrade threshold) or we favorably revise our
assessment of its business in terms of cash flow scale, forward
group booking visibility, and sustained growth in the hotel
portfolio's total RevPAR, EBITDA, and margins.
"The positive outlook reflects our expectation that Ryman will
reduce its total lease-adjusted debt to EBITDA to about 5x as of
the end of 2023.The company has already booked just under 50% of
its 2023 occupancy through forward group bookings, which provide it
with good occupancy visibility for the year, and we believe its
guidance for a high-single-digit percent increase in its total
RevPAR is plausible given the ongoing recovery in its portfolio
occupancy. Despite our continued base-case assumption for a shallow
recession in 2023, we recently revised our U.S. RevPAR forecast to
flat to up 5% relative to 2022 because U.S lodging will benefit
from a sustained recovery in business and group travel and
continued good leisure demand in 2023. We expect the improvement in
Ryman's RevPAR will exceed this pace supported by the good
visibility into its forward booking curve and focus on group and
leisure travel. Based on the company's operating results in the
first quarter, its total RevPAR was 63% higher than in the same
period of 2022, supported by a continued recovery in its occupancy,
and its average daily rate (ADR) reached a record high. In 2023, we
expect Ryman's ADR will be up modestly while its occupancy recovers
to just below 2019 levels.
"The company reported a strong operating performance in 2022, with
a continued solid recovery in group travel, full-year ADR 18.9%
above 2019 levels, and a 3.7% year-over-year rise in overall
RevPAR. Occupancy was still below 2019 levels but was over 71%
through the last three quarters of the year. The company's strong
recovery, particularly in its group business, over the past year
led to significant improvements in its credit metrics, including
S&P Global Ratings-adjusted EBITDA increasing to about $570 million
as of year-end 2022, from $193 million in 2021 (S&P Global
Ratings-adjusted EBITDA margins improved to 31% from 21% during the
year), and leverage declining to the high-5x area from about 16x.
These results exceeded our previous expectations and we now expect
Ryman could improve its S&P Global Ratings-adjusted leverage to
about 5x in 2023 and potentially below 5x in 2024.
"We expect strong results through the first half of 2023, as Ryman
laps the easy comparison with its performance in the first quarter
of last year amid the spread of the Omicron coronavirus variant,
though its performance may moderate in the second half amid the
weaker macroeconomic environment. We expect the company will
increase its hospitality segment revenue by the low-teens percent
area for full year 2023, due to continued strong group travel, as
it expands the revenue from its entertainment segment by more than
20%. We also anticipate the company will maintain EBITDA margin in
the low-30% area (near pre-pandemic levels) despite inflationary or
other cost pressures.
"The release of existing mortgages pledged on four of the company's
hotels for a new security package including first-priority liens
and security interests in the equity of its subsidiaries that own
the Gaylord Opryland and Gaylord Texan has unencumbered a
substantial portion of its asset base and increased its financial
flexibility. Our '1' recovery rating on the proposed secured debt
is unchanged despite the release of the mortgages, which reduced
the recovery prospects for its secured lenders, because there will
continue to be substantial asset coverage from the Gaylord Opryland
and Gaylord Texan subsidiary equity pledges.
"Our '2' recovery rating on the unsecured debt is unchanged because
of the substantial asset coverage under our recovery assumptions.
In addition, the recovery prospects for the unsecured lenders have
improved due to the release of the mortgages, which will increase
the value shared pari passu among the secured and unsecured
lenders.
"We add the fair value of the put option, stemming from the 2022
Atairos and NBCUniversal strategic investment in Opry Entertainment
Group (OEG), to our measure of the company's S&P Global Ratings-
adjusted debt because its redemption is outside of the issuer's
control. On June 16, 2022, Atairos and NBCUniversal acquired a 30%
equity stake in OEG for $296 million. In addition, Ryman issued a
new $300 million term loan B facility secured by OEG assets and
repaid its outstanding $300 million term loan A and the balance of
the borrowings outstanding under its revolving credit facility.
Following its investment, Atairos retains a put right that allows
it to put its shares in OEG back to Ryman at 1.5x its initial
investment after four years if it has requested an IPO of OEG and
Ryman declines. It also has the right to put the shares back to
Ryman after seven years if OEG has not completed an IPO, sale, or
spin off. Ryman has the option to settle in cash or stock at its
sole discretion. The put rights expire if Atairos increases its
investment above the original 30% stake. Ryman reports a
"non-controlling interest" line item on its balance sheet, which
equals the net present value of the IPO put until year 4, and fair
market value of the put between years 4 and 7 as long as the put
rights remain outstanding. We add this balance to our measure of
Ryman's debt because the redemption is outside of its control. For
the purpose of calculating our credit measures, we consolidate
Ryman and OEG because Ryman will retain a majority stake and
control of the board."
Ryman is well-positioned because of its asset quality and advance
bookings, which provide good revenue visibility. The company owns
high-quality properties that target groups and convention
customers. The expansion in the demand for this type of lodging has
been outpacing the increase in supply since before the pandemic,
which allowed Ryman to increase its total RevPAR at a faster rate
than the overall industry. S&P assumes the supply growth in the
U.S. large convention hotel market will be limited over the next
couple of years, which could benefit the company's occupancy and
rates when demand is strong. In addition, the customers for these
properties typically book far in advance, with the company
reporting about 50% occupancy at the start of each year, which
provides it with good revenue visibility under normal economic
conditions. Ryman generates about 70% of its room revenue from
group customers, which generally account for most of its
outside-the-room spending.
S&P said, "We believe Ryman's high-quality owned properties provide
it with the flexibility to issue equity, raise incremental debt,
and--although less likely--sell assets. In May 2021, the company
implemented an at-the-market equity distribution agreement that
allowed it to issue and sell up to 4 million shares (about $365
million at the current share price). Through the end of 2022, Ryman
had not issued any shares under this facility. However, we believe
that the company could issue equity to add liquidity or repay debt
if group travel recovers at a slower pace than we currently
anticipate. In addition, as a hotel owner, Ryman could raise cash
through asset sales, though there would likely be a limited pool of
buyers for its large group-oriented hotels even amid good economic
circumstances. Specifically, we believe the company could sell one
of its Gaylord-branded properties or one of the assets in its
entertainment segment, if needed, to raise liquidity."
If the group travel market becomes highly competitive, hotels in
Las Vegas, for example, may be able to offer lower daily rates than
Ryman due to their ability to generate significant gaming revenue.
In addition, the company has limited asset diversity because it
derives the majority of its revenue from its five Gaylord-branded
properties. The cyclicality of the lodging space and the earnings
volatility associated with its owned-hotel portfolio also increase
the potential for a decline in its cash flow under adverse market
conditions. Furthermore, Ryman occasionally makes significant
capital investments in its properties that increase its leverage.
S&P said, "The positive outlook indicates that we could raise our
ratings by one notch if we believe the company will sustain
leverage of less than 5.0x (our upgrade threshold) or we favorably
revise our assessment of its business in terms of cash flow scale,
forward group booking visibility, and sustained growth in the hotel
portfolio's total RevPAR, EBITDA, and margins.
"We could revise our outlook on Ryman to stable if its total
RevPAR, EBITDA and margin underperform due to
weaker-than-anticipated demand for group and leisure travel,
inflationary or other cost pressures, ADR competition, or currently
unannounced leveraging acquisitions or developments that cause it
to sustain leverage of more than 5x. While less likely under our
current base case, we could lower our ratings if the company
sustains leverage of more than 7x, which would most likely stem
from an unexpected severe deterioration in its business operations
or a materially leveraging transaction."
ESG credit indicators: E-2, S-3, G-2
S&P said, "Social factors are now a moderately negative
consideration in our credit rating analysis of Ryman, which
reflects the recovery in its RevPAR in recent quarters. This
incorporates the unprecedented decline in its RevPAR due to the
pandemic. We believe this was a rare and extreme disruption that
probably will not recur at the same magnitude. While its occupancy
levels are still below 2019 levels, Ryman's RevPAR in 2022 exceeded
its 2019 levels on strong ADR growth. In addition, Ryman's hotel
ownership business model entails high operating leverage and EBITDA
sensitivity to revenue fluctuations. The remain some risks around
regional health concerns, a slower recovery among upscale and
luxury hotels, and uncertainty over a longer-term disruption to
group and business travel."
SABRE GLBL: $404M Bank Debt Trades at 21% Discount
--------------------------------------------------
Participations in a syndicated loan under which Sabre GLBL Inc is a
borrower were trading in the secondary market around 79.3
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $404 million facility is a Term loan that is scheduled to
mature on December 17, 2027. About $396.9 million of the loan is
withdrawn and outstanding.
Sabre GLBL Inc. provides information technology services. The
Company offers technology solutions including data-driven business
intelligence, mobile, distribution, and Software as a Service
(SaaS) solutions. Sabre GLBL serves customers worldwide.
SALE LLC: Seeks to Hire Lipton Law Group as Bankruptcy Counsel
--------------------------------------------------------------
Sale, LLC seeks approval from the U.S. Bankruptcy Court for the
District of Massachusetts to hire Lipton Law Group, LLC as its
counsel.
The firm's services include:
(a) advising the Debtor with respect to its duties as
debtors-in-possession;
(b) advising the Debtor with respect to any plan of
reorganization and any other matters relevant to the formulation
and negotiation of a plan of reorganization;
(c) representing the Debtors at all hearings in this matter;
(d) preparing all necessary and appropriate applications,
motions, answers, proposed orders, reports, pleadings and other
documents, and review all financial and other reports to be filed
in the Chapter 11 proceeding;
(e) reviewing and analyzing the nature and validity of any
liens asserted against the Debtors' property;
(f) reviewing and analyzing claims against the Debtor, the
treatment of such claims and the preparation, filing or prosecution
of any objections to claims; and
(g) performing all other legal services as may be necessary or
appropriate during the course of the Debtors' bankruptcy
proceeding.
The firm will charge an hourly rate of $300 and seek reimbursement
for all reasonable and necessary expenses.
The firm received a retainer in the amount of $10,000, plus $1,717
as payment towards the Chapter 11 filing fee.
Lipton Law is a disinterested person as that term is defined in the
11 U.S.C. Sec.101(14), according to court filings.
The firm can be reached through:
Marques C. Lipton, Esq.
Lipton Law Group, LLC
945 Concord Street
Framingham, MA 01701
Phone: (508) 202-0681
Email: marques@liptonlg.com
About Sale LLC
Sale, LLC is a family-owned cafe with homestyle breakfasts &
classic lunch eats, such as sandwiches, hamburgers, muffins, and
pancakes.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 23-10545) on April 10,
2023. In the petition signed by Abderrahim Hmina, manager, the
Debtor disclosed $7,500 in assets and $3,127,759 in liabilities.
Judge Christopher J. Panos oversees the case.
Marques C. Lipton, Esq., at Lipton Law Group, LLC, represents the
Debtor as legal counsel.
SEMRAD LAW: Court OKs Interim Cash Collateral Access
----------------------------------------------------
The Semrad Law Firm, LLC sought and obtained entry of an order from
the U.S. Bankruptcy Court for the District of Delaware authorizing
the Debtor, among other things, to use cash collateral on an
interim basis in accordance with the budget, with a 20% variance.
The Debtor requires immediate access to liquidity to ensure it is
able to continue operating during the Chapter 11 Case and preserve
the value of its estate for the benefit of all parties-in-interest.
The Debtor, in consultation with Novo Advisors, prepared a
four-week cash flow, reflecting anticipated cash receipts,
operating disbursements, and non-operating expenditures, among
other things.
As of the Petition Date, the Debtor has approximately $3 million in
the aggregate principal amount of outstanding secured debt
obligations, including capitalized interest, arising under certain
agreements with its prepetition lender, Old National Bank.
Additionally, the Debtor has approximately $3.205 million in the
aggregate principal amount of unsecured debt obligations.
The Debtor entered into the Amended and Restated Loan Agreement,
dated as of September 20, 2018, by and among the Debtor, as
borrower, Robert J. Semrad, as guarantor, and First Midwest Bank,
as predecessor to Old National Bank. At the time of its issuance,
the Amended and Restated Loan Agreement provided for: (1) a term
loan in the amount of $600,000; and (2) a revolving loan not to
exceed $2,750,000. The obligations under the Amended and Restated
Loan Agreement are secured by a first priority lien on
substantially all of the assets of the Debtor and Guarantor,
subject to certain exclusions.
The Amended and Restated Loan Agreement was subsequently amended
four times on September 30, 2019, November 23, 2021, May 10, 2022,
and September 30, 2022. The Forbearance and Fourth Amendment to the
Amended and Restated Laon Agreement, dated as of December 22, 2022,
but effective as of September 30, 2022, made by and between the
Debtor, the Guarantor, and Old National Bank, as successor by
merger to First Midwest Bank, is the most recent and operative
agreement with respect to the Amended and Restated Loan Agreement.
Pursuant to the Fourth Amendment, the forbearance period with
respect to the Amended and Restated Loan Agreement was extended to
June 30, 2023.
Additionally, the Debtor acknowledged, as of the date of the Fourth
Amendment, that it was indebted to Old National Bank in the amount
of (1) $2.711 million on the Revolving Loan; and (2) $155,828 on
the Term Loan.
Old National Bank also holds a secured claim against the Debtor for
credit card debt that is under Robert's name. The Debtor
acknowledged, as of the date of the Fourth Amendment, that it was
indebted to Old National Bank in the amount of $388,436 for the
Credit Card Debt.
As of the Petition Date, $2.711 million is outstanding under the
Revolving Loan, $91,791 outstanding under the Term Loan, and
$153,001 outstanding on the Credit Card Debt.
As of the Petition Date, the Debtor estimates its unsecured debt
aggregates approximately $3.205 million, comprising primarily of
marketing, tax, and lease obligations.
As adequate protection, the Prepetition Secured Lender is granted
three primary forms of adequate protection:
1. Adequate Protection Claims. Solely to the extent of any
diminution in value, the Debtor will grant the Prepetition Secured
Lender allowed superpriority administrative claims pursuant to
sections 503(b), 507(a), and 507(b) of the Bankruptcy Code, which
superpriority claims shall have priority over all administrative
expenses of the kind specified in, or ordered pursuant to, any
provision of the Bankruptcy Code, subject and subordinate only to
the Carve Out.
2. Adequate Protection Liens. The Debtor will provide adequate
protection liens to the Prepetition Secured Lender, solely to the
extent of any diminution in value of their interests in the
Prepetition Collateral, including cash collateral, subject and
subordinate only to the Carve Out.
As additional adequate protection, the Prepetition Secured Lender
will receive from the Debtor current cash payments of all
reasonable and documented prepetition and postpetition fees,
including administrative fees, and out-of-pocket expenses incurred
by and payable to the Prepetition Secured Lender under the
Prepetition Financing Documents as disclosed in the Budget.
A final hearing on the matter is set for May 30, 2023 at 11 a.m.
A copy of the motion is available at https://bit.ly/428uVh9 from
PacerMonitor.com.
A copy of the order is available at https://bit.ly/3VlSmRW from
PacerMonitor.com.
About Semrad Law Firm, LLC
Semrad Law Firm, LLC is a debt relief agency -- a bankruptcy law
firm offering legal relief to families struggling with debt.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-10512) on April 26,
2023. In the petition signed by Patrick Semrad, manager, the Debtor
disclosed $8,267,344 in assets and $7,809,414 in liabilities.
Judge John T. Dorsey oversees the case.
Joseph C. Barsalona II, Esq., at Pashman Stein Walder Hayden, PC,
represents the Debtor as legal counsel.
SENTINEL INTELLIGENCE: Case Summary & Two Unsecured Creditors
-------------------------------------------------------------
Debtor: Sentinel Intelligence Group LLC
P.O. Box 3710
Akron, OH 44314
Business Description: The Debtor owns in fee simple title real
property located at 809 W. Waterloo Road, Akron,
OH, valued at $1.5 million.
Chapter 11 Petition Date: May 4, 2023
Court: United States Bankruptcy Court
Northern District of Ohio
Case No.: 23-50625
Judge: Hon. Alan M. Koschik
Debtor's Counsel: Peter G. Tsarnas, Esq.
GERTZ & ROSEN, LTD.
11 South Forge Street
Akron, OH 44304
Tel: 330-376-8336
Fax: 330-376-2522
Email: ptsarnas@gertzrosen.com
Total Assets: $1,500,000
Total Liabilities: $1,484,806
The petition was signed by Michael B. Humphrey, Sr. as member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's two unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/PLBWLCQ/Sentinel_Intelligence_Group_LLC__ohnbke-23-50625__0001.0.pdf?mcid=tGE4TAMA
SILICON VALLEY BANK: Federal Reserve Takes Some Blame for Collapse
------------------------------------------------------------------
The Federal Reserve on April 28, 2023, announced the results from
the review of the supervision and regulation of Silicon Valley
Bank, led by Vice Chair for Supervision Michael S. Barr. The review
finds four key takeaways on the causes of the bank's failure:
* Silicon Valley Bank's board of directors and management failed
to manage their risks;
* Federal Reserve supervisors did not fully appreciate the extent
of the vulnerabilities as Silicon Valley Bank grew in size and
complexity;
* When supervisors did identify vulnerabilities, they did not
take sufficient steps to ensure that Silicon Valley Bank fixed
those problems quickly enough; and
* The Board's tailoring approach in response to the Economic
Growth, Regulatory Relief, and Consumer Protection Act and a shift
in the stance of supervisory policy impeded effective supervision
by reducing standards, increasing complexity, and promoting a less
assertive supervisory approach.
"Following Silicon Valley Bank's failure, we must strengthen the
Federal Reserve's supervision and regulation based on what we have
learned," said Vice Chair for Supervision Barr. "This review
represents a first step in that process—a self-assessment that
takes an unflinching look at the conditions that led to the bank's
failure, including the role of Federal Reserve supervision and
regulation."
The report discusses in detail the management of the bank and the
supervisory and regulatory issues surrounding the failure of the
bank. It goes through the recent supervisory history of Silicon
Valley Bank and includes more than two dozen documents containing
the bank's confidential supervisory information such as supervisory
letters, examination results, and supervisory warnings.
"I welcome this thorough and self-critical report on Federal
Reserve supervision from Vice Chair Barr," Federal Reserve Chair
Jerome H. Powell said. "I agree with and support his
recommendations to address our rules and supervisory practices, and
I am confident they will lead to a stronger and more resilient
banking system."
The report and documents detail the bank's rapid growth, as well as
the challenges Federal Reserve supervisors faced in identifying the
bank's vulnerabilities and forcing the bank to fix them. At the
time of its failure, the bank had 31 unaddressed safe and soundness
supervisory warnings—triple the average number of peer banks.
For media inquiries, please email media@frb.gov or call
202-452-2955.
About Silicon Valley Bank
Silicon Valley Bank was the nation's 16th largest bank and the
biggest to fail since the 2008 financial meltdown.
During the week of March 6, 2023, Silicon Valley Bank, Santa Clara,
CA, experienced a severe "run-on-the-bank." On the morning of
March 10, 2023, the California Department of Financial Protection
and Innovation seized SVB and placed it under the receivership of
the Federal Deposit Insurance Corporation (FDIC).
The FDIC on March 13, 2023, disclosed that it transferred all
deposits -- both insured and uninsured -- and substantially all
assets of the former Silicon Valley Bank of Santa Clara,
California, to a newly created, full-service FDIC-operated "bridge
bank" in an action designed to protect all depositors of Silicon
Valley Bank.
SVB Financial Group is a financial services company focusing on the
innovation economy, offering financial products and services to
clients across the United States and in key international markets.
Prior to March 10, 2023, SVB Financial Group owned and operated
Silicon Valley Bank, a state-chartered bank.
On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 23-10367). The Hon. Martin
Glenn is the bankruptcy judge. The Debtor had assets of
$19,679,000,000 and liabilities of $3,675,000,000 as of Dec. 31,
2022.
Centerview Partners LLC is proposed financial advisor, Sullivan &
Cromwell LLP proposed legal counsel and Alvarez & Marsal proposed
restructuring advisor to SVB Financial Group as
debtor-in-possession. Kroll is the claims agent.
SINCLAIR TELEVISION: $750M Bank Debt Trades at 16% Discount
-----------------------------------------------------------
Participations in a syndicated loan under which Sinclair Television
Group Inc is a borrower were trading in the secondary market around
83.7 cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $750 million facility is a Term loan that is scheduled to
mature on April 21, 2029. About $744.3 million of the loan is
withdrawn and outstanding.
Sinclair Television Group, Inc. provides media broadcasting
services. The Company offers television broadcasting and
programming services. Sinclair Television Group serves clients in
the United States.
SORRENTO THERAPEUTICS: Hires Moelis & Company as Investment Banker
------------------------------------------------------------------
Sorrento Therapeutics, Inc. and its affiliates seek approval from
the U.S. Bankruptcy Court for the Southern District of Texas to
hire Moelis & Company LLC as their investment banker.
The firm will render these services:
a. assist the Debtors in reviewing and analyzing the Debtors'
results of operations, financial condition, and business plan to
the extent needed to advise on a potential Transaction;
b. assist the Debtors in reviewing and analyzing any potential
Restructuring, Sale Transaction, Scilex Monetization Transaction,
and/or Capital Transaction;
c. assist the Debtors in negotiating any Restructuring, Sale
Transaction, Scilex Monetization Transaction, and/or Capital
Transaction;
d. advise the Debtors on the terms of securities it offers in
any potential Capital Transaction;
e. advise the Debtors on its preparation of information
memoranda for a potential Sale Transaction, Scilex Monetization
Transaction, and/or Capital Transaction (each, an "Information
Memo");
f. assist the Debtors in contacting potential Counterparties
for a Sale Transaction, and/or Scilex Monetization Transaction
and/or purchasers or investors of a Capital Transaction
("Purchasers") that Moelis and the Debtors agree are appropriate
for the applicable Transaction(s), and meet with and provide them
with the applicable Information Memo(s) and such additional
information about the Debtors' and/or Scilex's3 assets, properties
or businesses that is acceptable to the Company, subject to
customary business confidentiality agreements; and
g. provide such other financial advisory and investment
banking services in connection with a Restructuring, Sale
Transaction, Scilex Monetization Transaction, and/or Capital
Transaction.
The firm will be paid as follows:
i. Monthly Fee. During the term of the Engagement Letter, the
Debtors shall pay Moelis a fee of $125,000 per month . Moelis shall
earn the first Monthly Fee immediately upon the execution of the
Engagement Letter, and all subsequent Monthly Fees on the monthly
anniversary of the Engagement Date. Whether or not a Restructuring,
Sale Transaction, Scilex Monetization Transaction, and/or Capital
Transaction occurs, Moelis shall earn and be paid the Monthly Fee
every month during the term of the Engagement Letter.
ii. Restructuring Fee. Promptly at the closing of a
Restructuring, the Debtors shall pay Moelis a fee of $2,250,000.
The Restructuring Fee shall be offset, to the extent previously
paid, by 50 percent of any (w) Monthly Fees payable following the
Debtors' payment of four Monthly Fees, (x) Sale Transaction Fee,
(y) Scilex Monetization Transaction Fee and/or (z) Capital
Transaction Fee, in each case, that may become payable under the
terms of the Engagement Letter; provided that in no event shall any
such crediting reduce the Restructuring Fee to less than
$1,250,000.
iii. Company Sale Transaction Fee. Promptly at the initial
closing of a Company Sale Transaction, including a Company Sale
Transaction consummated pursuant to section 363 of the Bankruptcy
Code, the Debtors shall pay Moelis a non-refundable cash fee equal
to 2.50 percent of the Transaction Value.
iv. Asset Sale Transaction Fee. Promptly at the initial
closing of an Asset Sale Transaction, the Debtors shall pay Moelis
a non-refundable cash fee equal to 2.50 percent of the aggregate
consideration paid or received, or to be paid or received, in
connection with an Asset Sale Transaction. The Debtors will pay a
separate Asset Sale Transaction Fee in respect of each Asset Sale
Transaction in the event that more than one Asset Sale Transaction
occurs. In the event of multiple Asset Sale Transactions that when
aggregated constitute a Company Sale Transaction, the Debtors shall
pay to Moelis a Company Sale Transaction Fee which shall be offset
by any Asset Sale Transaction Fee(s) that have already become
payable under the terms of the Engagement Letter.
v. Scilex Monetization Transaction Fee. Promptly at the
closing of a Scilex monetization Transaction, the Debtors shall pay
Moelis a non-refundable cash fee equal to 3.00 percent of the
aggregate consideration paid or received, or to be paid or
received, in connection with a Scilex Monetization Transaction. In
the event that a Scilex Monetization Transaction is implemented in
connection with a sale of at least 66.67 percent of the existing
Scilex Securities or a sale of substantially all of the assets of
Scilex, the Debtors will exercise commercially reasonable efforts
to cause Scilex to provide reasonable compensation to Moelis in an
amount no less than the Scilex Monetization Transaction Fee that
would have otherwise been payable pursuant to the terms of the
Engagement Letter. In no event will a Scilex Monetization
transaction Fee trigger a Company Sale Transaction Fee. In the
event that more than one Scilex Monetization Transaction occurs,
the Debtors shall pay to Moelis a separate Scilex Monetization
Transaction Fee in respect of each such Scilex Monetization
Transaction.
vi. Capital Transaction Fee. Promptly at the closing of any
Capital Transaction, the Debtors shall pay Moelis a non-refundable
cash fee as follows:
a. 1.00 percent of the aggregate gross amount of capital
Raised in a DIP financing, other than the Debtors' Current DIP
Financing (provided that in the event of a DIP financing raised by
Moelis that converts into exit financing, the Capital Transaction
Fee shall be calculated pursuant to Sections 2(a)(vi)(B) – (D) of
the Engagement Letter); plus
b. 2.00 percent of the aggregate gross amount of debt
obligations and other interests Raised in the Capital Transaction;
plus
c. 3.00 percent of the aggregate gross amount or face
value of capital Raised in the Capital Transaction as equity-linked
interests, options, forwards, warrants or other rights to acquire
equity interests; plus
d. 4.00 percent of the aggregate gross amount or face
value of capital Raised in the Capital Transaction as equity.
In the event that more than one Capital Transaction occurs, the
Debtors shall pay to Moelis pay a separate Capital Transaction Fee
in respect of each Capital Transaction. If, at any time prior to
the end of the Tail Period, the Debtors consummate any
Transaction(s), or enter into an agreement (or a Plan becomes
effective) regarding any Transaction(s) and any such Transaction is
subsequently consummated, then the Debtors (or their estates) shall
pay Moelis the applicable Transaction Fee(s) as specified above.
Barak Klein, managing director at Moelis' Capital Structure
Advisory Group, disclosed in a court filing that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
Moelis can be reached through:
Barak Klein
Moelis & Company, LLC
399 Park Avenue, 4th Floor
New York, NY 10022
Tel: 1 212 883 3800
Fax: 1 212 880 4260
Email: barak.klein@moelis.com
About Sorrento Therapeutics
Sorrento Therapeutics, Inc. -- http://www.sorrentotherapeutics.com/
-- is a clinical and commercial stage biopharmaceutical company
developing new therapies to treat cancer, pain (non-opioid
treatments), autoimmune disease and COVID-19. Sorrento's
multimodal, multipronged approach to fighting cancer is made
possible by its extensive immuno-oncology platforms, including key
assets such as next-generation tyrosine kinase inhibitors ("TKIs"),
fully human antibodies ("G-MAB(TM) library"), immuno-cellular
therapies ("DAR-T(TM)"), antibody-drug conjugates ("ADCs"), and
oncolytic virus ("Seprehvec(TM)"). Sorrento is also developing
potential antiviral therapies and vaccines against coronaviruses,
including STI-1558, COVISHIELD(TM) and COVIDROPS(TM), COVI-MSCTM;
and diagnostic test solutions, including COVIMARK(TM).
Sorrento Therapeutics, Inc., and Scintilla Pharmaceuticals, Inc.,
sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No.
23-90085) on Feb. 13, 2023. Sorrento disclosed assets in excess of
$1 billion and liabilities of about $235 million as of Feb. 10,
2023.
Judge David R. Jones oversees the cases.
The Debtors tapped Latham & Watkins, LLP as bankruptcy counsel;
Jackson Walker, LLP as local counsel; Tran Singh, LLP as conflicts
counsel; and M3 Advisory Partners, LP as financial advisor. Mohsin
Y. Meghji, managing partner at M3, serves as the Debtors' chief
restructuring officer. Stretto Inc. is the claims, noticing and
solicitation agent.
Norton Rose Fulbright US, LLP and Milbank, LLP represent the
official committee of unsecured creditors appointed in the Debtors'
Chapter 11 cases.
On April 10, 2023, the U.S. Trustee for Region 7 appointed an
official committee to represent the Debtors' equity security
holders.
SOUTH VALLEY CEMENT: $16.5M Bank Debt Trades at 16% Discount
------------------------------------------------------------
Participations in a syndicated loan under which South Valley Cement
is a borrower were trading in the secondary market around 84.3
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $16.5 million facility is a Term loan that is scheduled to
mature on March 10, 2033. The amount is fully drawn and
outstanding.
South Valley Cement Company SAE (SVCC) is an Egypt-based company
engaged in the manufacture of cement and its associated products,
as well as a range of building materials products. The Company's
product portfolio consists of three main categories: clinker,
Portland ordinary cement and ready mix concrete.
SOUTHERN HERITAGE: Court OKs Cash Collateral Access Thru May 23
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Alabama,
Northern Division, authorized Southern Heritage Timber Co LLC to
use cash collateral on an interim basis in accordance with the
budget, pending a final hearing set for May 23, 2023.
As previously reported by the Troubled Company Reporter, these
entities acquired or may have acquired security interests in, among
possibly other property, the Debtor-in-Possession's cash and cash
equivalents:
a. Peoples Exchange UCC-1 Filed September 20, 2021
b. Century Bank UCC-1 Filed December 14, 2021
c. John Deere UCC-1 Filed May 9, 2022
d. John Deere UCC-1 Filed June 23, 2022
e. John Deere UCC-1 Filed July 25, 2022
f. S & P Financial UCC-1 Filed December 10, 2022
As adequate protection, the secured creditors are granted a
replacement lien to the extent the value of each secured creditor's
lien is decreased by the Debtor-in-Possession's use of the cash
collateral, pursuant to 11 U.S.C. section 361(2).
A copy of the order is available at https://bit.ly/3NrWSfU from
PacerMonitor.com.
About Southern Heritage Timber Co LLC
Southern Heritage Timber Co LLC operates a timber harvesting or
logging business in Monroeville, Alabama.
The Debtor sought protection from Chapter 11 of the U.S. Bankruptcy
Code (Bankr. M.D. Ala. Case No. 23-30734) on April 14, 2023. In the
petition signed by Cory Willis, its member, the Debtor disclosed up
to $1 million in assets and up to $10 million in liabilities.
Judge Bess M. Parrish Creswell oversees the case.
Anthony Bush, Esq., at The Bush Law Firm, LLC, represents the
Debtor as legal counsel.
SOUTHERN HOSPITALITY: Taps De Leo Law Firm as Bankruptcy Counsel
----------------------------------------------------------------
Southern Hospitality Event Rentals, LLC seeks approval from the
U.S. Bankruptcy Court for the Eastern District of Louisiana to hire
The De Leo Law Firm to serve as its legal counsel in its Chapter 11
bankruptcy proceedings.
The firm's billing rate is $375 per hour for Robin De Leo, Esq.,
managing member of De Leo Law Firm, and $95 per hour for
paralegals.
De Leo Law Firm received a retainer in the amount of $15,000.
As disclosed in the court filings, De Leo Law does not represent or
hold any interest adverse to the Debtor and is a disinterested
party, as defined by the Bankruptcy Code.
The firm can be reached through:
Robin R. De Leo, Esq.
The De Leo Law Firm, LLC
800 Ramon St.
Mandeville, LA 70448
Tel: (985) 727-1664
Fax: (985) 727-4388
Email: lisa@northshoreattorney.com
About Southern Hospitality Event Rentals
Southern Hospitality Event Rentals is an event rentals company in
Abita Springs, LA.
Southern Hospitality Event Rentals, LLC filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
E.D. La. Case No. 23-10597) on April 20, 2023. The petition was
signed by Robert N. Verdi as managing member. At the time of
filing, the Debtor estimated $434,411 in assets and $1,777,088 in
liabilities.
Judge Meredith S. Grabill presides over the case.
Robin R. De Leo, Esq. at The De Leo Law Firm, LLC represents the
Debtor as counsel.
STARR GENERAL: Court OKs Interim Cash Collateral Access
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey authorized
Starr General Contracting Corporation to use cash collateral on an
interim basis in accordance with the budget.
The Debtor believes the United States Small Business Administration
has a purported secured claim against it in the approximate
principal amount of $166,000 as of the Petition Date.
The Debtor acknowledges the SBA purports its claim is secured by a
lien on, among other things, the Debtor's accounts, money and all
products and proceeds thereof.
The Debtor is authorized to use cash collateral to meet its
ordinary cash needs for the payment of actual expenses of the
Debtor necessary to (a) maintain and preserve its assets; and (b)
continue its business operations.
Upon the SBA's request, the Debtor will provide an accounting to
SBA setting forth the cash receipts and disbursements made by the
Debtor under the Order for the month in which such request is made.
In addition, the Debtor will provide SBA all other reports required
by the pre-petition loan documents and any other reports reasonably
required by SBA, as well as copies of the Debtor's monthly United
States Trustee operating reports.
A final hearing on the matter is set for May 18, 2023 at 10 a.m.
A copy of the Court's order is available at https://bit.ly/3AJxv1w
from PacerMonitor.com.
About Starr General Contracting Corporation
Starr General Contracting Corporation is a construction company
that does both residential and commercial construction. The Debtor
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D.N.J. Case No. 23-13205) on April 18, 2023. In the
petition signed by Charles Starr, Jr., its president, the Debtor
disclosed up to $1 million in assets and up to $500,000 in
liabilities.
Judge Jerrold N. Poslusny, Jr. oversees the case.
David A. Kasen, Esq., at Kasen & Kasen, P.C., represents the Debtor
as legal counsel.
STRUCTURLAM MASS TIMBER: U.S. Trustee Appoints Creditors' Panel
---------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Chapter 11 cases
of Structurlam Mass Timber U.S., Inc. and its affiliates.
The committee members are:
1. Simpson Strong Tie Canada, Ltd.
Attn: Cassandra Payton
811-19055 Airport Way
Pitt Meadows, BC V370G4
Canada
Phone: (714) 871-8373
Email: cpayton@strongtie.com
2. TICOMTEC USA, Inc.
Attn: Mikhail Gershfeld
1829 Rocky Road
Fullerton, CA 92831
Phone: (714) 936-4563
Email: mikhail.gershfeld@gmail.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 Structurlam Mass Timber Corporation
Structurlam -- http://structurlam.com/-- is the leading North
American provider of mass timber solutions for construction and
industrial markets in Canada and the U.S. Its structural laminated
mass timber and industrial products include CrossLam(R) CLT
cross-laminated panels, and GlulamPLUS(R) glue-laminated columns
and beams. Structurlam is also the first producer in North America
to introduce CLT in the production of industrial ground protection
matting products. Structurlam's entire product line is built from
North American sustainably harvested softwood lumber, ensuring
consistent product and environmental standards. Structurlam
collaborates with architects, engineers and industrial OEM
customers to create fully integrated solutions that combine design,
engineering, a customized project delivery experience. Established
in 1962, Structurlam's world-class reputation is built on
innovation, cost-efficiency and quality. Structurlam is based in
Penticton, British Columbia and has mass timber production
facilities in Canada and the U.S.
After reaching a deal with Mercer International Inc. to sell its
assets in British Columbia and Arkansas for US$60 million,
Structurlam Mass Timber U.S., Inc., and certain of its affiliates
sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
23-10497) on April 21, 2023.
Recognition of the Chapter 11 proceedings will be sought in the
Supreme Court of British Columbia.
Structurlam Mass Timber estimated assets and debt of $100 million
to $500 million as of the bankruptcy filing.
The Debtors tapped Paul Hastings, LLP as general bankruptcy
counsel; Potter Anderson Corroon, LLP as local bankruptcy counsel;
Gowling WLG as Canadian counsel; Alvarez & Marsal Canada, Inc. as
financial advisor; and Stifel, Nicolaus & Company, Incorporated and
Miller Buckfire & Co., LLC as investment bankers. Kurtzman
Carson Consultants, LLC is the claims agent.
SVB FINANCIAL: Seeks Court Approval to Sell SVB Securities
----------------------------------------------------------
James Nani of Bloomberg Law reports that SVB Financial Group, the
bankrupt parent of Silicon Valley Bank, is seeking to sell its
non-bankrupt investment banking subsidiary in an auction, hoping to
boost its value as it faces creditors' payout demands.
SVB Financial's request to a New York bankruptcy court on Thursday
to sell off SVB Securities Holdings LLC comes as the bankrupt
company spars with the Federal Deposit Insurance Corp. over access
to records and $2 billion the agency seized after Silicon Valley
Bank failed in March.
"Numerous parties" have expressed interest in the business, SVB
Financial said. The sale could include SVB Securities Holdings or
its subsidiaries, which include SVB Securities LLC, SVB MEDACorp
LLC, and MoffettNathanson LLC, the filing said.
SVB Financial has asked for a bid deadline by May 22, 2023 and
possibly holding an auction by May 25, 2023.
SVB Financial Group has estimated it has about $2.2 billion of
liquidity, including cash and interests in SVB Capital and SVB
Securities. It owes bondholders -- all of which are unsecured --
about $3.3 billion.
SVB Financial bought the securities bank from Leerink Holdings LLC
in 2019 for $280 million. Leerink has recently explored buying SVB
Securities back, Bloomberg News reported.
Bloomberg News also reported that Moelis & Co. has been recruiting
from the securities arm.
About SVB Financial Group
SVB Financial Group is a financial services company focusing on the
innovation economy, offering financial products and services to
clients across the United States and in key international markets.
Prior to March 10, 2023, SVB Financial Group owned and operated
Silicon Valley Bank, a state-chartered bank. During the week of
March 6, 2023, Silicon Valley Bank, Santa Clara, CA, experienced a
severe "run-on-the-bank." On the morning of March 10, the
California Department of Financial Protection and Innovation seized
SVB and placed it under the receivership of the Federal Deposit
Insurance Corporation. SVB was the nation's 16th largest bank and
the biggest to fail since the 2008 financial meltdown.
On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 23-10367). The Debtor had
assets of $19,679,000,000 and liabilities of $3,675,000,000 as of
Dec. 31, 2022.
The Hon. Martin Glenn is the bankruptcy judge.
The Debtor tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Centerview Partners, LLC as investment banker; and Alvarez & Marsal
North America, LLC as restructuring advisor. William Kosturos, a
partner at Alvarez & Marsal, serves as the Debtor's chief
restructuring officer. Kroll Restructuring Administration, LLC, is
the claims and noticing agent and administrative advisor.
TENET HEALTHCARE: Fitch Assigns BB- Rating on First Lien Notes
--------------------------------------------------------------
Fitch Ratings has assigned a 'BB-'/'RR3' rating to the new senior
secured first lien notes offered by Tenet Healthcare (Tenet). The
Long-Term Issuer Default Rating (IDR) for Tenet is 'B+' with a
Stable Rating Outlook. The new notes will rank equally with Tenet's
outstanding senior secured first lien notes. Proceeds of the
offering are expected to fund the redemption of Tenet's outstanding
4.625% senior secured first lien notes due July 2024 and 4.625%
senior secured first lien notes due September 2024.
Tenet's 'B+' IDR and Stable Outlook reflect its improved
competitive position as a healthcare provider and the durability of
its operational and financial results through the pandemic, with
debt leverage declining meaningfully in recent years. Fitch-defined
leverage is expected to remain in the 4.5x-5.5x range through the
rating horizon, as is appropriate for the 'B+' rating, absent
credit-negative capital allocation decisions such as large,
debt-funded acquisitions or excessive levels of share repurchases.
Entity/Debt Rating Recovery
----------- ------ --------
Tenet
Healthcare Corp.
senior secured LT BB- New Rating RR3
KEY RATING DRIVERS
ASCs Bolster Operating Outlook: Tenet is one of the largest
for-profit operators of general acute care hospitals, contributing
77% of revenue and 57% of EBITDA-NCI and, through ownership of
USPI, one of the largest operators of ambulatory surgery centers
(ASCs), contributing 17% of revenue but 32% of EBITDA-NCI, all as
reported for 2022. ASCs not only diversify Tenet by sites of care
and payor mix, their EBITDA margins are over 2.0x those of its
hospitals.
Fitch sees sustainable, secular ASC tailwinds bolstering Tenet's
volume growth and margin trends over the rating horizon, especially
with their influence on EBITDA likely rising with potential further
hospital divestitures and as ASC growth accelerates with the
maturation of over $2.5 billion of ASC assets acquired from
SurgCenter Development (SCD) in 2020-21 (and center-level equity
buy-ups ongoing).
Margins Show Stability: Tenet has progressed notably in recent
years in improving hospital operations, rationalizing its acute
care hospital footprint by exiting non-core assets, and in
expanding USPI. With the contribution of its high-margin ASC
business rising, pandemic volumes subsiding, and Tenet executing on
operating efficiencies to manage pandemic-driven labor cost
challenges, EBITDA-NCI declined by only 40 bps to 14.0% in 2022,
outperforming its for-profit peers. This is up materially from
12.5% in 2019 and lower levels previously despite ASC assets
acquired at YE 2021 ramping more slowly than expected.
Tenet's hospital operations, like those of its peers, will likely
be pressured in 2023 by pandemic-driven labor inflation and
government rate pressures (including Medicare 340B payment cuts,
expiring COVID-19 add-on payments and a tough Medicaid payment
comp). However, Fitch sees EBITDA-NCI declining only modestly in
2023 (by about 40 bps), with the pandemic's pernicious effects
likely moderating further and contributions from its ASCs rising
via organic growth, capital investment and some M&A.
While inflationary pressures on hospital labor costs in particular
are likely to persist well beyond 2023, Fitch expects that Tenet's
improved margins are sustainable and likely offer some upside over
the rating horizon (about 75 bps above 2022 levels), with Tenet
focusing on improving employee recruitment and retention and
reducing high-cost temporary staffing use, as evident in its solid
1Q23 financial results.
Leverage High But May Trend Lower: Notably improved from years ago
and its 2020 pandemic peak of about 8.0x, Tenet finished 2022 with
leverage stable at 5.5x EBITDA-NCI, reflecting its redemption of
$700 million of high-coupon senior secured notes offsetting a 4%
decline in EBITDA-NCI in 2022.
While Tenet bought back about $250 million of its stock in 4Q22 and
Fitch sees Tenet using the $750 million balance of its new
repurchase authorization (its first in many years) in 2023-2024 and
buybacks potentially rising moderately thereafter, Fitch views
these levels as consistent with the 'B+' IDR and Tenet's
much-improved FCF, which Fitch sees averaging $1.0 billion annually
over the ratings horizon.
With leverage still high, Fitch believes that debt reduction is as
much of a priority as share repurchases, and sees potential for up
to a turn of deleveraging over the rating horizon. That said, the
degree to which leverage in fact declines further is likely to
reflect the dynamic industry operating environment and Tenet's
prudence in its capital allocation decisions, most notably
debt-financed ASC acquisitions on a larger scale than Fitch has
forecasted or share repurchases beyond currently-contemplated
levels.
Ample Liquidity; Solid Balance Sheet: Tenet completed 2022 with a
solid liquidity position totaling $2.4 billion, including nearly
$0.9 billion of cash on hand and full availability under its $1.5
billion asset-based revolver (due March 2027). Fitch also sees
Tenet benefitting from improving FCF averaging about $1.0 billion
annually over its forecast through 2026. Fitch sees Tenet
maintaining solid access to debt capital markets, facilitated by a
balance sheet with well-laddered bond maturities.
Tenet has an ESG Relevance Score of '4' for Exposure to Social
Impacts due to societal and regulatory pressures to constrain
growth in U.S. healthcare spending. This has a negative impact on
the credit profile and is relevant to the rating in conjunction
with other factors. Unless otherwise disclosed in this section, the
highest level of ESG credit relevance is a score of '3' for ESG
issues that are credit-neutral or have a minimal credit impact on
the entity due to their nature or the way in which they are managed
by the entity.
DERIVATION SUMMARY
Tenet's 'B+' Long-Term IDR reflects its higher leverage relative to
that of its closest hospital industry peers HCA Healthcare, Inc.
(HCA) and Universal Health Services, Inc. (UHS; BB+/Stable). While
Tenet's operating and FCF margins lag those of HCA and UHS, Tenet
has made progress in closing the gap by reducing costs, divesting
lower-margin hospitals and expanding its higher-margin ASC
business.
Tenet has a stronger operating profile than lower-rated hospital
industry peers Prime Healthcare Services, Inc. (B/Negative) and
Community Health Systems, Inc. (B-/Negative). In contrast to these
peers, but similar to HCA and UHS, Tenet's operations are primarily
located in urban or large suburban markets, which generally have
more favorable organic growth prospects.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer:
- Organic revenue growth of 2.0%-3.0% annually, driven primarily by
modest but steady increases in ASC case volume and acute care
hospital pricing and mix;
- EBITDA increasing slightly in 2023, but further margin
improvement driving growth of 4.0%-5.0% annually thereafter with
the ASC business commanding a rising share of Tenet's EBITDA mix;
- Capex rising gradually in a range of 3.0%-4.0% of revenue and
$0.4 billion-$0.5 billion of acquisitions annually, focused on
expanding the ASC business and offering higher-acuity hospital
services;
- Interest payments of about $800 million-$850 million, including
Fitch's assumption that Tenet's near-term debt maturities ($1.35
billion of 4.625s of 2024 and $2.10 billion of 4.875s of 2026) can
be repaid with $200 million in cash on hand and $3.25 billion of
proceeds from issuance of new pari-passu senior secured first lien
notes priced at or below 7.0%-7.5% (above recent yields on
comparable Tenet bonds).
- Positive FCF rising gradually within a range of 5.0%-6.0% of
revenue and averaging $1.0 billion annually, funding share
repurchases averaging $0.4 billion annually (while only $0.7
billion remains under Tenet's current share repurchase
authorization as of March 31, 2023, Fitch expects further share
repurchase authorizations are likely to be approved in the future);
and
- Leverage sustained in the range of 4.5x-5.5x EBITDA-NCI, assuming
only modest allocation of positive FCF to voluntary debt
repayment.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch's expectation of leverage sustained below 4.5x EBITDA-NCI;
and
- Fitch's expectation of FCF sustained above 5.0% of revenue.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Fitch's expectation of leverage sustained above 5.5x EBITDA-NCI;
and
- Fitch's expectation of FCF sustained below 2.0% of revenue.
LIQUIDITY AND DEBT STRUCTURE
Solid Liquidity Profile: As of March 31, 2023, Tenet's sources of
liquidity included approximately $0.8 billion of cash on hand and
an undrawn, fully-available $1.5 billion asset-based revolving
credit facility. Fitch sees FCF rising gradually and exceeding $1.0
billion annually throughout its ratings forecast, with the vast
majority assumed to fund acquisitions and share repurchases at
comparable levels.
Pro forma for the refinancing of all outstanding 4.625% senior
secured first lien notes due July 2024 and 4.625% senior secured
first lien notes due September 2024 funded by its senior secured
notes offering, Tenet's nearest debt maturity is $2.1 billion of
senior secured first lien notes due January 2026. Tenet's
incremental senior secured debt capacity under its bond covenants
totaled $1.6 billion as of March 31, 2023, and Fitch expects Tenet
is likely to maintain access to capital markets to refinance its
2026 notes.
Fitch also notes that Tenet's only financial maintenance covenant
requires it to maintain at least 1.5x fixed charge coverage if
availability under its $1.5 billion asset-based revolver falls
below $150 million.
Debt Notching Considerations: The 'BB+'/'RR1' and 'BB-'/'RR3'
ratings for Tenet's ABL facility and senior secured first lien
notes, respectively, reflect Fitch's expectation of recoveries for
such debt in the ranges of 91%-100% and 51%-70%, respectively, in a
bankruptcy scenario. In contrast, the 'B+'/'RR4' ratings on Tenet's
senior secured second lien notes and senior unsecured notes reflect
Fitch's expectation of a recovery for such debt in the range of
31%-50% in a bankruptcy scenario. This debt notching and the
related recovery ranges are calculated on a pro forma basis for
Tenet's "like-for-like" senior secured debt refinancing and
unchanged from Fitch's previous estimates based on the balance
sheet as of YE 2022 pro forma for its planned May 2023 redemption
of all senior secured first lien notes due 2024.
Recovery Analysis: Fitch estimates an enterprise value (EV) on a
going-concern basis of $10.4 billion for Tenet after deducting 10%
for administrative claims assumed to accrued in restructuring. The
estimated EV reflects estimated post-reorganization EBITDA-NCI of
$1.6 billion (GC EBITDA), reflecting Fitch's view that GC EBITDA
around these levels is likely to trigger a default or restructuring
amid significant refinancing risk from negative FCF and high
leverage.
Fitch's GC EBITDA calculation is based on a scenario in which: (i)
acute care hospital volumes turn negative amid elevated pressure
from adverse secular shifts in the settings in which care is
provided, with declines in acuity mix and pricing further
pressuring revenue and compressing margins amid rising labor costs;
(ii) the ASC business expands at a much slower pace than that
assumed in its ratings case; and (iii) the Conifer business
generates lower revenue growth, further pressuring consolidated
margins.
The $10.4 billion EV further reflects Fitch's use of a 7.25x
EV/EBITDA multiple. This reflects (i) an increasing share of the
valuation attributable to an expanding ASC business (especially as
Fitch expects a default scenario to entail material
underperformance in the acute care hospital business relative to
the ASC business) and (ii) mature ASCs garnering EV multiples well
over 8.0x vs. EV multiples for acute care hospitals in the 6.5x
area, reflecting the latter's lower margins and less robust growth
prospects.
In estimating claims, Fitch assumes that Tenet would draw the full
amount available on its $1.5 billion asset-based revolver in a
bankruptcy scenario, and includes that amount of debt in the claims
waterfall along with $0.2 billion of mortgages as super-priority
debt in the claims waterfall recovering first and in full. The
waterfall analysis also reflects: (i) senior secured claims
consisting of $10.4 billion of senior secured first lien notes and
$1.5 billion of senior secured second lien notes, each
collateralized solely by the capital stock of Tenet's wholly-owned
guarantor subsidiaries that own or operate hospitals; and (ii) $2.9
billion of senior unsecured notes.
Fitch assumes non-guarantor subsidiaries (the Conifer and ASC
businesses) comprise 50% of Tenet's distributable EV, reflecting:
(i) an increasing share of the EV attributable to an expanding ASC
business garnering a rising share of EBITDA; and (ii) its view that
a default scenario is likely to entail material underperformance in
the hospital business relative to the ASC business. Fitch thus
assumes guarantor subsidiaries comprise the remaining 50% of the
distributable EV.
Fitch assumes that the collateral attributable to the guarantor
subsidiaries, again valued at 50% of distributable EV, is recovered
from first by both the ABL and mortgage claims in full, and
thereafter by the senior secured first lien notes in part due to
insufficient remaining value, leaving the senior secured first lien
notes with a deficiency claim of $6.9 billion and leaving the
senior secured second lien notes with no recovery from the
collateral and a full deficiency claim of $1.5 billion.
Fitch assumes these deficiency claims of $8.4 billion and the
senior unsecured notes claims of $2.9 billion, together totaling
$11.3 billion in unsecured claims, receive a pro-rata recovery of
the $5.2 billion of distributable EV attributable to the
non-guarantor subsidiaries, with all such unsecured claims thus
recovering in the 31%-50% range. The senior secured first lien
notes, in contrast, recover in the 51%-70% range, as they further
benefit from a partial recovery from the guarantor subsidiaries
collateral.
Fitch notes that hospital divestitures and/or continuing ASC
investments could narrow the notching between the senior secured
first lien notes and the senior unsecured notes and/or trigger
rating actions.
ISSUER PROFILE
Tenet Healthcare Corp. is a leading U.S. for-profit health system,
operating 61 acute care and specialty hospitals across nine states,
445 ASCs and 24 surgical hospitals across 35 states, and operating
Conifer Health Solutions, which provides revenue cycle management
and value-based care services.
ESG CONSIDERATIONS
Tenet has an ESG Relevance Score of '4' for Exposure to Social
Impact due to societal and regulatory pressures to constrain growth
in healthcare spending in the U.S. This has a negative impact on
the credit profile and is relevant to the rating in conjunction
with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This mean ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature of the way in which they are being
managed by the entity.
TGPC PROPERTIES: Gets Approval to Hire Realty One Group as Realtor
------------------------------------------------------------------
TGPC Properties, LLC received approval from the U.S. Bankruptcy
Court for the District of Arizona to hire Jason Miszuk and Realty
One Group as its realtor.
Mr. Miszuk will sell the Debtor's property located at 5536 N. 6th
Street, Phoenix, AZ 85012.
The firm will be paid as follows:
(1) a commission of 6 percent if two separate realtors are
involved in the sale (3 percent to Mr. Miszuk and 3 percent to the
buyer's broker); or
(2) a commission of 6 percent to Mr. Miszuk if he is the sole
realtor involved in the sale.
As disclosed in the court filings, Realty One Group and Jason
Miszuk do not hold or represent any interest adverse to the Debtor
or its estate.
The realtor can be reached through:
Jason Miszuk
Realty ONE Group Glendale
17235 N. 75th Ave Ste. C-190
Glendale, AZ85308
Mobile: (602) 363-5058
Email: jason.miszuk@gmail.com
About TGPC Properties
TGPC is primarily engaged in renting and leasing real estate
properties.
TGPC Properties, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No.
22-08374) on Dec. 19, 2022. The petition was signed by Paul Johnson
as manager. At the time of filing, the Debtor estimated $1 million
to $10 million in both assets and liabilities.
D. Lamar Hawkins, Esq. at Guidant Law, PLC represents the Debtor as
counsel.
TMK HAWK: Moody's Lowers CFR & Tranche B Term Loan to Caa3
----------------------------------------------------------
Moody's Investors Service downgraded TMK Hawk Parent, Corp.'s (dba
TriMark) Corporate Family Rating to Caa3 from Caa2, Probability of
Default Rating to Ca-PD from Caa2-PD, and the rating of the Tranche
B second out term loan rating to Caa3 from Caa2. At the same time,
Moody's affirmed the company's Tranche A first out term loan rating
at B3 and the senior secured second lien term loan rating at C. The
ratings outlook remains negative.
The downgrades of the CFR and PDR reflect that TriMark's high
financial leverage and negative free cash flow will make it
challenging to refinance the 2024 term loan maturities at a
manageable cash interest cost without impairing part of the debt
structure. Although TriMark's revenue and earnings are recovering
as a result of improving demand from certain end markets, including
restaurant chains, Moody's expects debt-to EBITDA to remain above
10x in 2023 even with solid revenue growth and meaningful earnings
improvement. Moody's also projects over $30 million of negative
free cash flow in 2023 due to higher capital spending and working
capital to support business growth. Moody's is concerned that the
approximately $970 million debt that matures between May and August
2024 (including over $200 million ABL borrowings) may not afford
the company sufficient time to improve earnings and strengthen
credit metrics enough to permit a refinancing of the debt without
an impairment. Moody's thus views default risk as growing including
the potential for a distressed exchange transaction such as a
discounted debt repurchase by the company or by an existing private
equity sponsor. The Caa3 CFR is one notch higher than the Ca-PD PDR
to reflect Moody's expectation of a higher than average family
recovery rate even with high debt balance of approximately $1.2
billion as of December 31, 2022, a result of TriMark's strong
revenue growth and solid earnings recovery partly due to new
business wins.
The affirmation of TriMark's Tranche A first out term loan at B3
and the senior secured second lien term loan rating at C reflects
Moody's view that the current ratings appropriately reflect
expected recovery in the event of a default. The rating downgrade
of the Tranche B second out term loan to Caa3 from Caa2, same as
the Caa3 CFR, reflecting that the facility represents the
preponderant of debt in the capital structure.
Moody's took the following rating actions:
Downgrades:
Issuer: TMK Hawk Parent, Corp.
Corporate Family Rating, Downgraded to Caa3 from Caa2
Probability of Default Rating, Downgraded to Ca-PD from Caa2-PD
Senior Secured Term Loan B, Downgraded to Caa3 from Caa2
Affirmations:
Issuer: TMK Hawk Parent, Corp.
Senior Secured Term Loan A, Affirmed B3
Senior Secured Second Lien Term Loan, Affirmed C
Outlook Actions:
Issuer: TMK Hawk Parent, Corp.
Outlook, Remains Negative
RATINGS RATIONALE
TriMark's Caa3 CFR reflects Moody's view that TriMark's capital
structure is unsustainable given its very high financial leverage
with debt/EBITDA expected to be around 10x and over $30 million
negative free cash flow in 2023 despite a meaningful projected
earnings rebound. The negative free cash flow is in part due to
higher capital spending and working capital to support business
growth, in addition to the high cash interest burden. TriMark has
end market concentration in the foodservice/restaurant sector and
the majority of its revenue relates to equipment sales. The rating
is supported by the company's strong market position in the
foodservice equipment and supplies distribution industry, its
relatively recurring revenue stream from supply replenishment and
equipment replacement, and modest capital expenditure requirement.
Moody's anticipates the company will have weak liquidity in the
next 12 months because of the maturity of the bulk of its debt in
May-August 2024 and that the company is heavily reliant on revolver
borrowings. The Tranche A term loan matures in May 2024 and the
Tranche B term loan matures in August 2024. The ABL expires in July
2025 or 90 days before the maturity of other debt if they have not
been extended by such date.
The CIS-5 credit impact score reflects Moody's view that ESG
factors have a very highly negative impact on TMK Hawk's ratings,
mainly due to the company's very high exposure to governance risk
as a result of a recapitalization transaction that effectively
subordinated existing senior secured term loan lenders in 2020, its
aggressive financial strategies including high leverage, and high
risk of a distressed exchange or other default.
Environmental risks include emissions from delivery trucks and
factors such as responsible sourcing. Effectively managing such
risks would help protect the company's market position. The company
leases the bulk of its delivery trucks, but must manage the
environmental impact of truck emissions and would indirectly bear
the cost of converting to lower-emission delivery trucks through
adjustments to lease payments over time.
Governance risk factors include the company's aggressive financial
policies under majority ownership by private equity sponsors,
including the 2020 recapitalization transaction that subordinated
existing senior secured term loan lenders, the very high financial
leverage, and its debt-financed growth through acquisition
strategy. TriMark changed its senior management in late 2021. The
new management team has been transparent on the company's strategy
and performance, including providing financial information to
lenders on a more accelerated timeline.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The negative outlook reflects Moody's view that TriMark's capital
structure is unsustainable owing to high leverage and significant
negative free cash flow, that the likelihood of a restructuring is
high in the next year, and that recovery values could weaken if
earnings do not improve meaningfully.
The ratings could be upgraded if leverage materially declines
driven by continued improvement in operating results and less
reliance on external sources of liquidity. The company would also
need to improve liquidity including interest coverage, cash
generation and the maturity profile to be upgraded.
The ratings could be downgraded if there is a deterioration in
liquidity, highlighted by increasing revolver reliance, the
probability of a debt restructuring or event of default increases
for any reason, or recovery prospects decline.
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in February 2023.
TMK Hawk Parent, Corp. (TriMark) is a distributor of foodservice
equipment and supplies in North America, providing all non-food
products used by restaurants and other foodservice operators. In
addition, the company offers value-added services, which include
design, procurement, and installation of commercial kitchens for
foodservice operations. TriMark was acquired by Centerbridge
Partners, L.P. in 2017. The company is private and does not
publicly disclose its financials. The company generated
approximately $2.2 billion of revenue for the twelve months ended
December 31, 2022.
TRINITY INDUSTRIES: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed Trinity Industries Inc.'s Long-Term
Issuer Default Rating (IDR), senior unsecured notes and revolving
credit facility at 'BB'. The Rating Outlook is Stable.
KEY RATING DRIVERS
The rating affirmations reflect Trinity's solid franchise as a
leading provider of railcar products and services in North America.
The ratings also reflect the company's diversified fleet portfolio
across customers, industries and car types, strong asset quality
performance over time, manageable exposure to residual value risk
given conservative depreciation policies, consistent cash flow
generation from the leasing business, adequate liquidity and
experienced management team.
Trinity's ratings are constrained by historically weak operating
performance given the high level of cyclicality of the railcar
manufacturing and railcar leasing businesses, meaningful reliance
on secured, short-term, wholesale funding sources, and modestly
elevated leverage. Rating constraints applicable to the broader
railcar leasing industry include a competitive operating
environment and the potential impact from federal, state, local,
and foreign environmental regulations on railcars, particularly
tank cars, which can heighten residual value risk and maintenance
expenses.
Trinity's leasing business (Trinity Industries Leasing Company, or
TILC) contributes the majority of the company's consolidated
pre-tax earnings, which helps to balance the more pronounced
cyclicality of the railcar manufacturing operations. Fitch believes
there are meaningful synergies between manufacturing and leasing,
as TILC generates substantial railcar orders for Trinity as it
obtains lease commitments from its customers. Trinity's leasing
portfolio is diversified across railcar types, commodities carried,
and customers serviced. In North America, Trinity served over 700
customers transporting around 900 different commodities with
approximately 270 railcar types in 2022.
Asset quality remains strong with negligible write-offs given the
company's conservative depreciation policy and the long economic
life of its assets. In 1Q23, Trinity recognized $0.2 million of
credit losses, which represented 0.6% of gross receivables. Asset
quality metrics have been relatively stable over time and Fitch
believes the company will maintain low write-offs given its ability
to remarket railcars within the fleet.
Operating performance as of 1Q23 benefited from higher lease
portfolio sales, partially offset by higher input costs in the
manufacturing operations, higher fleet operating expenses,
increased interest expenses and increased depreciation in the
leasing business. Consolidated pre-tax return on average assets
(ROAA) were 0.25% in 1Q23 annualized, well above the four-year
average of negative 0.43% from 2019-2022. This is consistent with
Fitch's 'b and below' category earnings and profitability benchmark
range of less than 1% for balance sheet intensive finance and
leasing companies with an operating environment score in the 'bbb'
category.
Fitch expects orders and deliveries to strengthen in line with a
recovery in the railcar sector, in addition to improved operating
leverage, which should support improved profitability metrics in
2023. Failure to develop a stronger and more consistent earnings
profile could yield negative rating momentum.
Consolidated leverage (gross debt-to-tangible equity) was 5.6x at
1Q23, up from 4.6x a year ago, which is consistent with the 'bb'
category benchmark range of 4.0x to 7.0x for balance sheet
intensive finance and leasing companies with an operating
environment score in the 'bbb' category. Based on the manufacturing
and leasing businesses' contribution to operating income, which
were 14% and 86%, respectively. Averaged over the last four-years,
leverage would have been 4.0x on a blended basis at 1Q23. Fitch
believes leverage will remain elevated in 2023 given increased debt
balances to support portfolio growth.
Secured funding represented 88% of total funding at 1Q23 and is
primarily comprised of non-recourse warehouse facilities, secured
term loans, and equipment notes secured by railcars issued by the
leasing operations. Trinity's unsecured funding consisted of a $450
million committed, revolving credit facility (RCF) and $400 million
of unsecured notes. Fitch believes Trinity's secured funding is
high relative to more highly rated finance and leasing companies.
Fitch would view an increase in unsecured funding favorably as it
would improve the firm's overall funding flexibility.
Fitch believes Trinity's liquidity, which included $82 million in
cash and marketable securities and $278 million of availability
under the RCF, as adequate. This is further supplemented by
operating cash flow, which averaged $411.1 million over the last
four-years. The next debt maturity is in October 2024 when $400
million of senior unsecured notes come due.
The Stable Outlook reflects Fitch's expectation for the maintenance
of strong asset quality performance, adequate liquidity and
consistent access to the capital markets. The Rating Outlook also
reflects the expectation for continued improvement in operating
performance in line with the recovery in the railcar sector.
Trinity's senior debt ratings are equalized with its Long-Term IDR,
reflecting sufficient unencumbered assets to support unsecured
noteholders and suggest average recovery prospects under a stress
scenario.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
A material and sustained increase in leverage approaching 6.0x,
failure to improve the level and consistency of operating earnings,
a reduction in the diversity and/or credit quality of its
customers, a material and persistent reduction in fleet
utilization, an increase in impairments, and/or weakening of the
liquidity profile would be negative for ratings.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
A reduction in consolidated leverage approaching 4x, enhanced
earnings consistency and ROAA sustained above 2.5%, and an increase
in unsecured funding approaching 25% of total debt could lead to
positive rating momentum.
The unsecured debt rating is linked to Trinity's IDR and is
expected to move in tandem.
ESG CONSIDERATIONS
Trinity has an GHG Emissions & Air Quality, Energy Management,
Water & Wastewater Management, and Waste &Hazardous Materials
Management; Ecological Impacts scores of '3', '3', '2', and '3',
which differs from broader financial institution peer scores of
'2', '2', '1' and '1', respectively. This reflects Trinity's
differentiated exposure to environmental impacts in its
manufacturing business, but does not have a material impact on its
rating.
Trinity also has a Labor Relations & Practices score of '3', which
differ from the broader financial institution peer scores of '2',
reflecting product safety and the impact of labor on its
manufacturing business, but does not have a material impact on its
rating.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Prior
----------- ------ -----
Trinity
Industries Inc. LT IDR BB Affirmed BB
senior
unsecured LT BB Affirmed BB
TUESDAY MORNING: Court Okays Sale to Hilco for $32.1 Million
------------------------------------------------------------
Homepage News reports that liquidation operator Hilco Merchant
Resources has won an auction for the assets of Tuesday Morning
Corp.
The agreed-on price was $32.1 million, and the United States
Bankruptcy Court for the Northern District of Texas has approved
the sale, although the sales price and the court's order clearing
the transaction are subject to adjustment or objection from parties
that continue to have an interest in the retailer.
After the auction held April 19-20, 2023 Hilco Merchant Resources
entered into an asset purchase agreement for Tuesday Morning on
April 24. A hearing on the sale was held April 27, 2023, and the
court approved the Tuesday Morning sales on April 28, 2023.
Tuesday Morning filed for Chapter 11 bankruptcy protection on
February 14, 2023.
The Hilco Merchant Resources segment of Hilco Global provides
retail and consumer products inventory monetization services for
retailers and wholesalers, according to the parent company.
Principal among the services provided are retail inventory,
fixtures and equipment sale events associated with strategic store
closings and store re-merchandising initiatives. Hilco Global
describes itself as is a privately held financial services company
and authority on maximizing the value of assets for both healthy
and distressed companies.
About Tuesday Morning
Dallas, Texas-based Tuesday Morning Corporation is an off-price
retailer specializing in products for the home, including upscale
home textiles, home furnishings, housewares, gourmet food, toys and
seasonal decor, at prices generally below those found in boutique,
specialty and department stores, catalogs and on-line retailers.
Tuesday Morning and several affiliates filed for Chapter 11
bankruptcy protection (Bankr. N.D. Texas Lead Case No. 23-90001) on
Feb. 14, 2023. The Debtors said both assets and liabilities, on a
consolidated basis, range from $100 million to $500 million.
Judge Edward L. Morris presides over the cases.
The Debtors tapped Munsch Hardt Kopf & Harr, P.C. as bankruptcy
counsel; Phelanlaw as special counsel; Force Ten Partners LLC as
financial advisor; and Piper Sandler & Co. as investment banker.
Stretto, Inc. is the claims and noticing agent.
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 the law firms of Fox Rothschild, LLP
and Lowenstein Sandler, LLP. Province, LLC, serves as the
committee's financial advisor.
TWIN CITIES GERMAN: S&P Affirms 'BB' Rating on 2013/19 Rev Bonds
----------------------------------------------------------------
S&P Global Ratings revised the outlook to negative from stable and
affirmed its 'BB' long-term rating on St. Paul Housing &
Redevelopment Authority, Minn.'s series 2013 and 2019 charter
school revenue bonds, supported by Educational Properties Inc. and
issued on behalf of the Twin Cities German Immersion School
(TCGIS).
"The outlook revision reflects the deterioration in TCGIS's
financial performance in fiscal 2022, which resulted in a debt
service coverage violation," said S&P Global Ratings credit analyst
Alexander Enriquez. While management has implemented a corrective
action plan, another violation is expected in fiscal 2023.
Management has developed a plan for fiscal 2024 and beyond that
includes increasing class sizes, developing other revenue streams,
and optimizing staffing.
The negative outlook reflects the potential for operating stress
beyond fiscal 2023, attributable to the one-time nature of many of
the revenue increases management is exploring. The school faces
reputational risk if optimizing staffing levels leads to
significantly larger classrooms or a significant increase in
teacher turnover, which in turn could lower its market position.
S&P could lower the rating if TCGIS's operations were to greatly
deteriorate, resulting in significantly weaker maximum annual debt
service coverage or liquidity in fiscal 2023, or if it experiences
significant enrollment deterioration. A material and sustained
drawdown of reserves, without plans to rebuild quickly, could
likewise result in a negative rating action.
S&P would consider a return to stable scenario if management were
to produce operations that resulted in compliance with covenants,
while all other credit characteristics remain at least steady.
UNITED PF HOLDINGS: $525M Bank Debt Trades at 23% Discount
----------------------------------------------------------
Participations in a syndicated loan under which United PF Holdings
LLC is a borrower were trading in the secondary market around 77.1
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $525 million facility is a Term loan that is scheduled to
mature on December 30, 2026. The amount is fully drawn and
outstanding.
United PF Holdings, LLC operates fitness and recreation centers.
The Company offers services in the United States.
UNIVERSAL DOOR: Unsecureds Will Get 2% of Claims in 60 Months
-------------------------------------------------------------
Universal Door and Window Manufacture Inc. filed with the U.S.
Bankruptcy Court for the District of Puerto Rico a Disclosure
Statement describing Plan of Reorganization dated May 2, 2023.
Debtor is a privately owned corporation incorporated under the Laws
of the Commonwealth of Puerto Rico on February 5, 1993. It is
located at 52 Ave. Serrano Carr. 466 Km 0.5, Bo. Guatemala, San
Sebastian, Puerto Rico.
Prior to 2012, Debtor was dedicated to the manufacturing of
aluminum door and windows, and related products related to the
construction industry. Since 2012, Debtor converted its real estate
to a rental property. Debtor's shareholders are Mr. Evelio Crespo
Traverso (50%) and Mrs. Lilliam Alers Soto (50%).
The ongoing economic downturn and recession faced by Puerto Rico
during the last years, primarily due to the earthquakes and the
effects of the COVID-19 Pandemic, adversely impacted numerous
sectors and entities of Puerto Rico's economy, including Debtors'
industry. As a result, in an effort to protect its businesses,
obtain a breathing spell which stays all collection actions and
judicial proceedings, on July 5, 2022, Debtor filed its Chapter 11
petition.
As of the Petition Date, Debtor was the owner of various real
properties, as listed and more fully described in its Schedule A
filed at Court on July 5, 2022 (Docket No.1), with an aggregate
estimated value of $1,666,000.
As of the Petition Date, Debtor's Schedules listed Debtor's
personal property consisting of vehicles, office equipment, and
machinery, with a $25,500 value (at cost).
Class 1 consists of the Secured Claim of BPPR. Class 1 Shall be
paid in accordance with the Stipulation for the Treatment of Banco
Popular de Puerto Rico's Claim. Class 1 is impaired under the Plan
and is entitled to vote to accept or reject the Plan.
Class 2 consists of the Secured Claim of USDT. The Secured Portion
of Class 2, estimated in $471,978, shall be paid in monthly
installments of $2,533.68, including principal and interest at 5%
per annum, until the full payment of this claim. The unsecured
portion of USDT's claim (deficiency claim), estimated in
$1,081,015.53, will be dealt under Class 3. Class 2 is impaired.
Class 3 consists of Holders of Allowed General Unsecured Claims.
Class 3 shall be paid in full satisfaction of their claims their
pro-rata portion of 60 equal consecutive monthly installments of
$704.53 commencing on the Effective Date and continuing on the 30th
day of the subsequent 59 months. It is estimated that if all of
Debtor's objections to claims are granted as the payments would
yield a 2% recovery on their claims. Members of Class 3 are
impaired under the Plan.
Class 4 consists of Interest in Debtor. Members of Class 4 will not
receive any distribution under the Plan but will retain their
shares in Debtor unaltered. Class 4 is unimpaired under the Plan
and is not entitled to vote to accept or reject the Plan.
Except as otherwise provided in the Plan, Debtor will make payments
of Administrative Expense Claims, Priority Tax Claims, Allowed
Secured and General Unsecured Claims in accordance with the payment
plans set forth above from the cash flows generated from its rental
operations, the collection of its accounts receivables, and the
cash accumulated during the pendency of the case. Initial payment
to BPPR for $250,000 shall be made from the sale of the parcels of
land mentioned in the Stipulation with BPPR.
Lastly, Debtor's insiders' monthly management fee of $3,500.00,
will be decreased to $2,500.00 on or about July 2023, and further
decreased to $2,000.00 on or about January 2026 to give feasibility
to the Plan.
A full-text copy of the Disclosure Statement dated May 2, 2023 is
available at https://bit.ly/417PbhZ from PacerMonitor.com at no
charge.
Debtor's Counsel:
Alexis Fuentes-Hernandez, Esq.
Fuentes Law Offices, LLC
P.O. Box 9022726
San Juan, PR 00902-2726
Tel: (787) 722-5215, 5216
Fax: (787) 722-5206
Email: alex@fuentes-law.com
About Universal Door
Universal Door and Window Manufacture, Inc., a company based in San
Sebastian, P.R., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. P.R. Case No. 22-01961) on July 5, 2022,
disclosing $1.54 million in assets and $2.86 million in
liabilities. Judge Enrique S. Lamoutte oversees the case.
Alexis Fuentes-Hernandez, Esq., at Fuentes Law Offices, LLC and CPA
Luis R. Carrasquillo & Co., P.S.C. serve as the Debtor's legal
counsel and financial consultant, respectively.
US STEEL: Fitch Gives BB Rating on New $240MM Environmental Bonds
-----------------------------------------------------------------
Fitch Ratings has assigned a 'BB'/'RR4' rating to United States
Steel Corporation's (U. S. Steel) new $240 million Environmental
Improvement Revenue Bonds, Series 2023 issued by the Arkansas
Development Finance Authority on behalf of United States Steel
Corporation (U. S. Steel). Proceeds will be used for qualifying
project expenses associated with the new $3 billion,
three-million-ton, flat-rolled mini mill in Osceola, Arkansas (Big
River 2).
KEY RATING DRIVERS
Conservative Leverage Expectations: Fitch expects EBITDA leverage,
roughly 1.0x at Dec. 31, 2022, to be slightly elevated in 2023 in
line with Fitch's expectation for lower margins and economic
weakness, but to remain below 2.5x on average from 2024-2026. U. S.
Steel reduced total debt outstanding by more than $2.0 billion
since 1Q21 and has no outstanding borrowings on its credit
facilities. Fitch expects EBITDA to moderate from the 2021/2022
peak of around $5 billion per year, but to average around $1.5
billion-$2 billion annually after 2023. This compares with
Fitch-calculated EBITDA of approximately $1.5 billion during a
previous high point in the cycle in 2018.
Best for All Strategy: Fitch views U. S. Steel's strategy to invest
in flexible and lower-cost, less capital-intensive, more-efficient
assets positively and believes it will improve EBITDA and the
company's overall cost position and operating profile resulting in
reduced earnings volatility through the cycle. U. S. Steel acquired
a 49.9% equity interest in Big River Steel in 4Q19, an electric arc
furnace (EAF) facility with 3.3 million tons of annual capacity,
and acquired the remaining equity interest in 1Q21.
In 1Q22, U. S. Steel began construction on a $3 billion new
three-million-ton mini mill (Big River 2), with production expected
to begin in 2024. Fitch believes Big River 2, in addition to the
new value-added lines being constructed at Big River Steel, will
lower the company's overall cost position improving margins and
EBITDA generation.
Strong Liquidity Position: U. S. Steel generated over $1.7 billion
of Fitch-calculated FCF in 2022, and the company had cash and cash
equivalents of $2.8 billion as of March 31, 2023. Fitch believes
cash on hand in combination with future cashflow generation will
likely be sufficient to fund the majority of the new $3 billion
investment to build Big River 2 in addition to other strategic
capex. The ability to fund capex with cash on hand and internally
generated cash lowers the risk of compromising the balance sheet if
there is a period of prolonged economic weakness.
Strategic Capex Improves EBITDA: U. S. Steel began construction on
a $450 million nongrain-oriented (NGO) electrical steel line at BRS
in 3Q21. The 200,000-ton NGO electrical steel line is expected to
deliver first coil in 3Q23 and be available to meet growing
electric vehicle demand expected in North America over the coming
years. U. S. Steel also announced a 325,000-ton
galvanizing/galvalume line at BRS in 3Q21. Fitch expects this $280
million investment to expand the company's presence in value-added
construction and appliance applications. Both the NGO line and
galvanizing/galvalume lines are expected to enhance BRS's product
mix.
U. S. Steel began producing pig iron in 4Q22 at a new $60 million
pig iron facility constructed at Gary Works. The facility is
expected to have production capacity of around 500,000 tons of pig
iron intended to be consumed internally at its EAFs and provide
nearly 50% of BRS's current ore-based metallics requirements. In
3Q22, U. S. Steel began construction of a $150 million direct
reduced (DR)-grade pellet facility at its Keetac iron ore
operations which is expected to be operational in 2024. The new
facility provides the ability to produce DR-grade pellets for EAFs
in addition to providing the flexibility to continue producing
BF-grade pellets and optionality to ship to third parties.
DERIVATION SUMMARY
U. S. Steel is comparable in size and has a similar operating
profile compared with Cleveland-Cliffs (BB-/Stable) as both
companies are integrated and have both blast furnace and EAF
production, but are primarily blast furnace producers. U. S. Steel
is more diversified by product and geography with slightly more
favorable credit metrics than Cleveland-Cliffs.
U. S. Steel is larger in terms of annual shipments compared with
EAF steel producer Commercial Metals Company (CMC; BB+/Stable). U.
S. Steel has higher product and end-market diversification compared
with CMC, but CMC has historically had lower leverage metrics and
its profitability is less volatile, resulting in more stable
margins and leverage metrics through the cycle. U. S. Steel is
larger in terms of total shipments, but it is less profitable with
weaker credit metrics compared with EAF producer Steel Dynamics,
Inc. (BBB/Stable) and smaller with less favorable metrics compared
with EAF producer Nucor Corporation (A-/Stable).
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer:
- Declining flat-rolled steel prices through 2026;
- Combined Flat-rolled segment and Mini Mill segment steel
shipments of approximately 11.0-11.5 million tons in 2023,
increasing as Big River 2 comes online in 2024;
- Capex of approximately $2.5 billion in 2023, declining
significantly thereafter following completion of the new mini
mill;
- The new mini mill is funded primarily with internally generated
cash;
- Share repurchases made with excess cash flow.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Visibility into completion of the new $3 billion mini mill on
time and on budget, in addition to the ability to fund the project
primarily with internally generated cash;
- EBITDA margins sustained above 12%;
- EBITDA leverage sustained below 2.3x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A material weakening of domestic steel market conditions leading
to EBITDA leverage sustained above 3.3x;
- EBITDA margins sustained below 10%.
LIQUIDITY AND DEBT STRUCTURE
Solid Liquidity: U. S. Steel had roughly $2.84 billion of cash and
cash equivalents as of March 31, 2023 and roughly $2.44 billion, in
aggregate, available under its $1.75 billion asset-based loan (ABL)
credit facility due 2027, its U. S. Steel Kosice, s.r.o. credit
facilities due 2026 and the BRS ABL due 2026.
ISSUER PROFILE
U. S. Steel is an integrated steel producer of flat-rolled steel
and tubular products with operations in North America and Europe.
The company has a combination of blast furnace and electric arc
furnace capacity.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery
----------- ------ --------
United States
Steel Corporation
senior
unsecured LT BB New Rating RR4
VECTRA CO: S&P Downgrades ICR to 'CCC+' on Weaker Credit Metrics
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Vectra Co.
to 'CCC+' from 'B-' and assigned a negative outlook. At the same
time, S&P lowered its issue-level rating on the company's
first-lien debt to 'CCC+' from 'B-' and on its second-lien debt to
'CCC-' from 'CCC'. The recovery ratings remain '3' and '6',
respectively.
S&P said, "The negative outlook reflects our expectation that
Vectra's S&P Global Ratings-adjusted debt to EBITDA will be above
10x in 2023 and 2024, and the company faces some refinancing risk.
We expect Vectra's revenue and EBITDA will be lower than our
previous forecast due to multiple external factors." Revenue is
likely to experience significant growth in 2023 as the company
fulfills orders that comprise its significant backlog, but the
growth might be slightly less than expected. Supply chain issues
are likely to persist, at least through the first half of 2023,
disrupting operations. Vectra is also working in a challenging
labor market, where it must work to maintain its existing workforce
while attempting to maximize efficiency by forecasting order
volume. This can lead to higher costs, hurting EBITDA margins.
Lastly, a shift in revenues away from some of Vectra's highest
margin work is also likely to prevent margins from reaching
historical highs.
Vectra is likely to have negative free cash flow for the third
consecutive year. In addition to the challenges to EBITDA, higher
interest rates could result in cash outflows in excess of previous
expectations. S&P expects interest expense to be $5 million-$10
million higher in 2023 than 2022, resulting in free operating cash
outflow of $15 million-$20 million for the year.
S&P said, "We expect Vectra to maintain sufficient liquidity.While
covenants limit its revolver availability, Vectra has a solid cash
balance relative to its very modest liquidity needs. Even with
negative cash from operations over the next 12 months, the company
has a cushion in the event of prolonged earnings challenges or
rising interest rates. However, debt maturities could present a
risk in early 2024 if the company is unable to refinance before the
revolver and first-lien notes become current.
"The negative outlook reflects our expectation that Vectra's
leverage will remain above 10x through 2024 as supply chain
challenges and labor constraints continue to delay the realization
of its earnings and hurt cash flows. We expect debt to EBITDA of
12x-12.5x in 2023 and 10x-10.5x in 2024, potentially making it
challenging to refinance its capital structure before debt becomes
current."
S&P could lower its rating if we believe Vectra will likely default
within 12 months. This could occur if:
-- It has a near-term liquidity shortfall, likely driven by
continued supply chain disruptions or labor shortages that delay
revenue growth and limit free cash flow;
-- The company cannot refinance its first-lien notes due March
2025; or
-- S&P believes Vectra is considering a distressed exchange
offer.
S&P could revise the outlook to stable if Vectra's EBITDA improves
such that we view the capital structure as more sustainable, it
expects the company to generate positive free cash flow, and the
company is able to extend upcoming debt maturities through
refinancing. This could occur if:
-- Vectra's earnings increase more than we expect; and
-- Cash flow improves due to working capital improvements.
ESG credit indicators: E-2, S-2, G-3
S&P said, "Governance is a moderately negative consideration in our
credit rating analysis of Vectra, as is the case for most rated
entities owned by private-equity sponsors. We believe the company's
highly leveraged financial risk profile reflects corporate
decision-making that prioritizes the interests of the controlling
owners. This also reflects private-equity owners' generally finite
holding periods and focus on maximizing shareholder returns."
VISTAM INC: Seeks to Hire Selwyn D. Whitehead as Legal Counsel
--------------------------------------------------------------
Vistam Inc. seeks approval from the U.S. Bankruptcy Court for the
Central District of California to hire the Law Office of Selwyn D.
Whitehead as its legal counsel.
The firm will provide these services:
a. advise Debtor of its rights, powers and duties to operate
and manage its business and properties;
b. take all actions necessary to protect and preserve the
Debtor's bankruptcy estate, including the prosecution of actions on
its behalf and negotiations concerning all litigation in which the
Debtor is involved;
c. prepare legal papers necessary to administer the case;
d. assist in the negotiation and documentation of financing
agreements, debt and cash collateral orders, and related
transactions;
e. review the nature and validity of any liens asserted
against the Debtor's property and advise the Debtor concerning the
enforceability of such liens;
f. advise the Debtor regarding its ability to initiate actions
to collect and recover property for the benefit of its estate, any
potential property dispositions, and the assumption, assignment or
rejection of its executory contracts and unexpired leases; and
g. negotiate with creditors and prepare a plan of
reorganization.
Whitehead's billing rates are:
Selwyn Whitehead $700
Paralegal $250
Bookkeeper/Accountant $150
The firm received a $25,000 retainer from the Debtor, plus $1,738
filing fee.
Selwyn Whitehead, Esq., disclosed in an affidavit that her firm
does not represent any interest adverse to the Debtor.
The firm can be reached at:
Selwyn D. Whitehead
Law Offices of Selwyn D. Whitehead
4650 Scotia Ave.
Oakland, CA 94605
Phone: (510)632-7444
Email: selwynwhitehead@yahoo.com
About Vistam Inc.
Vistam Inc. is a provider of engineering and technical services.
Vistam Inc. filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
23-12137) on April 10, 2022. In the petition filed by Desmond
D'Souza, as member, the Debtor reported total assets of $695,107
and total liabilities of $1,082,731.
The Honorable Bankruptcy Judge Neil W Bason oversees the case.
Moriah Douglas Flahaut has been appointed as Subchapter V trustee.
The Debtor is represented by Selwyn Whitehead, Esq. at the Law
Office of Selwyn D. Whitehead.
VIVO TECHNOLOGIES: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Vivo Technologies, LLC
1820 E. Ray Rd., Suite E100
Chandler, AZ 85225
Business Description: Vivo Technologies is a modern and holistic
unified communications and collaboration
(UCC) solutions provider. Vivo has evolved
the process for designing, deploying, and
supporting UCC solutions.
Chapter 11 Petition Date: May 5, 2023
Court: United States Bankruptcy Court
District of Arizona
Case No.: 23-02964
Debtor's Counsel: M. Preston Gardner, Esq.
DAVIS MILES MCGUIRE GARDNER, PLLC
40 E. Rio Salado Parkway, Suite 425
Tempe, AZ 85281
Tel: (480) 733-6800
Fax: (480) 733-3748
Email: azbankruptcy@davismiles.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Spencer Jones as manager.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
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/BHS6KVQ/VIVO_TECHNOLOGIES_LLC__azbke-23-02964__0001.0.pdf?mcid=tGE4TAMA
WESTERN GLOBAL: Fitch Cuts LongTerm Issuer Default Rating to CCC-
-----------------------------------------------------------------
Fitch Ratings has downgraded Western Global Airlines, Inc.'s (WGA)
Long-Term Issuer Default Rating (IDR) to 'CCC-' from 'B-'. Fitch
has also removed the IDR from Rating Watch Negative. Fitch has
downgraded WGA's senior unsecured notes to 'CC'/'RR5' from
'B'/'RR3'.
The downgrade is driven by further increases in liquidity and
refinance risks given low aircraft activity with large parts of
WGA's fleet either stored or parked and limited flights to and from
Asia. The downgrade also reflects the continued deterioration of
capital markets access with WGA's unsecured bonds currently trading
at distressed levels.
KEY RATING DRIVERS
Elevated Liquidity Risks: WGA's liquidity is constrained due to a
fully drawn revolver and weak FCF profile. The company has
approximately $4 million of quarterly payments in interest expenses
and principal amortization related to its secured debt and larger
$21 million semi-annual coupons on the unsecured bonds (next
payment due Aug. 23). Fitch believes Q1 cash levels will be very
low, while FCF for the remainder of the year will be challenged by
ongoing weakness in the air cargo environment.
WGA's operations remained limited as of April 2023 despite Asia's
post-COVID and Chinese New Year reopening. Fitch believes the
dedicated air cargo market will remain pressured as demand softens
from slow economic growth and elevated inflation while the supply
of belly-hold capacity in passenger planes gradually returns. WGA
has experienced challenges in its ability to attract and retain
pilots.
Narrowing Contingent Liquidity Options: Fitch believes that WGA's
capital market access and contingent liquidity options have
materially deteriorated since its last review. The company has
roughly $40 million of secured debt capacity (net of outstanding
revolver and term loans) under its bond indenture. The issuance is
dependent on WGA having a fixed charge coverage ratio below 2x. The
potential issuance of additional secured debt could alleviate
near-term liquidity concerns but would likely pressure the
unsecured bond rating. WGA could also sell non-core assets to
further support liquidity, though the timing and ultimate proceeds
from such sales are uncertain.
Updated Recovery Analysis: Fitch believes WGA's competitive
position has structurally deteriorated. A large number of inactive
aircraft and disadvantaged pilot position have reduced Fitch's
post-emergence EBITDA expectations. Fitch assumes the company would
significantly shrink its fleet size to improve efficiency in the
event of bankruptcy, given the advanced age of the fleet. 15 out of
WGA's 21 aircraft are above 25 years old. Fitch estimates the
company will receive a going concern EBITDA of $60 million,
materially lower than previous estimates. The multiple is unchanged
at 4x. The updated recovery analysis resulted in a lower recovery
rating of 'RR5' for the unsecured debt.
DERIVATION SUMMARY
Relative to a larger air cargo airline Rand Parent (Atlas Air;
BB/Stable), WGA faces higher liquidity risks with its revolver
fully drawn and greater operational and pilot retention challenges.
WGA also has weaker credit metrics than Atlas.
WGA has a smaller fleet than Atlas, which increases its operating
risks associated with aircraft downtime. WGA's contracts with
customers are shorter, which fits with its strategy to cater to
high margin last minute demand; however, the shorter contract
durations increase WGA's exposure to freight rates.
Relative to passenger airlines such as American Airlines, Hawaiian
Holdings, and WestJet (all rated B-), WGA faces liquidity
challenges while the passenger airlines currently hold ample
liquidity. WGA's EBITDAR fixed-charge coverage and EBITDAR leverage
are slightly stronger than the 'B-' rated passenger airline peers.
WGA is exposed to freight rates and pilot recruitment while the
company benefits from fuel pass through built into its contract
structure, compared with the passenger airlines that are typically
exposed to fuel price fluctuation.
KEY ASSUMPTIONS
Fitch's forecast includes conservative assumptions based on WGA's
currently weak operating results:
- Block hours are materially impaired in 2023, dropping
approximately 40% yoy, partially offset by incremental block hours
from two newly conformed aircraft. Lower block hour rates are
driven by weakened demand and a continued recovery of belly space
capacity. Block hours gradually increase 10% and 30% in 2024 and
2025 assuming the company is able to navigate near-term liquidity
issues;
- Block hour rates are assumed to decline by 9% and 2% in 2023 and
2024. Fitch illustrates a rate decline to $8,300 per hour in 2024,
assuming demand/supply conditions rebalance. This is slightly above
2019 levels of $8,200 per hour;
- EBITDA margins contract in 2022 and remain in 2023 due to
operational challenges and increased salaries for pilots and
maintenance costs. Margins improve in 2024 as WGA reduces aircraft
downtime and has completed heavy C-check and conformity of new
aircraft. In 2025, Fitch has illustrated an additional $15 million
of opex, the high end of early estimates of incremental
unionization costs;
- Increased investment into account receivables as WGA increases
business in the military segment;
- WGA reduces annual CAPEX to $60 million in forecast years to
preserve cash;
- SOFR rate sustained at 5% throughout the forecast.
Recovery Analysis
The recovery analysis for WGA reflects Fitch's expectation that the
enterprise value of the company and recovery rates for creditors
would be maximized as a going concern rather than through
liquidation. Fitch has assumed a 10% administrative claim. Fitch
estimates the post-reorganization value of the company at roughly
$215 million, which is comparatively higher than its
Fitch-estimated liquidation value estimate at $155 million. The
liquidation values incorporate appraised aircraft values and a
significant haircut to book values of engines and parts largely due
to concerns around the secondary market for MD-11s.
An enterprise value multiple of 4.0x is used to calculate the
post-reorganization valuation. The multiple considers the recent
buyout of a larger peer Atlas World Wide at 5x. Additionally, Fitch
considered various other airline bankruptcies which have
historically reorganized around 3.1x - 6.8x EBITDA with most of the
airline multiples below the 6.1x cross-sector corporate median.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to a
positive rating action/upgrade:
- FCF generation, increased revolver availability or procurement of
additional liquidity sufficient to alleviate near-term liquidity
and refinance risks;
- Normalizing operations including successful pilot recruitment and
increased aircraft utilization rates;
- Fitch-calculated fixed-charge coverage ratio sustained around
1.5x.
Factors that could, individually or collectively, lead to a
negative rating action/downgrade:
- The company enters bankruptcy or restructuring becomes imminent.
A distressed debt exchange or payment default becomes probable;
- Heightened liquidity and refinance risks due to an inability to
generate positive FCF and to execute on contingent liquidity
options.
LIQUIDITY AND DEBT STRUCTURE
Elevated Liquidity: Total liquidity was below normal levels at
3Q22, standing at $27 million of cash on the balance sheet. The
$47.5 million revolver due 2025 is currently fully drawn. Fitch
expects liquidity to be challenged in 2023 due to large financial
obligations, including the $21 million semi-annual coupon bond
payments and $4 million interest and TL amortization on the secured
facilities, while FCF is expected to be challenged.
Heightened Refinance Risks: WGA has roughly $100 million of secured
debt and $400 million of unsecured debt maturities in 2025. Fitch
believes operational execution is crucial to increase EBITDA and
bring leverage metrics down. This would alleviate future challenges
to refinance the debt in capital markets before 2025.
ISSUER PROFILE
WGA is an international cargo airline. It provides air freight
services to large e-commerce, express, airlines, logistics
companies as well as governments and NGOs. WGA has a vertically
integrated model with significant heavy maintenance and engine
capabilities through its in-house MRO facility
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Western
Global Airlines,
Inc. LT IDR CCC- Downgrade B-
senior
unsecured LT CC Downgrade RR5 B
YIELD10 BIOSCIENCE: Signs Investment LOI With Marathon Petroleum
----------------------------------------------------------------
Yield10 Bioscience, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission it signed a non-binding letter
of intent with Marathon Petroleum Corporation for a potential
investment in Yield10 by Marathon and an offtake agreement for
low-carbon intensity Camelina feedstock oil for use in renewable
fuels. In connection with signing the LOI, Yield 10 sold and
issued to MPC Investment LLC, an affiliate of Marathon, a senior
unsecured convertible note in the original principal amount of $1.0
million which is convertible into shares of the Company's common
stock or other Qualified Securities, subject to certain conditions
and limitations set forth in the Convertible Note. The Company
sold and issued the Convertible Note pursuant to a securities
purchase agreement, dated as of April 28, 2023, between the Company
and the Purchaser. The Company will use the net proceeds from the
Convertible Note for working capital and general corporate
purposes.
The Convertible Note contains customary events of default for such
an instrument, accrues interest at 8% per annum, payable
semi-annually in arrears, and has a maturity date of the earlier of
(i) the date that is one year after the Exclusivity End Date or
(ii) the Fundamental Change Effective Date (as defined in the
Convertible Note), unless earlier repaid or converted prior to such
date in accordance with its terms. In addition, Yield10 may, at
its option upon written notice to the Purchaser at least five
business days prior to any interest payment date, pay the interest
due on such interest payment date in kind, in which case such PIK
Interest will be capitalized and added to the unpaid principal
amount of the Convertible Note. Under the LOI, Yield10 and
Marathon currently intend to negotiate, finalize and agree to the
terms of definitive agreements for the Investment and Offtake
Relationship within the 120 day exclusivity period set forth in the
LOI. The "Exclusivity End Date" is defined as the earlier of (i)
the date on which the 120 day exclusivity period set forth in the
LOI expires without the execution of definitive agreements for the
Investment and Offtake Relationship or a similar transaction or
(ii) the date on which Marathon notifies Yield10 that it will no
longer pursue such transaction.
If any amount remains outstanding under the Convertible Note,
whether on, after or before the Exclusivity End Date, when a
transaction or event constituting a Fundamental Change (as defined
in the Convertible Note) occurs or is publicly announced, then the
Convertible Note will, at the election of the Purchaser, be
convertible, in whole or in part, into shares of common stock at a
conversion price equal to $3.07 per share, subject to any mandatory
adjustments as provided in the Convertible Note, the ("Fixed
Conversion Rate"). The Fixed Conversion Rate exceeds the "minimum
price" as defined in Nasdaq listing standard 5635(d). Any portion
of the Convertible Note that is not converted in connection with
the Fundamental Change will be due and payable on the effective
date of the transaction constituting a Fundamental Change. If, at
any time any amount under the Convertible Note remains outstanding
before the Exclusivity End Date and Yield10 enters into definitive
agreements for the Investment and Offtake Relationship or similar
transaction that qualifies as a Qualified Financing (as defined in
the Convertible Note), then the Convertible Note will convert, in
whole, into the securities issued in respect of such Qualified
Financing at a conversion price equal to the purchase price of such
Qualified Securities sold in the Qualified Financing. Yield10 will
not issue any fractional share of Common Stock or any fractional
share, unit or note of Qualified Securities upon any conversion of
the Convertible Note and will instead pay cash in lieu of
delivering any fractional share in accordance with the terms of the
Convertible Note. In no event will Yield10 issue any shares of
common stock or other securities upon conversion of the Convertible
Note if the issuance of such common stock or other securities, as
the case may be, together with any securities issued in connection
with any other related transactions that may be considered part of
the same series of transactions for purposes of the rules of Nasdaq
Stock Market LLC, would exceed the aggregate number of shares of
common stock or other securities that Yield10 may issue in a
transaction without first obtaining stockholder approval in
compliance with Yield10's obligations under the rules or
regulations of the Nasdaq Stock Market LLC, except that such
limitation will not apply if Yield10’s stockholders have approved
issuances in excess of the Conversion Cap in accordance with the
rules of Nasdaq Stock Market LLC.
The Purchase Agreement contains customary representations,
warranties, and covenants by the parties (including a covenant by
Yield10 to register the securities issuable upon conversion of the
Convertible Note). The representations, warranties and covenants
contained in the Purchase Agreement were made only for purposes of
the Purchase Agreement and as of specific dates, were made solely
for the benefit of the parties to such agreement and are subject to
certain important limitations.
About Yield10
Yield10 Bioscience, Inc. -- http://www.yield10bio.com-- is an
agricultural bioscience company that is using its differentiated
trait gene discovery platform, the "Trait Factory", to develop
improved Camelina varieties for the production of proprietary seed
products, and to discover high value genetic traits for the
agriculture and food industries.
Yield10 Bioscience reported a net loss of $13.57 million for the
year ended Dec. 31, 2022, compared to a net loss of $11.03 million
for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company
had $8.08 million in total assets, $3.68 million in total
liabilities, and $4.40 million in total stockholders' equity.
Boston, Massachusetts-based RSM US LLP, the Company's auditor since
2017, issued a "going concern" qualification in its report dated
March 14, 2023, citing that the Company has suffered recurring
losses from operations and does not have sufficient liquidity to
meet forecasted costs. This raises substantial doubt about the
Company's ability to continue as a going concern.
[^] BOND PRICING: For the Week from May 1 to 5, 2023
----------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
99 Escrow Issuer Inc NDN 7.500 38.500 1/15/2026
99 Escrow Issuer Inc NDN 7.500 36.598 1/15/2026
99 Escrow Issuer Inc NDN 7.500 36.598 1/15/2026
AMC Entertainment
Holdings Inc AMC 5.875 40.337 11/15/2026
Acorda Therapeutics Inc ACOR 6.000 62.274 12/1/2024
Air Methods Corp AIRM 8.000 6.113 5/15/2025
Air Methods Corp AIRM 8.000 6.864 5/15/2025
Amyris Inc AMRS 1.500 25.000 11/15/2026
Applied Optoelectronics AAOI 5.000 76.058 3/15/2024
Audacy Capital Corp CBSR 6.500 7.227 5/1/2027
Audacy Capital Corp CBSR 6.750 7.490 3/31/2029
Audacy Capital Corp CBSR 6.750 7.784 3/31/2029
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Bed Bath & Beyond Inc BBBY 5.165 2.625 8/1/2044
Bed Bath & Beyond Inc BBBY 4.915 2.875 8/1/2034
Bed Bath & Beyond Inc BBBY 3.749 2.875 8/1/2024
Brixmor LLC BRX 6.900 10.275 2/15/2028
BuzzFeed Inc BZFD 8.500 65.000 12/3/2026
Capital Impact Partners CAIMPA 3.500 99.239 5/15/2023
Capital Impact Partners CAIMPA 3.300 99.237 5/15/2023
Citigroup Global
Markets Holdings
Inc/United States C 8.500 82.300 5/17/2032
Citizens Financial
Group Inc CFG 6.000 77.500 N/A
Clovis Oncology Inc CLVS 1.250 12.375 5/1/2025
Clovis Oncology Inc CLVS 4.500 12.091 8/1/2024
Clovis Oncology Inc CLVS 4.500 12.250 8/1/2024
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 6.350 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 5.000 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 6.625 2.448 8/15/2027
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 6.350 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 6.249 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 6.625 3.000 8/15/2027
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 6.500 8/15/2026
Diebold Nixdorf Inc DBD 8.500 11.098 4/15/2024
Diebold Nixdorf Inc DBD 9.375 42.918 7/15/2025
Diebold Nixdorf Inc DBD 9.375 40.911 7/15/2025
Diebold Nixdorf Inc DBD 9.375 47.250 7/15/2025
Diebold Nixdorf Inc DBD 9.375 40.911 7/15/2025
Diebold Nixdorf Inc DBD 9.375 41.860 7/15/2025
Endo Finance LLC /
Endo Finco Inc ENDP 5.375 5.001 1/15/2023
Endo Finance LLC /
Endo Finco Inc ENDP 5.375 5.001 1/15/2023
Energy Conversion
Devices Inc ENER 3.000 0.551 6/15/2013
Envision Healthcare Corp EVHC 8.750 1.000 10/15/2026
Envision Healthcare Corp EVHC 8.750 1.989 10/15/2026
Esperion Therapeutics ESPR 4.000 41.750 11/15/2025
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 11.500 12.472 7/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 10.000 40.000 7/15/2023
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 11.500 11.932 7/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 10.000 45.010 7/15/2023
Federal Home Loan
Mortgage Corp FHLMC 5.000 99.326 11/8/2024
First Citizens
Bancshares Inc/TX FIRCTZ 6.000 82.228 9/1/2028
First Citizens
Bancshares Inc/TX FIRCTZ 6.000 82.228 9/1/2028
First Horizon Corp FHN 3.550 98.500 5/26/2023
First Republic Bank/CA FRCB 4.375 0.739 8/1/2046
First Republic Bank/CA FRCB 4.625 1.082 2/13/2047
GNC Holdings Inc GNC 1.500 0.819 8/15/2020
General Electric Co GE 4.200 92.617 N/A
Goodman Networks Inc GOODNT 8.000 1.000 5/31/2022
Gossamer Bio Inc GOSS 5.000 27.000 6/1/2027
Groupon Inc GRPN 1.125 36.000 3/15/2026
Hope Bancorp Inc HOPE 2.000 99.100 5/15/2038
Inseego Corp INSG 3.250 49.157 5/1/2025
Invacare Corp IVC 5.000 1.625 11/15/2024
Invacare Corp IVC 4.250 3.443 3/15/2026
JPMorgan Chase & Co JPM 2.000 85.700 8/20/2031
JPMorgan Chase Bank NA JPM 2.000 82.469 9/10/2031
Lannett Co Inc LCIN 7.750 7.587 4/15/2026
Lannett Co Inc LCIN 4.500 4.361 10/1/2026
Lannett Co Inc LCIN 7.750 7.246 4/15/2026
Liberty Interactive LLC LINTA 8.500 31.292 7/15/2029
Liberty Interactive LLC LINTA 4.000 19.500 11/15/2029
Liberty Interactive LLC LINTA 4.000 19.244 11/15/2029
Liberty Interactive LLC LINTA 3.750 17.345 2/15/2030
Liberty Interactive LLC LINTA 3.750 17.375 2/15/2030
Lightning eMotors Inc ZEV 7.500 54.495 5/15/2024
MBIA Insurance Corp MBI 16.520 5.250 1/15/2033
MBIA Insurance Corp MBI 16.597 2.000 1/15/2033
Macquarie Infrastructure
Holdings LLC MIC 2.000 97.499 10/1/2023
Macy's Retail Holdings M 6.900 88.656 1/15/2032
Macy's Retail Holdings M 6.900 88.656 1/15/2032
Mashantucket Western
Pequot Tribe MASHTU 7.350 42.000 7/1/2026
Morgan Stanley MS 1.800 73.677 8/27/2036
National CineMedia LLC NATCIN 5.750 2.625 8/15/2026
NiSource Inc NI 5.650 96.012 N/A
OMX Timber Finance
Investments II LLC OMX 5.540 0.850 1/29/2020
Pacific Western Bank PACW 3.250 41.926 5/1/2031
Party City Holdings Inc PRTY 8.750 14.875 2/15/2026
Party City Holdings Inc PRTY 10.130 14.500 7/15/2025
Party City Holdings Inc PRTY 6.625 1.000 8/1/2026
Party City Holdings Inc PRTY 8.750 15.000 2/15/2026
Party City Holdings Inc PRTY 6.625 0.750 8/1/2026
Party City Holdings Inc PRTY 10.130 13.546 7/15/2025
Photo Holdings
Merger Sub Inc SFLY 8.500 42.760 10/1/2026
Photo Holdings
Merger Sub Inc SFLY 11.000 37.289 10/1/2027
Photo Holdings
Merger Sub Inc SFLY 8.500 42.746 10/1/2026
Porch Group Inc PRCH 0.750 32.500 9/15/2026
Rackspace Technology
Global Inc RAX 5.375 22.634 12/1/2028
Rackspace Technology
Global Inc RAX 5.375 23.570 12/1/2028
Renco Metals Inc RENCO 11.500 24.875 7/1/2003
Rite Aid Corp RAD 7.700 31.626 2/15/2027
RumbleON Inc RMBL 6.750 37.492 1/1/2025
SVB Financial Group SIVB 4.000 4.998 N/A
SVB Financial Group SIVB 4.100 5.500 N/A
SVB Financial Group SIVB 4.250 6.006 N/A
SVB Financial Group SIVB 4.700 7.875 N/A
Shift Technologies Inc SFT 4.750 12.125 5/15/2026
Signature Bank/
New York NY SBNY 4.000 2.500 10/15/2030
Signature Bank/
New York NY SBNY 4.125 1.357 11/1/2029
Talen Energy Supply LLC TLN 10.500 31.125 1/15/2026
Talen Energy Supply LLC TLN 6.500 30.875 6/1/2025
Talen Energy Supply LLC TLN 7.000 43.250 10/15/2027
Talen Energy Supply LLC TLN 9.500 36.250 7/15/2022
Talen Energy Supply LLC TLN 6.500 43.750 9/15/2024
Talen Energy Supply LLC TLN 6.500 28.375 9/15/2024
Talen Energy Supply LLC TLN 9.500 23.823 7/15/2022
Talen Energy Supply LLC TLN 10.500 33.000 1/15/2026
Talen Energy Supply LLC TLN 10.500 31.318 1/15/2026
Team Health Holdings Inc TMH 6.375 50.182 2/1/2025
Team Health Holdings Inc TMH 6.375 50.665 2/1/2025
Team Inc TISI 5.000 88.716 8/1/2023
TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019
Tricida Inc TCDA 3.500 10.750 5/15/2027
US Renal Care Inc USRENA 10.625 22.115 7/15/2027
US Renal Care Inc USRENA 10.625 21.274 7/15/2027
UpHealth Inc UPH 6.250 30.774 6/15/2026
WeWork Cos Inc WEWORK 7.875 49.461 5/1/2025
WeWork Cos Inc WEWORK 7.875 50.208 5/1/2025
WeWork Cos LLC /
WW Co-Obligor Inc WEWORK 5.000 52.582 7/10/2025
WeWork Cos LLC /
WW Co-Obligor Inc WEWORK 5.000 52.905 7/10/2025
Wesco Aircraft
Holdings Inc WAIR 9.000 8.864 11/15/2026
Wesco Aircraft
Holdings Inc WAIR 8.500 3.763 11/15/2024
Wesco Aircraft
Holdings Inc WAIR 13.125 2.921 11/15/2027
Wesco Aircraft
Holdings Inc WAIR 8.500 11.875 11/15/2024
Wesco Aircraft
Holdings Inc WAIR 13.125 8.208 11/15/2027
Wesco Aircraft
Holdings Inc WAIR 9.000 9.485 11/15/2026
Western Global
Airlines LLC WGALLC 10.375 11.161 8/15/2025
Western Global
Airlines LLC WGALLC 10.375 12.312 8/15/2025
Zions Bancorp NA ZION 5.800 79.000 N/A
*********
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.
*** End of Transmission ***