/raid1/www/Hosts/bankrupt/TCR_Public/230511.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, May 11, 2023, Vol. 27, No. 130
Headlines
724 GROVERS: Joseph Kershaw Spong Named Subchapter V Trustee
960 FRANKLIN: Blasts Kahan's "Hail Mary" Objection to Plan
960 FRANKLIN: Unsecured Creditors Unimpaired in Plan
ACER THERAPEUTICS: Receives Noncompliance Notice From Nasdaq
ALLEGIANCE COAL: $10MM DIP Loan from Collins Has Interim OK
ALPHATEC HOLDINGS: Incurs $43.5 Million Net Loss in First Quarter
AMERICAN HVAC: Christopher Hayes Named Subchapter V Trustee
AMERICORE HOLDINGS: Chapter 11 Trustee Submits Disclosure Statement
APPLE BIDCO: Moody's Affirms B2 CFR & Cuts 1st Lien Loans to B2
APPLE STREET: Voluntary Chapter 11 Case Summary
ARCHDIOCESE OF NEW ORLEANS: Half of Judges Recused from Case
ASCENT RESOURCES: Fitch Affirms LongTerm IDR at B, Outlook Positive
ASIA PACIFIC: Kathlyn Selleck Named Subchapter V Trustee
ATHEN'S INC: Edward Burr Named Subchapter V Trustee
ATLAS PURCHASER: $250M Bank Debt Trades at 46% Discount
AVENIR MEMORY: Court Directs U.S. Trustee to Appoint PCO
AVENIR MEMORY: Gets OK to Hire Sacks Tierney as Bankruptcy Counsel
AVISON YOUNG: $375M Bank Debt Trades at 27% Discount
BADGER FINANCE: $268.7M Bank Debt Trades at 23% Discount
BALL CORP: Moody's Rates New $1BB Unsecured Notes Due 2029 'Ba1'
BANDED HORN: Court OKs Interim Cash Collateral Access
BANYAN CAY: Plan & Disclosures Due in 120 Days
BETHLEHEM-CENTER SCHOOL: Moody's Cuts Issuer & GOLT Ratings to B2
BEVERLY COMMUNITY: Has Deal on Cash Collateral Access
BIGHORN RESTAURANTS: Seeks Cash Collateral Access
BIONIK LABORATORIES: Signs Distribution Agreement With Pro-Med
BLITMAN SARATOGA: Revised Plan Not Confirmable, Says Blitman Estate
BLUE DOLPHIN: Unit Agrees With Investor to Alter Note Payment Terms
BLUE LIGHTNING: Wins Interim Cash Collateral Access
BLUE RIBBON: $368M Bank Debt Trades at 31% Discount
BUCK-LEITER PALM: Ruediger Mueller Named Subchapter V Trustee
CALIFORNIA-NEVADA: Unsecureds Owed $725K to Get 27.6% Under Plan
CAPSTONE BORROWER: S&P Assigns 'B-' ICR on Proposed Buyout
CAPSTONE TOPCO: Moody's Assigns 'B2' CFR, Outlook Stable
CAREERBUILDER LLC: Moody's Affirms Caa3 CFR & Rates New Loan Caa3
CARVANA CO: Incurs $286 Million Net Loss in First Quarter
CATALENT INC: S&P Places 'BB' Long-Term ICR on Watch Negative
CATALINA MARKETING: Court Confirms Prepackaged Plan
CENPORTS COMMERCE: Mark Sharf Named Subchapter V Trustee
CERTIFIED 360: Seeks Cash Collateral Access
CINEWORLD GROUP: Unsecureds Owed up to $1.45B to Get up to 4.8%
COMPASS MINERALS: Notes Repayment No Impact on Moody's 'Ba3' CFR
COX INDUSTRIAL: Tedd Burr Named Subchapter V Trustee
CPC ACQUISITION: $1.03B Bank Debt Trades at 30% Discount
CROWN EUROPEAN: S&P Rates New EUR400MM Unsecured Notes 'BB+'
CROWN HOLDINGS: Moody's Affirms 'Ba1' CFR, Outlook Remains Stable
CUENTAS INC: Closes Purchase of 21.8 Acres of Land for $5.1M
CYXTERA TECHNOLOGIES: S&P Downgrades ICR to 'CCC-', On Watch Neg.
DECURTIS HOLDINGS: Files for Chapter 11 Amid Dispute With Carnival
DEYO ENTERPRISES: Jolene Wee Named Subchapter V Trustee
DIAMOND SCAFFOLD: Court OKs Cash Collateral Use Thru July 8
DIEBOLD NIXDORF: $626M Bank Debt Trades at 57% Discount
DIMENSIONS IN SENIOR: No Patient Complaints at Wilcox Facility
DUNBAR PARTNERS: Unsecureds Owed $89.8M Unimpaired in Sale Plan
EAST BROADWAY: Bank of Hope Files Plan to Assign Lease
EAST BROADWAY: June 14 Hearing on Bank's Plan Disclosures
EFS PARLIN: Jami Nimerof Named Subchapter V Trustee
ELEVATE TEXTILES: $585M Bank Debt Trades at 52% Discount
ENVISION HEALTHCARE: $2.20B Bank Debt Trades at 90% Discount
EPIC CRUDE: S&P Alters Outlook to Stable, Affirms 'CCC+' ICR
FARADAY FUTURE: Appoints Rich Schmidt as New VP of Manufacturing
FONDUE 26: Wins Interim Cash Collateral Access
FRANKLIN SOUTHERN: Robert Altman Named Subchapter V Trustee
FUTURE VALUE: Sequoia Says Plan Not Feasible, Can't Be Crammed Down
GM NORTH POINT TWO: Files Bare-Bones Chapter 11 Petition
HERC HOLDINGS: S&P Alters Outlook to Positive, Affirms 'BB-' ICR
IEH AUTO PARTS: To Seek Plan Confirmation on June 1
IEH AUTO PARTS: Unsecureds Owed $170M Get 10% in Liquidating Plan
IMPERVA INC: $290M Bank Debt Trades at 20% Discount
INFINERA CORP: Incurs $8.4 Million Net Loss in First Quarter
INTERNAP HOLDING: Unsecureds Owed $10M-$15M to Get Nothing in Plan
INVACARE CORP: Court Confirms First Amended Plan
IQOR US: $300M Bank Debt Trades at 29% Discount
KUEHG CORP: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
LANNETT COMPANY: Court OKs Interim Cash Collateral Access
LIFESCAN GLOBAL: $275M Bank Debt Trades at 42% Discount
LINCOLN POWER: Hires Guggenheim Securities as Investment Banker
LINCOLN POWER: Hires Young Conaway as Bankruptcy Co-Counsel
LINCOLN POWER: Seeks to Hire Omni Agent as Administrative Advisor
LINCOLN POWER: Seeks to Tap FTI Consulting to Provide CRO, Staff
LINCOLN POWER: Seeks to Tap Latham & Watkins as Bankruptcy Counsel
LONG & ASSOCIATE: Michael Markham Named Subchapter V Trustee
LPI LLC: Case Summary & 12 Unsecured Creditors
LYLES AND LEWIS: Richard Furtek Named Subchapter V Trustee
MADISON CLINIC: Cash Collateral Access, $15,000 DIP Loan OK'd
MADISON SQUARE: June 26 Hearing on Plan and Disclosures
MANZELLA PROPERTIES: Court OKs Deal on Cash Collateral Access
MARKING IMPRESSIONS: Taps Lefkovitz & Lefkovitz as Legal Counsel
MONITRONICS INT'L: Moody's Cuts CFR to Ca, Outlook Stable
NATIONAL CINEMEDIA: $270M Bank Debt Trades at 68% Discount
NAUTILUS POWER: S&P Lowers Debt Rating to 'D', Off Watch Negative
NAVARRO PECAN: Unsecureds Get Share of Liquidating Trust
NESV ICE: Unsecureds to Get Share of Plan Payment and Proceeds
NEW CITY AUTO GROUP: Court Approves Disclosure Statement
NEXERA MEDICAL: Files Emergency Bid to Use Cash Collateral
NEXERA MEDICAL: Maria Yip Named Subchapter V Trustee
NEXTPLAY TECHNOLOGIES: Corrects Annual Report Misstatements
NIKOFAM INC: Files Emergency Bid to Use Cash Collateral
NORTHERN OIL: Moody's Ups CFR to B1 & Rates New Unsecured Notes B2
NORTHWEST CHRISTIAN: Moody's Affirms Ba2 Rating on 2020A/B Bonds
NP LEHI: To Seek Plan Confirmation on June 7, 2023
NS FOA: Wins Final Cash Collateral Access
OUR COMMUNITY: Monique Almy Named Subchapter V Trustee
OUTPUT SERVICES: $180.3M Bank Debt Trades at 52% Discount
OUTPUT SERVICES: $369.8M Bank Debt Trades at 52% Discount
OZ NATURALS: Court OKs Cash Collateral Access Thru May 19
PACKERS HOLDINGS: $1.24B Bank Debt Trades at 57% Discount
PARKER MEDICAL: Court OKs Final Cash Collateral Access
PETES AUTO: George Purtill Named Subchapter V Trustee
PRECISION DRILLING: Moody's Ups CFR to B1 & Unsecured Bond to B2
PRETIUM PKG: $350M Bank Debt Trades at 43% Discount
PROMEDICA HEALTH: Moody's Affirms 'Ba2' Rating, Outlook Negative
PROTECH METALS: Daniel Bruton Named Subchapter V Trustee
REVERSE MORTGAGE: Court Confirms Liquidating Plan
REVLON CONSUMER: $1.80B Bank Debt Trades at 79% Discount
ROCKING M: Court Grants Non-Material Modification to Plan
RODAN & FIELDS: Moody's Affirms Caa3 CFR & Alters Outlook to Stable
RYMAN HOSPITALITY: New Secured Loans No Impact on Moody's Ba3 CFR
SAS AB: Apollo Wants Majority Stake in Chapter 11 Rescue Plan
SHOPS@BIRD & 89: Tarek Kiem Named Subchapter V Trustee
SIO2 MEDICAL: Appointment of Examiner Sought
SIO2 MEDICAL: Seeks Approval to Hire Cole Schotz as Co-Counsel
SMITH & SONS: Thomas Willson Named Subchapter V Trustee
SOUND INPATIENT: $200M Bank Debt Trades at 29% Discount
SOUND INPATIENT: $215M Bank Debt Trades at 36% Discount
SOUND INPATIENT: $610M Bank Debt Trades at 29% Discount
SPECTRUM HOLDINGS III: Moody's Puts Caa1 CFR on Review for Upgrade
SPEIDEL CONSTRUCTION: Taps Lefkovitz & Lefkovitz as Legal Counsel
SPINE GROUP: Files Emergency Bid to Use Cash Collateral
STERLING CAPITAL VIII: Fitch Affirms 'BB' IDR on Preferred Notes
STRUCTURLAM MASS: Broadhead Appointed as New Committee Member
TALKING TADPOLES: Areya Holder Aurzada Named Subchapter V Trustee
TEMPUR SEALY: S&P Places 'BB+' ICR on CreditWatch Negative
TRINSEO PLC: Moody's Lowers CFR to B1, Outlook Remains Negative
TURBO COMPONENTS: Scott Chernich Named Subchapter V Trustee
UNITED PF HOLDINGS: $100M Bank Debt Trades at 23% Discount
VALCAL INC: Aaron Cohen Named Subchapter V Trustee
VALCAL INC: Seeks Cash Collateral Access
VALCOUR PACKAGING: $160M Bank Debt Trades at 37% Discount
VINTAGE WEST: Kevin Heard Named Subchapter V Trustee
VYERA PHARMACEUTICALS: Case Summary & 20 Top Unsecured Creditors
WP CPP HOLDINGS: $276M Bank Debt Trades at 21% Discount
Z NEWS SERVICE: David Klauder Named Subchapter V Trustee
ZHANG MEDICAL: Eric Huebscher Named Subchapter V Trustee
ZHANG MEDICAL: Fertility Clinic Starts Case Over Unused Floors
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
724 GROVERS: Joseph Kershaw Spong Named Subchapter V Trustee
------------------------------------------------------------
John Fitzgerald, III, Acting U.S. Trustee for Region 4, appointed
Joseph Kershaw Spong as Subchapter V trustee for 724 Grovers Road,
LLC.
Mr. Spong will be paid an hourly fee of $350 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred. Rebecca Faulkenberry, Mr. Spong's legal
assistant, and Melissa White, paralegal, will charge $125 per hour
and $150 per hour, respectively.
Mr. Spong declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Joseph Kershaw Spong
PO Box 11449
Columbia, SC 29211
Phone: 803-929-1400
Email: kspong@robinsongray.com
About 724 Grovers Road
724 Grovers Road, LLC filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. D.S.C. Case No. 23-01288) on May
1, 2023, with $100,001 to $500,000 in both assets and liabilities.
Judge Helen E. Burris oversees the case.
The Debtor is represented by Christine E. Brimm, Esq., at Barton
Brimm, PA.
960 FRANKLIN: Blasts Kahan's "Hail Mary" Objection to Plan
----------------------------------------------------------
960 Franklin Owner LLC, 960 Franklin LLC, and Daryl Hagler
(together, "Plan Proponents") filed a response to Haim Kahan's
Reservation of Rights and Objection to Approval/Confirmation of
Amended Joint Disclosure Statement and Joint Plan of
Reorganization.
The Plan Proponents point out that the Kahan Objection is a
last-ditch "hail mary" objection by a stranger to this chapter 11
case who has potential claims against another stranger to the
proceeding, Cheskie Weiz. This fact was made clear in the Kahan
Objection, where Kahan recounts his involvement with Weisz who he
claims an oral understanding for a proposed partnership between
Weisz and Kahan to allegedly buy a controlling membership interest
in 960 Franklin. At the time, 960 Franklin was in contract to
purchase premises designated as Block 1192, Lots 41 and 46 and
Block 1192, Lot 40, in Kings County, New York ("Property").
The Plan Proponents further point out that Kahan claims Weisz
induced him to provide $4,500,000 for Weisz to use in conjunction
with his purchase of a 49% membership interest in 960 Franklin.
When Kahan realized Weisz was a "flipper," Kahan claims the
nondisclosure constituted a fraud by Weisz on Kahan.
The Plan Proponents assert that what is notable about Kahan's story
is that there is no allegation that 960 Franklin Owner LLC, the
Debtor in this chapter 11 case, did anything to Kahan, much less
defraud him. When Kahan had an opportunity to assert a claim
against the Debtor, after receiving notice of the bar date, he
failed to file a claim against the Debtor or its estate. Similarly,
Kahan also fails to allege that 960 Franklin, or the owner of the
membership interests at issue, Daryl Hagler ("Hagler"), made any
representations to Kahan or had any involvement with Kahan at any
time. Tellingly, there is no written agreement between Kahan and
the Debtor, or between Kahan and 960 Franklin or between Kahan and
Hagler.
According to Plan Proponents, although Kahan has no claim against
the Property, since Weisz, at best, was in contract to buy a 49%
membership interest in 960 Franklin and not the Property, and Kahan
is in privity only with Weisz individually, not the Debtor, 960
Franklin or Hagler. Kahan filed a baseless lis pendens against 960
Franklin's Property to attempt to leverage his weak claims against
Weisz and cloud title on the Property, so presumably, he could
extract some "hold-up" value from the Debtor and not have to go
against the alleged defrauder, Weisz, the only party he was
involved with.
Attorneys for Daryl Hagler and 960 Franklin LLC:
Fred B. Ringel, Esq.
Steven Eichel, Esq.
Clement Yee, Esq.
LEECH TISHMAN ROBINSON BROG, PLLC
875 Third Avenue
New York, NY 10022
About 960 Franklin Owner
960 Franklin Owner, LLC, is engaged in activities related to real
estate. The company is based in Brooklyn, N.Y.
960 Franklin Owner filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
22-42760) on Nov. 2, 2022, with up to $50,000 in assets and $10
million to $50 million in liabilities. David Goldwasser, manager,
signed the petition.
Judge Jil Mazer-Marino presides over the case.
Mark Frankel, Esq., at Backenroth Frankel & Krinsky, LLP, is the
Debtor's legal counsel.
960 FRANKLIN: Unsecured Creditors Unimpaired in Plan
----------------------------------------------------
960 Franklin Owner LLC, Daryl Hagler and 960 Franklin LLC submitted
an Amended Disclosure Statement for their Second Amended Joint Plan
of Reorganization.
The Plan of Reorganization provides for the Debtor's restructuring
as follows: The implementation of the Plan is based on the
appointment of a Plan Administrator who will be empowered to (i)
execute a 99-year ground lease of the Property with Franklin Plaza
II LLC post-confirmation, (ii) encumber or authorize Franklin Plaza
II LLC to encumber the ground lease with the Leasehold Mortgage,
(iii) encumber of the Property with the Property Mortgage, and (iv)
the subsequent transfer of the Property subject to the ground
lease.
Upon confirmation of the Joint Plan, the Debtor's beneficial 51%
membership interest in 960 Franklin shall be irrevocably assigned
to the Plan Administrator and held by the Plan Administrator in
escrow for the purposes of either (i) selling the Property at
Hagler's direction, or (ii) assigning the Debtor's beneficial 51%
ownership interest in 960 Franklin to Hagler or his designee.
The Plan Administrator shall release the beneficial 51% membership
interest to either (x) the purchaser of the Property with the sale
proceeds to be paid to Hagler (or his designee) upon the closing of
the sale of the Property or (y) Hagler (or his designee) if the
Property is not sold within one year of the confirmation of the
Joint Plan.
The Hagler Parties shall fund to the Plan Administrator on the
Effective Date the sums necessary to pay the claims of the general
unsecured creditors in accordance with the terms of the Plan.
Under the Plan, Class 3 General Unsecured Claims are unimpaired.
Each such holder shall receive payment in full with interest at the
federal judgment rate on the Effective Date. The Hagler Parties
shall provide the Plan Administrator with up to $124,000 plus
applicable interest at the Federal Rate five business days before
the Confirmation Hearing to pay the Allowed Class 3 General
Unsecured Claims.
The Debtor, the Hagler Parties along with Franklin Plaza II LLC and
16972 Holdings LLC, the purported beneficial owner of the Debtor,
entered into the Amended and Restated Restructuring Support
Agreement, which was a global resolution of the outstanding dispute
described in Section II above.
Pursuant to Section 1123 of the Bankruptcy Code and Bankruptcy Rule
9019, and in consideration for the classification, distributions,
releases and other benefits provided under the Plan, including the
settlement of the dispute between the Debtor and the Hagler Parties
set forth in the Amended and Restated Restructuring Support
Agreement on the Effective Date, the provisions of the Plan shall
constitute a good faith compromise and settlement of all Claims and
Equity Interests and controversies resolved pursuant to the Plan,
and all Distributions made to holders of Allowed Claims in any
Class in accordance with the Plan are intended to be, and shall be
final.
Attorneys for Daryl Hagler and 960 Franklin LLC:
Steven B. Eichel, Esq.
Fred B. Ringel Esq.
LEECH TISHMAN ROBINSON BROG, PLLC
875 Third Avenue, 9th Floor
New York, NY 10022
Tel: 212 603 6300
Attorneys for the Debtor:
Mark Frankel, Esq.
BACKENROTH FRANKEL AND KRINSKY LLP
800 Third Avenue, 11th Floor
New York, NY 10036
Tel: 212-593-1100
A copy of the Disclosure Statement dated April 28, 2023, is
available at https://bit.ly/3NqWFcG from PacerMonitor.com.
About 960 Franklin Owner
960 Franklin Owner, LLC, is engaged in activities related to real
estate. The company is based in Brooklyn, N.Y.
960 Franklin Owner filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
22-42760) on Nov. 2, 2022, with up to $50,000 in assets and $10
million to $50 million in liabilities. David Goldwasser, manager,
signed the petition.
Judge Jil Mazer-Marino presides over the case.
Mark Frankel, Esq., at Backenroth Frankel & Krinsky, LLP, is the
Debtor's legal counsel.
ACER THERAPEUTICS: Receives Noncompliance Notice From Nasdaq
------------------------------------------------------------
Acer Therapeutics Inc. received a letter from the listing
qualifications department staff of The Nasdaq Stock Market on May
3, 2023, notifying the Company that for the last 30 consecutive
business days, the Company's minimum Market Value of Listed
Securities was below the minimum of $35 million required for
continued listing on the Nasdaq Capital Market pursuant to Nasdaq
listing rule 5550(b)(2).
The notice has no immediate effect on the listing of the Company's
common stock, and the Company's common stock continues to trade on
the Nasdaq Capital Market under the symbol "ACER."
In accordance with Nasdaq listing rule 5810(c)(3)(C), the Company
has 180 calendar days, or until Oct. 30, 2023, to regain
compliance. The notice states that to regain compliance, the
Company's MVLS must close at $35 million or more for a minimum of
ten consecutive business days (or such longer period of time as the
Nasdaq staff may require in some circumstances, but generally not
more than 20 consecutive business days) during the compliance
period ending Oct. 30, 2023. The Company believes that it can also
regain compliance by meeting the continued listing standard of a
minimum stockholders' equity of at least $2.5 million.
If the Company does not regain compliance by Oct. 30, 2023, Nasdaq
staff will provide written notice to the Company that its
securities are subject to delisting. At that time, the Company may
appeal any such delisting determination to a Hearings Panel.
The Company intends to actively monitor the Company's MVLS between
now and Oct. 30, 2023, and may, if appropriate, evaluate available
options to resolve the deficiency and regain compliance with the
MVLS rule. While the Company is exercising diligent efforts to
maintain the listing of its common stock on Nasdaq, there can be no
assurance that the Company will be able to regain or maintain
compliance with Nasdaq listing standards.
About Acer Therapeutics
Acer Therapeutics Inc. -- http://www.acertx.com-- is a
pharmaceutical company focused on the acquisition, development and
commercialization of therapies for serious rare and
life-threatening diseases with significant unmet medical needs. In
the U.S., OLPRUVA (sodium phenylbutyrate) is approved for the
treatment of urea cycle disorders (UCDs) involving deficiencies of
carbamylphosphate synthetase (CPS), ornithine transcarbamylase
(OTC), or argininosuccinic acid synthetase (AS). Acer is also
advancing a pipeline of investigational product candidates for rare
and life-threatening diseases, including: OLPRUVA (sodium
phenylbutyrate) for treatment of various other inborn errors of
metabolism, including Maple Syrup Urine Disease (MSUD); ACER-801
(osanetant) for treatment of induced Vasomotor Symptoms (iVMS) and
Post-traumatic Stress Disorder (PTSD); EDSIVO (celiprolol) for
treatment of vascular Ehlers-Danlos syndrome (vEDS) in patients
with a confirmed type III collagen (COL3A1) mutation; and ACER-2820
(emetine), a host-directed therapy against a variety of viruses,
including cytomegalovirus, Zika, dengue, Ebola and COVID-19.
Acer Therapeutics reported a net loss of $26.24 million for the
year ended Dec. 31, 2022, compared to a net loss of $15.37 million
for the year ended Dec. 31, 2021.
Boston, Massachusetts-based BDO USA, LLP, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated March 27, 2023, citing that the Company has suffered
recurring losses from operations, negative cash flows from
operations, has a net working capital deficiency, has a net capital
deficiency, and has minimum unencumbered liquid assets balance
requirements under their existing SWK Credit Agreement, that raises
substantial doubt about its ability to continue as a going
concern.
ALLEGIANCE COAL: $10MM DIP Loan from Collins Has Interim OK
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Allegiance Coal USA Ltd and debtor-affiliates to use cash
collateral and obtain postpetition financing on an interim basis.
The Debtor is permitted to obtain an aggregate principal amount not
to exceed $2 million, with the maximum principal amount that may be
borrowed following entry of the Final Order not to exceed $5
million in new money advances.
As previously reported by the Troubled Company Reporter, the
Debtors sought to obtain a senior secured debtor-in-possession
credit facility from Collins St Convertible Notes Pty Ltd, as
trustee for The Collins St Convertible Notes Fund, in an aggregate
principal amount of up to $5 million in new money advances, plus
the roll-up of up to $5 million of Prepetition Note Obligations
consisting of:
(a) $1.3 million in new money to be made available in a single
draw in accordance with the Approved Budget on the Interim Closing
Date;
(b) $700,000 in new money to be made available in a single
draw at the end of the week ending April 28, 2023, in the Approved
Budget, subject to compliance with the Approved Budget and the Case
Milestones;
(c) $3 million in new money to be made available on and after
the Final Closing Date as follows: (i) $500,000 at the end of the
week ending June 2, 2023, (ii) $1.5 million at the end of the week
ending June 9, 2023, and (iii) $1 million at the end of the week
ending June 16, 2023, in the Approved Budget, subject to compliance
with the Approved Budget and the Case Milestones; and
(d) Subject to entry of the Final Order, a roll-up of up to $5
million on a dollar-for-dollar basis with any new money actually
advanced by the DIP Lender to the Debtors under the DIP Facility.
The Prepetition Noteholder, Cline Mining Corporation and Warrior
Met Coal Land, LLC each hold an interest in the cash collateral.
The Debtors are required to comply with these milestones:
(a) No later than five business days after entry of the
Interim Order, the Debtors will have filed a motion with the
Bankruptcy Court seeking approval of the procedures for the
Transaction on terms acceptable to the DIP Lender.
(b) No later than 21 days after entry of the Interim Order,
the Bankruptcy Court will enter the Final Order.
(c) No later than 21 days after the Debtors file the motion,
the Bankruptcy Court will have entered an order approving the
proposed Transaction procedures.
(d) No later than 60 days after entry of the Interim Order
will be the deadline for initial indications of interest.
(e) No later than 65 days after entry of the Interim Order
will be the deadline for the submission of Qualified Bids. For the
avoidance of doubt, a Qualified Bid may include a proposal for a
sale of substantially all of the Debtors' assets or a refinancing
or recapitalization transaction sufficient to satisfy the
obligations under the DIP Facility and the Prepetition Note
Agreement in full and in cash.
(f) No later than 70 days after entry of the Interim Order, an
auction will be conducted if there is more than one Qualified Bid.
(g) No later than 80 days after entry of the Interim Order,
the Bankruptcy Court will have entered an order approving the
Transaction.
(h) No later than 90 days after entry of the Interim Order,
the consummation of (i) the Transaction, or (ii) more than one
Transaction will have occurred.
Debtor Allegiance Coal USA Limited and non-debtor Allegiance Coal
Limited are parties to the Deed of Variation, dated August 12,
2022, that amends and restates a Convertible Note Agreement, dated
May 24, 2022, by and between Allegiance USA and AHQ, on the one
hand, and Collins St Convertible Notes Pty Ltd, as trustee for The
Collins St Convertible Notes Fund, on the other hand.
The Debtors and AHQ are parties to the Guaranty and Security
Agreement dated May 24, 2022, as amended, in favor of the
Prepetition Noteholder, on account of the Debtors' use of cash
collateral and any diminution in value of the Prepetition
Noteholder's interests in the Prepetition Collateral.
As of the Petition Date, the Debtors are indebted to the
Prepetition Noteholder in the aggregate principal amount of
A$42.857 million under the Prepetition Note Agreement, plus accrued
and unpaid interest, fees, and expenses.
As adequate protection, the Prepetition Noteholder is granted the
following adequate protection for, and equal in amount to, the
diminution in the value of the prepetition security interests of
the Prepetition Noteholder securing the Prepetition Note
Obligations:
(a) Adequate Protection Liens. Effective and perfected as of
the date of entry of the Interim Order, replacement security
interests in and liens on the collateral securing the Prepetition
Note Obligations. The adequate protection liens will be
subordinated only to the Carve-Out, the DIP Liens and Permitted
Liens;
(b) Super-Priority Claim. To the extent of any diminution in
value of the Prepetition Note Security Interests, a superpriority
administrative expense claim, which will be immediately junior to
the Carve-Out, the DIP Superpriority Claim, and senior to all other
administrative expense claims; and
(c) The Prepetition Noteholder may pay interest at the default
rate using the Interest Funds (to the extent not advanced as DIP
Loans hereunder) in accordance with the terms of the Prepetition
Note Agreement.
Warrior Met Coal Land is granted the following adequate protection
for, and equal in amount to, the diminution in the value of its
interests in the cash collateral:
(a) Adequate Protection Liens. Effective and perfected as of
the date of entry of the Interim Order, replacement liens on the WM
Prepetition Collateral; and
(b) Warrior Land's Super-Priority Claim. To secure the WM
Prepetition Collateral, a superpriority administrative expense
claim.
Cline Mining is granted the following adequate protection for, and
equal in amount to, the diminution in the value of its interests in
the cash collateral:
(a) Adequate Protection Liens. Effective and perfected as of
the date of entry of the Interim Order, replacement liens on the
Cline Prepetition Collateral; and
(b) Cline's Super-Priority Claim. To secure the Cline
Replacement Liens, a superpriority administrative expense claim as
provided for in section 507(b) of the Bankruptcy Code.
A final hearing on the matter is set for May 5, 2023 at 10 a.m.
A copy of the order is available at https://bit.ly/3LAhekd from
PacerMonitor.com.
About Allegiance Coal USA Limited
Allegiance Coal USA Limited is a listed Australian company focused
on seaborne met coal mine development and operations, with
operating mines in southeast Colorado, central Alabama, as well as
a development project in northwest British Columbia.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-10234) on February 21,
2023. In the petition signed by Jonathan Romcke, chief executive
officer, the Debtor disclosed up to $100 million in assets and up
to $50 million in liabilities.
Judge Craig T. Goldblatt oversees the case.
Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell LLP,
represents the Debtor as legal counsel.
ALPHATEC HOLDINGS: Incurs $43.5 Million Net Loss in First Quarter
-----------------------------------------------------------------
Alphatec Holdings, Inc. has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $43.53 million on $109.11 million of total revenue for the three
months ended March 31, 2023, compared to a net loss of $42.62
million on $70.93 million of total revenue for the three months
ended March 31, 2022.
As of March 31, 2023, the Company had $569.69 million in total
assets, $142.9 million in total current liabilities, $419.45
million in long-term debt, $25.91 million in operating lease
liabilities, $16.18 million in other long-term liabilities, $23.60
million in redeemable preferred stock, and a total stockholders'
deficit of $58.36 million.
"We continue to execute against our mission to revolutionize the
approach to spine surgery," said Pat Miles, chairman and chief
executive officer. "As many in our industry capitulate, or seek to
drive growth through acquired revenues, ATEC is content to be the
outlier: methodically applying our 100% spine focus and unmatched
know-how to integrate and evolve technologies that improve the
predictability and reproducibility of spine care. ATEC's
innovation is not only driving rapid adoption today, it will also
set new clinical standards for years to come."
Financial Outlook for the Full-Year 2023
The Company continues to expect total revenue to grow 28% to $450
million for the fiscal year ended Dec. 31, 2023, in line with
expectations shared in conjunction with the release of preliminary
first-quarter financial results. This includes surgical revenue
growth of approximately 30% and $57 million of EOS revenue. The
Company continues to expect to achieve non-GAAP adjusted EBITDA
break-even for the full-year 2023.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001350653/000095017023017951/atec-20230331.htm
About Alphatec Holdings
Alphatec Holdings, Inc. (ATEC) (www.atecspine.com), through its
wholly-owned subsidiaries, Alphatec Spine, Inc. and SafeOp
Surgical, Inc., is a medical device company dedicated to
revolutionizing the approach to spine surgery through clinical
distinction. ATEC architects and commercializes approach-based
technology that integrates seamlessly with the SafeOp Neural
InformatiX System to provide real-time, objective nerve information
that can enhance the safety and reproducibility of spine surgery.
Alphatec reported a net loss of $152.15 million for the year ended
Dec. 31, 2022, a net loss of $144.33 million for the year ended
Dec. 31, 2021, a net loss of $78.99 million for the year ended Dec.
31, 2020, a net loss of $57 million for the year ended Dec. 31,
2019, and a net loss of $28.97 million for the year ended Dec. 31,
2018. As of Dec. 31, 2022, the Company had $513.37 million in total
assets, $138.87 million in total current liabilities, $349.51
million in long-term debt, $26.56 million in operating lease
liabilities (less current portion), $11.54 million in other
long-term liabilities, $23.60 million in redeemable preferred
stock, and a total stockholders' deficit of $36.71 million.
* * *
This concludes the Troubled Company Reporter's coverage of Alphatec
Holdings until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
AMERICAN HVAC: Christopher Hayes Named Subchapter V Trustee
-----------------------------------------------------------
The U.S. Trustee for Region 17 appointed Christopher Hayes as
Subchapter V trustee for American HVAC & Plumbing, Inc.
Mr. Hayes will be paid an hourly fee of $440 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Hayes declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Christopher Hayes
23 Railroad Avenue, #1238
Danville, CA 94526
Phone: (925) 725-4323
Email: chayestrustee@gmail.com
About American HVAC
American HVAC & Plumbing, Inc. is an HVAC contractor in Campbell,
Calif.
American HVAC & Plumbing filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. N.D. Calif. Case No.
23-50461) on April 28, 2023, with $115,224 in assets and $2,221,984
in liabilities. Cuinn F. Hamm, president of American HVAC &
Plumbing, signed the petition.
Judge Stephen L. Johnson oversees the case.
Lars Fuller, Esq., at The Fuller Law Firm, PC is the Debtor's
counsel.
AMERICORE HOLDINGS: Chapter 11 Trustee Submits Disclosure Statement
-------------------------------------------------------------------
Carol Fox, as chapter 11 trustee for Americore Holdings, LLC and
its affiliated debtors jointly administered Chapter 11 Cases,
proposed the Joint Chapter 11 Plan of Liquidation of Chapter 11
Trustee for Americore Holdings, LLC and Affiliated Debtors dated
April 26, 2023.
The Plan provides for the liquidation of the Debtors (and the
eventual dissolution of the Debtors) and payment, or other
satisfaction, as described below, on or after the Effective Date,
of all Allowed Administrative Expense Claims, Priority Tax Claims,
Priority Non-Tax Claims, and Statutory Fees. Any remaining assets
shall vest in 4 liquidating trusts established pursuant to the Plan
and Liquidating Trust Agreements for the purpose of liquidating and
distributing the Liquidating Trust Assets for the benefit of the
Ellwood Liquidating Trust Beneficiaries, Izard Liquidating Trust
Beneficiaries, Pineville Liquidating Trust Beneficiaries, and St.
Alexius Liquidating Trust Beneficiaries.
To ensure the equitable treatment of all General Unsecured
Creditors, Americore Health, LLC, Americore Health Enterprises,
LLC, Ellwood Medical Center, LLC, Ellwood Medical Center Real
Estate, LLC, and Ellwood Medical Center Operations, LLC will be
substantively consolidated into the Ellwood Debtors for purposes of
distributions under the Plan and Americore Holdings, LLC, St.
Alexius Properties, LLC, St. Alexius Hospital Corporation #1, and
Success Healthcare 2, LLC will be substantively consolidated into
the St. Alexius Debtors for purposes of distributions under the
Plan. The Izard Debtor and the Pineville Debtor will remain
separate and will not be consolidated under the Plan. The Plan
further provides for the cancellation of Intercompany Claims and
Equity Interests in the Debtors, the Holders of which shall receive
no Distributions from or Beneficial Interest in either Liquidating
Trust under the Plan.
Under the Plan, Class 2 Ellwood General Unsecured Claims totaling
$207,000,000 will recover 0% to 5% of their claims. Each Holder of
an Allowed Ellwood General Unsecured Claim shall receive its Pro
Rata Share of Ellwood Liquidating Trust Units. Class 2 is
impaired.
Class 3 Izard General Unsecured Claims totaling $4,100,000 will
recover 0% to 5% of their claims. Each Holder of an Allowed Izard
General Unsecured Claim shall receive its Pro Rata Share of Izard
Liquidating Trust Units. Class 3 is impaired.
Class 4 Pineville General Unsecured Claims total $2,000,000 and
will recover 0% to 5% of their claims. Each Holder of an Allowed
Pineville General Unsecured Claim shall receive its Pro Rata Share
of Pineville Liquidating Trust Units. Class 4 is impaired.
Class 5 St. Alexius General Unsecured Claims totaling $14,000,000
will recover 0% to 5% of their claims. Each Holder of an Allowed
St. Alexius General Unsecured Claim shall receive its Pro Rata
Share of St. Alexius Liquidating Trust Units. Class 5 is impaired.
Counsel to the Chapter 11 Trustee:
Elizabeth A. Green, Esq.
Jimmy D. Parrish, Esq.
BAKER & HOSTETLER LLP
SunTrust Center, 200 South Orange Avenue, Suite 2300
Orlando, FL 32802-0112
Telephone: (407) 649-4000
Facsimile: (407) 841-0168
E-mail: egreen@bakerlaw.com
jparrish@bakerlaw.com
A copy of the Disclosure Statement dated April 26, 2023, is
available at https://bit.ly/3AMyAWe from PacerMonitor.com.
About Americore Holdings
Americore Holdings, LLC and its affiliates, including Americore
Health LLC, own and operate the Ellwood City Medical Center in
Pennsylvania, Southeastern Kentucky Medical Center (formerly
Pineville Community Hospital), Izard County Medical Center in
Arkansas; and St. Alexius Hospital in St. Louis.
Americore Holdings and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Ky. Lead Case
No.19-61608) on Dec. 31, 2019, listing as much as $50,000 in both
assets and liabilities. Judge Gregory R. Schaaf oversees the
case.
Bingham Greenebaum Doll, LLP and Rose Grasch Camenisch Mains, PLLC
serve as the Debtors' bankruptcy counsel and special counsel,
respectively.
Carol A. Fox was appointed as the Debtors' Chapter 11 trustee. The
trustee is represented by Baker & Hostetler LLP.
Suzanne Koeing was appointed as the Debtor's patient care
ombudsman. The PCO is represented by Saul Ewing Arnstein & Lehr
LLP.
APPLE BIDCO: Moody's Affirms B2 CFR & Cuts 1st Lien Loans to B2
---------------------------------------------------------------
Moody's Investors Service affirmed its ratings for Apple Bidco, LLC
("Atlantic" or the "company"), including the B2 Corporate Family
Rating and the B2-PD Probability of Default Rating. Concurrently,
Moody's downgraded the ratings on the company's senior secured
first lien bank credit facilities to B2 from B1. The company
intends to raise $750 million in incremental first lien term loan
borrowings. Proceeds will be used to pay down $350 million of
second lien term debt and to make a $385 million dividend to
shareholders. Moody's took no action on the existing senior secured
second lien rating of Caa1, and expects that this rating will be
withdrawn upon transaction close. The outlook remains stable.
The downgrade of the senior secured first lien bank credit
facilities reflects the incremental first lien debt that comes from
the refinancing and the dividend recap. It also reflects the
removal of the second lien debt cushion that was previously
supporting the first lien debt.
The following is a summary of the rating actions:
Affirmations:
Issuer: Apple Bidco, LLC
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Downgrades:
Issuer: Apple Bidco, LLC
Senior Secured 1st Lien Revolving Credit Facility, Downgraded to
B2 from B1
Senior Secured 1st Lien Term Loan B, Downgraded to B2 from B1
No Actions:
Issuer: Apple Bidco, LLC
Senior Secured 2nd Lien Term Loan, Caa1
Outlook Actions:
Issuer: Apple Bidco, LLC
Outlook, Remains Stable
RATINGS RATIONALE
The B2 CFR balances Atlantic's high financial leverage and heavy
exposure to the cyclical general aviation market against the
company's strong position as the second largest fixed-base operator
(FBO) within the US. Moody's expects Atlantic to maintain an
aggressive financial policy and anticipates pro forma
debt-to-EBITDA to approach 7x following the proposed dividend
recap. Moody's anticipates modest free cash generation over the
balance of 2023 and 2024, with FCF-to-debt in the low
single-digits.
The B2 CFR is supported by Atlantic's scale advantages that arise
from its geographically diverse footprint of 103 locations, many of
which are situated in high traffic metropolitan locations.
Atlantic's strong gross margins reflect its good competitive
standing within the highly fragmented FBO industry where the
company benefits from its position as either the sole or joint
provider of FBO services at 75% of its locations. Meaningful
barriers to entry, including long-dated leases and limited
developable land at many FBO airports, add further credit support.
Moody's views the FBO industry as being cyclical and vulnerable to
economic downturns with flight volumes strongly correlated with
changes in GDP. Atlantic's dividend and the resultant increase in
financial risk that limits near-term financial flexibility comes at
a time of elevated economic uncertainty.
The stable outlook reflects Moody's expectations of modest earnings
growth over the next 12 - 18 months, which will result in a gradual
improvement in Atlantic's credit metrics.
Moody's expects Atlantic to maintain good liquidity over the next
12 - 18 months. Cash will be around $144 million at the close of
the transaction. Moody's expects modestly positive free cash
generation during 2023 with FCF-to-debt (before dividends) in the
low single-digits. Amortization on term debt is 1% or $27 million
per annum and Atlantic has no near-term principal obligations.
External liquidity is provided by a $325 million revolving credit
facility that expires in 2026. Moody's does not expect Atlantic to
be reliant on the facility. The revolver contains a springing first
lien net leverage ratio of 9.5x that comes into effect when
revolver usage exceeds the greater of $130 million or 40% of the
facility. The term loan facilities are covenant lite.
The senior secured first lien bank credit facilities will represent
the entirety of Atlantic's funded debt structure. The senior
secured bank credit facilities are rated identically to the
corporate family rating of B2. The bank credit facilities are
comprised of a $325 million senior secured revolver due 2026 and
around $2.7 billion of senior secured term loans. The credit
facilities benefit from upstream subsidiary guarantees and are
secured by substantially all of the borrower's and guarantor's
assets.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to a ratings upgrade include improved
liquidity with free cash flow-to-debt consistently in the
mid-single digits and a more conservative financial policy with
debt-to-EBITDA sustained below 6x.
Factors that could lead to a ratings downgrade include lower
general aviation traffic volumes that result in weaker earnings.
Debt-to-EBITDA above 7x, EBITDA-to-Interest below 2.5x, or
weakening liquidity could also result in a downgrade.
Apple Bidco, LLC ("Atlantic"), headquartered in Plano, Texas, is a
fixed base operator (FBO) at 103 general aviation locations across
the US. The company's FBOs provide fueling and fuel related
services, aircraft parking and hangar services to owners/operators
of jet aircraft, primarily in the general aviation sector of the
air transportation industry, but also to commercial, military,
freight and government aviation customers. Atlantic is owned by KKR
& Co. Inc.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
APPLE STREET: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Apple Street One Twenty, LLC
f/k/a 451 Apple Street LLC
2452 Scenic Drive
Salt Lake City, UT 84109
Business Description: The Debtor is a Single Asset Real Estate
as defined in 11 U.S.C. Section 101(51B).
Chapter 11 Petition Date: May 10, 2023
Court: United States Bankruptcy Court
District of Utah
Case No.: 23-21870
Debtor's Counsel: Ted F. Stokes, Esq.
STOKES LAW PLLC
2072 North Main Suite 102
North Logan, UT 84341
Tel: (435) 213-4771
Fax: (888) 443-1529
Email: ted@stokeslawpllc.com
- and -
Ryan E. Simpson, Esq.
ASCENT LAW
8833 South Redwood Road, Suite C
West Jordan, UT 84088
Tel: (801) 432-8682
Fax: (888) 247-2541
Email: ryan.simpson@ascentlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Steven K. Walker 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/EI4XR3A/Apple_Street_One_Twenty_LLC__utbke-23-21870__0001.0.pdf?mcid=tGE4TAMA
ARCHDIOCESE OF NEW ORLEANS: Half of Judges Recused from Case
------------------------------------------------------------
Stephanie Riegel of Nola.com reports that days after U.S. District
Court Judge Gerard Guidry recused himself from hearing appeals
related to the Archdiocese of New Orleans bankruptcy, U.S. District
Court Judge Lance Africk also has recused himself from the case.
Judge Guidry recused himself late Friday, May 5, 2022, after the
Associated Press reported that the former Louisiana Supreme Court
justice donated $50,000 in leftover campaign contributions to New
Orleans-area Catholic charities before affirming several rulings in
the case that were favorable the church.
The archdiocese's bankruptcy is being overseen by U.S. Bankruptcy
Judge Meredith Grabill, and appeals of her rulings by parties in
the case are heard by U.S. District Court judges. In his order,
Guidry said he did not believe recusal was "mandated" but that he
wanted to "avoid any possible appearance of personal bias or
prejudice."
Africk did not explain his reasons, but cited a federal law that
requires judges to recuse themselves if there is any reason for
their impartiality to reasonably be questioned.
With Guidry and Africk, six of the 13 federal district judges in
New Orleans have now recused themselves from the case, which was
filed three years ago this month amid mounting claims of child sex
abuse at the hands of Roman Catholic clergy.
Earlier in the cases, four other federal judges recused themselves
because of their close ties to the church, its charities or the
attorneys representing it.
The latest recusals, as with the earlier ones, underscore how
deeply the Roman Catholic church is woven into the fabric of New
Orleans and how that adds to the challenges of reaching a
settlement in the case anytime soon.
The Archdiocese of New Orleans declined to comment.
Dragging on
The archdiocese filed for Chapter 11 bankruptcy protection on May
1, 2020 and nearly 500 people have since put in claims for
compensation based on alleged abuse at the hands of priests or
other clergy.
But three years and more than $20 million in legal bills later,
there are few signs the church and its creditors and abuse victims
are close to a resolution.
That's in part because they have been fighting in court over
documents that the archdiocese hasn't turned over to attorneys for
the abuse survivors, among other issues.
“Anytime you deal with ancillary issues, whether it's recusing
judges or sanctioning lawyers, that slows things down and takes
away from efforts that could be directed toward the merits of the
case,” said Loyola University constitutional law professor Dane
Ciolino.
Though the meat of the case is playing out in bankruptcy court,
those side disputes are being fought in the district court because
appeals of bankruptcy court matters are heard by district court
judges.
Guidry, a 2019 appointee to the federal bench, had been playing a
key role in hearing those matters, court records show, and had
affirmed rulings by Grabill in favor of the church in recent
months.
Many ties
Guidry issued his recusal order late Friday, May 5, 2023. Court
records show that the matters before his court were initially
reallotted to U.S. District Judge Ivan Lemelle. But that,
apparently, was a clerical error, as Lemelle recused himself in
2020 from the case citing his affiliation with the nonprofit
Catholic Communities Foundation, where he served as a member of the
board of directors.
The court then reallocated the case to Africk, who also recused
himself. U.S. District Judge Barry Ashe, who was appointed to the
federal bench in 2018 by President Donald Trump, will now hear
appeals and other contested matters.
Earlier in the case, U.S. District Judge Wendy Vitter recused
herself because she served as general counsel for the archdiocese.
U.S. District Judge Sarah Vance recused herself because her husband
is a partner with Jones Walker, which represents the archdiocese.
U.S. District Judge Jay Zainey recused himself because of his close
ties to the church and personal friendship with Archbishop Gregory
Aymond.
There are seven other members of the federal bench in the U.S.
Eastern District of Louisiana and one vacancy.
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.
ASCENT RESOURCES: Fitch Affirms LongTerm IDR at B, Outlook Positive
-------------------------------------------------------------------
Fitch Ratings has affirmed Ascent Resources Utica Holdings LLC's
(Ascent) Long-Term Issuer Default Rating (LT IDR) at 'B'. The
Rating Outlook remains Positive. Fitch has also affirmed Ascent's
first lien credit facility at 'BB'/'RR1'.
Fitch has withdrawn the 'BB-' rating on Ascent's second lien (2L)
term loans because they have been repaid and are therefore no
longer relevant to the agency's coverage. Fitch has upgraded the
senior unsecured debt to 'B+'/'RR3' from 'B'/'RR4' based on
improved recovery prospects due to the repayment of the 2L term
loans. The upgrade resolves the Rating Watch Positive placed on
those issue ratings on April 28, 2023.
Ascent's ratings reflect expectations of positive FCF over the
rating horizon, debt reduction, moderate leverage, an above-average
production scale and an adequate hedge book. These factors are
offset by fairly high revolver utilization and relatively high firm
transportation costs, which slightly decrease netbacks.
Fitch believes Ascent will maintain access to debt capital markets
and generate FCF to reduce refinancing risk despite volatile
natural gas prices and sometimes challenging debt capital markets.
The Positive Outlook reflects the company's proactive approach to
dealing with the 2L term loans and expectations that the company
will use FCF to reduce revolver borrowings and total debt over the
next 12-24 months.
KEY RATING DRIVERS
Improving FCF Generation: Ascent's transition to growing positive
FCF generation is supportive of the ratings. It generated $1
billion of FCF in 2022, according to Fitch calculations. Fitch
expects the company to be FCF positive over the rating horizon and
that proceeds will be used for debt reduction. Ascent is expected
to maintain production in the 2.0-2.2 billion cubic feet equivalent
per day (bcfe/d) range, which should allow for positive FCF at
Fitch's base case prices. Further FCF growth could be realized by
lower firm transportation costs, continued drilling and completion
efficiencies, and interest savings from debt
reduction/refinancing.
Improved Capital Structure and Maturity Schedule: The presence of
the 2nd lien notes with a 2025 maturity and the revolver with a
2024 maturity were an overhang to the credit. The extension of the
revolver to 2027 and the increase in the commitment to $2 billion
is a credit positive. Repayment of the 2nd lien notes removed the
2025 maturity, simplified the capital structure, and will lead to
improved recovery for the unsecured notes. Fitch expects management
to use expected FCF over the next several years to reduce revolver
borrowings. This should position the company to have capital
markets access such that it can refinance the notes maturing in
2026.
Netbacks Curtailed: Ascent generates strong realized pricing
compared with its peers, but this is offset by higher operating
costs due to high firm transportation costs and higher interest
costs. Although firm transportation costs are relatively high,
Fitch believes the risk of Ascent being exposed to production
mismatches is very low as the volumetric commitments are well below
production levels. The various contracts expire over time until
2032; therefore, Fitch does not expect material savings in the near
term. Lease operating expenses continue to move lower and the
removal of the high cost 2L term loans and expected reduction in
revolver borrowings over time will decrease interest expense.
Protective Hedging Program: Ascent has hedged 77% of expected gas
production for the remainder of 2023 at $3.19/thousand cubic foot
of gas (mcf) and 63% of 2024 production at $3.48/mcf. Fitch
believes that the hedging program protects current capital spending
and debt reduction plans given the pricing environment. While many
peers have begun to deemphasize hedging, Ascent maintains a robust
hedging program, which is a credit positive.
DERIVATION SUMMARY
Ascent's EBITDA leverage of 1.5x as of Dec. 31, 2022 is in line
with other peer-rated entities.
Ascent is a large natural gas producer within the 'B' rating
category with 2022 production of 1,971 mmcfe/d, which is larger
than all of its 'B' category peers. The nearest peer is Comstock
(B+/Stable) at 1,373 mmcfe/d. Ascent is also larger than CNX
Resources (BB+/Stable) at 1,589 mmcfe/d. Production is well below
other 'BB' rated issuers including Chesapeake Energy (BB+/Positive)
at 4,000 mmcfe/d and Southwestern Energy (BB+/Positive) at 4,747
mmcfe/d.
Ascent generated unhedged netbacks of $4.93/thousand cubic feet
equivalent (mcfe) in 2022, which is slightly below all of its peers
other than Aethon (B/Stable) at $4.33/mcfe and Gulfport (B+/Stable)
at $4.83/mcfe. Ascent generates a relatively high realized price
compared with its peers, but this is offset by higher firm
transportation and interest costs.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Henry Hub natural gas price of $3.50 per thousand cubic feet
(mcf) in 2023, $3.50/mcf in 2024, $3/mcf in 2025 and $2.75/mcf
thereafter;
- West Texas Intermediate oil price of $80/barrel (bbl) in 2023,
$70/bbl in 2024, $60/bbl in 2025 and $50/bbl thereafter;
- Production flat to low single digit growth over the forecast
horizon;
- Capex of $925 million in 2023 and $850 million to $900 million
over the remainder of the forecast horizon.
- FCF is expected to address debt reductions. No assumptions of
dividends or acquisitions/divestitures;
- $597 million 2026 maturity is refinanced with a $500 new bond
issue and cash on the balance sheet.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Material FCF generation that is applied to debt repayment;
- Mid-cycle EBITDA leverage sustained 2.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Reduction in production that does not support positive FCF
generation;
- Weakening of commitment to stated financial policy, including the
hedging program;
- Mid-cycle EBITDA leverage sustained above 3.5x.
ISSUER PROFILE
Ascent is one of the largest producers of natural gas in the U.S.
in terms of daily productions. It is focused on exploring for,
developing, producing and operating natural gas and oil properties
in the Utica Shale in the Appalachian Basin.
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
----------- ------ -------- -----
Ascent Resources
Utica Holdings, LLC LT IDR B Affirmed B
senior secured LT BB Affirmed RR1 BB
Senior Secured
2nd Lien LT WD Withdrawn BB-
senior unsecured LT B+ Upgrade RR3 B
ASIA PACIFIC: Kathlyn Selleck Named Subchapter V Trustee
--------------------------------------------------------
Tiffany Carroll, Acting U.S. Trustee for Region 15, appointed
Kathlyn Selleck as Subchapter V trustee for Asia Pacific Financial
Management Group, Inc.
Ms. Selleck will be paid an hourly fee of $200 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Selleck declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Kathlyn Selleck
P.O. Box 315396
Tamuning, Guam 96931
Email: cetguam@gmail.com
Phone: (671) 689-8380
About Asia Pacific Financial
Management Group
Asia Pacific Financial Management Group, Inc. provides professional
advice based on proven financial principles to help clients plan
for retirement years, for college expenses and for other
specialized savings and investment goals. The company is based in
Hagatna, Guam.
Asia Pacific Financial Management Group filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Guam
Case No. 23-00005) on April 25, 2023, with $1 million to $10
million in both assets and liabilities. Sandra McKeever, AIF,
president and chief executive officer of Asia Pacific Financial
Management Group, signed the petition.
Judge Frances M. Tydingco-Gatewood oversees the case.
Joyce C.H. Tang, Esq., at Civille & Tang, PLLC is the Debtor's
counsel.
ATHEN'S INC: Edward Burr Named Subchapter V Trustee
---------------------------------------------------
The U.S. Trustee for Region 17 appointed Edward Burr, Eq., as
Subchapter V trustee for Athen's Inc.
Mr. Burr, a practicing attorney in Scottsdale, Ariz., will be paid
an hourly fee of $425 for his services as Subchapter V trustee and
will be reimbursed for work-related expenses incurred.
Mr. Burr declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Edward Burr, Esq.
10191 E. Shangri La Road
Scottsdale, AZ 85260
Phone: (602) 418-2906
Email: Ted@macrestructuring.com
About Athen's Inc.
Las Vegas-based Athen's Inc. provides passenger transportation
services.
Athen's filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Nev. Case No. 23-11659) on April 27,
2023, with $793,698 in assets and $2,890,982 in liabilities.
Anthony Dobbs, president of Athen's, signed the petition.
Judge Natalie M. Cox oversees the case.
Candace C. Carlyon, Esq., at Carlyon Cica Chtd., is the Debtor's
counsel.
ATLAS PURCHASER: $250M Bank Debt Trades at 46% Discount
-------------------------------------------------------
Participations in a syndicated loan under which Atlas Purchaser Inc
is a borrower were trading in the secondary market around 53.8
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $250 million facility is a Term loan that is scheduled to
mature on May 18, 2029. The amount is fully drawn and
outstanding.
Atlas Purchaser, Inc., which does business as Alvaria, Inc.,
acquired the assets of Aspect Software in a leveraged buyout in
2021. Aspect is a provider of call center software and solutions.
AVENIR MEMORY: Court Directs U.S. Trustee to Appoint PCO
--------------------------------------------------------
Judge Brenda Moody Whinery of the U.S. Bankruptcy Court for the
District of Arizona directed the U.S. Trustee for Region 14 to
appoint a patient care ombudsman for Avenir Memory Care @
Knoxville, LP.
The bankruptcy judge finds that the provisions of Section 333(a)(1)
of the Bankruptcy Code for appointment of a patient care ombudsman
apply to Avenir Memory Care after having filed its bankruptcy
petition, indicating that it operates a health care business.
The bankruptcy judge further ordered that Avenir's objection to the
U.S. Trustee's motion for the appointment of a patient care
ombudsman is overruled.
About Avenir Memory Care @ Knoxville
Avenir Memory Care @ Knoxville, LP operates a nursing care facility
in Scottsdale, Ariz.
Avenir Memory Care @ Knoxville filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz.
Case No. 23-02047) on March 31, 2023, with $10 million to $50
million in both assets and liabilities. David L. Craik, president
and director of the General and Limited Partners, signed the
petition.
Judge Brenda Moody Whinery oversees the case.
Philip R. Rudd, Esq., at Sacks Tierney, P.A. represents the Debtor
as counsel.
AVENIR MEMORY: Gets OK to Hire Sacks Tierney as Bankruptcy Counsel
------------------------------------------------------------------
Avenir Memory Care @ Fayetteville LP received approval from the
U.S. Bankruptcy Court for the District of Arizona to hire Sacks
Tierney P.A. as its attorneys.
The firm will assist the Debtor in all matters associated with the
Debtor's Chapter 11 bankruptcy proceeding and represent the Debtor
in all hearings before the Bankruptcy Court; and to negotiate and
resolve all issues related to the Debtor's Chapter 11 proceeding.
The firm will be paid at these rates:
Partners $385 to $600 per hour
Associates $300 to $375 per hour
Paralegals $205 to $230 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Philip Rudd, Esq., a partner at Sacks Tierney, 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:
Philip R. Rudd, Esq.
SACKS TIERNEY P.A.
4250 N Drinkwater Blvd., 4th Floor
Scottsdale, AZ 85251-3693
Tel: 480-425-2600
Email: Philip.Rudd@SacksTierney.com
About Avenir Memory Care @ Fayetteville
Avenir Memory Care @ Fayetteville operates a nursing care
facility.
Avenir Memory Care @ Fayetteville LP filed its voluntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz.
Case No. 23-02640) on April 25, 2023. The petition was signed by
David L. Craik as president and director of the General and Limited
Partners. At the time of filing, the Debtor estimated $10 million
to $50 million in both assets and liabilities.
Judge Brenda Moody Whinery presides over the case.
Philip R. Rudd, Esq. at SACKS TIERNEY P.A. represents the Debtor as
counsel.
AVISON YOUNG: $375M Bank Debt Trades at 27% Discount
----------------------------------------------------
Participations in a syndicated loan under which Avison Young Canada
Inc is a borrower were trading in the secondary market around 73
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $375 million facility is a Term loan that is scheduled to
mature on January 31, 2026. About $361 million of the loan is
withdrawn and outstanding.
Avison Young (Canada) Inc. provides real estate services. The
Company offers consulting, advisory, lease administration,
investment and asset management, and mortgage services. Avison
Young (Canada) serves customers worldwide.
BADGER FINANCE: $268.7M Bank Debt Trades at 23% Discount
--------------------------------------------------------
Participations in a syndicated loan under which Badger Finance LLC
is a borrower were trading in the secondary market around 77
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $268.7 million facility is a Term loan that is scheduled to
mature on September 28, 2024. About $255.9 million of the loan is
withdrawn and outstanding.
Based in Little Chute, Wisconsin, Badger Finance, LLC is an
intermediate holding company of Trilliant Food and Nutrition, LLC.
Horseshoe Beverage Company, LLC, and affiliated companies. The
company is a U.S. manufacturer of private label and value branded
beverage products, mainly single serve coffee pods. The company’s
branded coffee products are primarily sold under its Victor Allen
brand. Badger also recently expanded into ready-to-drink (RTD)
coffee beverages through its Horseshoe Beverages subsidiary. Badger
is sponsored by private equity firm Blackstone Group, which
acquired the company in 2017 and holds a majority equity interest
in the company.
BALL CORP: Moody's Rates New $1BB Unsecured Notes Due 2029 'Ba1'
----------------------------------------------------------------
Moody's Investors Service assigned a Ba1 to Ball Corporation's
proposed $1 billion senior unsecured notes due 2029. Proceeds from
this bond issuance will be used substantially to repay revolver
borrowings and other debt, which may include the 4% senior
unsecured notes due in November 2023. Moody's expects the proposed
notes to be pari passu with Ball's existing unsecured notes. Ball's
Ba1 corporate family rating, Ba1-PD Probability of Default Rating,
and all other ratings, including the Speculative Grade Liquidity
rating (SGL) of SGL-2, are unchanged. The outlook is negative.
The proposed note issuance will free up financial flexibility for
Ball Corporation. Moody's expect free cash flow to be generated in
2023, where proceeds will further provide financial flexibility in
addressing near term maturities.
The negative outlook reflects elevated execution risk in reducing
the company's high leverage and its return to generating normalized
free cash flow.
Assignments:
Issuer: Ball Corporation
Senior Unsecured Notes, Assigned Ba1
RATINGS RATIONALE
Ball's Ba1 CFR reflects Ball's superior global position in the
consolidated and recession resilient metal can industry, and the
healthy backlog of its aerospace business. The Ba1 rating also
considers the company's high leverage and a shareholder friendly
financial policy.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
A ratings upgrade would require less aggressive financial policies,
liquidity improvement, and a migration to an investment grade
capital structure. Specifically, the ratings could be upgraded if
adjusted total debt-to-EBITDA (inclusive of Moody's adjustments) is
below 3.5x, free cash flow-to-debt above 10%, and
EBITDA-to-interest greater than 6.0x.
A ratings downgrade may occur if there is a deterioration in the
company's business profile, credit metrics, or liquidity.
Specifically, if adjusted total debt-to-EBITDA is above 4.25x
(inclusive of Moody's adjustments) without a reasonable path to
fall below this threshold, free cash flow-to-debt falls below 7%,
and EBITDA-to-interest is below 5.5x.
Westminster, Colorado based Ball Corporation is a manufacturer of
metal packaging, primarily for beverages, and a supplier of
aerospace and other technologies and services to government and
commercial customers. Revenue for the twelve months ended March 31,
2023 totaled $15.1 billion.
The principal methodology used in this rating was Packaging
Manufacturers: Metal, Glass and Plastic Containers published in
December 2021.
BANDED HORN: Court OKs Interim Cash Collateral Access
-----------------------------------------------------
Banded Horn Brewing Company, LLC sought and obtained entry of an
order from the U.S. Bankruptcy Court for the District of Maine
authorizing the use of cash collateral on an interim basis in
accordance with the budget.
The Debtor requires the use of cash collateral to continue
operating its business at all locations.
Prior to the Petition Date, the Debtor entered into four loan
agreements with Bangor Savings Bank. The Debtor also entered into
a promissory note with US Small Business Association. At the time
of filing, the SBA loan was not in default and payments were not
due to begin according to the terms of the loan until January
2024.
As adequate protection of the interests of BSB, the Debtor will
make monthly adequate protection payments to BSB in an amount not
less than $2,032 not later than May 15, 2023, and, if the Order is
continued following the Second Interim Hearing, continuing on the
15th of each following month through and including September 15,
2023. As necessary, the Debtor will file a revised cash plan on or
before September 1, reflecting the continued use of cash collateral
for an additional 13 weeks.
As additional adequate protection of BSB's interests, BSB will have
replacement liens in and on property of the same type in which BSB
had a security interest before the start of this case, to the same
validity, perfection, enforceability, and priority as any security
interest BSB had in such prepetition collateral, including cash
collateral, immediately prior to the start of the case. The
Replacement Liens granted will be automatically perfected without
further act.
The Debtor will keep BSB's collateral properly maintained and
insured and will provide proof of insurance on BSB’s collateral
no later than June 10, 2023.
The Debtor will provide BSB, on the Tuesday following the end of
each budget week, a budget to actual variance report for the
proceeding week.
A continued interim hearing on the matter is set for May 17 at
10:30 a.m.
A copy of the motion is available at https://bit.ly/3LF7B42 from
PacerMonitor.com.
A copy of the order is available at https://bit.ly/3HQhCdz from
PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3VCSnB8 from
PacerMonitor.com.
The Debtor projects total disbursements, on a weekly basis, as
follows:
$49,619 for the week ending May 5, 2023;
$49,619 for the week ending May 12, 2023;
$49,619 for the week ending May 19, 2023;
$49,619 for the week ending May 26, 2023;
$49,619 for the week ending June 2, 2023;
$49,619 for the week ending June 9, 2023;
$49,619 for the week ending June 16, 2023;
$49,619 for the week ending June 23, 2023; and
$49,619 for the week ending June 30, 2023.
About Banded Horn Brewing Company LLC
Banded Horn Brewing Company LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D. Maine Case No. 23-20091) on
May 2, 2023. In the petition signed by Ian McConnell, founding
member, the Debtor disclosed up to $500,000 in assets and up to $10
million in liabilities.
Judge Peter G. Cary oversees the case.
Tanya Sambatakos, Esq., at Molleur Law Firm, represents the Debtor
as legal counsel.
BANYAN CAY: Plan & Disclosures Due in 120 Days
----------------------------------------------
Judge Erik P. Kimball has entered an order, that Banyan Cay Resort
& Golf, LLC, et al. or any debtor and/or any party in interest may
file a request for the Court to hold a status conference under 11
U.S.C. s 105(d).
Each debtor must file a plan and disclosure statement no later than
120 days after the date of the applicable order for relief under
this chapter. If any debtor fails to file timely a plan and
disclosure statement, the Court may set a hearing to consider
whether that Debtor's case should be dismissed or converted.
About Banyan Cay Resort & Golf
Banyan Cay Resort & Golf, LLC and affiliates operate resorts and
golf clubs. The Debtor sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-12386) on March
29, 2023. In the petition signed by Gerard A. McHale, McHale, P.A.,
proposed chief restructuring officer, the Debtor disclosed up to
$500 million in both assets and liabilities.
Judge Mindy A. Mora oversees the case.
Gerard McHale of McHale, PA serves as CRO and CEO of the Debtors.
Joseph A. Pack, Esq., at Pack Law, represents the Debtor as legal
counsel. Keen-Summit Capital Partners LLC serves as marketing agent
and broker for the Debtors.
BETHLEHEM-CENTER SCHOOL: Moody's Cuts Issuer & GOLT Ratings to B2
-----------------------------------------------------------------
Moody's Investors Service has downgraded Bethlehem-Center School
District, PA's issuer and general obligation limited tax (GOLT)
ratings to B2 from B1. The district has $11.9 million in net direct
debt outstanding as of June 30, 2021. The outlook remains
negative.
RATINGS RATIONALE
The downgrade of the issuer rating reflects the district's
continued financial deterioration with a negative fund balance and
limited cash position, the result of five years of structurally
imbalanced operations. The district relies on rolling cash flow
borrowing to finance deficits and meet debt service payments.
Enrollment is expected to remain pressured, particularly with
growing charter school presence in the district. Additionally, the
rating incorporates the district's average debt burden, and its
weak economic base which limits revenue raising opportunities.
Governance is material to the credit rating. The district's
transparency and disclosure is not in line with peers due to past
audit delays. Budget management is also a material governance
weakness.
The absence of distinction between the issuer and GOLT ratings is
based on the district's general obligation full faith and credit
pledge. The GOLT rating also reflects Pennsylvania school
districts' ability to apply for exceptions to the cap on property
tax increases for debt service and the Commonwealth's history of
granting such exceptions.
RATING OUTLOOK
The negative outlook reflects the expectation that the school
district's financial position will remain highly pressured for the
near to medium term.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
Significant revenue increase, such that cash flow is positive in
all months of the year
Sustained structural balance that moderates the current fund
balance deficit or leads to material growth in reserves and
liquidity
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
Failure to provide for timely principal or interest payments on
any debt obligation
Contraction of the tax base and deterioration of resident wealth
and income
LEGAL SECURITY
The district's rated debt is secured by its general obligation
limited tax (GOLT) pledge, which is subject to the limitations of
Pennsylvania's Act 1 index.
PROFILE
Bethlehem-Center School District is located in the southeast corner
of Washington County, PA (Aa2), approximately 28 miles southeast of
the City of Pittsburgh, PA (A1 stable). The district covers an area
of approximately 55 square miles which includes the boroughs of
Beallsville, Centerville, Deemston and Marianna and the Townships
of East Bethlehem and West Bethlehem. The district operates one
elementary school, one middle school and one high school and has an
enrollment of approximately 985 students.
METHODOLOGY
The principal methodology used in these ratings was US K-12 Public
School Districts Methodology published in January 2021.
BEVERLY COMMUNITY: Has Deal on Cash Collateral Access
-----------------------------------------------------
Beverly Community Hospital Association and its debtor-affiliates
ask the U.S. Bankruptcy Court for the Central District of
California, Los Angeles Division, for entry of an order authorizing
further use of cash collateral in accordance with its agreement
with U.S. Bank National Association, as indenture trustee pursuant
to existing funded indebtedness facilities.
The April 27 Cash Collateral Order extended cash collateral usage
as described in an interim order filed on April 25 and provided,
among other things, that the Debtors were authorized to use cash
collateral under the terms and conditions enumerated therein.
The April 27 Cash Collateral Order set the following briefing
schedule for the final hearing on the Debtor's request:
1. The hearing will be held on May 17, 2023, at 9 a.m. Pacific
time;
2. Any opposition to the Motion will be filed and served on or
before 5 p.m. Pacific time on May 3, 2023; and
3. Any reply in support of the Motion will be filed and served
on or before 5 p.m. Pacific time on May 10, 2023.
The April 27 Cash Collateral Order authorized the Debtors to use
cash collateral through 5 p.m. Pacific time on May 12, 2023, in
accordance with the terms and conditions, including the adequate
protection, enumerated therein.
The California Statewide Communities Development Authority issued
California Statewide Communities Development Authority Revenue
Bonds (Beverly Community Hospital Association), Series 2015 in the
aggregate principal amount of $39,725,000 for the benefit of the
Debtors pursuant to a Bond Indenture, dated as of December 1, 2015,
between the Authority and U.S. Bank, as trustee thereunder, and the
proceeds of the 2015 Bonds were lent by the Authority to the
Debtors pursuant to a Loan Agreement, dated as of December 1,
2015.
The Authority also issued California Statewide Communities
Development Authority Revenue Bonds (Beverly Community Hospital
Association), Series 2017 in the aggregate principal amount of
$19,840,000 for the benefit of the Debtors pursuant to a Bond
Indenture, dated as of May 1, 2017, between the Authority and U.S.
Bank, as trustee thereunder, and the proceeds of the 2017 Bonds
were lent by the Authority to the Debtors pursuant to a Loan
Agreement, dated as of May 1, 2017.
Each of the two facilities were issued and secured pursuant to a
Master Trust Indenture dated as of December 1, 2015 among the
Debtors and U.S. Bank as Master Trustee.
The collateral granted by the Debtors pursuant to the Indenture
consists of (i) the real property that constitutes the Beverly
Community Hospital; and (ii) "Gross Receivables," is defined in the
Indenture as “all of the accounts, chattel paper, instruments;
general intangibles. . . of each Debtor." The Debtors agree that
the Gross Receivables and the proceeds thereof constitute cash
collateral as defined by 11 U.S.C. section 363(a).
The Debtors believe that within the past year or two, U.S. Bank may
have transferred its trust business to U.S. Bank Trust Company,
National Association. If the transfer did occur, the Indenture
Trustee shall refer to U.S. Bank Trust Company, National
Association.
The Debtors and the Indenture Trustee are engaging in settlement
discussions that, if successful, would resolve the Motion. They
therefore seek to postpone for a short period the deadlines for
filing any opposition and any reply to the to enable them to
concentrate on settlement. Moreover, to avoid yet a third interim
order re the use of cash collateral, the Indenture Trustee has
agreed to the use of cash collateral for an additional week to and
including May 17, 2023, under the same terms and conditions as
specified in the April 27 Cash Collateral Order.
The Indenture Trustee will be granted a replacement lien on Gross
Receivables, which for clarity, includes any insurance or utility
refunds received by the Debtors.
The Indenture Trustee will be 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 for any diminution in the value
of its collateral, the Indenture Trustee will have a super-priority
administrative expense claim pursuant to 11 U.S.C. Section 507(b).
As additional adequate protection, the Indenture Trustee will be
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 such
fees and expenses is subject to the paragraph of the debtor in
possession stipulation that addresses fees and expenses of the
professionals engaged by the Debtors.
A final hearing on the matter is set for May 17 at 9 a.m.
A copy of the motion is available at https://bit.ly/3NMEI8A 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: Seeks Cash Collateral Access
-------------------------------------------------
Bighorn Restaurants, LLC and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Colorado for authority to use
cash collateral in accordance with the budget and provide adequate
protection.
The Debtors require the use of cash collateral to pay operating
expenses associated with their business operations.
Cadence Bank, formerly known as Cadence Bank, N.A., has an interest
in the cash collateral.
Prior to the Petition Date, the MS Facilities LLC made a loan in
the amount of $21.5 million as evidenced by the Term Loan Note
dated December 9, 2020 in the original principal amount of $21.5
million. In connection therewith, the Debtors and the Lender
entered into a Loan and Security Agreement, dated December 9, 2020,
as amended by the Forbearance and Amendment to Loan Agreement dated
March 3, 2023.
Pursuant to the Loan Documents, the Debtors incurred loan
obligations in favor of Lender. Those Secured Obligations were in
default as of the Petition Date. As of the Petition Date, the
Secured Obligations owed to the Lender in the amount of $22.4
million as of the Petition Date, consisting of principal in the
amount of $22.121 million and unpaid accrued interest in the amount
of $206,717, plus attorneys' fees and expenses existing immediately
prior to the Petition Date.
As adequate protection, the Agent, on behalf of itself and for the
benefit of the Lender, will be granted a continuing replacement
security interest in, and lien, junior only to the Carve Out. The
Replacement Liens will have the same priority, validity, force,
extent, and effect as the liens that they replace, effective as of
the Petition Date without the necessity of Agent taking any further
action, upon the right, title and interest in the following
property of the Debtors: (a) all Prepetition Collateral of Agent
and/or Lender, including all proceeds, profits, rents, and products
thereof; and (b) property acquired by the Debtors after the
Petition Date, which is of the same nature, kind, and character as
the Prepetition Collateral, and all proceeds, profits, rents, and
products thereof.
As additional adequate protection, the Agent and the Lender's claim
in the Chapter 11 Case will have priority under 11 U.S.C. section
507(b) to the extent, if any, that the adequate protection for the
Debtor's use of the Prepetition Collateral and cash collateral
provided proves to be inadequate.
A copy of the motion is available at https://bit.ly/42cCqE1 from
PacerMonitor.com.
About Bighorn Restaurants, LLC
Bighorn Restaurants, LLC and affiliates constitute one of the
largest current franchisees of Hardee's restaurants. The Debtors
formerly operated over 145 Hardee's restaurants, recently closed 39
restaurants, and currently operate 108 restaurants. The Restaurants
span the states of Alabama, Florida, Georgia, South Carolina,
Kansas, Missouri, Wyoming, and Montana. The Restaurants are
operated by Debtors Empire, Heartland, Bighorn, and Atlantic Star.
Bighorn Restaurants sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Colo. Case No. 23-11919) on May 4, 2023.
In the petition signed by Dewey R. Brown, CEO, the Debtor disclosed
up to $10 million in assets and up to $50 million in liabilities.
Judge Michael E. Romero oversees the case.
The Debtors tapped Markus Williams Young and Hunsicker as legal
counsel, Brookwood Associates, LL as investment banker,
MorrisAnderson and Associates, Ltd. as financial advisor, and BMC
Group, Inc. as noticing agent.
BIONIK LABORATORIES: Signs Distribution Agreement With Pro-Med
--------------------------------------------------------------
Bionik Laboratories Corp. announced it has entered into a
distribution agreement with Pro-Med Technology LTD, a provider of
medical equipment based in Hong Kong. The agreement between the
two companies will grant Pro-Med Technology with the exclusive
rights to market and sell Bionik's InMotion Arm/Hand robotic device
in Hong Kong.
Bionik's InMotion robots are used in rehabilitation following
stroke and other neurological conditions to help patients regain
arm and hand movement. The robot guides patients through specific
tasks, aiming to improve motor control of the arm and hand by
increasing strength, range of motion and coordination, and
assisting with the provision of efficient, effective, intensive
sensorimotor therapy. InMotion robots assist patients as needed
while measuring the position, speed and acceleration to adjust to
the patient's needs during each session. Extensive clinical data
on more than 1,000 patients has demonstrated that the InMotion
robots provide more effective patient outcomes than traditional
therapy alone.
"By entering into this agreement with Pro-Med Technology, we are
expanding our global footprint into Hong Kong," said Richard Russo
Jr., chief executive officer at Bionik Laboratories. "As stroke
cases continue to impact the Asian community, there is a great need
for advanced rehabilitation technologies to help patients regain
mobility and their independence. Pro-Med Technology is the right
partner to penetrate the market and allow Bionik to become the
standard of care for stroke rehabilitation across Hong Kong and we
look forward to a long-term relationship with the Pro-Med team."
Pro-Med Technology LTD are leaders within rehabilitation and sports
sciences, providing innovative technology solutions for their
customers across leading hospitals, clinics, education institutions
and schools, welfare organizations and fitness centers.
"We look to provide the best solutions in technology, products, and
services to all our customers. We are pleased to partner with
Bionik to bring the InMotion devices to those who need them the
most," said Terence Yu, Founder & CEO, Pro-Med Technology. "We
look forward to showcasing how InMotion can provide positive
outcomes to patients affected by strokes to our customers, and the
opportunity to grow our sales pipeline."
Bionik InMotion devices are now present across 20 countries
worldwide. This recent distribution agreement follows the
Company's continued efforts to expand InMotion's presence in Hong
Kong, as well as other new markets including the EU, Canada, and
Brazil. To learn more about the Company and its InMotion devices,
visit https://bioniklabs.com/
About BIONIK Laboratories
Bionik Laboratories Corp. -- http://www.BIONIKlabs.com-- is a
robotics company focused on providing rehabilitation and mobility
solutions to individuals with neurological and mobility challenges
from hospital to home. The Company has a portfolio of products
focused on upper and lower extremity rehabilitation for stroke and
other mobility-impaired patients, including three products on the
market and three products in varying stages of development.
Bionik reported a net loss and comprehensive loss of $10.41 million
for the year ended March 31, 2022, compared to a net loss and
comprehensive loss of $13.62 million for the year ended March 31,
2021. As of Dec. 31, 2022, the Company had $3.68 million in total
assets, $4.21 million in total liabilities, and a total
stockholders' deficit of $521,906.
In its Quarterly Report for the three months ended Dec. 31, 2022,
Bionik Laboratories said, "There can be no assurance that necessary
debt or equity financing will be available, or will be available on
terms acceptable to us, in which case we may be unable to meet our
obligations or fully implement our business plan, if at all. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern."
BLITMAN SARATOGA: Revised Plan Not Confirmable, Says Blitman Estate
-------------------------------------------------------------------
Robin Winter, as Executor of the Estate of Howard N. Blitman filed
an objection to Blitman Saratoga LLC's motion for entry of an order
approving Debtor's Disclosure Statement, which was filed on April
10, 2023, with respect to Debtor's Revised Plan of Reorganization,
which was filed on March 7, 2023.
Robin Winter points out that as the Revised Plan is not
confirmable, and the Disclosure Statement should not be approved.
Robin Winter further points out that the current Plan completely
undermines any progress made in this case between the Gorens and
Mr. Blitman's estate by reversing course and seeking to utilize the
Plan, as well as this case and this Court, to advance the Gorens' -
- and not the Debtor's - - interests. Rather han keeping separate
Debtor's restructuring issues and the internal disputes between the
Gorens and Mr. Blitman's estate, Debtor seeks to leverage the
bankruptcy plan process to benefit the Gorens to the detriment of
Mr. Blitman's estate and its affiliates. And by doing so, the Plan
violates not just the Interim Order Approving and Authorizing the
Debtor to Obtain Replacement and New Postpetition Financing
Pursuant to 11 U.S.C. ss 362 and 364(c) (the "Interim Order") and
Final Order Authorizing the Debtor to Obtain Postpetition Financing
Pursuant to 11 U.S.C. ss 362 and 364(c) (the "Final Order, and,
collectively with the Interim Order, the "DIP Orders") (as well as
subsequent sale orders that incorporate the DIP Orders), but also
ss 502, 1122, 1129(a)(1), (a)(2), (a)(3), (a)(7), (a)(8), and
1129(b), among other Bankruptcy Code provisions.
Robin Winter asserts that remarkably, pursuant to section 7.4 of
the Plan, Debtor is attempting to alter the paydown provisions
mandated by the DIP Orders. Section 7.4 of the Plan provides that
"[t]he provisions of the DIP Financing Order relating to the
allocation of loan payments shall not be operative following the
Effective Date."
According to Robin Winter, this language is not even included in
any claim provision of the Plan. Instead, Debtor snuck it in the
section titled "No Third-Party Releases." While the section title
may not be clear, what is clear is that Debtor and the Gorens are
attempting to not only collaterally attack and alter the terms by
which the Court was willing to approve the DIP financing, including
the allocation of the associated risks, which the Gorens agreed to,
but to also force the Blitman estate to fund both the Debtor's
operating expenses, and distributions under the Plan.
Robin Winter points out that section 4.1 of the Plan also violates
the DIP Orders by failing to bifurcate the BSNB Loans and the DIP
Loans, and to provide for the satisfaction of all obligations under
the BSNB Loans prior to payment on account of the DIP Loans. To the
extent that certain proceeds were previously applied to reduce the
DIP Loans, as Debtor states on p. 8 of the Plan, rather than
reducing the BSNB Loans, as required by the DIP Orders, Debtor has
violated the DIP Orders, as well as sale orders entered by the
Court. See Order entered on March 16, 2022 ("the residual proceeds
generated from the sale of the properties after payment of (i) all
tax and mechanic liens (including any escrows for any disputed
amounts), (ii) the reasonable closing costs and expenses, (iii) the
reserve for the amount of requested brokers commission(s), and (iv)
the Plan Escrow shall be paid over to the DIP Lender to reduce the
BSNB Loans (as defined in the DIP Order) assigned by BSNB (as
defined in the DIP Order)."). Moreover, the vote of Saratoga
Funding, which is controlled by the Gorens, should not count in
determining whether the Plan will be accepted by creditors.
Robin Winter further points out that additionally, utilizing sale
proceeds to fund Plan payments to holders of Administrative Expense
Claims, including Professional Fees and Expenses, and Non-Insider
Unsecured Claims, also violates the DIP Orders. At the time the
Court approved Debtor's request to escrow the $600,000
"Confirmation Fund", Debtor projected there would be more than
sufficient sale proceeds to satisfy the BSNB Loans, the DIP Loans,
administrative claims and unsecured claims. However, if, as Debtor
now claims, there will be insufficient sale proceeds to satisfy the
BSNB Loans, among other claims, the Plan, which provides for
distributions to administrative claims and unsecured claims, no
distributions to insiders, and that members of the Debtor shall
retain their interests, cannot be confirmed.
Robin Winter asserts that the Plan provides for disparate treatment
of insiders, as it provides favorable treatment to those insiders
the Gorens favor, over those they do not. Under the Plan, Debtor
proposes to pay, in full as an administrative expense claim, the
brokerage commissions of Scott Varley's brokerage firm, which was
never retained, nor could be retained as Debtor's real estate
broker. As Debtor has been repeatedly advised, both in informal
communications and in limited objections filed with the Court,
Scott Varley, who is both a member of Debtor, and one of the
guarantors of the BSNB Loans, is the associate real estate broker,
whose license is held by Keller Williams Capital District. It is
therefore inappropriate to pay commissions to Mr. Varley or his
firm or any salesperson in that firm in any transactions concerning
Debtor.
Robin Winter points out that contrary to Debtor's averments on p. 9
of the Disclosure Statement, the Blitman estate only objected to
brokerage commissions being paid to Mr. Varley or his brokerage
firm, Keller Williams. In response to that objection, pursuant to
an order entered on March 16, 2022, the Court directed that Debtor
"establish an escrow with Debtor's counsel in an amount equal to
all requested brokers' commissions (including direct brokers,
sub-brokers and co-brokers) pending submission of an application or
applications for allowance thereof under 11 U.S.C. s 330, which
application(s) shall include a certification from the brokers
involved as to the division of the respective commissions among
them."1 However, in the more than a year that has elapsed since the
entry of that order, Debtor has neither filed any applications nor
certifications in compliance with the Court's order. It was only
this morning that Keller Williams Capital District filed an
application for brokerage commissions. Thus, any delay with respect
to the retention or payment of any brokers was caused entirely by
Debtor or the brokers.
Robin Winter asserts that the Plan further provides that the
allowance of Mr. Blitman's estate's claims, as well as its
affiliates, will be resolved in State Court. However, this
provision not only violates s 502 of the Bankruptcy Code, but also
ignores the procedures and protections provided under Rules 3007
and 9011 of the Federal Rules of Bankruptcy Procedure. Moreover,
Jay Russ, Esq. of Russ and Russ, P.C., who is currently acting as
Debtor's counsel in the State Court Action, was never authorized by
this Court to be retained as Debtor's counsel, nor could he be
retained, as he is irreconcilably conflicted. Despite appearing as
counsel for Debtor in the State Court Action, Mr. Russ represents
Saratoga Funding LLC in this Court. Mr. Russ also appeared for
Saratoga Funding in another action he commenced on June 11, 2021,
in New York Supreme Court, Saratoga County, against Mr. Blitman's
estate, but against no other guarantors, with respect to the BSNB
loans that Saratoga Funding purchased as part of the DIP facility.
According to Robin Winter as reflected in the monthly operating
reports recently filed with the Court, Debtor continues to pay
Bredefeld & Associates for accounting services. As reflected in the
General Ledger in Debtor's November operating report, Bredefeld was
paid $23,605.50 in the first 11 months of 2022. In 2021, Bredefeld
was paid $15,495.00. However, Bredefeld & Associates is the Gorens'
personal accountants. This could also explain why the loans
purportedly made by the Gorens or their affiliates are included on
Debtor's balance sheet and general ledger, while the loans made by
Mr. Blitman are not. While these concerns have been raised at prior
hearings, Debtor has still not addressed them.
Robin Winter points out that debtor also failed to disclose that
during the two-year period prior to the November 6, 2020 filing
date, Goren affiliates (at the Gorens' insistence) were paid by
Debtor $294,033.72 ($134,503.13 to Goren Cousins I, LLC and
$159,530.59 to Goren Brothers LP) with respect to purported loans
they made to Debtor.
Attorneys for Robin Winter, as Executor of the Estate of Howard N.
Blitman:
Kenneth M. Lewis, Esq.
WHITEFORD, TAYLOR & PRESTON LLP
444 Madison Avenue, 4th Floor
New York, NY 10022
Tel: (914) 761-8400
E-mail: klewis@whitefordlaw.com
About Blitman Saratoga
White Plains, N.Y.-based Blitman Saratoga LLC was formed in 2012 to
develop and build a residential community consisting of at least 77
single-family homes spread over approximately 149 acres on Geyser
Road in Saratoga County, N.Y.
Blitman Saratoga sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 20-23177) on November 6,
2020. At the time of the filing, the Debtor disclosed $5,857,288 in
assets and $2,755,584 in liabilities. Judge Robert D. Drain
oversees the case.
Kevin J. Nash, Esq., at Goldberg Weprin Finkel Goldstein LLP, is
the Debtor's legal counsel.
On Dec. 21, 2020, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. The committee tapped
Nolan Heller Kauffman, LLP as its bankruptcy counsel.
BLUE DOLPHIN: Unit Agrees With Investor to Alter Note Payment Terms
-------------------------------------------------------------------
Lazarus Energy, LLC, a wholly owned subsidiary of Blue Dolphin
Energy Company, and John H. Kissick, a note holder, entered into a
Payment Agreement, pursuant to which Note Holder agreed to modify
the payment terms of a Promissory Note dated June 1, 2006.
As of March 31, 2023, principal and accrued interest under the Note
totaled $11,205,516. Pursuant to the Payment Agreement, LE will
make monthly payments on the Note in the amount of $500,000
beginning in April 2023 and continuing through and including
February 2025. In March 2025, LE shall make a final payment of
approximately $444,000 resulting in aggregate payments to the Note
totaling the Payoff Amount plus any unpaid accrued interest then
outstanding. Effective April 1, 2023, interest accrues under the
Note at 6.25% per year.
LE made payments of $500,000 to Note Holder on April 7 and May 1 of
2023. If LE continues to make payments as contemplated by the
Payment Agreement, Note Holder has agreed to forbear from
exercising any of its remedies under the Note related to existing
defaults. If LE fails to make any payment under the Payment
Agreement when due, and such failure continues for 30 calendar days
following the due date, Note Holder's agreement to forbear shall
terminate automatically without further act or action by Note
Holder and Note Holder shall have the immediate right to exercise
its rights and remedies under the Note or applicable law or in
equity. In addition, as of the thirteenth calendar day following
failure to make any payment, the modified payment and interest
terms contemplated by this Payment Agreement shall be of no further
force or effect and the terms of the Note as the date immediately
prior to the date of the Payment Agreement shall again be
applicable to LE and Note Holder.
About Blue Dolphin
Headquartered in Houston, Texas, Blue Dolphin Energy Company --
http://www.blue-dolphin-energy.com-- is an independent downstream
energy company operating in the Gulf Coast region of the United
States. The Company's subsidiaries operate a light sweet-crude,
15,000-bpd crude distillation tower with approximately 1.2 million
bbls of petroleum storage tank capacity in Nixon, Texas. Blue
Dolphin was formed in 1986 as a Delaware corporation and is traded
on the OTCQX under the ticker symbol "BDCO."
Sterling Heights, Michigan-based UHY LLP, the Company's auditor
since 2002, issued a "going concern" qualification in its report
dated April 3, 2023, citing that the Company is in default under
secured and related party loan agreements and has a net working
capital deficiency. These conditions raise substantial doubt about
the Company's ability to continue as a going concern.
BLUE LIGHTNING: Wins Interim Cash Collateral Access
---------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas, Fort
Worth Division, authorized Blue Lightning Transportation Solutions,
Inc., Truckers Pipeline, Inc., and Blue Lightning Holdings, Inc. to
use cash collateral in accordance with the budget, with a 10%
variance, and obtain credit pursuant to a factoring agreement on an
interim basis.
The Debtors require the use of cash collateral and obtain credit to
finance their operations, maintain business relationships with its
vendors, suppliers and customers, and to pay their employees.
RTS Financial Service, Inc., the Debtors' proposed post-petition
factor, is willing to purchase the Debtors' Accounts post-petition
and make advances and extend financing.
As previously reported by the Troubled Company Reporter, on June 2,
2017, the Debtors entered into a factoring and security agreement
with Third Coast Commercial Capital, Inc. Before the Petition Date,
the Debtors routinely sold their accounts receivable from a portion
of their trucking services to Third Coast. Third Coast is unwilling
to continue the factoring arrangement post-petition.
Accordingly, the Debtor has negotiated a post-petition factoring
agreement with RTS Financial Service, Inc. Under the Factoring
Agreement, the purchase price for the Debtors' post-petition
receivables sold to RTS is the face amount of the invoices sold
less a fee of 1.75%, subject to increases in the prevailing prime
rate. If the prime rate remains unchanged, RTS will advance 98.25%
of the face amount of the invoices. The Factoring Agreement
requires that the Debtors repurchase certain receivables those
invoices are not paid within a certain time or are later disputed
— both of which are very rare.
The Debtors have not yet identified any other parties which appear
to hold a security interest in the Debtors' post-petition cash
collateral within the meaning of 11 U.S.C. section 363(a). The
Debtors' pre-existing senior secured lenders include Centerstone,
the United States Small Business Association and potentially Global
Merchants Cash, Inc. in addition to Third Coast, but none of the
Debtor's post-petition revenues constitute proceeds, products,
offspring, or profits of the collateral of Third Coast, GM, the
SBA, or Centerstone, and thus any lien of those parties on accounts
created post-petition is cut off pursuant to 11 U.S.C. section
552.
The Debtors are further authorized to sell to RTS their
post-petition accounts and RTS will have a first and priority
interest in the Accounts over any creditor of the Debtors.
These events constitute an "Event of Default" under the Factoring
Agreement and the Interim Order:
(i) The failure to timely make payments RTS as and when due;
(ii) The failure of the Debtors to pay all of their
administrative expenses in full in accordance with and subject to
the terms as provided for in the Budget;
(iii) The Interim Order becomes stayed, reversed, vacated,
amended or otherwise modified in any respect without the prior
written consent of RTS, except by the Final Order;
(iv) The dismissal of the Chapter 11 cases, conversion of the
Chapter 11 cases to Chapter 7 cases, or suspension of the Chapter
11 cases under 11 U.S.C. section 305;
(v) The appointment of a chapter 11 trustee or an examiner
with enlarged powers (beyond those set forth in 11 U.S.C. section
1104(c) and 1106(a)(3) and (4));
(vi) The granting of relief from the automatic stay to permit
foreclosure with respect to a material asset of the Debtors, by any
entity other than RTS on any Collateral;
(vii) The entry of an order granting any superpriority claim
which is senior or pari passu with that of RTS pursuant to the
Interim Order;
(viii) The payment of or granting adequate protection with
respect to prepetition indebtedness of the Debtors other than as
set forth in the Budget or as provided for in the Interim Order;
(ix) Any of the liens or claims or RTS granted pursuant to the
Interim Order to be valid, perfected and enforceable in all
respects; or
(x) The payment of estate professional fees by the Debtors
other than to the extent set forth in the Budget.
A final hearing on the matter is set for May 25, 2023 at 11 a.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3M4O7qH from PacerMonitor.com.
The Debtor projects $388,664 in total expenses.
About Blue Lightning Holdings, Inc.
Blue Lightning Holdings, Inc. and its affiliates provide short and
long haul trucking services throughout the continental United
States. They operate approximately 32 trucks and trailers out of a
home office located in Tarrant County, Texas.
Blue Lightning Transportation Solutions, Inc., Truckers Pipeline,
Inc., and Blue Lightning Holdings, Inc. sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead Case
No. 23-41064) on April 15, 2023. In the petition signed by Eran
Blitzblau, president, the Debtor disclosed up to $50,000 in assets
and up to $10 million in liabilities.
The Hon. Mark X. Mullin oversees the case.
Howard Marc Spector, Esq., at Spector and Cox PLLC, represents the
Debtor as legal counsel.
BLUE RIBBON: $368M Bank Debt Trades at 31% Discount
---------------------------------------------------
Participations in a syndicated loan under which Blue Ribbon LLC is
a borrower were trading in the secondary market around 68.9
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $368 million facility is a Term loan that is scheduled to
mature on May 7, 2028. About $345 million of the loan is withdrawn
and outstanding.
Blue Ribbon, LLC, parent company of Pabst Brewing Company, is one
of the largest privately held independent brewers in the US, with a
portfolio of iconic American beer brands.
BUCK-LEITER PALM: Ruediger Mueller Named Subchapter V Trustee
-------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Ruediger Mueller as
Subchapter V trustee for Buck-Leiter Palm Avenue Development, LLC.
Mr. Mueller will be paid an hourly fee of $350 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Mueller declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Ruediger Mueller
1112 Watson Court
Reunion, FL 34747
Phone: (676) 863-0473
Email: trustee@tcmius.com
About Buck-Leiter Palm
Buck-Leiter Palm Avenue Development, LLC filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla.
Case No. 23-01803) on May 3, 2023. In the petition signed by its
manager, Mait Leitez, the Debtor disclosed $2,763,102 in assets and
$2,795,413 in liabilities.
Judge Roberta Colton oversees the case.
Edmund S. Whitson III, Esq., of McGlinchey Stafford is the Debtor's
counsel.
CALIFORNIA-NEVADA: Unsecureds Owed $725K to Get 27.6% Under Plan
----------------------------------------------------------------
California-Nevada Methodist Homes submitted a First Amended
Disclosure Statement dated April 28, 2023.
On Dec. 17, 2021, the Debtor and Pacifica Companies, LLC, entered
into an agreement under which Pacifica agreed to serve as the
stalking horse bidder at an auction for substantially all of the
Debtor's assets and to purchase the Assets on the terms set forth
in the Purchase Agreement if no other buyers submitted a better
offer. At the conclusion of the Feb. 2, 2022 auction the Debtor
declared Pacifica to be the successful bidder and Heritage Campus
Group as the backup bidder. On Feb. 8, 2022, the Bankruptcy Court
entered an order approving the sale of the Assets to Pacifica or
its assignees (collectively, the "Buyers") on terms substantially
similar to those set forth in the Purchase Agreement, with the
exception that the "Purchase Price" as used therein was increased
to $34,000,000, consisting of $33,000,000 in cash and a $1,000,000
credit bid of Pacifica's "Break-Up Fee" as that term was used in
the Purchase Agreement.
On Dec. 6, 2022, the Debtor closed the sale of the Assets to the
Buyers. After the payoff of the Debtor's obligations under the
Oceanside DIP Loan, the payment of Ziegler's commission, payment of
transfer taxes and other closing costs, and the application of
various prorations and adjustments, the Debtor received
approximately $4.8 million in cash from the sale of its Assets. In
addition, pursuant to the terms of the Purchase Agreement, among
other things, the Buyers assumed all obligations the Debtor had to
pay the Entrance Fee Claims and the Buyers assumed all obligations
under the Residency Agreements.
Under the Plan, Class 6 General Unsecured Claims other than Claims
that fall within other Classes totaling $724,890 will recover 27.6%
of their claims. Class 6 Claims are Impaired under the Plan. The
Holder of an Allowed Claim in Class 6 shall receive their pro rata
share of the $200,000 Combined General Unsecured Distribution,
which shall be paid as follows:
(a) If the Class 6 Claim is an Allowed Claim as of the date that
is the fiftieth Business Day after the Effective Date, the Holder
of such Class 6 Claim will receive an initial payment of a portion
of their pro rata share of the Combined General Unsecured
Distribution (based on the total amount of Class 6 Claims as of
that date that have not been disallowed) and if the balance of such
Holder's pro rata share of the Combined General Unsecured
Distribution is greater than or equal to one dollar ($1.00), the
Holder shall receive a second payment equal to the balance of such
Holder's pro rata share of the Combined General Unsecured
Distribution on or before the date that is fourteen days after
every timely objection to a Class 6 Claim has been resolved; and
(b) If the Class 6 Claim first becomes an Allowed Claim after
the fiftieth Business Day after the Effective Date, the Holder of
such Class 6 Claim will receive their pro rata share of the
Combined General Unsecured Distribution on or before the date that
is fourteen days after every timely objection to a Class 6 Claim
has been resolved.
On the Effective Date, the Debtor believes it will have sufficient
funds to satisfy claims pursuant to the treatment set forth in the
Plan as well as to implement the Plan. Specifically, the Debtor
projects that it will have approximately $4,599,000 in cash in the
aggregate as of the Effective Date (assuming an effective date of
July 1, 2023), which is equal to or greater than the sum of the
estimated Administrative Expense Claims, estimated Priority Tax
Claims, the Combined General Unsecured Distribution, the estimated
outstanding amount of the Wilmington Secured Claim as of the
Effective Date, the HCAI Initial Distribution, and the Wind-Down
Expenses.
Attorneys for the Debtor:
Anthony J. Dutra, Esq.
HANSON BRIDGETT LLP
425 Market Street, 26th Floor
San Francisco, CA 94105
Telephone: (415) 777-3200
Facsimile: (415) 541-9366
E-mail: adutra@hansonbridgett.com
A copy of the Disclosure Statement dated April 28, 2023, is
available at https://bit.ly/3nd574H from Stretto, the claims
agent.
About California-Nevada Methodist Homes
California-Nevada Methodist Homes -- http://www.cnmh.org/-- is a
California non-profit public benefit corporation that operates
nursing homes and long-term care facilities. It presently operates
two continuing care retirement communities, one known as Lake Park,
in Oakland Calif., and the other, known as Forest Hill, in Pacific
Grove, Calif.
On March 16, 2021, California-Nevada Methodist Homes filed a
Chapter 11 petition (Bankr. N.D. Cal. Case No. 21-40363), with $10
million to $50 million in assets and $50 million to $100 million in
liabilities.
The Hon. Charles Novack is the case judge.
The Debtor tapped Hanson Bridgett LLP, led by Neal L. Wolf, Esq.,
as legal counsel; and Silverman Consulting and B.C. Ziegler and
Company as financial advisors. Stretto, LLC, is the claims agent.
The U.S. Trustee for Region 17 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee is represented by Perkins Coie, LLP.
CAPSTONE BORROWER: S&P Assigns 'B-' ICR on Proposed Buyout
----------------------------------------------------------
S&P Global Ratings assigned an issuer credit rating to Tysons
Corner, Va.-based Capstone Borrower Inc. (dba Cvent) of 'B-', and
'B-' issue-level and '3' recovery ratings to the revolver and
first-lien term loan.
S&P Global Ratings-adjusted leverage pro forma for the transaction
will be over 8x excluding the preferred and over 20x including it,
which S&P considers debt-like.
The stable outlook reflects S&P's expectation for strong revenue
growth in the low-teen percent area in 2023 and 2024. S&P forecasts
S&P Global Ratings-adjusted EBITDA margins of about 14%-16%,
resulting in positive annual free operating cash flow (FOCF) as
Cvent achieves its planned cost savings.
The 'B-' issuer credit rating reflects Cvent's high leverage, small
scale ($70 million S&P Global Ratings-adjusted EBITDA in 2022,
rising to about $100 million in 2023), and lower margins than
software service company peers. These risks are offset by its
strong growth potential, resilient earnings through economic
downturns, and high customer retention.
Cvent will have a highly leveraged capital structure and low FOCF
following the transaction. S&P said, "The leveraged buyout by
Blackstone will push Cvent's leverage above 8x in 2023, excluding
preferred equity, and above 20x on a full S&P Global
Ratings-adjusted basis because we consider the preferred equity as
debt given its two-year callable provision. While we forecast about
15% organic revenue growth in 2023, high interest and capitalized
software development costs will limit FOCF-to-debt to the low
single-digit percent area in 2023 and 2024. We forecast S&P Global
Ratings-adjusted EBITDA margins for Cvent in the mid-teen percent
area, compared to the mid- to high-20% area for
software-as-a-service peers." Cvent's lower average margins are due
to its high labor intensity relative to software peers.
Cvent has a significant cost-saving initiative underway but faces
execution risks to fully achieve the margin benefits. Cvent aims to
cut about $70 million from its operating expense base by the end of
2024 through labor and procurement actions. Blackstone's ownership
will provide scale advantages to help Cvent negotiate lower
supplier costs, consolidate vendors, and reduce lease costs. Our
forecast considers overall operating leverage improvement over the
next two years from these and related actions. Much of the
initiative involves labor cost savings across the business,
including increasing the mix shift of research and development
labor to India. While Cvent has already reduced headcount ahead of
schedule through voluntary attrition, S&P believes the projected
mild macroeconomic recession could slow attrition rates, top-line
performance may encourage rehiring, and planned restructurings
could cost more than expected.
S&P said, "Cvent's resilience through the COVID-19 pandemic and
quick pivot to new products underpin our growth forecasts. Cvent's
traditional Event Cloud and Hospitality Cloud software were tested
by the pandemic's sudden shutdown of in-person events, eliminating
demand for hotel spaces and vendors. Cvent preserved EBITDA in
2020, recovered quickly and improved its competitive position in
2021 with new hybrid and virtual event platforms, and had above
pre-pandemic growth by 2022. Cvent's contracts require payment of
an agreed sum up front regardless of whether events are held by the
customer and auto renew with built-in price escalations. Cvent has
been the clear market leader in end-to-end event planning software
and vendor procurement services for several years, servicing over
half the Fortune 500. The company emerged from the pandemic
stronger with new virtual and hybrid platforms integrated into its
offerings, which we believe will continue to drive growth as
corporations increasingly manage hybrid workforces and customers
demand the flexibility. We expect the top line will stay strong
through a mild recession even if companies pull back on in-person
events because Cvent now has additional revenue streams in its
Event Cloud segment. We believe there is upside potential to
margins as customers gain proficiency with new hybrid and virtual
services and require less support and less staff time from Cvent.
"The stable outlook reflects our expectation of double-digit
percent revenue growth and EBITDA margins in the mid-teens,
resulting in positive FOCF in 2023 and 2024."
S&P could revise the outlook to negative or lower the rating on
Cvent if it believes the capital structure becomes unsustainable.
This could result from:
-- Operational missteps significantly delaying realization of
targeted margin improvements;
-- An aggressive financial policy of debt-funded dividends,
lowering free cash flow to negative or negligible; or
-- A material deterioration in top-line performance and
competitive advantage.
Although unlikely, S&P could raise its rating on Cvent if EBITDA
significantly expands and free cash flow generation increases, such
that S&P believes it can maintain an FOCF-to-debt ratio approaching
5% on a sustained basis and substantially reduce leverage. This
could result from:
-- Successful execution of its cost-saving program; and
-- Double-digit percent growth of the business in excess of
forecasts.
ESG credit indicators: E-2, S-2, G-3
Governance is a moderately negative consideration, as it is for
most rated entities owned by private-equity sponsors. S&P believes
the company's highly leveraged financial risk profile 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.
CAPSTONE TOPCO: Moody's Assigns 'B2' CFR, Outlook Stable
--------------------------------------------------------
Moody's Investors Service assigned Capstone Topco, Inc. ("Cvent"),
a provider of cloud-based enterprise event management and
hospitality software and services, a B2 corporate family rating and
B2-PD probability of default rating in connection with the proposed
acquisition of Cvent Holding Corp. by affiliates of Blackstone,
Inc. ("Blackstone"). At the same time, Moody's assigned a B2 rating
to the company's senior secured credit facilities consisting of a
$115 million revolving credit facility due 2028 and $400 million
term loan due 2030 at Capstone Borrower, Inc. The outlook is
stable.
The new credit facility is being issued concurrent with the
acquisition of 100% of the common stock of Cvent Holding Corp. by
Blackstone for $8.50 per share, representing a total enterprise
value of approximately $4.6 billion. Capstone Borrower, Inc. is a
new legal entity that has been established to acquire Cvent Holding
Corp. Capstone Borrower, Inc. will be the initial borrower under
the credit facilities with indirect parent and guarantor, Capstone
Topco, Inc., providing the consolidated financials. Affiliates of
Vista Equity Partners ("Vista") will also retain equity in the form
of perpetual preferred shares. Additional proceeds will be used to
repay existing indebtedness at Cvent, add $100 million of
incremental cash for general corporate purposes, and pay related
fees and transaction expenses. Moody's also expects Cvent to issue
$500 million of pari passu senior secured debt to complete the
funding of the transaction in the near term.
Assignments:
Issuer: Capstone TopCo, Inc.
Corporate Family Rating, Assigned B2
Probability of Default Rating, Assigned B2-PD
Issuer: Capstone Borrower, Inc.
Backed Senior Secured Term Loan, Assigned B2
Backed Senior Secured Revolving Credit Facility, Assigned B2
Outlook Actions:
Issuer: Capstone Borrower, Inc.
Outlook, Assigned Stable
Issuer: Capstone TopCo, Inc.
Outlook, Assigned Stable
The assigned ratings remain subject to Moody's review of the final
terms and conditions of the proposed financing that is expected to
close in June 2023.
RATINGS RATIONALE
Cvent's B2 CFR reflects the company's high pro forma debt to
EBITDA, estimated at 8.8x at close and including deferred revenue,
expensing capitalized software costs and excluding cost savings at
March 31, 2023. Moody's estimates that the company will be able to
improve debt to EBITDA to the mid-to-high 5x by the end of 2024
assuming the company can successfully implement about half of its
cost savings plans with the remainder fully realized in 2025.
Moody's expects free cash flow to debt of around 6% or $55 million
on an annual basis through 2024, however the company has to make a
series of deferred equity payments over the next three years that
will initially absorb the majority of free cash flow during the
next 12 to 18 months. Moody's believes free cash flow to debt of
around 10% is possible beginning in 2025. These projections are
highly dependent on Cvent achieving the majority of its planned
cost savings of around 14% of its total cost of goods sold and
operating expenses. Moody's also assumes revenue growth will be
high at 12% during the next two years, albeit lower relative to the
low 20% growth rate Cvent has experienced over the past year
through March 31, 2023. Revenue size and scope of the company is
limited, with Moody's-expected 2024 revenue of around $800 million.
Revenue is concentrated within the meetings and events industry,
with nearly 88% coming from North America. The company's has high
software expenditure requirements as it must continuously invest in
technology to maintain and expand its market position. Moody's
expects financial policy to be aggressive given private equity
ownership and the company's history of acquisitions.
Cvent benefits from a leading market position in the event
management and hospitality software solutions market through its
Event Cloud and Hospitality Cloud segments. Revenue is highly
recurring in nature and employs a subscription-based model with
guaranteed minimums that help mitigate periods of macroeconomic
uncertainty and about 50% of the company's clients are under
multi-year contracts. Cash flow benefits from high net revenue
retention rates, other than during the COVID-19 pandemic, that have
been above 108% as clients pay upfront for the current year. The
company has a diverse base of over 22,000 customers that includes
large enterprise clients from various end markets. The company has
a strong market position with most competitors in the virtual event
segment that lack the resources to compete in the in-person and
hybrid event space. The $3.85 billion of equity from Blackstone and
Vista also suggests that Cvent has value well in excess of its
rated debt. Moody's considers Cvent's liquidity to be good, with
balance sheet cash in excess of $250 million and access to an
undrawn $115 million of revolving credit facility expected at
close.
In consideration of the company's aggressive financial policy which
includes private equity ownership, history of acquisitions, and a
mix of independent and non-independent board members, governance
was considered a key driver in the assignment of Cvent's ratings
and resulted in a credit impact score of CIS-4.
As proposed, the new first lien credit agreement is expected to
provide covenant flexibility that if utilized could negatively
impact creditors. Notable terms include the incremental debt
capacity of up to the greater of $220 million and 100% of
consolidated EBITDA at the time of determination, plus unused
capacity reallocated from the general debt basket, plus additional
amounts subject to a currently unspecified first lien net leverage
test (if pari passu secured). Incremental amounts (not in excess of
amounts permitted by an earlier maturity carve-out) may be incurred
with an earlier maturity than the initial term loans, and amounts
incurred under the ratio-based or acquisition debt carve-outs are
not subject to any limitations in maturity or weighted average
life. Additional restricted payment capacities may be reallocated
to incur debt or grant liens under an available capacity basket to
be determined. There are no express "blocker" provisions which
prohibit the transfer of specified assets to unrestricted
subsidiaries; such transfers are permitted subject to carve-out
capacity and other conditions. Non-wholly-owned subsidiaries are
not required to provide guarantees; dividends or transfers
resulting in partial ownership of subsidiary guarantors could
jeopardize guarantees, with no explicit protective provisions
limiting such guarantee releases. There are no express protective
provisions prohibiting an up-tiering transaction. The above are
proposed terms and the final terms of the credit agreement may be
materially different.
The senior secured credit facilities are rated B2 reflecting both
the B2-PD PDR and a loss given default assessment of LGD3. The
senior secured credit facilities benefit from secured guarantees
from its direct parent and all existing and subsequently acquired
domestic subsidiaries.
The stable outlook reflects Moody's expectation that the company
will grow the top-line organically around 12% during the next 12 to
18 months. Moody's also expects EBITDA will increase such that debt
to EBITDA approaches the mid-5x by the end of 2024.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Cvent increases revenue scale,
sustains leverage of 4.5x debt to EBITDA (including deferred
revenue and expensing capitalized software costs) and free cash
flow to debt of 10%, and demonstrates a commitment to sustaining a
more conservative financial policy.
The ratings could be downgraded if Cvent fails to grow organically,
EBITDA margins decline from current levels, Moody's expects debt to
EBITDA is not on track to decline below 6.5x, or FCF to debt is
sustained in the low single digit percentage range. A deterioration
in liquidity could also pressure ratings.
The principal methodology used in these ratings was Software
published in June 2022.
Cvent, based in Tyson's Corner, VA, provides cloud-based enterprise
event management and hospitality software and services, mostly in
North America. Moody's expects revenue around $700 million in 2023.
The company will be privately owned by affiliates of Blackstone.
CAREERBUILDER LLC: Moody's Affirms Caa3 CFR & Rates New Loan Caa3
-----------------------------------------------------------------
Moody's Investors Service downgraded CareerBuilder, LLC's probably
of default to D-PD from Ca-PD, following the extension of the
maturities of the company's first lien term loan to July 2026 from
July 2023. Moody's considers the extension a distressed exchange
and a default under Moody's definition. The D-PD will be a
temporary assignment and the PDR will be changed to Ca-PD in three
business days. Concurrent with this rating action, Moody's affirmed
the company's Caa3 corporate family rating. Moody's also assigned a
Caa3 rating to the new senior secured first lien term loan and
withdrew ratings on the old credit facility. The outlook is
stable.
The default assignment is driven by CareerBuilder's effective
restructuring of its entire debt capital structure by extending the
maturities of its senior secured term loan. Moody's views the
extension as a distressed exchange given the company's weak
liquidity and negative operating trends that include negative free
cash flow, declining revenue, and a lack of consolidated profits.
The maturity extension did not constitute an event of default under
the company's credit agreement.
RATINGS RATIONALE
On April 19, 2023, CareerBuilder completed an amendment and
extension of its $175.3 million senior secured first lien term
debt, the entirety of the company's debt, to July 2026 from July
2023. While the company has extended its debt maturities by three
years, Moody's believes the capital structure is currently
unsustainable absent the company taking additional actions to
optimize costs and meaningfully grow new revenue streams. During
the year ending December 31, 2022, revenue declined by nearly 7% or
$17 million and the company generated negative $47 million of free
cash flow. Additionally, the company's cash balance has declined
significantly over the past year to $23.8 million on December 31,
2022 from $61.4 million one year prior. Given the company's free
cash flow deficits and lack of a revolving credit facility, the
company will have to rely on its relatively low cash balance to
fund operations, which Moody's expects will be insufficient to
sustain operations for more than 18 to 24 months without a
significant improvement in profitability and stable revenue or
equity infusion.
All financial metrics cited reflect Moody's standard adjustments.
Earnings quality is very weak and the company would have negative
EBITDA without including large add-backs for restructuring charges
and other items. While restructuring costs modestly declined in
2022 compared to 2021, the company has yet to demonstrate
consistent growth in revenue and earnings such that the current
debt load could be supported. However, the company benefits from a
well-known brand and a large database of resumes. Nevertheless, the
company faces strong competition, including from larger,
better-capitalized peers such as Indeed.com owner Recruit Holdings
Co., Ltd. (A3 stable) and LinkedIn Corporation owner Microsoft
Corporation (Aaa stable).
Governance risks including an aggressive financial policy and a
shareholder friendly distressed exchange have negatively impacted
CareerBuilder's credit profile and are a key consideration to the
ratings.
Moody's expects CareerBuilder's financial strategies will remain
aggressive under its private equity ownership and may include
additional distressed exchanges. The company has previously used
proceeds from asset sales in 2020 for debt reduction and may
potentially look to divest other assets to reduce its debt burden.
Moody's notes that the losses and cash flow burn are partly a
result of the company's decision to invest asset sale proceeds in
the business.
CareerBuilder's liquidity profile is considered weak. The company
will rely on its cash balance to fund operations. Cash as December
31, 2022 was $23.8 million. The company does not have a revolving
credit facility. Moody's expects the company will generate negative
$20 million of free cash flow in 2023. The first lien term loan is
subject to financial covenants including a weekly minimum liquidity
requirement covenant of $7.5 million, a minimum annual EBITDA
requirement of $7.5 million beginning March 31, 2024, and
limitations on capital expenditures in excess of $10 million in any
fiscal year.
The Caa3 rated senior secured $175.3 million term loan maturing in
July 2026 reflects the loss given default ("LGD") assessment of
LGD3 and benefits from secured guarantees from all existing and
subsequently acquired domestic subsidiaries and is in line with the
Caa3 CFR, as there is no other meaningful debt in the capital
structure.
The stable outlook reflects Moody's view that the company's
probability of default, including the potential for a debt
restructuring, will remain at current levels as it executes its
plan to improve operations.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company reduces its debt
burden to a sustainable level and stabilize revenue declines.
The ratings could be downgraded if the company's liquidity were to
erode faster than Moody's expects such that the likelihood of
default became more imminent or if the company were to undertake a
distressed exchange of its debt.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Downgrades:
Issuer: CareerBuilder, LLC
Probability of Default Rating, Downgraded to D-PD from Ca-PD
Assignments:
Issuer: CareerBuilder, LLC
Senior Secured 1st Lien Term Loan B3, Assigned Caa3
Affirmations:
Issuer: CareerBuilder, LLC
Corporate Family Rating, Affirmed Caa3
Withdrawals:
Issuer: CareerBuilder, LLC
Senior Secured Bank Credit Facility, Withdrawn, previously rated
Caa3
Outlook Actions:
Issuer: CareerBuilder, LLC
Outlook, Remains Stable
CareerBuilder, headquartered in Chicago, IL and controlled by
affiliates of private-equity sponsor Apollo Global Management,
Inc., operates an online job board and provides related services
and software. Revenue for the twelve months ending December 31,
2022 was $227 million.
CARVANA CO: Incurs $286 Million Net Loss in First Quarter
---------------------------------------------------------
Carvana Co. has filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $286
million on $2.61 billion of net sales and operating revenues for
the three months ended March 31, 2023, compared to a net loss of
$506 million on $3.49 billion of net sales and operating revenues
for the three months ended March 31, 2022.
"The first quarter was a big step in the right direction and there
are more steps to come. Given our strong start to the year, we
expect to achieve positive adjusted EBITDA in Q2 2023. It is clear
our strategy and execution are working as evidenced by our 61%
increase in gross profit per unit, the best first quarter GPU in
company history," said Carvana CEO Ernie Garcia.
As of March 31, 2023, the Company had $8.64 billion in total
assets, $9.96 billion in total liabilities, and a total
stockholders' deficit of $1.32 billion.
Carvana said, "We generate cash from the sale of retail vehicles,
the sale of wholesale vehicles, and proceeds from the sale of
finance receivables originated in connection with the sale of
retail vehicles. We generate additional cash flows through our
financing activities including our short-term revolving inventory
and finance receivable facilities, real estate and equipment
financing, the issuance of long-term notes, and new issuances of
equity. Historically, cash generated from financing activities has
funded growth and expansion into new markets and strategic
initiatives and we expect this to continue in the future. In
response to the current macroeconomic environment, we have
increased focus on driving profitability through initiatives to
better conform our expense structure to unit volume levels. We
expect our primary sources of cash to continue to be sufficient to
fund our operating activities and cash commitments for investing
and financing activities for at least the next 12 months."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1690820/000169082023000163/cvna-20230331.htm
About Carvana
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.
* * *
In March 2023, S&P Global Ratings lowered its issuer credit rating
on Carvana Co. to 'CC' from 'CCC+'. S&P said, "The negative
outlook reflects our expectation that we will lower our issuer
credit rating on the company to 'D' (default) upon the completion
of the proposed exchange offer. Shortly after restructuring, we
would raise the ratings to a level that reflects the ongoing risk
of a conventional default or future distressed restructurings."
As reported by the TCR on March 31, 2023, Moody's Investors Service
downgraded Carvana Co.'s corporate family rating to Ca from Caa1
and probability of default rating to Ca-PD from Caa1-PD. Moody's
said the downgrade reflects Carvana's proposed offer to exchange
some of the company's outstanding senior unsecured debt into $1
billion of new 2nd lien secured debt at a substantial discount to
face value.
CATALENT INC: S&P Places 'BB' Long-Term ICR on Watch Negative
-------------------------------------------------------------
S&P Global Ratings placed the 'BB' long-term issuer credit rating,
'BBB-' senior secured issue-level rating, and 'BB-' senior
unsecured issue-level ratings on CreditWatch with negative
implications on Catalent Inc..
The CreditWatch placement reflects the potential for a downgrade,
which could be more than one notch, over the next few weeks.
Catalent has delayed third-quarter results and provided an update
on 2023 guidance. The company announced that it expects operational
and productivity issues to reduce both fiscal 2023 net revenue and
adjusted EBITDA guidance by more than $400 million each. S&P
anticipates this may increase S&P Global Ratings-adjusted leverage
to 5x-6x in fiscal 2023 and significantly affect free operating
cash flow.
CreditWatch negative incorporates the potential for a downgrade,
which could be more than one notch. Catalent's press releases
provided limited information. It is unclear how long the
productivity and operational issues will persist, but management
plans to have an earnings call on May 15.
S&P expects to resolve the CreditWatch over the next few weeks,
following the third-quarter earnings call. S&P could lower the
rating more than one notch, depending on the severity and
persistence of the EBITDA deterioration and credit metrics.
Catalent is a contract development and manufacturing organization
that focuses on advanced delivery technologies and development for
drugs, biologics, gene and cell therapies, and consumer health
products. Catalent employs approximately 19,000 people at 58
facilities globally. In fiscal 2022, it generated about $4.8
billion in annual revenue.
CATALINA MARKETING: Court Confirms Prepackaged Plan
---------------------------------------------------
Judge Philip Bentley has entered an order approving the Disclosure
Statement on a final basis and approving and confirming the Second
Amended Joint Prepackaged Chapter 11 Plan of Pacificco Inc., et
al.
The solicitation of votes on the Plan complied with the
Solicitation Procedures, was appropriate and satisfactory based on
the circumstances of the Chapter 11 Cases, and was in compliance
with the provisions of the Bankruptcy Code, the Bankruptcy Rules,
and applicable non-bankruptcy law.
The findings of fact and conclusions of law listed, as well as any
additional findings of fact and conclusions of law announced by
this Court at the Confirmation Hearing, are incorporated into this
Confirmation Order.
Any and all objections to the approval and entry of this Order, the
approval of the Plan, the assumption and/or assumption and
assignment of executory contracts and unexpired leases, or any
terms of the Purchase Agreement that have not been withdrawn,
waived, or settled, or not otherwise resolved pursuant to the terms
hereof, if any, hereby are denied and overruled on the merits with
prejudice.
NCS Agreement
The Amended & Restated Limited Liability Company Agreement (the
"NCS Agreement") by and between The Nielsen Company (US), LLC
("Nielsen") and Catalina Marketing Corporation ("CMC") is not a
Reorganized Debtor Assumed Contract and shall not be assumed by the
Debtors pursuant to the Plan. Further, notwithstanding anything
contained in the Plan or this Order, assumption of the NCS
Agreement, if any, shall be effectuated only by separate motion
(the "NCS Assumption Motion") to be filed in the Bankruptcy Court
for the District of Delaware within thirty (30) days following the
Venue Transfer Date as set forth in paragraph 27 of this Order.
Nielsen shall not object with respect to the timeliness of the
Debtors' filing of the NCS Assumption Motion in accordance with
this Order. Nielsen reserves its rights to seek arbitration with
respect to the issue of the effect of assumption of the NCS
Agreement on CMC's management rights under the NCS Agreement
pursuant to section 15.2 of the NCS Agreement, and the Debtors
reserve all rights to oppose such relief. Both Nielsen and CMC
reserve all other rights under the NCS Agreement. The Debtors
further reserve the right to reject the NCS Agreement.
Notwithstanding anything in the Plan or this Order to the contrary,
Nielson's setoff and recoupment rights relating to the NCS
Agreement shall survive confirmation of the Plan.
New Term Loan Facility
The Reorganized Debtors are hereby authorized to enter into, and
take such actions as necessary or desirable to perform under the
New Term Loan Facility, including the execution and delivery of the
New Term Loan Facility Credit Agreement, the New Term Loan Facility
Documents and all other documents or agreements related thereto,
and the payment or reimbursement of any fees, indemnities and
expenses under or pursuant to any such documents and agreements in
connection therewith. Upon the closing of the New Term Loan
Facility and without any further action by any party, the secured
parties thereunder (or the New Term Loan Agent on behalf of such
secured parties) shall have legal, valid, binding, perfected and
enforceable Liens on the collateral specified in the New Term Loan
Facility Credit Agreement and New Term Loan Facility Documents, as
applicable, with the priority set forth in the New Term Loan
Facility Credit Agreement and New Term Loan Facility Documents, and
subject only to such Liens and security interests as may be
permitted pursuant hereto or to the Plan or under the New Term Loan
Facility Credit Agreement and New Term Loan Facility Documents, as
applicable, and the Debtors are hereby authorized to make any and
all filings and recordings necessary or desirable in connection
with such Liens. The obligations, guarantees, mortgages, pledges,
Liens and other security interests granted pursuant to or in
connection with the New Term Loan Facility are granted in good
faith, for good and valuable consideration and for legitimate
business purposes as an inducement to the lenders to extend credit
thereunder and shall be, and hereby are deemed not to constitute a
fraudulent conveyance or fraudulent transfer and shall not
otherwise be subject to avoidance or recharacterization.
Fair Purchase Price
The consideration provided by the Buyer pursuant to the Purchase
Agreement and the other Sale Transaction Documents is fair and
reasonable and constitutes: (i) reasonably equivalent value under
the Bankruptcy Code and the Uniform Fraudulent Transfer Act, (ii)
fair consideration under the Uniform Fraudulent Conveyance Act and
the Uniform Voidable Transactions Act, and (iii) reasonably
equivalent value, fair consideration and fair value under any other
applicable laws of the United States, any state, territory or
possession or the District of Columbia.
Consummation of the Sale Transaction
The applicable Debtors, their affiliates and their respective
officers, employees and agents, are authorized to: (a) execute and
deliver, and empowered to perform under, consummate, and implement,
the Purchase Agreement, the other Sale Transaction Documents, and
all additional instruments and documents that the Debtors and the
Buyer, as applicable, deem necessary or appropriate to implement
the Purchase Agreement and the other Sale Transaction Documents and
the transactions contemplated thereby, (b) effectuate the Sale
Transaction, and (c) take all further actions as may be reasonably
required for the purpose of effectuating the Sale Transaction,
including, issuing, assigning, transferring, granting, and
conveying to, and conferring on the Buyer, the Catalina Japan
Equity Interests. All instruments and documents entered into in
connection therewith shall be deemed authorized without further
order of the Court. The Debtors are authorized, empowered and
directed to take all actions necessary and required to implement
and consummate the Plan, the Purchase Agreement and the other Sale
Transaction Documents, and the transactions contemplated thereby.
Transfer of Catalina Japan Equity Interests and Transferred Asset
Pursuant to Sections 1141(b) and (c) of the Bankruptcy Code, the
Catalina Japan Equity Interests and the Transferred Asset shall
vest in the Buyer. All Persons having Claims of any kind or nature
whatsoever against the Catalina Japan Equity Interests or the
Transferred Asset are forever barred, estopped and permanently
enjoined from creating, perfecting, pursuing, enforcing, attaching,
collecting, recovering, or asserting such Claims against the
Catalina Japan Equity Interests or the Transferred Asset, as
applicable, or the Buyer, or any of its respective Affiliates or
any of their respective property, successors or assigns, as an
alleged successor or on any other ground, except as permitted by
the Plan.
Modification of Purchase Agreement or Sale Transaction
The Purchase Agreement, the related Sale Transaction Agreements,
and documents or other instruments executed in connection
therewith, may be modified, amended or supplemented by the parties
thereto, in a writing signed by each party, and in accordance with
the terms thereof, without further order of the Court.
A copy of the Disclosure Statement dated April 28, 2023, is
available at https://bit.ly/40WFTFv 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.
(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 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 Debtors's Plan of Reorganization allowing Catalina to reduce
debt by more than 80 percent 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 percent 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 will receive their pro rata share of 10
percent of the New Common Stock, subject to dilution. Allowed
general unsecured claims were paid in the ordinary course and
otherwise unimpaired.
CENPORTS COMMERCE: Mark Sharf Named Subchapter V Trustee
--------------------------------------------------------
The U.S. Trustee for Region 17 appointed Mark Sharf, Esq., as
Subchapter V trustee for Cenports Commerce Inc.
Mr. Sharf, a practicing attorney in Los Angeles, Calif., will be
paid an hourly fee of $600 for his services as Subchapter V trustee
and will be reimbursed for work-related expenses incurred.
Mr. Sharf declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Mark Sharf, Esq.
6080 Center Drive, Suite 600
Los Angeles, CA 90045
Phone: (323) 612-0202
Email: mark@sharflaw.com
About Cenports Commerce
Cenports Commerce, Inc. is a B2B drop shopping (virtual
distribution) company that helps brands sell products online to
HomeDepot, Lowes and others under their own account. The company
has no inventory and uses internal tools to help retailers.
Cenports Commerce filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. N.D. Calif. case No. 23-40478) on
April 25, 2023, with $212,973 in assets and $7,391,240 in
liabilities. The petition was signed by Derrick Chen, chief
executive officer of Censports Commerce Holding Inc., a shareholder
of Cenports Commerce.
Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger,
represents the Debtor as legal counsel.
CERTIFIED 360: Seeks Cash Collateral Access
-------------------------------------------
Certified 360, LLC asks the U.S. Bankruptcy Court for the Middle
District of Florida, Jacksonville Division, for authority to use
the cash collateral and provide adequate protection.
The Debtor requires the use of cash collateral to meet
post-petition contractual and tax obligations related to payroll,
inventory and equipment owned by the Debtor and ongoing business
operations.
The Debtor executed a Promissory Note and Chattel Mortgage and
Security Agreement to United States of America c/o Small Business
Association, in the original principal amount of $600,000. The
rents, accounts receivables, chattel paper, contracts, documents,
cash, bank accounts, etc. were pledged as collateral.
LoanBuilder and Nu Direction Lending, LLC also assert interests in
the cash collateral.
The Debtor estimates the value of the cash and accounts receivable
to be approximately $307,721 based on a current aging report of
receivables less than 90 days old and bank balances.
The Debtor is willing to enter into an agreement with the primary
secured creditor to provide a post-petition replacement lien of a
continuing nature on all post-petition accruing cash collateral to
the secured creditor.
A copy of the motion is available at https://bit.ly/3M2LHZU from
PacerMonitor.com.
About Certified 360, LLC
Certified 360, LLC is part of the construction industry. The Debtor
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. M.D. Fla. Case No. 23-01002) on May 4, 2023. In the
petition signed by Ashley Downing, managing member, the Debtor
disclosed $528,466 in assets and $1,598,966 in liabilities.
Judge Jacob A. Brown oversees the case.
Bryan K. Mickler, Esq., at Law Offices of Mickler & Mickler, LLP,
represents the Debtor as legal counsel.
CINEWORLD GROUP: Unsecureds Owed up to $1.45B to Get up to 4.8%
---------------------------------------------------------------
Cineworld Group PLC, et al. submitted a Second Amended Joint
Chapter 11 Plan of Reorganization and a corresponding Disclosure
Statement.
In January 2023, the Debtors' investment banker, PJT Partners LP
initiated outreach to potential transaction parties. In total, the
Debtors reached out to over forty parties, including various
institutional investment firms and strategic bidders in the cinema
industry. Fourteen of these parties entered into confidentiality
agreements with the Debtors. While the Debtors received indicative
proposals for strategic transactions involving the Debtors' entire
business (including their businesses in the United States, the
United Kingdom, and Ireland) (a "WholeCo Transaction"), none of
these proposals involved an all-cash bid for the entire business.
The Debtors and the Ad Hoc Group jointly determined that, absent an
all-cash bid significantly in excess of the valuation underpinning
the transactions set forth in the Restructuring Support Agreement,
the Debtors would not continue the process towards completion of a
WholeCo Transaction. After evaluating the indications of interest
received through the first phase of the Marketing Process, the
Debtors, in conjunction with the Ad Hoc Group, determined that the
Marketing Process should continue with a focus on Cineworld's "Rest
of World" business encompassing its operations in Bulgaria, Czech
Republic, Hungary, Israel, Poland, Romania, and Slovakia. More
specifically, the proposals contemplated an acquisition of Debtor
Crown UK HoldCo Limited's equity interests in Crown NL Holdco BV
(such interests, the "RoW Equity"). Accordingly, the Debtors and
PJT initiated a second phase of the Marketing Process with the goal
of eliciting binding bids for the sale of the RoW Equity by a
deadline of April 10, 2023 (the "Bid Deadline"). While the Debtors
received several bids ahead of the Bid Deadline, the proposals
received did not reach the value required by the Ad Hoc Group to
pursue a sale of the RoW Equity. Accordingly, the Debtors and the
Ad Hoc Group have jointly terminated the Marketing Process.
In parallel with administering the Marketing Process, the Debtors
continued negotiations with the Ad Hoc Group with respect to a
standalone restructuring transaction. In early February, following
a lengthy diligence process, the Debtors received a response to the
standalone restructuring proposal they provided to the Ad Hoc
Group. On April 2, 2023, after extensive hard-fought, arm's-length
negotiations, the Debtors and the Consenting Creditors entered into
the Restructuring Support Agreement, the terms of which are
embodied in the Plan and this Disclosure Statement. The Plan
provides for a comprehensive restructuring transaction that will
(a) reduce the Debtors' funded indebtedness by approximately $4.53
billion through an equitization of the Allowed Legacy Facilities
Claims, (b) raise $800 million in aggregate gross proceeds through
the Direct Equity Allocation and the Rights Offering, which is
fully backstopped by the Equity Capital Raising Parties, to fund
the costs associated with the Debtors' emergence from these Chapter
11 Cases with any remainder to be used for general corporate
purposes, (c) provide the Debtors with $1.46 billion, net of any
original issuance discount (subject to downward adjustment based
upon the net sale proceeds realized through any Partial Sale), in
exit debt financing, which would be raised either through a
comprehensive third-party financing process or through an exit debt
facility provided by the Sponsored Facility Capital Raising
Parties, and (d) provide the Debtors with the ability to enter into
an up to $200 million in exit revolver financing, in each case, to
fund the Debtors' go-forward business operations.
Critically, the RSA reflects a global settlement reached between
the Debtors, the Ad Hoc Group, the Consenting Creditors, and the
Creditors' Committee. Among other things, the Committee Settlement
provides that the Plan will establish a post-Plan effective date
litigation trust (the "Litigation Trust"). In accordance with the
Committee Settlement, on the Plan Effective Date, the Debtors
incorporated in the United States will transfer, or will cause to
be transferred, to the Litigation Trust (a) $10 million in Cash,
(b) all of their rights, title, and interests in the Estate's
claims under the class action lawsuit captioned In re Payment Card
Interchange Fee and Merchant Discount Antitrust Litigation, MDL
1720 (MKB) (JO) (E.D.N.Y.) and under any such similar class action
against credit card issuers arising from similar allegations as
those set forth in the Interchange Litigation (the "Interchange
Litigation," and such claims, the "Interchange Litigation Claims")
as may be identified on or after the Effective Date, and (c)
$500,000 in Cash for the administration of the Litigation Trust,
including the disposition of the Interchange Litigation Claims and
the reconciliation of General Unsecured Claims held by
beneficiaries of the Litigation Trust for purposes of
distributions. Holders of Allowed General Unsecured Claims shall,
in accordance with the allocation determined by the Creditors'
Committee, receive their allocable share of (a) $10 million in Cash
and (b) interests in the Litigation Trust representing a right to
recovery of (i) the first $5 million of Cash recovered by the
Litigation Trust from the Interchange Litigation Claims and (ii)
50% of any Cash recovered in excess of $5 million in connection
with such claims. In addition, the Plan provides for the payment of
the reasonable and documented expenses of BNY Mellon Corporate
Trustee Services Limited, in its capacity as indenture trustee for
the Convertible Bonds, in an amount not to exceed $700,000.
Further, as part of the Committee Settlement, (a) the Holders of
Legacy Facilities Claims will not receive any recovery on account
of their deficiency claims and any adequate protection claims for
diminution of value beyond what is set forth in Article III.F of
this Disclosure Statement for "Class 4 Legacy Facilities Claims"
and (b) all Avoidance Actions will be released and waived under the
Plan.
Under the Plan, Class 5A General Unsecured Claims Against the Class
5A Debtors total $1.41 billion to $1.45 billion and will recover
0.3 - 0.5% of their claims. Each Holder of an Allowed General
Unsecured Claim in Class 5A shall receive its Pro Rata share of 40%
of the GUC Recovery Pool. Class 5A is impaired.
Class 5B General Unsecured Claims Against the Class 5B Debtors
total $224.4 million to $916.4 million and will recover 0.7 - 4.8%
of their claims. Each Holder of an Allowed General Unsecured Claim
in Class 5B shall receive its pro rata share of 60% of the GUC
Recovery Pool. Class 5B is impaired.
The Debtors and the Reorganized Debtors, as applicable, shall fund
distributions under the Plan with (1) proceeds from the Exit First
Lien Facility, (2) proceeds from the Direct Equity Allocation and
Rights Offering, (3) the New Common Stock, and (4) Cash on hand.
The voting deadline is June 8, 2023 at 5:00 p.m., prevailing
Central Time. The Plan and Disclosure Statement Objection Deadline
will be on June 8, 2023 at 5:00 p.m. (prevailing Central Time).
The Planconfirmation hearing date will be on June 12, 2023 at 8:00
a.m. (prevailing Central Time), or such other date as may be
scheduled by the Bankruptcy Court.
Co-Counsel to the Debtors:
Joshua A. Sussberg, Esq.
Ciara Foster, 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: joshua.sussberg@kirkland.com
ciara.foster@kirkland.com
- and -
Matthew D. Cavenaugh, Esq.
Rebecca Blake Chaikin, Esq.
Veronica A. Polnick, Esq.
Vienna Anaya, 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
rchaikin@jw.com
vpolnick@jw.com
vanaya@jw.com
A copy of the Disclosure Statement dated April 28, 2023, is
available at https://bit.ly/3Nv7PNL from PacerMonitor.com.
About Cineworld Group
London-based Cineworld Group PLC was founded in 1995 and is the
world's second-largest cinema chain. Cineworld operates 751 sites
with 9,000 screens in 10 countries, including the Cineworld and
Picturehouse screens in the UK and Ireland, Yes Planet in Israel,
and Regal Cinemas in the United States.
According to The Guardian, the Griedinger family, including Mooky's
brother and deputy chief executive, Israel, have struggled to
maintain control of the ailing business but have been forced to
reduce their stake from 28% in recent years. Cineworld's top five
investors include the Chinese Jangho Group at 13.8%, Polaris
Capital Management (7.82%), Aberdeen Standard Investments (4.98%)
and Aviva Investors (4.88%).
The London-listed Cineworld, which has run up debt of more than
$4.8 billion after losses soared during the pandemic, is pinning
its hopes on a meatier slate of movies in 2022 to bounce back from
a two-year lull.
Cineworld Group plc and 104 affiliates sought Chapter 11 protection
(Bankr. S.D. Texas Lead Case No. 22-90168) on Sept. 7, 2022,
estimating more than $1 billion in assets and debt. Judge Marvin
Isgur oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP and Jackson Walker, LLP as
bankruptcy counsels; PJT Partners, LP as investment banker;
AlixPartners, LLP as restructuring advisor; and Ernst & Young, LLP
as tax services provider. Kroll Restructuring Administration, LLC
is the claims agent.
The U.S. Trustee for Region 7 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on Sept. 23,
2022. The committee tapped Weil, Gotshal & Manges, LLP and
Pachulski Stang Ziehl & Jones, LLP as legal counsels; FTI
Consulting, Inc., as financial advisor; and Perella Weinberg
Partners, LP as investment banker.
COMPASS MINERALS: Notes Repayment No Impact on Moody's 'Ba3' CFR
----------------------------------------------------------------
Moody's Investors Service noted that refinancing of Compass
Minerals International, Inc.'s revolving credit facility (RCF) and
term loan A (TLA) due 2025 and repayment of senior unsecured notes
due 2024 will not impact the company's ratings, including its Ba3
CFR and B1 rating of its senior unsecured notes due 2027, or its
negative ratings outlook. Proceeds from the $71 million draw on the
new $375 million RCF and the new $200 million TLA (both due 2028)
will be used to redeem $250 million of existing senior unsecured
notes due 2024 and $17 million outstanding under the current RCF,
and pay for related transaction fees and expenses. The rating of
the existing RCF, TLA and 2024 notes will be withdrawn upon the
completion of the transaction.
Moody's views the transaction as leverage and credit neutral. At
the same time, Moody's acknowledges that by addressing the looming
maturity of 2024 notes and by upsizing the revolver from $300
million to $375 million, Compass Minerals will be able to more
fully focus on the implementation of its two key growth projects,
development of lithium brine resources and fire retardant products,
and will also benefit from the increased financial flexibility.
Compass Minerals' ratings outlook was changed to negative from
stable on July 15, 2022 because of deterioration in the company's
financial and operating performance as well as the meaningful risk
that leverage could remain elevated and credit metrics weak.
Despite the company-wide efforts to restore profitability closer to
historical levels, the company continues to face ongoing
inflationary pressures and persistent Ogden facility productivity
issues. Below-average winter conditions for three consecutive
winters season in most markets served by the company have likely
left the states and municipalities with elevated inventories, which
could test the company's ability to continue recouping its
operating margins and EBITDA during the current bidding season.
The Ba3 corporate family rating (CFR) of Compass Minerals reflects
strong competitive position in the North American salt industry,
more balanced capital allocation policy, traditionally attractive
EBITDA margins and ability to generate robust operating cash flow.
The company is also a low-cost producer of sulfate of potash (SOP)
fertilizer from naturally occurring brines. Factors limiting the
company's credit profile are persistently elevated leverage
notwithstanding material debt reduction since 2020, relatively
unpredictable nature of the deicing salt and plant nutrition
business as well as the lack of scale and geographic reach.
Headquartered in Overland Park, Kansas, Compass Minerals
International, Inc. (Compass Minerals) is a leading North American
producer of salt used for highway de-icing, agriculture
applications, water conditioning, and other consumer and industrial
uses as well as magnesium chloride used for de-icing and road
stabilization. The company is also a significant specialty
fertilizer manufacturer, including SOP (sulfate of potash) in the
US and Canada. For the last twelve months ended December 31, 2022,
Compass Minerals generated net sales (gross revenue less shipping
and handling) of about $874 million.
COX INDUSTRIAL: Tedd Burr Named Subchapter V Trustee
----------------------------------------------------
The U.S. Trustee for Region 14 appointed Tedd Burr of Mac
Restructuring Advisors, LLC as Subchapter V trustee for Cox
Industrial Services, LLC.
Mr. Burr will be paid an hourly fee of $425 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Burr declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Tedd Burr
Mac Restructuring Advisors, LLC
10191 E. Shangri La Road
Scottsdale, AZ 85260
Cell: (602) 418-2906
Email: Ted@MacRestructuring.com
About Cox Industrial
Cox Industrial Services, LLC is a multi-trade industrial based
company that offers services for the following trades: custom metal
fabrication, structural steel fabrication and erection, and
industrial refrigeration.
Cox Industrial Services filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. D. Ariz. Case No.
23-02866) on May 2, 2023, with $5,793,413 in assets and $4,238,957
in liabilities. Judge Scott H. Gan oversees the case.
Thomas H. Allen, Esq., at Allen, Jones & Giles, PLC is the Debtor's
counsel.
CPC ACQUISITION: $1.03B Bank Debt Trades at 30% Discount
--------------------------------------------------------
Participations in a syndicated loan under which Cpc Acquisition
Corp is a borrower were trading in the secondary market around 69.8
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $1.03 billion facility is a Term loan that is scheduled to
mature on December 29, 2027. The amount is fully drawn and
outstanding.
CPC Acquisition Corp is in the chemicals industry.
CROWN EUROPEAN: S&P Rates New EUR400MM Unsecured Notes 'BB+'
------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating and '3'
recovery rating to Crown European Holdings S.A.'s proposed EUR400
million unsecured notes. The '3' recovery rating indicates its
expectation for meaningful recovery (50%-70%; rounded estimate:
65%) in a default scenario.
S&P said, "We expect Crown will use the proceeds to repay existing
debt, including amounts under the revolver, as well as for general
corporate purposes. We expect the additional liquidity the issue
provides will allow Crown to repay other debt as maturities
approach. All other ratings on Crown, including the 'BB+' issuer
credit rating, are unchanged."
CROWN HOLDINGS: Moody's Affirms 'Ba1' CFR, Outlook Remains Stable
-----------------------------------------------------------------
Moody's Investors Service affirmed Crown Holdings, Inc.'s ("Crown")
Ba1 corporate family rating and Ba1-PD probability of default
rating. Moody's also assigned a Ba1 rating to the proposed EUR400
million senior unsecured notes issued by Crown European Holdings
S.A. The proceeds will be used to pay down the outstanding amount
under its revolving credit facility, which stood at $586 million as
of March 31, 2022. At the same time, Moody's affirmed the ratings
for the senior unsecured notes issued by Crown's US and European
subsidiaries. Further, Moody's downgraded to Baa3 from Baa2 the
rating assigned to the group's senior secured credit facilities.
The company's speculative grade liquidity (SGL) rating was
maintained at SGL-2. The rating outlook remains stable.
"The affirmation of the corporate family rating reflects Moody's
expectation of a gradual sales recovery towards 2024 and lower
capital spending in 2024, which will help Crown generate free cash
flow and manage its total debt," said Motoki Yanase, VP - Senior
Credit Officer at Moody's.
The Ba1 rating of senior unsecured notes at Crown European Holding
S.A. reflects their priority position in the capital structure
relative to the senior unsecured debt at Crown Americas and Crown
Cork & Seal Company. The notes benefit from guarantees by Crown
Holdings, Inc., Crown Cork & Seal Company, Inc., Crown
International Holdings, Inc. and each of the US restricted
subsidiaries, Canadian restricted subsidiaries, and the UK
restricted subsidiaries. The notes are subordinated to Crown's
first-lien debt.
The downgrade of senior secured credit facility ratings reflects
the updated deficiency claim for the senior secured credit
facilities, aligned to its peers. The senior secured credit
facilities currently have no meaningful tangible assets as
collateral.
Moody's took the following actions:
Downgrades:
Issuer: Crown Americas LLC
Backed Senior Secured Bank Credit Facility, Downgraded to Baa3
from Baa2
Issuer: Crown European Holdings S.A.
Backed Senior Secured Bank Credit Facility, Downgraded to Baa3
from Baa2
Issuer: Crown Metal Packaging Canada LP
Backed Senior Secured Bank Credit Facility, Downgraded to Baa3
from Baa2
Assignments:
Issuer: Crown European Holdings S.A.
Backed Senior Unsecured Regular Bond/Debenture, Assigned Ba1
Affirmations:
Issuer: Crown Holdings, Inc.
Corporate Family Rating, Affirmed Ba1
Probability of Default Rating, Affirmed Ba1-PD
Issuer: Crown Americas LLC
Backed Senior Unsecured Regular Bond/Debenture, Affirmed Ba2
Senior Unsecured Regular Bond/Debenture, Affirmed Ba2
Issuer: Crown Cork & Seal Company, Inc.
Backed Senior Unsecured Regular Bond/Debenture, Affirmed Ba3
Issuer: Crown European Holdings S.A.
Backed Senior Unsecured Regular Bond/Debenture, Affirmed Ba1
Senior Unsecured Regular Bond/Debenture, Affirmed Ba1
Outlook Actions:
Issuer: Crown Holdings, Inc.
Outlook, Remains Stable
Issuer: Crown Americas LLC
Outlook, Remains Stable
Issuer: Crown Cork & Seal Company, Inc.
Outlook, Remains Stable
Issuer: Crown European Holdings S.A.
Outlook, Remains Stable
Issuer: Crown Metal Packaging Canada LP
Outlook, Remains Stable
RATINGS RATIONALE
The affirmation of the Ba1 CFR takes into consideration Crown's
focus on its net leverage target of 3.0x and 3.5x (unadjusted), and
Moody's expectation that unless the company is within its target
leverage, it will not execute meaningful share repurchases through
2024 to secure cash flow and manage its debt load. As a result,
Moody's expects that the company will able to maintain its leverage
(as adjusted) below 4.25x on a gross debt basis.
Crown's credit profile is supported by its exposures to the
consolidated industry structure in the can segment, which
demonstrates solid growth prospects over the medium term. In
addition, within the can segment, Crown serves the stable
alcoholic/non-alcoholic beverage and food end markets. Its credit
profile is also supported by a large base of installed equipment in
the transit packaging segment that drives a high percentage of
recurring sales of consumables. Crown also benefits from geographic
diversification to Europe.
On the other hand, the credit profile is constrained by the
company's high customer and product concentration of sales and
exposure to cyclical end markets in the transit packaging segment.
Additionally, the fragmented and competitive industry structure in
the transit packaging segment makes growth and margin expansion
difficult. The company also has an outstanding asbestos liability,
which Moody's adds to total debt as a part of Moody's adjustments.
The stable outlook reflects Moody's expectation that Crown will be
able to improve its free cash flow generation in the next 12-18
months, supported by a gradual demand recovery and the company's
controlling capital spending and share repurchase.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade the ratings if Crown sustainably improves its
credit metrics within the context of a stable competitive
environment and maintains good liquidity. An upgrade would also
require a more streamlined debt capital structure and the
flexibility of an unsecured capital structure. Specifically, the
ratings could be upgraded if total debt/EBITDA is below 3.5x and
free cash flow/debt is over 10%.
Moody's could downgrade the ratings if credit metrics, liquidity or
the competitive environment deteriorate. Specifically, the rating
could be downgraded if total debt/EBITDA rises above 4.25x, free
cash flow/debt falls below 6.0%, or EBITDA/Interest expense is
below 5.0x.
The principal methodology used in these ratings was Packaging
Manufacturers: Metal, Glass and Plastic Containers published in
December 2021.
Headquartered in Yardley, Pennsylvania, Crown Holdings, Inc. (NYSE:
CCK), is a global manufacturer of steel and aluminum containers for
food, beverage, and consumer products. Crown also manufactures
protective packaging products and solutions. For the twelve months
ending March 2023, the company generated about $12.7 billion in
revenue.
CUENTAS INC: Closes Purchase of 21.8 Acres of Land for $5.1M
------------------------------------------------------------
Cuentas, Inc. announced that it has closed on the purchase of a
21.8 acre, $5.1M parcel of land and is moving forward with its plan
to add to its growing affordable real estate portfolio. The
Company also confirmed that it is signing an operating agreement to
develop a 360 apartment complex, "Arden by Cuentas Casa" on the
site, which is strategically located in Brooksville Florida, a
suburb of Tampa and a short drive from Clearwater beaches.
Arden by Cuentas Casa will be managed by Brooksville Development
Partners, LLC, which will utilize its "Resident-Tech" platform to
help people live safer, better and more productive lives. The
Development will also be utilizing the same patented, leading edge
construction technology from Renco USA that was used on the
Lakewood Village project, which was Cuentas' first sustainable real
estate investment. The Renco system is proving to be less
expensive, faster, "greener" and stronger than traditional
construction techniques, with little to no history of
deterioration. Cuentas believes that it is important to offer a
broad range of services to the underserved, and the Company has
taken a novel and innovative approach by investing in the core
areas of financial services, communications, and real estate, in
order to serve what management feels as a massive demand from a
large and rapidly growing segment of the population that has been
left out of the financial system.
"We believe that a platform for the underserved must be
encompassing, including not only personal financial solutions but
also, realistic and affordable living opportunities as well as
green solutions that will help the environment and our future,"
said Michael De Prado, co-founder and president of Cuentas Inc.
"We have taken a broad approach, building a growing portfolio of
assets for this exploding but overlooked market."
"The current banking system has left millions able consumers in the
US and around the world behind, and the turmoil in the system is
adding even more stress and concern," said Cuentas co-founder and
CEO, Arik Maimon. "With initiatives like Cuentas Casa, we are
taking another step at moving beyond the bank, supporting
good-willed people to create better lives for themselves and their
families."
Management is underscoring its commitment to growing its
alternative housing portfolio with this latest announcement.
Cuentas provided the $2 million equity portion of the $5.1 purchase
property purchase price, and will be not only a significant owner
of the development, but will also partner with Arden to provide
additional services to residents and their families. When
completed, the property will have over 346,000 square feet of
rentable space. The Company's first project at Lakewood is on
track towards completion and expects to be sold out. Cuentas plans
to have multiple projects under development by 2024 and expects to
announce additional features of its Cuentas financial tools
portfolio to help renters and home owners.
Cuentas' beyond-the-bank approach began with financial tools and
management is now expanding into telecommunications and real
estate. "There is so much need, and at the same time, so much
opportunity," concluded Maimon. "We are focusing on identifying
these opportunities and bringing the right players to the table to
find meaningful solutions."
About Cuentas
Headquartered in Miami, Florida, Cuentas, Inc. --
http://www.cuentas.com-- currently focuses on the business of
using proprietary fintech technology to provide e-banking and
e-commerce services for delivering mobile banking, prepaid debit
and digital content services to the unbanked, underbanked and
underserved Latino, Hispanic and immigrant communities. The
Company's proprietary software platform enables Cuentas to offer
comprehensive financial services and robust functionality that is
absent from other Mobile Apps through the use of its Prepaid Debit
Mastercard/General-Purpose Reloadable cards.
Cuentas reported a net loss attributable to the company of $14.53
million in 2022, a net loss attributable to the company of $10.73
million in 2021, a net loss attributable to the company of $8.10
million in 2020, a net loss attributable to the company of $1.32
million in 2019, and a net loss of $3.56 million in 2018. As of
Dec. 31, 2022, the Company had $1.50 million in total assets, $2.22
million in total liabilities, and a total stockholders' deficit of
$724,000.
Tel-Aviv, Israel-based Yarel + Partners, Certified Public
Accountants (Isr.), the Company's auditor since 2023, issued a
"going concern" qualification in its report dated March 31, 2023,
citing that the Company has incurred net losses since its
inception, and has not yet generated sufficient revenues to support
its operations. As of Dec. 31, 2022, there is an accumulated
deficit of $52,750,000. These conditions, along with other matters,
raise substantial doubt about the Company's ability to
continue as a going concern.
CYXTERA TECHNOLOGIES: S&P Downgrades ICR to 'CCC-', On Watch Neg.
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Cyxtera
Technologies Inc. by one notch to 'CCC-' from 'CCC' and placed all
ratings on CreditWatch with negative implications.
S&P also lowered its issue-level rating on the company's revolver
and first-lien term loan by one notch to 'CCC' from 'CCC+'. The
recovery rating on both the revolver and term loan remains '2',
indicating its expectation for substantial (70%-90%; rounded
estimate: 80%) recovery of principal in the event of a payment
default.
The CreditWatch negative placement reflects the likelihood of a
rating downgrade in the coming weeks either as a result of a
Chapter 11 bankruptcy filing or a debt restructuring that S&P could
consider as distressed and akin to a default.
The downgrade follows Cyxtera's announcement that it has entered
into an RSA with its equity sponsors and an ad hoc group of
lenders. The terms of the RSA contemplate the company undertaking a
process to pursue a potential sale of the business or a significant
investment from a new investor. In connection with this process,
the lenders have agreed to offer long-term financing for potential
investors to address existing near-term maturities. To the extent
the process does not result in an acceptable transaction with a
third party, as defined by the RSA, the company would implement a
comprehensive financial restructuring and transition majority
ownership of the business to the lenders through an expedited,
pre-packaged Chapter 11 filing under the U.S. Bankruptcy Code.
The new $50 million term loan has priority over existing
obligations. In connection with the RSA, the new $50 million term
loan has priority over the existing revolver and first-lien term
loan. This weakens the recovery prospects of both pieces of debt
slightly although estimated recovery prospects remain within the
existing 70%-90% range for a '2' recovery rating. The new term loan
does provide a modest boost the company's weak liquidity
situation.
S&P said, "Despite solid EBITDA growth, we believe debt levels are
too high in the current interest rate environment. Due to
significantly higher interest rates, Cyxtera will likely need to
lower its debt, thereby reducing its interest burden to generate
positive free cash flow. We project that the company will need to
continue to invest to increase capacity in markets that are highly
utilized, resulting in capex of about $115 million in 2023 and a
cash flow deficit of about $100 million (excluding working capital
changes). Although these investments will likely drive growth and
are being made in markets with solid demand, given the current debt
load (and assuming a 12% interest rate), we project Cyxtera would
still deplete $20 million to $65 million of cash in 2024, even
assuming no expansion-related capex. We project that Cyxtera will
report negative free operating cash flow (FOCF) of $20 million to
$65 million in 2024, based on: lease-adjusted EBITDA of $320
million to $340 million (up from about $275 million in 2022);
required capital and operating lease payments of $200 million to
$215 million; interest expense on debt of $110 million to $115
million; and nonexpansion capex of $50 million to $55 million."
The CreditWatch negative placement reflects the likelihood of a
rating downgrade in the coming weeks either via a Chapter 11
bankruptcy filing or a debt restructuring that we could consider as
distressed and akin to a default.
S&P said, "We would lower the issuer credit rating to 'CC' if the
company were to launch a distressed debt exchange or restructuring
and likely lower to 'SD' (selective default) or 'D' upon
completion. We would lower the issuer credit rating to 'D' if
Cyxtera files for bankruptcy under Chapter 11 of the U.S.
Bankruptcy Code."
ESG credit indicators: E-3; S-2; G-3
S&P said, "Environmental and governance factors are a moderately
negative consideration in our credit analysis of Cyxtera. It is
exposed to climate transition risks given the vast power
requirements to run its data centers, which only derive power from
about 50% of renewable sources. We believe there will be heightened
customer sensitivity toward providers that utilize renewable
energy, which could affect a data centers competitive advantage.
For example, compared to Switch which derives power from nearly all
renewable sources, Cyxtera is susceptible to higher churn rates
given Switch is better able to help its customers meet their ESG
goals. Our assessment of the company's financial risk profile as
highly leveraged reflects corporate decision-making that
prioritizes the interests of controlling owners, in line with our
view of most rated entities owned by private-equity sponsors. Our
assessment also reflects their generally finite holding periods and
a focus on maximizing shareholder returns."
DECURTIS HOLDINGS: Files for Chapter 11 Amid Dispute With Carnival
------------------------------------------------------------------
DeCurtis Holdings LLC filed for chapter 11 protection in the
District of Delaware.
DeCurtis provides guest experience and operational management
product-focused SaaS software solutions designed to power any
indoor, complex environment. DeCurtis is the industry leader in
transformational experience technology focused on the cruise line
industry, and DeCurtis makes software systems used for providing
guests a seamless experience with cruise ship facilities through
the use of wireless sensing technologies. Beyond the cruise line
industry, DeCurtis' products and services are also applicable to
restaurants, theme parks, and the extended hospitality industry,
with the potential to expand into healthcare and other settings.
With a vast range of experience working with some of the world's
best, most-recognized brands, such as Disney Cruise Line, Norwegian
Cruise Line ("NCL"), and Virgin Voyages, DeCurtis transforms
existing client experiences to make them better, faster, and
stronger through creative application of the latest technology.
Pairing deep industry knowledge with that technology, DeCurtis
transforms day-to-day experiences for clients and their guests.
DeCurtis owns patents on its transformative technology such as U.S.
10,932,089 and U.S. 11,601,778.
In fiscal years 2018 and 2019, and due to the value of its
technology to its customers, DeCurtis was prospering, generating
more than $22 million of revenue each year, while turning gross
profits of approximately $17 million and $11 million, respectively.
Despite strong, efficient operations and an advantageous market
position, in early 2020, DeCurtis was forced to initiate litigation
against one of its prior clients, Carnival Corporation, following
Carnival's interference with DeCurtis' customer contracts with
Carnival's competitors. Specifically, Carnival threatened those
other cruise lines (DeCurtis' customers) with litigation based on
accusations that DeCurtis technology misappropriates and infringes
upon Carnival intellectual property. DeCurtis believes that those
threats were an attempt to put it out of business and preclude it
from selling its guest engagement systems and methods to other
cruise line operators. And the threats to DeCurtis' customers had a
significant impact on DeCurtis because Carnival is the largest
cruise ship operator in the world, with nine different cruise lines
and 45% of the market, while DeCurtis is a much smaller company.
On July 29, 2020, the United States District Court for the Southern
District of Florida (the "Florida District Court") consolidated
Carnival Corporation v. DeCurtis Corporation and DeCurtis LLC (Case
No. 20-21547) with the related, higher-numbered action, DeCurtis
LLC v. Carnival Corporation (Case No. 20-22945). All filings in
both actions are now submitted under Case No. 20-22945 (the
"Carnival Litigation").
Michael Atkinson, a principal with the firm of Province, LLC,
explains that in the wake of Carnival's threats to DeCurtis'
customers, certain of DeCurtis' current and prospective customers
ceased to do business with DeCurtis. As a result of Carnival's
threats, DeCurtis believes its reputation in the market was
destroyed alongside its relationships with its actual and potential
customers. Carnival and DeCurtis subsequently became entangled in
litigation in April 2020. During the litigation, DeCurtis
continued business, to the extent it was able, with the cloud of
Carnival's accusations hanging over it and the financial pressures
from the cruise industry shutting down due to the COVID-19
pandemic.
In 2020, DeCurtis only generated approximately $7 million in
revenue and had negative gross profits. However, in 2021,
DeCurtis’s business began to recover, and DeCurtis generated
revenue of approximately $15 million in fiscal year 2021, and $12
million in fiscal year 2022, with gross profits of approximately $7
million and $3 million, respectively.
This changed in early 2023 when the Carnival Litigation proceeded
to trial. The Carnival Litigation unexpectedly resulted in an
adverse jury verdict in favor of Carnival on Carnival's patent
infringement and breach of contract claims against DeCurtis that
has been memorialized in a non-final judgment. Carnival's counsel
has also publicly threatened to seek entry of injunctive relief
against DeCurtis and its customers in furtherance of the judgment.
DeCurtis, in consultation with its counsel, believes it has strong
bases to overturn the jury verdict as contrary to law and the facts
established at trial, and reserves all of its rights to seek
further review of the judgment. Nonetheless, DeCurtis was compelled
to file these cases because it lacks the liquidity to satisfy the
judgment, post a supersedeas bond to halt execution of the
judgment, or pay the associated legal expenses necessary to quickly
challenge the judgment.
Indeed, prior to filing the Chapter 11 cases, DeCurtis entered into
an emergency bridge loan with certain of its first lien lenders,
absent which DeCurtis would have been unable to fund critical
ongoing expenses, including payroll.
DeCurtis's goals in this Chapter 11 case are to preserve its
business as a going concern to maximize the value of its estate. In
addition to its existing cruise line business, DeCurtis believes it
has strong potential to expand its land-based business once the
overhang associated with the Carnival Litigation is removed. After
exploring strategic alternatives, the Debtors determined that the
best and only way to preserve and maximize their value is by
consummating a Section 363 sale of substantially all of their
assets to certain of their first lien lenders (the "Stalking Horse
Bidder") through a credit bid, subject to higher and better offers
at an auction. In connection therewith, on April 30, 2023, the
Debtors entered into a Term Sheet for Stalking Horse Credit Bid
with the Stalking Horse Bidder that details the principal terms of
a proposed sale transaction. The Debtors intend to expeditiously
file a motion to approve bidding procedures and designate the
lenders as the stalking-horse bidder for the sale of substantially
all of their assets.
Notwithstanding the pre-petition bridge loan, DeCurtis faces a
rapidly declining cash position that has rendered it unable to pay
necessary expenses, including payroll. Accordingly, DeCurtis is
seeking immediate approval of a debtor-in-possession loan facility
(the "DIP Facility") to be provided by its first lien lenders (the
"DIP Lenders"), that will provide the Debtors with up to
approximately $6.5 million in new money, subject to the roll-up of
the prepetition secured obligations into the DIP Facility, to fund
the Debtors' operating expenses and consummate a value-maximizing
sale process. Pending the approval of the DIP Facility and
ultimately a sale, DeCurtis will continue to operate in the
ordinary course of business and provide uninterrupted service to
its customers.
About DeCurtis Holdings
DeCurtis Holdings LLC provides guest experience and operational
management product-focused SaaS software solutions designed to
power any indoor, complex environment. DeCurtis is the industry
leader in transformational experience technology focused on the
cruise line industry, and DeCurtis makes software systems used for
providing guests a seamless experience with cruise ship facilities
through the use of wireless sensing technologies. Beyond the cruise
line industry, DeCurtis's products and services are also applicable
to restaurants, theme parks, and the extended hospitality industry,
with the potential to expand into healthcare and other settings.
DeCurtis Holdings LLC and it affiliates sought relief under Chapter
11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No.
23-10548) on May 1, 2023.
In the petition filed by Joseph J. Carino, as chief financial
officer, DeCurtis Holdings estimated assets between $10 million and
$50 million and liabilities between $50 million and $100 million.
The petition states that funds will be available to unsecured
creditors.
Judge Kate Stickles oversees the case.
Potter Anderson and Corroon LLP and Cooley LLP are serving as the
Debtors' legal counsel and Province, LLC, is the financial advisor.
Groombrige, Wu, Baughman & Stone LLP is special counsel, and Omni
Agent Solutions is the claims, noticing, and administrative agent.
DEYO ENTERPRISES: Jolene Wee Named Subchapter V Trustee
-------------------------------------------------------
The U.S. Trustee for Region 1 appointed Jolene Wee of JW Infinity
Consulting, LLC as Subchapter V trustee for Deyo Enterprises, Inc.
Ms. Wee will be paid an hourly fee of $595 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Wee declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Jolene E. Wee
JW Infinity Consulting, LLC
447 Broadway 2nd Fl #502
New York, NY 10013
E-mail: jwee@jw-infinity.com
Phone: (929) 502-7715
Fax: (646) 810-3989
About Deyo Enterprises
Deyo Enterprises, Inc., doing business as Supercuts, filed a
petition under Chapter 11, Subchapter V of the Bankruptcy Code
(Bankr. S.D.N.Y. Case No. 23-22323) on May 2, 2023, with as much as
$50,000 in assets and $500,001 to $1 million in liabilities. Judge
Sean H. Lane oversees the case.
The Debtor is represented by James J. Rufo, Esq., at The Law Office
of James J. Rufo.
DIAMOND SCAFFOLD: Court OKs Cash Collateral Use Thru July 8
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Alabama
authorized Diamond Scaffold Services, LLC to use cash collateral on
an interim basis in accordance with the budget, with a 10%
variance, through July 8, 2023.
The Debtor requires the use of cash collateral to pay operating
expenses.
Prior to June 2021, the Debtor owned scaffolding and leased it to
its customers. It now leases scaffolding from Sertant Capital, SMA
II LP I, LLC, Mazuma Capital, and First Guaranty Bank and subleases
that scaffolding to its customers. Sertant, SMA, Mazuma, and First
Guaranty Bank claim security interests in the scaffolding and in
the proceeds thereof.
Honest Funding, LLC; Cheetah Capital; Dynasty Capital 26, LLC;
Reserve Capital Management; Byrd Capital, LLC; Granite State
Services, LLC; Strategic Investments, LLC; LCF Group, Inc.; and
Imperial Funding -- which the Debtor calls "Cash Advance
Facilitators" -- may also claim to own or to have a security
interest in certain of Debtor's receivables.
Byrd Capital, LLC, Granite State Services, LLC, and Strategic
Investments, LLC are members of 3 Cajuns, LLC and consolidated
their claims against the Debtor into one promissory note in the
principal amount of $875,000 prior to the petition date.
The IRS, Alabama Department of Revenue, and the State of Texas
recorded tax liens against the Debtor prior to the Petition Date,
which may attach to the Debtor's pre-petition accounts
receivables.
The IRS, the Alabama Department of Revenue, the Louisiana
Department of Revenue, the State of Texas, and the Funders are the
"Cash Collateral Claimants."
To provide adequate protection to those of the Equipment Lessors
and Cash Collateral Claimants that have ownership claims to or
valid liens on the Debtor's cash collateral, the Equipment Lessors
and Cash Collateral Claimants are granted, effective as of the date
of the Interim Order, a post-petition security interest and
replacement lien on the Debtor's postpetition receivables to the
same extent, priority, and perfection status as they have valid
prepetition liens.
A copy of the order is available at https://bit.ly/3nxTIwx from
PacerMonitor.com.
About Diamond Scaffold Services
Diamond Scaffold Services LLC -- https://www.diamondscaffold.com/
-- is an authorized distributor of Ring-lock, Cup-lock, Shoring,
and Frame Scaffold. Diamond Scaffold Services, LLC, sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
S.D. Ala. Case No. 22-11208) on June 21, 2022. In the petition
filed by Jewell Wayne Sumrall, as president, the Debtor estimated
assets between $1 million and $10 million and liabilities between
$10 million and $50 million.
Judge Jerry Oldshue oversees the case.
Alexandra K. Garrett, Esq., at Silver, Voit & Garrett, is the
Debtor's counsel. Jason R. Watkins is serving as special counsel,
representing the Debtor in various litigation.
DIEBOLD NIXDORF: $626M Bank Debt Trades at 57% Discount
-------------------------------------------------------
Participations in a syndicated loan under which Diebold Nixdorf Inc
is a borrower were trading in the secondary market around 43.3
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $626 million facility is a Term loan that is scheduled to
mature on July 15, 2025. About $529.5 million of the loan is
withdrawn and outstanding.
Diebold Nixdorf, Incorporated provides automatic teller machines,
financial, and point of sale.(POS)
DIMENSIONS IN SENIOR: No Patient Complaints at Wilcox Facility
--------------------------------------------------------------
Abigail Mohs, the duly appointed patient care ombudsman, filed with
the U.S. Bankruptcy Court for the District of Nebraska her initial
report regarding the status of patient care provided by Wilcox
Properties of Fort Calhoun, LLC (doing business as Autumn Pointe
Assisted Living0, an affiliate of Dimensions in Senior Living, LLC.
The report covers the period from Feb. 18 to April 21, 2023.
During the on-site visit, the PCO met with Tammy Woodard, executive
director of Wilcox Properties of Fort Calhoun, where Ms. Woodard
explained that the key leadership roles have remained the same. She
explained that there are several roles that seem to have high
turnover due to the nature of the work and interested individuals
(high school students). She said that Dimensions has been open with
the bankruptcy proceeding and announced it to all staff.
The PCO and Ms. Woodard discussed other patient care issues,
including grooming, which is charted as an activity of daily
living; and resident activities (during non-COVID-19 outbreaks)
which includes internal activities and outings.
The PCO noted that Ms. Burns confirmed that there were no patient
complaints during the period covered by this report. Wilcox
Properties of Fort Calhoun held resident council meetings to obtain
resident input and no complaints were reported during those
sessions. Ms. Burns provided the patient complaints policy.
As of April 21, Wilcox Properties of Fort Calhoun employed 42
employees, an increase from 38 as of January 15. There is an open
housekeeping position at Wilcox Properties of Fort Calhoun at this
time. Ms. Burns stated payroll has been met and she does not see a
problem with future funding of payroll at this time.
A copy of the Ombudsman Report is available for free at
https://bit.ly/4169b4F from PacerMonitor.com.
The ombudsman may be reached at:
Abigail T. Mohs, Esq.
Baird Holm, LLP
1700 Farnam Street, Suite 1500
Omaha, NE 68102-2068
Phone: 402.636.8296
Email: amohs@bairdholm.com
About Dimensions in Senior Living
Dimensions in Senior Living, LLC -- https://www.dimsrivg.com/ --
through a series of entities, owns and manages a series of senior
living and assisted living facilities in Nebraska, Iowa, Missouri,
and Kansas.
Dimensions in Senior Living and six affiliates each filed a
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
D. Neb. Lead Case No. 22-80860) on Nov. 21, 2022. In the petition
filed by its chief restructuring officer, Amy Wilcox-Burns,
Dimensions in Senior Living reported assets and liabilities between
$1 million and $10 million.
Judge Brian S. Kruse oversees the cases.
The Debtors are represented by Patrick Raymond Turner, Esq., at
Turner Legal Group, LLC.
DUNBAR PARTNERS: Unsecureds Owed $89.8M Unimpaired in Sale Plan
---------------------------------------------------------------
Dunbar Partners BSD LLC submitted a Plan and a Disclosure
Statement.
The Debtor is a limited liability company currently under contract
to purchase the real property and improvements thereon located at
2802 Frederick Douglass Boulevard, New York, New York 10039
("Property"). The Property is currently owned by Dunbar Owner LLC
("Dunbar Owner"). The Property is commonly known as the Dunbar
Apartments and includes 12 commercial spaces and approximately 538
residential units.
Prior to the Commencement Date, on July 29, 2022, the Debtor and
Dunbar Owner entered into a contract for the Debtor to acquire the
Property for a purchase price of $96,000,000. Debtor and Dunbar
Owner entered into a first amendment to the contract dated August
17, 2022 and a second amendment to the contract dated August 26,
2022 pursuant to which the purchase price was reduced to
$92,500,000.00 (hereinafter, the contract, and any and all
amendments shall be referred to as the "Contract of Sale").
Pursuant to the Contract of Sale, Madison Title Agency as Escrowee
is holding a $3,000,000 deposit to be applied at Closing to the
purchase price. The Contract of Sale contains a "time of the
essence" closing deadline of November 29, 2022, as to the Debtor,
but which closing deadline was subject to adjournment by Dunbar
Owner.
Pursuant to a letter dated December 2, 2022, Dunbar Owner asserted
that the Debtor was in default of its obligations under the
Contract including (1) failing to close on the transaction and (2)
failing to fully fund the required deposit. The December 2, 2022
letter purported to terminate the Contract of Sale and demanded a
release of the deposit to Dunbar Owner. By letter dated December 2,
2022, Debtor rejected Dunbar Owner's default letter and asserted
that Dunbar Owner was not ready, willing and able to close and that
the Contract of Sale remained in full force and effect. On January
18, 2023, Dunbar Owner sent another default letter to Debtor and
demanded a closing take place in accordance with the Contract of
Sale on February 22, 2023.
The Debtor sought the protections afforded it by the Bankruptcy
Code, including, but not limited to, the provisions of Section
108(b) of the Bankruptcy Code, which extended the February 22, 2023
closing deadline for 60 days, through and including April 24, 2023,
so that the Debtor could obtain additional time to close on the
Contract of Sale.
Prior to filing the Plan, the Debtor and Dunbar Owner negotiated
and entered into the Stipulation Agreeing to Extend the Time to
Close Under the Contract For the Sale of Real Property
("Stipulation") which amended the Contract of Sale to, among other
things, extend the Debtor's ability to close on the Contract of
Sale through May 31, 2023, reduce the purchase price to
$86,750,000, consent to the assignment of the contract of sale to a
designated assignee, require the Debtor to pay per diem interest
under the Seller's existing mortgage loan from May 1, 2023 until a
closing, and require the Debtor to pay any transfer taxes imposed
in connection with the Contract of Sale. The Stipulation is pending
approval by the Bankruptcy Court. Parties in interest are referred
to the Debtor's motion for approval of the Stipulation for further
detail.
Assuming the Bankruptcy Court grants the Debtor's motion to approve
the Stipulation, the Debtor will seek to confirm its Plan. On the
Effective Date, the Closing will take place and the Debtor and the
Assignee of the Debtor's Contract, 2802-2816 FDB LLC (DE) will
close in two substantially contemporaneously transactions under the
Assignment Agreement and the Contract of Sale. Under the Assignment
Agreement, the Assignee will pay to the Debtor cash in an amount
sufficient to fund the Plan, including the payment of all General
Unsecured Claims, Administrative Claims and Professional Fees.
Under the Closing for the Contract of Sale, in addition to paying
for the assignment of the Contract of Sale, the Assignee will
satisfy the purchase price, as adjusted, pursuant to the Contract
of Sale, as amended, and as further amended by and pursuant to the
Stipulation and acquire title to the Property. Absent the
contemporaneous assignment and closing, the Debtor will not have
sufficient funds to consummate its Plan.
Under the Plan, Class 1 General Unsecured Claims total $89,834,000
and will recover 100% of claims. Each holder of an Allowed General
Unsecured Claim shall receive on the Effective Date, Cash in the
full amount of such Allowed General Unsecured Claim plus interest
at the federal judgment rate payable from the Sale Proceeds in full
and final satisfaction of such Allowed General Unsecured Claim.
Class 1 is unimpaired.
The proceeds from the Assignment Agreement shall be the funding
source for Plan payments. All amounts due Dunbar Owner under the
Contract of Sale will be paid from equity funded by Assignee, funds
previously deposited by the Debtor under the Contract of Sale, and
a mortgage loan to the Assignee, in the amount of $83,000,000,
which MF1 Capital LLC has entered into a term sheet to provide on
or before the Effective Date via Assignee's assumption of existing
mortgage debt owed by Dunbar Owner to MF1 Capital LLC. The Debtor
shall take all necessary steps, and perform all necessary acts, to
consummate the terms and conditions of the Plan.
Attorneys for the Debtor:
Fred B. Ringel, Esq.
Lori Schwartz, Esq.
Clement Yee, Esq.
LEECH TISHMAN ROBINSON BROG, PLLC
875 Third Avenue
New York, NY 10022
Tel: 212-603-6300
A copy of the Disclosure Statement dated April 28, 2023, is
available at https://bit.ly/3VkJH2f from PacerMonitor.com.
About Dunbar Partners BSD
Dunbar Partners BSD, LLC is a Brooklyn-based company engaged in
activities related to real estate.
Dunbar Partners BSD filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
23-40575) on Feb. 21, 2023, with $95,500,000 in assets and
$92,395,000 in liabilities. Judge Nancy Hershey Lord oversees the
case.
Fred R. Ringel, Esq., at Leech Tishman Robinson Brog, PLLC and
Jeffrey Zwick & Associates PC serve as the Debtor's bankruptcy
counsel and special real estate counsel, respectively.
EAST BROADWAY: Bank of Hope Files Plan to Assign Lease
------------------------------------------------------
Bank of Hope f/k/a BBCN Bank ("Bank of Hope" or "Bank" or ‘BOH'),
secured creditor for the Chapter 11 estate (the "Estate") of the
above-captioned debtor, East Broadway Mall ("Debtor" or "EBM")
submits this disclosure statement, pursuant to section 1125 of the
Bankruptcy Code, to Holders of Claims against and Interests in the
Debtor in connection with the solicitation of votes for acceptance
of the Chapter 11 Plan of East Broadway Mall.
The Plan is a contract between the Debtor and all of its creditor
constituencies. It provides the mechanism, timing, and details of
all treatment and payment of creditor Claims. It is the blueprint
for the liquidation and distribution of the Debtor's assets for the
benefit of the Debtor's creditors. The information contained in
this document is designed to provide Claimants and Interest Holders
of the Debtor with information to enable them to make an informed
judgment concerning the method by which the Plan will be carried
out. If the Bankruptcy Court confirms the Plan, it will be binding
on the Debtor, its creditors, equity holders, and other interested
parties.
The Plan provides for the assumption and assignment of the Debtor's
remaining interest in the Lease to the Approved New Tenant in
accordance with the provisions of the Term Sheet and the June 21,
2022 Stipulation and Order. In late summer 2022, the Debtor
submitted a revised proposal to the City and BOH for the Debtor to
be permitted to remain as the tenant under the Lease pursuant to
certain proposed amendments. BOH was thereafter advised that the
City determined to reject the Debtor's revised proposal, and
preferred to go forward with the assignment to Broadway East Group,
LLC as the Approved New Tenant.
On December 5, 2022, BOH filed a motion seeking approval of a prior
disclosure statement and other related relief, and would later
submit two additional versions of the disclosure statement. While
that motion was pending, two additional parties expressed interest
in becoming the Approved New Tenant. With the Court's guidance, BOH
and the City determined that the best approach would be to receive
best and final offers from all three parties. Because negotiations
were ongoing, the Court denied the original motion and entered an
order directing any party, including BOH, to file a motion for
approval of a disclosure statement and plan by April 28, 2023.
BOH and the City reached out to the interested parties, as well as
the Debtor, and requested their best and final offers by April 11,
2023. Each interested party timely submitted its best and final
offer by the deadline.2 BOH and the City collectively determined
that Broadway East Group, LLC had submitted the highest and best
offer. The City and BOH will therefore go forward with the
assignment to Broadway East Group, LLC as the Approved New Tenant.
BOH has therefore filed the Plan in order to effectuate the
transaction with Broadway East Group, LLC as the Approved New
Tenant.
BOH reserves the right to propose additional changes to this Plan
in accordance with a Plan Supplement that will be filed on or prior
to the deadline for filing the Plan Supplement and hearing on
confirmation of the Plan. The Plan Supplement will identify the
Approved New Tenant, including details of the Approved New Tenant
and Term Sheet and/or New Lease.
BOH believes the Plan will provide the best possible return to
Holders of Claims and Interests and is in the best interests of the
Debtor, its Creditors, and Interest Holders.
Under the Plan, Class 4 Non-Priority Unsecured Claims consists of
unsecured claims that are not "priority" unsecured claims,
including the Super-Priority adequate protection claim of BOH
(Class 4A), the Claim of the City, which will be waiving its Claim
in order to allow other Unsecured Creditors to receive Distribution
under the Plan, and any other any other unsecured Claims that are
not "priority" unsecured claims, including the unsecured deficiency
claim of BOH and any unsecured claims listed in Debtor's Petition
under Schedule F approximately in the amount of $35,000.00 and for
any other filed Proofs of Claims that become allowed Claims (Class
4B). Class 4C is a Convenience class for any Creditor in classes 2,
3, or 4 that elect to receive a 10% distribution on its Allowed
Claim capped at $2,000. Class 4 is impaired.
A hearing on the confirmation of the Plan is scheduled for July 25,
2023 at 10:00 a.m. at the United States Bankruptcy Court for the
Southern District of New York, 1 Bowling Green, New York, NY 1004.
The objection to the Adequacy of the Disclosures, must be made by
May 30, 2023 and objection to the terms of the proposed plan, must
be made by July 18, 2023.
The deadline to vote on the plan is July 18, 2023 at 4:00 p.m.
(prevailing Eastern Time).
The deadline to object to the plan is July 18, 2023, at 4:00 p.m.
(prevailing Eastern Time).
Attorneys for Bank of Hope:
James M. Sullivan, Esq.
Robert J. Malatak, Esq.
WINDELS MARX LANE & MITTENDORF, LLP
156 West 56th Street
New York, NY 10019
Tel: (212) 237-1000
E-mail: jsullivan@windelsmarx.com
rmalatak@windelsmarx.com
A copy of the Disclosure Statement dated April 28, 2023, is
available at https://bit.ly/3LmuRUf from PacerMonitor.com.
About East Broadway
Mall
East Broadway Mall, Inc., operates a commercial mall located at 88
East Broadway in the City, County and State of New York. On March
1, 1985, Debtor entered into a 50-year lease commercial lease, with
the City through the New York City Department of General Services
for use of land beneath the Manhattan Bridge. Upon execution of the
Lease in 1985, the Debtor expended more than one million dollars to
construct a mall on the land.
East Broadway Mall, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 19-12280) on July 12,
2019. In the petition signed by its president, Grace Chan, the
Debtor was estimated to have assets and debts of less than $50,000.
The Debtor hired Sferrazza & Keenan, PLLC, as counsel, and The
Carey Group LLC, as special counsel.
EAST BROADWAY: June 14 Hearing on Bank's Plan Disclosures
---------------------------------------------------------
Bank of Hope, f/k/a BBCN Bank, secured creditor of the Chapter 11
estate of debtor East Broadway Mall, filed a motion for entry of an
order approving the Third Amended Disclosure Statement for the
Third Amended Plan of Liquidation, solicitation of votes to accept
or reject the Third Amended Plan of Liquidation and notice
procedures, forms of ballots and notices in connection therewith
and certain dates with respect thereto.
The hearing on the Motion has been adjourned to June 14, 2023 at
10:00 a.m. (Prevailing Eastern Time).
Bank of Hope proposes the following dates and deadlines, subject to
modification as necessary:
i. Voting Record Date. May 30, 2023 as the date for determining
(i) which Holders of Claims in the Voting Classes are entitled to
vote to accept or reject the Plan and receive Solicitation Packages
in connection therewith and (ii) whether Claims have been properly
assigned or transferred to an assignee pursuant to Bankruptcy Rule
3001(e) such that the assignee can vote as the Holder of the
respective Claim;
ii. Solicitation Launch Date. June 9, 2023 as the outside date to
commence distributing Solicitation Packages, including Ballots, to
Holders of Claims entitled to vote to accept or reject the Plan;
iii. Plan Supplement Notice. July 13, 2023, the date by which the
notice related to the filing of the Plan Supplement will be filed;
iv. Voting Deadline. July 18, 2023, at 4:00 p.m. prevailing
Eastern Time as the deadline by which all Ballots must be properly
executed, completed, and delivered so that they are actually
received by counsel for the Bank;
v. Plan Objection Deadline. July 18, 2023, as the deadline by
which objections to the Plan must be filed with the Court and
served so as to be actually received by the appropriate notice
parties; and
vi. Deadline to File Voting Report. July 21, 2023, at 4:00 p.m.
prevailing Eastern Time as the date by which the report tabulating
the voting on the Plan shall be filed with the Court;
vii. Plan Confirmation Hearing Date. July 25, 2023, at 10:00 a.m.
or as soon thereafter as the Bank may be heard as the date for the
hearing at which the Court will consider Confirmation of the Plan.
Prior to the Petition Date, by lease dated as of March 1, 1985 (the
"1985 Lease"), the City of New York (the "City"), through the New
York City Department of General Services, now consolidated as part
of the Department of Citywide Administrative Services ("DCAS") as
Landlord, and Debtor as Tenant, entered into a 50-year lease for
use of land beneath the Manhattan Bridge, originally designated as
59-77 Division Street, Manhattan, later re-designated as 88 East
Broadway, and thereafter developed by Debtor, pursuant to the terms
of the Lease (the "Premises"). The Premises is delineated on the
Tax Map of the City of New York, County of New York, as Block 282,
Lot 44.
The City asserted that, as of the Petition Date, the Debtor owed a
substantial amount to the City under the Lease, consisting of Base
Rent, PILOT, Late Charges, plus Water Charges and Percentage Rent
(the "City Pre-petition Claim"). The City further asserted that the
Debtor has failed to make numerous payments due under the Lease
during the post-petition period (the "City Post-petition Claim",
and together with the City Pre-petition Claim, the "City Claim").
As reflected in the "So Ordered" Stipulated Order Re: (I) Use of
Cash Collateral, (II) Post-Petition Replacement Liens, and (III)
Related Relief dated November 13, 2019 (the "Cash Collateral
Order"), the Bank and Debtor agreed that BOH is the senior secured
creditor of the Debtor, pursuant to certain loan documents,
including a promissory note, a loan agreement and a leasehold
mortgage on the Lease, all dated December 29, 2011 (the "Loan
Documents").
As reflected in the Cash Collateral Order, the Debtor and BOH also
agreed that as of the Petition Date, pursuant to the Loan
Documents, the Debtor's indebtedness to BOH under the note was no
less than $5,851,940.00, including, without limitation,
$5,490.691.13 of principal, $129,847.56 of interest, and
$231,401.31 of attorneys' fees (together with continuing interests,
costs, and expenses due under the loan documents (collectively, the
"BOH Pre Petition Claim").
The Debtor has failed to make numerous payments due under the Loan
Documents and the Cash Collateral Order during the post-petition
period (the "BOH Post petition Claim", and together with the BOH
Pre-petition Claim, the "BOH Claim").
As reflected in the Cash Collateral Order, the Debtor and BOH
further agreed that the BOH Claim is secured by substantially all
of the Debtor's assets, including but not limited to the Lease. The
Debtor, the City and the Bank shall be referred to collectively
herein as the "Parties".
By letter dated April 8, 2014, the Landlords sent a Notice to Cure
to the Debtor, arising out of what the Debtor alleged was an
erroneous calculation of a percentage rent due and owing.
On May 10, 2018, in response to a notice to cure served by the
City, the Debtor, as Plaintiff, e-filed a motion in the Supreme
Court of the State of New York, City of New York (the "State Court
Litigation"), Index No. 154341/2018, for a so-called Yellowstone
injunction, seeking to toll the 10-day cure period set forth in the
notice to cure. The Debtor thereafter filed additional pleadings,
including an Amended Complaint, and the City filed pleadings in
opposition, including an answer and counter-claims. The State Court
granted the injunction but conditioned its continuation on the
Debtor's payment of certain amounts to the City. The City alleged
that the Debtor did not make the requisite payments. Subsequently,
the Debtor commenced this Chapter 11 case.
On October 16, 2019, the Debtor filed in the Bankruptcy Court a
motion for an order pursuant to section 365(d)(4) of the Bankruptcy
Code extending the time for the Debtor to assume or reject the
Lease relating to 88 East Broadway by 90 days. The City filed an
objection to the Motion.
Thereafter, the City and the Debtor negotiated, and consulted BOH,
as Leasehold Mortgagee. As a result of those negotiations, the
City, the Debtor and the Bank all agreed to the terms of an order
entered by the Court on November 26, 2019 (the "November 26, 2019
Order"). The November 26, 2019 Order provided that the time within
which the Debtor was permitted to assume or reject the Lease
pursuant to section 365(d)(4) of the Bankruptcy Code was extended
by ninety (90) days through and including February 9, 2020 (the
"February 9, 2020 Deadline").
The November 26, 2019 Order further provided that if the City did
not consent in writing to a further extension before the February
9, 2020 Deadline, then the Lease would be rejected pursuant to 11
U.S.C. Section 365(d)(4), effective as of the February 9, 2020
Deadline. In addition, the November 26, 2019 Order provided that
thereupon the City would be entitled to immediate possession of the
leased premises, that the Debtor would immediately surrender the
premises to the City as lessor.
On or about January 29, 2020, the Debtor defaulted on its
obligations to the Bank under the Cash Collateral Order by failing
to make required adequate protection payments to the Bank. The
Debtor has not made any adequate protection payments to the Bank
since January 9, 2020. As a result of the Debtor's continuing
material defaults under the Cash Collateral Order, the Bank is
entitled to enforce the remedies to which it is entitled under the
Cash Collateral Order.
Subsequently, the United States Trustee filed a motion to convert
the case to Chapter 7 or to dismiss the case on January 14, 2022.
The City filed an objection to the Conversion Motion in which the
Bank joined. The hearing on the Conversion Motion was adjourned
several times. On October 17, 2022, the Court entered an order
denying the Conversion Motion, but permitting the United States
Trustee to reinstate the motion in the event that the Plan is not
confirmed by March 1, 2023.
The City and the Bank had negotiated a term sheet with a proposed
new tenant, Broadway East Group, LLC (the "Approved New Tenant")
setting forth the terms under which the City, the Bank, and the
Approved New Tenant would agree to the assumption and assignment of
the Lease to the Approved New Tenant, except that the terms of the
Lease would be governed by the form of new lease negotiated between
the Approved New Tenant and the City, which was the foundation of
the original plan.
On June 22, 2022, the parties entered into a stipulation and order
establishing deadlines for certain actions by Debtor, City of New
York and Bank of Hope pertaining to Debtor's interest in lease for
88 Broadway, New York, NY ("Stipulation").
The Plan sets forth the Bank's strategy for distribution to
creditors, and does no present a complex case. The Bank
respectfully submits that there is not any additional information
that they could provide that would provide creditors and other
parties in interest with better information than that presented in
order to make a better informed decision whether to vote for or
against the Plan.
Attorneys for Bank of Hope:
James M. Sullivan, Esq.
Robert J. Malatak, Esq.
WINDELS MARX LANE & MITTENDORF, LLP
156 West 56th Street
New York, NY 10019
Tel: (212) 237-1000
E-mail: jsullivan@windelsmarx.com
rmalatak@windelsmarx.com
About East Broadway Mall
East Broadway Mall, Inc., operates a commercial mall located at 88
East Broadway in the City, County and State of New York. On March
1, 1985, Debtor entered into a 50-year lease commercial lease, with
the City through the New York City Department of General Services
for use of land beneath the Manhattan Bridge. Upon execution of the
Lease in 1985, the Debtor expended more than one million dollars to
construct a mall on the land.
East Broadway Mall, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 19-12280) on July 12,
2019. In the petition signed by its president, Grace Chan, the
Debtor was estimated to have assets and debts of less than $50,000.
The Debtor hired Sferrazza & Keenan, PLLC, as counsel, and The
Carey Group LLC, as special counsel.
EFS PARLIN: Jami Nimerof Named Subchapter V Trustee
---------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Jami Nimeroff, Esq.,
as Subchapter V trustee for EFS Parlin Holdings, LLC.
Ms. Nimeroff, a partner at Brown McGarry Nimeroff, LLC, will be
paid an hourly fee of $400 for her services as Subchapter V trustee
and will be reimbursed for work-related expenses incurred.
Ms. Nimeroff declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Jami Nimeroff, Esq.
Brown McGarry Nimeroff, LLC
919 N. Market Street, Suite 420
Wilmington, DE 19801
Telephone: (302) 428-8142
Fax: (302) 351-2744
Email: jnimeroff@bmnlawyers.com
About EFS Parlin
EFS Parlin Holdings, LLC is in the business of electric power
generation, transmission, and distribution. The company is based in
Norwalk, Conn.
EFS Parlin Holdings filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. D. Del. Case No. 23-10539) on April
28, 2023. In the petition signed by its authorized representative,
Michael Whitworth, the Debtor disclosed $9,424,029 in assets and
$12,594,508 in liabilities.
Judge John T. Dorsey oversees the case.
J. Cory Falgowski, Esq., at Burr Forman, LLP is the Debtor's
counsel.
ELEVATE TEXTILES: $585M Bank Debt Trades at 52% Discount
--------------------------------------------------------
Participations in a syndicated loan under which Elevate Textiles
Inc is a borrower were trading in the secondary market around 47.8
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 May 1, 2024. About $515.5 million of the loan is
withdrawn and outstanding.
Elevate Textiles, Inc. manufactures and supplies textile products
worldwide.
ENVISION HEALTHCARE: $2.20B Bank Debt Trades at 90% Discount
------------------------------------------------------------
Participations in a syndicated loan under which Envision Healthcare
Corp is a borrower were trading in the secondary market around 9.8
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $2.20 billion 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.
EPIC CRUDE: S&P Alters Outlook to Stable, Affirms 'CCC+' ICR
------------------------------------------------------------
S&P Global Ratings affirmed its 'CCC+' issuer credit rating on Epic
Crude Services L.P. (Epic) and revised the outlook to stable from
negative. S&P also affirmed its 'CCC+' issue-level rating on the
company's senior secured debt. The '3' recovery rating is
unchanged, indicating its expectation of meaningful (50%-70%;
rounded estimate: 55%) recovery in the event of a payment default.
The stable outlook highlights Epic's mitigated refinancing risk
related to its RCF maturity and S&P's expectation that the company
will continue to strengthen its credit metrics with adjusted debt
to EBITDA of approximately 8x in 2023.
Epic recently refinanced its $75 million revolving credit facility
(RCF) with a $50 million RCF and repaid the remaining $25 million
balance with cash on hand. The transaction addressed its near-term
refinancing risk and extended the maturity on its RCF to March
2026.
Epic's refinancing transaction eliminates its near-term refinancing
risk and improves leverage. On May 1, 2023, the company refinanced
its $75 million RCF with a $50 million RCF due March 2026,
eliminating any near-term maturities. In connection with the
refinancing transaction, the company repaid the remaining $25
million outstanding balance through proceeds from liquidation of
interest rate hedges and sales of crude oil inventory. S&P said,
"We believe this debt reduction helps accelerate improvements to
the company's credit profile. We believe it is unlikely that Epic
will face liquidity issues over the next 24 months, however the new
RCF is fully drawn and Epic has had no availability under its RCF
since 2021. We expect 2023 to be the first full year in which the
company will generate sufficient excess cash to meet its near-term
liquidity needs, which is a turning point from its historical
reliance on external capital."
S&P said, "We expect Epic to continue to benefit from strong demand
for crude at Corpus Christi. In 2022, Epic operated above 85% of
its capacity and was able to secure contracts at higher rates,
resulting in stronger-than-expected credit metrics. Following this
milestone year, we expect the company will continue to improve its
asset utilization and generate excess cash to bolster credit
metrics. We expect crude demand at Corpus Christi to remain high
but assume a slightly weaker commodity price environment throughout
our outlook period. This results in an adjusted debt to EBITDA
ratio of around 8x in 2023, which is at the weaker end among its
midstream peers. Although Epic's credit metrics have improved and
the business has sufficient liquidity to meet its mandatory
payments over the next 12 months, we continue to view the capital
structure as unsustainable over the long term.
"We estimate the majority of Epic's volumes are contracted on a
short-term basis and approximately half of total volumes are
minimum volume commitments (MVCs). Epic's contract profile has
improved compared with previous years but is still relatively
weaker compared with higher rated peers. We view its contract
duration as shorter in tenor which leads to some level of
uncertainty for the outer years. That said, we believe the company
could be well positioned to improve its credit ratios through 2024
if utilization rates remain at current levels.
"The stable outlook on Epic reflects our expectation that its
credit metrics will continue to improve as it continues to increase
its asset utilization. We also expect the company's S&P Global
Ratings'-adjusted debt to EBITDA will decline toward approximately
8x in 2023.
"We could consider a positive rating action on Epic if its cash
flows improve and it sustains S&P Global Ratings'-adjusted debt to
EBTIDA below 7.5x."
S&P could consider a negative rating action on the company if:
-- S&P expects S&P Global Ratings'-adjusted debt to EBTIDA of
above 9x on continuous basis, which could cause it to restructure
its debt; or
-- S&P expects it will miss an interest or amortization payment
over the next 12 months; or
-- The company's liquidity deteriorates such that it doesn't have
sufficient capital to meet its upcoming debt maturities before
becoming current.
ESG credit indicators: E-3, S-2, G-4
FARADAY FUTURE: Appoints Rich Schmidt as New VP of Manufacturing
----------------------------------------------------------------
Faraday Future Intelligent Electric Inc. announced its new Vice
President of Manufacturing, Rich Schmidt. Rich will be responsible
for leading all facets of FF's production and manufacturing,
focusing on the Hanford, CA manufacturing plant, FF ieFactory
California. He will oversee the continued development, component
tooling, and hiring related to the production of the FF 91.
Rich succeeds Mathias Hofmann, FF's senior vice president of Global
Supply Chain, who has been in the interim role for the past eight
months. FF would like to thank and recognize Mathias for his hard
work and many contributions during his interim role as head of
manufacturing during this time. Mathias continues in his role as
SVP of Global Supply Chain at FF.
FF announced on April 14th the completion of the first production
build FF 91 vehicle, coming off the production line at the FF
ieFactory California, located in Hanford, California. This closely
followed the recently announced official start of production of the
FF 91 vehicle.
"I am thrilled to join the FF team and contribute my expertise of
automotive manufacturing organizations to this distinctive and
growing brand," said Rich Schmidt, vice president of Manufacturing.
"I'm looking forward to getting to know the team and helping to
lead them through our future growth opportunities and the
production of this great new product, the FF 91."
Rich started his career with Toyota in Georgetown Kentucky, where
he spent 16 years working in Manufacturing and engineering. After
Toyota, Rich led several major OEM plant startups and stabilization
functions in North America including Nissan, Hyundai, Volkswagen
and Tesla, working within both manufacturing and engineering
divisions within these organizations. After Tesla, Rich started
his own consulting company where he consulted for many years for JD
Powers, Kia Motors, Honda, Plastic Omnium, Gibson Guitar and many
other valued partners. Rich also spent time at both Lordstown
Motors and Canoo in various manufacturing and leadership roles.
"We are very excited to welcome Rich to our growing team as we
continue our ramp up of production vehicles at our Hanford
manufacturing facility," said Xuefeng Chen, Global CEO of Faraday
Future. "Rich brings a wealth of experience to help oversee the
manufacturing and launch of our flagship FF 91 and will help ensure
we deliver the best product to our valued customers."
About Faraday Future
Gardena, CA-based Faraday Future (NASDAQ: FFIE) --
http://www.ff.com-- is a luxury electric vehicle company. The
Company has pioneered numerous innovations relating to its
products, technology, business model, and user ecosystem since
inception in 2014. Faraday Future aims to perpetually improve the
way people move by creating a forward-thinking mobility ecosystem
that integrates clean energy, AI, the Internet.
Faraday Future reported a net loss of $552.07 million for the year
ended Dec. 31, 2022, a net loss of $516.50 million for the year
ended Dec. 31, 2021, compared to a net loss of $147.08 million for
the year ended Dec. 31, 2020.
New York, NY-based Mazars USA LLP, the Company's auditor since
2022, issued a "going concern" qualification in its report dated
March 9, 2023, citing that the Company has incurred operating
losses since inception, has continued cash outflows from operating
activities, and has an accumulated deficit. These conditions raise
substantial doubt about its ability to continue as a going concern.
FONDUE 26: Wins Interim Cash Collateral Access
----------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Fondue 26, LLC d/b/a the Ainsworth to use cash
collateral on an interim basis in accordance with the budget.
The Debtor requires the use of cash collateral for the continued
preservation and maximization of the Debtor's estate.
The Debtor received advances from the U.S. Small Business
Administration.
The SBA holds a note and a security interest against the Debtor's
property, real and personal, which includes cash, rents and
receivables, together with the Debtor's property.
The Debtor agrees that it is the borrower for the Loan Documents
that were executed and delivered in the principal amount of
$150,000, on December 17, 2020, and subsequently modified to the
principal amount of $2 million on January 6, 2022.
The Debtor will make adequate protection payments to the SBA by
making the required payments as set forth in the Loan Documents.
In addition to the existing rights and interests of the SBA in the
Collateral and for the purpose of adequately protecting it from any
diminution of value therein, the SBA is granted, as of the Petition
Date:
(a) valid, enforceable, unavoidable, and fully perfected
replacement liens upon all existing and after-acquired tangible and
intangible personal and real property and assets of the Debtor of
any kind or nature, whether existing prior to or acquired after the
Petition Date and wherever located, and all products and proceeds
of all of the foregoing, only to the extent that said prepetition
liens are deemed valid, perfected and enforceable as of the
Petition Date, in the continuing order of priority, nature, extent
and validity of said pre-petition liens and claims as existed on
the Petition Date; and
(b) a super-priority administrative expense claim under
sections 503(b) and 507(b) of the Bankruptcy Code, subject only to:
(i) the fees of the Sub Chapter V Trustee, counsel for the Debtor,
the Debtor's accountant and any other professionals authorized to
act on behalf of the Debtor in an amount not to exceed $50,000, as
approved by the Bankruptcy Court; and (ii) the fees and commissions
of a Chapter 7 trustee, in the event that the chapter 11 case is
converted to one under chapter 7 not to exceed $10,000.
The security interests and liens granted and regranted:
(i) are in addition to all security interests, liens and
rights of set-off existing in favor of the SBA on the Petition
Date;
(ii) will secure the payment of indebtedness to the SBA in an
amount equal to the aggregate cash collateral used or consumed by
the Debtor and any diminution in the value of the Collateral; and
(iii) will be deemed to be automatically perfected without the
necessity of any further action by the SBA or the Debtor.
These events constitute an "Event of Default":
(i) Use of cash collateral in a manner materially outside the
Budget;
(ii) Failure to pay, timely and in full any insurance premiums;
and
(iii) Failure to comply with any of the dates and deadlines
contained in the Order.
Unless extended further with the written consent of the SBA, the
authorization granted to the Debtor to use cash collateral will
terminate immediately upon the earliest to occur of:
(i) The entry of an order dismissing the Bankruptcy Case;
(ii) The entry of an order converting the Bankruptcy Case to a
case under chapter 7;
(iii) The entry of an order appointing a chapter 11 trustee;
(iv) The Debtor's failure to cure an Event of Default within
seven business days' of written notice;
(v) Entry of an order reversing, vacating, or otherwise
amending, supplementing or modifying the Order; or
(vi) Entry of an order granting relief from the automatic stay
to any creditor (other than the SBA) holding or asserting a lien in
or against the Collateral.
A further interim hearing on the matter is set for May 16, 2023 at
10 a.m.
A copy of the order is available at https://bit.ly/3M2VtLw from
PacerMonitor.com.
About Fondue 26, LLC
Fondue 26, LLC operates sports bar, restaurant, and private event
venues. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-10306) on March 2,
2023. In the petition signed by Matthew Shendell, managing member,
the Debtor disclosed up to $50,000 in assets and up to $10 million
in liabilities.
Judge Martin Glenn oversees the case.
Anne Penachio, Esq., at Penachio Malara, LLP, represents the Debtor
as legal counsel.
FRANKLIN SOUTHERN: Robert Altman Named Subchapter V Trustee
-----------------------------------------------------------
The U.S. Trustee for Region 21 appointed Robert Altman, Esq., as
Subchapter V trustee for Franklin Southern Manufacturing, LLC.
Mr. Altman, a practicing attorney in Palatka, Fla., will be paid an
hourly fee of $275 for his services as Subchapter V trustee and
will be reimbursed for work-related expenses incurred.
Mr. Altman declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Robert Altman
P.O. Box 922
Palatka, FL 32178- 0922
Phone: 386-325-4691
Email: robertaltman@bellsouth.net
About Franklin Southern Manufacturing
Franklin Southern Manufacturing, LLC, a company in Jacksonville,
Fla., sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. M.D. Fla. Case No. 23-00938) on April 27, 2023, with
$473,665 in assets and $6,325,214 in liabilities. Billy Sermons,
president and chief executive officer of Franklin Southern
Manufacturing, signed the petition.
Judge Jacob A. Brown oversees the case.
Bryan K. Mickler, Esq., at the Law Offices of Mickler and Mickler,
LLP, represents the Debtor as legal counsel.
FUTURE VALUE: Sequoia Says Plan Not Feasible, Can't Be Crammed Down
-------------------------------------------------------------------
Sequoia Loan Servicing, Inc., filed an objection to the adequacy of
Future Value Construction, Inc.'s Disclosure Statement1 filed on
March 27, 2023, filed in support of Debtor's Chapter 11 Plan of
Reorganization Dated March 27, 2023. Sequoia asserts two
alternative bases for rejection of the Disclosure Statement: (i)
the Disclosure Statement does not contain adequate information to
allow creditors to make an informed decision as to the Plan and
(ii) the Disclosure Statement cannot be approved because the Plan
is patently unconfirmable. Sequoia sought to meet and confer with
the Debtor to work through objections to the Plan and Disclosure
Statement and communicated much of what is set forth below. The
Debtor chose not to make any amendments. In support thereof,
Sequoia respectfully represents as follows:
Sequoia points out that the Disclosure Statement does not discuss
the various classes of claims delineated in the Plan and their
respective treatment. In fact, the only mention of "Class" in the
Disclosure Statement is a list of classes "entitled to vote on the
Plan" on pages 11 and 12. Instead, the Disclosure Statement lumps
all assets into one list and all secured creditors together in
another list on page 6. A creditor reviewing the Disclosure
Statement would have no idea how its claim, or any other claim,
will be treated in the Plan. While there are mentions of "deferred
payments at contract rate," the Disclosure Statement never
specifies whether payments will be in full or in part.
Sequoia further points out that the disclosure statement, exhibit
"A" and plan are inconsistent. Further confusing the proposed
terms of the Plan are inconsistencies between the Disclosure
Statement, Exhibit "A" and the Plan. For example, the Disclosure
Statement projects general unsecured claims at "$917,000" and notes
the "largest general unsecured creditor is Kathy Grahek, who is a
friend of Chuck R. Thomason and supports confirmation of Debtor's
Plan." Both the Plan and Disclosure Statement call for 4% interest
on unsecured claims. However, the quarterly distributions to Class
12 General Unsecured Claims specified in the Plan total only
$750,000. As noted above, it is impossible to tell from Exhibit "A"
what the proposed distribution to general unsecured claims will be
as they are seemingly lumped with administrative expenses for
distributions.
Moreover, according to Sequoia, the biggest gaping hole in the
Debtor's disclosures concerns the treatment of Sequoia's claim.
Sequoia arguably has the best collateral of all the creditors but
is slotted to receive the worst treatment by far under the Plan.
Sequoia holds a first position deed of trust on the Debtor's only
model home (the "Model Home"). The Model Home is a completely
finished home and lot. The interests of all other secured creditors
(except John Deere Financial) are empty lots. Debtor valued the
Model Home at $809,900 in its Schedules—the same amount at which
the Debtor has been seeking to sell the Model Home for some time
without success.
Sequoia asserts that there is a lack of adequate information on
means for implementation and potential risks.
The Disclosure Statement does not disclose the means for
implementing the Plan. It does state: "Debtor's Plan is premised
upon only partial completion of the two development projects."
However, the Disclosure Statement does not reveal how this partial
completion of the two development projects will occur.
The Disclosure Statement provides little to no disclosure as to the
risks posed by the Plan. Rather, it states in conclusory fashion
that "payment depends on the development and sales of the"
undeveloped lots. While that may be true for some of the creditors,
including Mr. Thomason's friend Ms. Grahek, it is clearly not true
for Sequoia and other creditors such as JCAP. The "Chapter 7
Comparison" is, likewise, conclusory and inaccurate. Further,
simply stating "[t]here are inherent risk associated with the
current economic client as it pertains to home sales" does not
adequately capture the risk the Plan is asking creditors to take on
for Mr. Thomason's potential benefit. The Plan hinges upon the
expedited development and sale of lots during an economic
recession, when this very same development has already failed once
before it was acquired by the Debtor. It also requires priming
construction loans, not yet approved by the Court or even proposed
by the Debtor.
Furthermore, according to Sequoia, the plan violates the absolute
priority rule and cannot be crammed down.
The Plan violates the fundamental rule of absolute priority in
several ways. First, the Plan proposes to pay Unsecured Claims in
full, with interest, without paying Sequoia in full. Second, the
Plan proposes to pay Unsecured Claims on the same quarterly payment
schedule as secured creditors, with the secured creditors'
collateral as the source for those payments. Third, the Plan
proposes to use the collateral of some secured creditors to make
interim payments to other creditors. Finally, Exhibit "A" lumps
payments on Unsecured Claims together with administrative expenses.
This framework violates Sections 1129(a)(1), 506, 1129(a)(7) and
1129(b)(2)(A). A violation of any of these Sections, standing
alone, is sufficient to make the Plan unconfirmable. Taken
together, the deficiencies of the Plan are overwhelming.
Sequoia points out that the plan is not feasible. The Debtor has
failed to meet its burden of proof as to feasibility. The Plan
requires two sources of funding: (i) the use and control by the
Debtor of proceeds of collateral of specific secured creditors for
the benefit of other creditors and (ii) anticipated priming
construction loans. The first proposed funding source, as noted
above, is prohibited by law. No information is provided as to the
second proposed funding source other than a passing reference to
its anticipated use. There is no reasonable or credible basis to
find these unspecified priming construction loan(s) are likely to
be obtained. The projections on Exhibit "A" a simply a "visionary
[scheme] which promise creditors and equity security holders
more…. than the debtor can possibly attain after the
confirmation." As such, the Plan is patently unconfirmable and
unfeasible.
Counsel for Secured Creditor Sequoia Loan Servicing, Inc.:
Stephen D. Finestone, Esq.
Kimberly S. Fineman, Esq.
FINESTONE HAYES LLP
456 Montgomery Street, 20th Floor
San Francisco, CA 94104
Tel: (415) 209-5027
Fax: (415) 398-2820
E-mail: kfineman@fhlawllp.com
About Future Value Construction
Future Value Construction, Inc., is engaged in the business of
constructing custom and semi-custom homes.
Future Value Construction filed a Chapter 11 bankruptcy petition
(Bankr. E.D. Cal. Case No. 22-12016) on Nov. 28, 2022, with up to
$50,000 in assets and up to $10 million in liabilities.
Judge Jennifer E. Niemann oversees the case.
The Debtor is represented by the Law Office of D. Max Gardner.
GM NORTH POINT TWO: Files Bare-Bones Chapter 11 Petition
--------------------------------------------------------
GM North Point Two LLC filed for Chapter 11 protection in the
Northern District of Georgia without stating a reason.
According to court filings, GM North Point Two LLC estimates
between $10 million and $50 million in debt owed to 1 to 49
creditors. The petition states that funds will be available to
unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
June 1, 2023 at 11:00 a.m.
About GM North Point Two LLC
GM North Point Two LLC is a lessor of real estate.
GM North Point Two LLC filed a petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-20494) on May
1, 2023. In the petition filed by Stewart Geyer, as manager, the
Debtor reported assets and liabilities between $10 million and $50
million each.
The case is overseen by Honorable Bankruptcy Judge James R Sacca.
The Debtor is represented by:
William A. Rountree, Esq.
Rountree Leitman Klein & Geer, LLC
3259 Dogwood Lane
Hiawassee, GA 30546
Tel: 404-584-1238
Email: wrountree@rlkglaw.com
HERC HOLDINGS: S&P Alters Outlook to Positive, Affirms 'BB-' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based equipment
rental company Herc Holdings Inc. to positive from stable and
affirmed all its ratings, including its 'BB-' issuer credit
rating.
S&P said, "The positive outlook reflects our view that Herc will
continue to grow its revenues and earnings amid continued favorable
industry conditions and operate with debt leverage of 2x-3x on an
S&P Global Ratings-adjusted basis over the next 12 months.
"We believe Herc will grow revenue by a double-digit percent over
the next 12-24 months. We believe equipment rental demand should
remain solid over the next 12-24 months as construction and
industrial project activity continues and supply of original
equipment remains relatively tight. We expect private
nonresidential construction spending to only grow modestly in 2023
but believe Herc, like other large equipment rental players, is
well positioned to provide equipment for domestic projects focused
on energy, onshoring of manufacturing, and infrastructure over the
next two years, which should enable the company to maintain healthy
fleet utilization rates. In a favorable rental environment, we also
believe Herc can pass on increased fleet, logistics, and labor
costs to customers through higher rental rates. Incorporating about
$500 million in annual acquisition spending, we believe Herc's
revenue growth will remain robust in 2023 and 2024.
"Herc is continuing to invest in capital expenditures to meet
demand. We believe Herc will continue to grow its fleet over the
next 12-24 months to capitalize on continued demand for equipment
rentals, and will increase its market share as the industry
consolidates. Herc was successful in doing this in 2022, and
increased its market share by 100 basis points (bps) to 4% as it
ramped up capital spending and acquisitions. Although the equipment
rental market remains highly competitive and fragmented, we expect
Herc will remain successful in acquiring fleet additions and branch
locations as well as increasing the density of its rental locations
to capture rental demand. Under our base-case scenario, we believe
Herc will generate neutral FOCF in 2023 and moderately positive
FOCF in 2024 as earnings grow, despite a modest increase in net
capex.
"We expect Herc to maintain good EBITDA margins and fleet
utilization. The company's dollar utilization increased modestly by
20 bps in 2022, surpassing its 2021 company record of 43.1%. We
expect Herc will continue to grow its footprint through greenfield
expansions in high-growth markets, as well as through local and
regional acquisitions. We also believe the company can continue to
increase rental rates, albeit at a moderating pace, which will
support healthy dollar utilization over the next two years. On the
EBITDA margin side, we believe benefits of continued rental rate
increases, volume growth, and a focus on higher-margin specialty
rentals will largely offset new store openings (which take time to
ramp up) and an increase in fleet costs and operating costs, such
as labor.
"To raise the rating, we would need to believe that Herc will
manage its capital spending to align to demand conditions and
generate moderate free cash flow through the cycle. Herc's revenue
is tied to nonresidential construction and industrial markets, both
of which are cyclical. However, the equipment rental industry is
characterized by a countercyclical pattern of FOCF generation,
typically showing an uptick in rental fleet investment during
favorable economic conditions, paired with the ability to pull back
during industry downturns. Herc's moderate fleet age of 47 months
as of March 31, 2023, allows the company to pull back on capital
expenditures (capex) during softer economic periods to generate
good FOCF and reduce its debt.
"The positive outlook reflects our view that Herc will continue to
grow its revenues and earnings amid continued favorable industry
conditions and operate with debt leverage of 2x-3x on an S&P Global
Ratings-adjusted basis over the next 12 months."
S&P could revise its outlook to stable if:
-- Operating missteps result in moderately lower equipment
utilization or EBITDA margins;
-- The company's competitive advantage erodes through loss of
market share; or
-- The company does not curtail capex quickly if market conditions
begin to deteriorate.
S&P could raise the ratings if:
-- Herc continues to grow its scale and profits over the next 12
months while maintaining S&P Global Ratings-adjusted debt to EBITDA
of less than 3x, which would provide sufficient cushion to
withstand earnings volatility through an economic cycle;
-- S&P expects Herc will generate moderate free cash flow through
the cycle; and
-- S&P believes it will rapidly pull back on capex in periods of
stress.
ESG credit indicators: E-2, S-2, G-2
ESG factors are an overall neutral consideration in S&P's credit
rating analysis of Herc, which rents aerial, earthmoving, material
handling, trucks and trailers, air compressors, compaction, and
lighting equipment. Herc curates a fleet of equipment from original
equipment manufacturers (OEMs) and therefore has some control over
the sustainability of its fleet by choosing equipment that meets
the environmental goals for its customers.
IEH AUTO PARTS: To Seek Plan Confirmation on June 1
---------------------------------------------------
IEH Auto Parts Holding LLC, et al., sought and obtained approval of
an emergency motion for entry of an order conditionally approving
the Disclosure Statement, approving the solicitation and notice
procedures, approving the forms of ballots and notices in
connection therewith, approving the combined hearing timeline and
granting related relief.
The Court approved these dates and deadlines with respect to
confirmation of the Plan:
* Voting Record Date: May 1, 2023
* Deadline for Plan Solicitation and Mailing and Publication of
Confirmation Hearing Notice: Four Business Days after entry of the
Order conditionally approving the Disclosure
Statement
* Deadline for Filing Plan Supplement Wednesday, May 24, 2023
* Voting Deadline Friday, May 26, 2023, at 4:00 p.m.
(prevailing Central Time)
* Deadline for Objecting to Disclosure Statement and
Confirmation of the Plan:
Friday, May 26, 2023, at 5:00 p.m. (prevailing Central Time)
* Deadline for Filing Voting Report: Tuesday, May 30, 2023
* Combined Hearing on Final Approval of the Disclosure
Statement and Plan Confirmation:
Thursday, June 1, 2023, at 1 p.m. (prevailing Central Time).
Counsel to the Debtors:
Matthew D. Cavenaugh, Esq.
Veronica A. Polnick, Esq.
Vienna Anaya, Esq.
Emily Meraia, 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
vpolnick@jw.com
vanaya@jw.com
emeraia@jw.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.
IEH AUTO PARTS: Unsecureds Owed $170M Get 10% in Liquidating Plan
-----------------------------------------------------------------
IEH Auto Parts Holding LLC, et al. submitted a Combined Disclosure
Statement and Joint Plan of Liquidation.
The Plan is a liquidating plan. The Debtors are selling
substantially all of their Assets.
Under the Plan, Class 2 General Unsecured Claims total $170 million
and will recover 10% of claims. Each Holder of an Allowed General
Unsecured Claim will receive (i) its Pro Rata share of the GUC
Pool. "GUC Pool" means GUC Payment, as that term is defined in the
9019 Motion and any proceeds from any Retained Causes of Action.
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 Claims that are not General Unsecured Claims, (c)
establishing and funding the Disputed Claims Reserve, (d) filing
appropriate Tax returns, (e) liquidating all Assets of the Debtors
and winding down the Estates, and (f) otherwise administering the
Plan. The Wind-Down Debtors shall be deemed to be substituted as
the party-in-lieu of the Debtors in all matters, including (i)
motions, contested matters, and adversary proceedings pending in
the Bankruptcy Court, and (ii) all matters pending in any courts,
tribunals, forums, or administrative proceedings outside of the
Bankruptcy Court, without the need or requirement for the Plan
Agent to file a motion or otherwise substitution as a parties or
counsel in any matter.
A hearing to consider the final approval of the Disclosure
Statement and confirmation of the Plan is scheduled for May 31,
2023.
Objections to the final approval of the Disclosure Statement or
objections to Confirmation of the Plan must be in writing and must
be filed with the Clerk of the Bankruptcy Court and served on the
Notice Parties to ensure receipt by them on or before 5:00 p.m.
(prevailing Central Time) on May 26, 2023. Bankruptcy Rule 3007
governs the form of any such objection.
The Bankruptcy Court directed that, to be counted for voting
purposes, Ballot must be received by the designated claims and
noticing agent, Kurtzman Carson Consultants LLC ("KCC") by 4:00
p.m. (prevailing Central Time) on May 26, 2023.
Counsel for the Debtors:
Matthew D. Cavenaugh, Esq.
Veronica A. Polnick, Esq.
Vienna F. Anaya, Esq.
Emily Meraia, Esq.
JACKSON WALKER L.L.P.
1401 McKinney Street, Suite 1900
Houston, TX 77010
Telephone: (713) 752-4200
Facsimile: (713) 752-4221
E-mail: mcavenaugh@jw.com
vpolnick@jw.com
vanaya@jw.com
emeraia@jw.com
Co-Counsel and Conflicts Counsel for the Debtors and Debtors in
Possession:
Elizabeth C. Freeman, Esq.
LAW OFFICE OF LIZ FREEMAN
PO Box 61209
Houston, TX 77208-1209
Telephone: (832) 779-3580
E-mail: liz@lizfreemanlaw.com
A copy of the Disclosure Statement dated April 28, 2023, is
available at https://bit.ly/3AEleuX from www.kccllc.net, the claims
agent.
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.
IMPERVA INC: $290M Bank Debt Trades at 20% Discount
---------------------------------------------------
Participations in a syndicated loan under which Imperva Inc is a
borrower were trading in the secondary market around 79.7
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $290 million facility is a Term loan that is scheduled to
mature on January 10, 2027. The amount is fully drawn and
outstanding.
Imperva, Inc. develops protection software and services for
databases and business applications. The Company offers data
security, monitoring, and web application security to the energy,
financial services, government, healthcare, insurance, retail, and
e-commerce industries.
INFINERA CORP: Incurs $8.4 Million Net Loss in First Quarter
------------------------------------------------------------
Infinera Corporation has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $8.41 million on $392.07 million of total revenue for the three
months ended April 1, 2023, compared to a net loss of $41.85
million on $338.87 million of total revenue for the three months
ended March 26, 2022.
As of April 1, 2023, the Company had $1.59 billion in total assets,
$634.23 million in total current liabilities, $661.74 million in
long-term debt, $17.34 million in long-term accrued warranty,
$22.26 million in long-term deferred revenue, $2.36 million in
long-term deferred tax liability, $44.65 million in long-term
operating lease liabilities, $29.55 million in other long-term
liabilities, and $186.25 million in total stockholders' equity.
Infinera CEO David Heard said, "I am pleased with our solid start
to 2023 with revenue, margins, and earnings per share all coming in
above the mid-point of our outlook range. Compared to the year-ago
quarter, we grew revenue by 16%, above our annual target of 8% for
2023, and expanded gross margin by more than 250bps."
"As we look ahead to the second quarter, we are planning to achieve
continued year-over-year revenue growth and margin expansion and to
deliver approximately 10% revenue growth in the first half of 2023.
We remain focused on the six milestones we laid out at our investor
day in March, which includes launching our subsystems products and
driving to at least a $1 per share in earnings by 2025-2026."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1138639/000113863923000092/infn-20230401.htm
About Infinera Corp.
Headquartered in Sunnyvale, Calif., Infinera Corp. --
www.infinera.com -- is a semiconductor manufacturer and global
supplier of networking solutions comprised of networking equipment,
optical semiconductors, software and services. The Company's
portfolio of solutions includes optical transport platforms,
converged packet-optical transport platforms, compact modular
platforms, optical line systems, coherent optical engines and
subsystems, a suite of networking and automation software
offerings, and support and professional services.
Infinera Corporation reported a net loss of $76.04 million for the
year ended Dec. 31, 2022, a net loss of $170.78 million for the
year ended Dec. 25, 2021, a net loss of $206.72 million for the
year ended Dec. 26, 2020, and a net loss of $386.62 million for the
year ended Dec. 28, 2019.
INTERNAP HOLDING: Unsecureds Owed $10M-$15M to Get Nothing in Plan
------------------------------------------------------------------
Internap Holding LLC, et al., submitted a Joint Chapter 11 Plan and
a Disclosure Statement.
The Debtors commenced Chapter 11 cases to deleverage their balance
sheet and continue as a going concern. The Plan contemplates that
the holders of Second Out Term Loans (the "SOTL Loans") will
convert all of their SOTL Loans into equity, eliminating
approximately $160.1 million plus accrued interest of secured debt
from INAP's balance sheet. In addition, certain of the holders of
SOTL Loans have agreed to provide the Debtors with an exit facility
in an amount up to $30 million on the Effective Date of the Plan.
Holders of approximately 67% of the SOTL Loans in dollar amount and
more than 60% in number (collectively, the "Consenting Lenders")
have executed a Restructuring Support Agreement (as it may be
amended from time to time, the "RSA") in which they have agreed to,
among other things, support the Plan.
In addition to the debt-for-equity exchange with the holders of the
Debtors' SOTL Loans, other key terms of the Plan include full
payment of all administrative and priority claims, if any, and the
claims of certain go-forward critical trade vendors. Other
unsecured creditors will not receive a distribution under the Plan.
The Debtors submit that the proposed Plan meaningfully reduces the
Debtors' aggregate secured debt, maximizes recoveries, ensures the
Debtors will continue as a going-concern preserving jobs for the
Debtors' employees, and best positions the Debtors for future
success.
Under the Plan, Class 5 General Unsecured Claims totaling $10
million to $15 million will receive no distribution under the Plan.
Class 5 is impaired.
The Reorganized Company will fund distributions under the Plan with
Cash held on the Effective Date by or for the benefit of the
Debtors or Reorganized Company, including Cash from operations, the
New Term Loan Exit Facility, proceeds from all Causes of Action not
settled, released, discharged, enjoined, or exculpated under the
Plan or otherwise on or prior to the Effective Date, and the New
Common Stock.
Proposed Counsel to the Debtors:
Catherine Steege, Esq.
Melissa Root, Esq.
Breana Drozd, Esq.
JENNER & BLOCK LLP
353 North Clark Street
Chicago, IL 60654
Tel: (312) 222-9350
E-mail: csteege@jenner.com
mroot@jenner.com
bdrozd@jenner.com
- and -
Mark Minuti, Esq.
Monique B. DiSabatino, Esq.
SAUL EWING LLP
1201 North Market Street, Suite 2300, P.O. Box 1266
Wilmington, DE 19899
Tel: (302) 421-6800
E-mail: mark.minuti@saul.com
monique.disabatino@saul.com
A copy of the Disclosure Statement dated April 28, 2023, is
available at https://bit.ly/3AYGMTz from PacerMonitor.com.
About Internap Holding
Internap Holding LLC and its 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.
Their 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.
The Debtors 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 signed by Michael T. Sicoli, chief
executive officer, the Debtor disclosed up to $500 million in both
assets and liabilities.
Judge Craig T. Goldblatt oversees the case.
The Debtors tapped Saul Ewing LLP and Jenner and Block LLP, as
legal counsel, FTI Consulting as financial advisor, and Stretto,
Inc. as claims and noticing agent.
INVACARE CORP: Court Confirms First Amended Plan
------------------------------------------------
On April 28, 2023, the Honorable Christopher Lopez, United States
Bankruptcy Judge for the United States Bankruptcy Court for the
Southern District of Texas entered the order Confirming the First
Amended Joint Chapter 11 Plan of Invacare Corporation and Its
Debtor Affiliates.
The Effective Date of the Plan occurred on May 5, 2023. All of the
conditions precedent
to the Effective Date of the Plan have been satisfied or waived in
accordance with the Plan
Under the Plan, Class 5 Unsecured Notes Claims shall be Allowed in
the aggregate principal amount of $222,982,842.56, consisting of
(i) $72,909,000.00 in principal due and payable under the 5.00%
series I convertible senior exchange notes due 2024; (ii)
$68,875,000.00 in principal and $8,883,161.45 in accreted principal
due and payable under the 5.00% Series II convertible senior
exchange notes due 2024, and (iii) $69,700,000.00 in principal due
and payable under the 4.25% convertible senior notes due 2026, plus
accrued and unpaid Allowed interest on such principal, plus any
other Allowed unpaid fees, costs, indemnities or other amounts due
and owing under the Unsecured Notes Indentures. The Unsecured Notes
Claims shall not be subject to any avoidance, reductions, setoff,
offset, recharacterization, subordination (equitable or contractual
or otherwise), counter-claim, defense, disallowance, objection, or
any challenges under applicable law or regulation. Each Holder of
an Allowed Unsecured Notes Claim shall receive its Pro Rata share
of:
(i) the Unsecured Noteholder Rights, in accordance with the
Rights Offering Procedures;
(ii) 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
(iii) the distributions in respect of its Litigation Trust
Interests, to the extent provided in Article IV.K of the Plan.
Class 5 is impaired.
Class 6 General Unsecured Claims will receive either:
(i) (x) if such Holder of an Allowed General Unsecured Claim
does not elect to receive the Class 6 Equity Option, the GUC Cash
Settlement and (y) its Pro Rata share of the distributions in
respect of its Litigation Trust Interests, to the extent provided
in Article IV.K of the Plan; or
(ii) (x) if such Holder of an Allowed General Unsecured Claim
elects to receive the Class 6 Equity Option in lieu of the GUC Cash
Settlement, its share (on a Pro Rata basis with Holders of Allowed
Unsecured Notes Claims in respect of their Residual Unsecured Notes
Claims and other 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 (y) its Pro Rata
share of the distributions in respect of its Litigation Trust
Interests, to the extent provided in Article IV.K of the Plan.
Class 6 is impaired.
"GUC Cash Settlement" means, with respect to an Allowed General
Unsecured Claim, Cash equal to 5% of such Claim.
A copy of the First Amended Joint Chapter 11 Plan dated April 28,
2023, is available at https://bit.ly/44d2hx8 from epiq11, the
claims agent.
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.
IQOR US: $300M Bank Debt Trades at 29% Discount
-----------------------------------------------
Participations in a syndicated loan under which iQor US Inc is a
borrower were trading in the secondary market around 71.4
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 Payment in kind Term loan that is
scheduled to mature on November 19, 2025. The amount is fully
drawn and outstanding.
iQor is a global provider of customer engagement and technology
enable business process outsourcing solutions. Solutions include,
customer service, third-party collections and accounts receivable
management to world's largest brands. The company uses integrated
digital capabilities and proprietary technology and analytics to
enhance the customer experience lifecycle.
KUEHG CORP: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has assigned Long-Term Issuer Default Ratings (IDRs)
of 'BB-' to KinderCare Learning Companies, Inc. and KUEHG Corp.
with a Stable Rating Outlook. Fitch has also assigned a 'BB+'/'RR1'
rating to KUEHG's revolving facility and term loan.
The ratings reflect modest revenue growth and robust cash flow
generation and leverage profile. The rating is constrained by
margin contraction and competition.
KinderCare is seeking to refinance its existing first lien and
second lien debt with a new seven-year $1.4 billion first lien Term
Loan. As part of the transaction, the revolving credit facility
will be upsized to $160 million and extended to a five-year tenor.
The proposed transaction will significantly extend maturities,
increase liquidity and eliminate high-cost second lien debt.
KEY RATING DRIVERS
Competitive Landscape: Fitch views the company's solid footprint as
the largest private provider of early childhood education (ECE) in
the United States by center capacity as a credit positive, but
acknowledges that this is a highly fragmented, competitive
industry. The company had 1,553 early childhood education centers
with a student capacity of 213,908 and 788 at before- and
after-school sites, respectively, as of Dec. 31, 2022.
KinderCare faces intense competition within the child-care industry
from a number of companies including scaled providers, smaller
regional providers and faith-based or local operators. Bright
Horizons, Kiddie Academy, Goddard, Primrose and the Learning Care
Group, Inc. brands (La Petite, Tutor Time and others) are
considered to be the closest competitors. In addition to ECE
offerings, the company serves school-age children at before- and
after-school programs. Competitors in this segment include YMCA and
other regional providers like Alphabest and Right at School.
Margin Contraction: KinderCare's margin has been volatile in recent
years due to government grants during the pandemic, and Fitch
expects margins could decline through 2023-2025 to the mid-teens.
The EBITDA margin was 10.2% in 2019 and dropped to 4.1% in 2020 due
to the impact of the pandemic. The company's government assistance
is related to both income and capital projects. KinderCare
recognizes income grants as revenue or as an offset to the related
expenses within the cost of services and selling, general and
administrative expenses. Fitch believes the effect of government
assistance will unwind in the rating horizon, and the margin will
be in the mid-teen level.
Post-Pandemic Tailwind: Government restrictions and shifts in
consumer behavior caused many operators to experience significant
financial challenges and reduced enrollment during the COVID-19
pandemic. As a result, approximately 16,000 centers permanently
closed between December 2019 and March 2021. This reduced capacity
has increased demand for scaled providers, such as KinderCare.
In addition, many employers are actively implementing blended
models, balancing the amount of time employees spend working
remotely versus in the office. In response to the evolving
landscape, the mix of demand for ECE provided in communities, at
corporate offices and onsite in schools is expected to evolve.
Modest Revenue Growth: Fitch expects total revenues to grow
modestly through its forecast period after the pandemic-induced
demand volatility ECE during FY2019-FY2021. The growth is mainly
driven by an expansion in center count and an increase in tuition
rate supported by offering high-quality service. In FY2022, the
company reached pre-pandemic occupancy rate of 69% from 47% in
2020. In 2022, the company acquired Crème de la Crème, Inc.
(Crème), an entity that operates 47 ECE centers as a second,
stand-alone brand within KinderCare. This acquisition improves
geographic and price point diversification.
Solid FCF Generation: Fitch believes the company's business model
will support steady and predictable cash generation in the years to
come. KinderCare improved its cash generation profile materially
from burning $36 million of FCF in 2020 to generating positive FCF
during FY 2022. Much of this increase came from government grants
and post-pandemic demand for the company's offering. Fitch believes
high demand and top-line growth will drive continued FCF growth
over the next few years.
Leverage Profile: Fitch expects KinderCare's EBITDAR leverage to be
in the 5.0x-5.9x range over the next few years, which positions the
issuer at the low-'BB' rating level in conjunction with its scale
and history of positive FCF generation. EBITDA leverage will likely
be meaningfully lower in the 3.0x-4.0x range due to the company
leasing its facilities. Rental expense from leasing totaled
approximately 15% of revenue in 2022 and Fitch believes lease
expenses will continue to be the same portion of revenue in rating
horizon.
DERIVATION SUMMARY
KinderCare operates early childhood education and development
centres. A direct comparable for KinderCare is Bright Horizons
Family Solutions Inc (BFAM), which operates within the same
industry and offers child care, early education, and other services
designed to help employers and families better address the
challenges of work and family life. Both companies operate in the
same scale at greater than $2 billion. Bright Horizons has more
than 1,350 client relationships with employers across a diverse
array of industries with a total of 1,014 child care and early
education centers with the capacity to serve approximately 114,000
children and their families in the United States, the United
Kingdom, the Netherlands and India. BFAM further operates at a
lower leverage ratio with a more sustainable profitability
profile.
KEY ASSUMPTIONS
- Revenue growth assumed in mid-single digits over the forecast
horizon driven by the opening of new child care centers and
increases in occupancy rate. Utilization improvements are also
expected within existing centers;
- EBITDA margin is expected to be down to the stable mid-teens
level due to unwinding the post pandemic effect and government
stimulus;
- Lease expense will continue to grow in line with the top-line
growth
- Capex are expected to be in the average range of 4% of total
revenue correlated with the number of new centers that company
planned to open;
- No dividends or share buybacks are assumed in the rating
horizon.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- A significant increase in margins while maintaining scale and
EBITDAR leverage below 4.5x over a multi-year period.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- EBITDAR leverage rising above 6.0x over a multi-year period;
- A significant increase in dividends or share buybacks funded with
debt.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity and Cushion: As of December 2022, KinderCare had
$105 million of cash on hand and an available borrowing capacity of
$70.2 million after giving effect to the outstanding letters of
credit of $69.8 million. The company's liquidity position is also
supported by its ability to generate consistent positive FCF with
FCF margins historically ranging from 6%-9%.
ISSUER PROFILE
KinderCare Learning Companies, Inc. offers early childhood
education and care programs to children ranging from six weeks
through 12 years of age. Founded in 1969, the services provided
include infant and toddler care, preschool, kindergarten, and
before- and after-school programs.
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
----------- ------ --------
KUEHG Corp. LT IDR BB- New Rating
senior secured LT BB+ New Rating RR1
KinderCare
Learning
Companies, Inc. LT IDR BB- New Rating
LANNETT COMPANY: Court OKs Interim Cash Collateral Access
---------------------------------------------------------
Lannett Company, Inc. and its affiliates sought and obtained entry
of an order from the U.S. Bankruptcy Court for the District of
Delaware authorizing the use cash collateral on an interim basis in
accordance with the budget, with a 20% variance.
Following several weeks of negotiations with their key creditors
and stakeholders, on April 30, 2023, the Debtors entered into a
restructuring support agreement with holders of more than 80% of
their First Lien Senior Secured Notes and 100% of their Second Lien
Term Loans. Shortly thereafter, on May 2, 2023, the Debtors
launched solicitation of the Plan, with the overwhelming support
from their key stakeholders. The Debtors commenced these
prepackaged chapter 11 cases to effectuate the consensual
restructuring contemplated by the RSA in an effort to restructure
the Debtors' balance sheet while limiting disruption to their
ongoing business operations. Importantly, the Plan will
significantly strengthen the Debtors' balance sheet and enhance
financial flexibility going forward by eliminating approximately
$597 million of the Debtors' funded debt obligations and providing
the Debtors with access to a new revolving credit facility, while
providing unimpaired treatment to all unsecured trade claims.
During these Chapter 11 cases, the Debtors do not seek access to
debtor‑in‑possession financing. The Debtors will, however, need
access to cash on hand and cash flow from operations to fund their
working capital needs, capital expenditures, and for other general
corporate purposes.
The Debtors require immediate access to liquidity to ensure that
they are able to continue operating their business during these
chapter 11 cases, preserve the value of their estates for the
benefit of all parties in interest, and pursue confirmation and
consummation of the Plan.
As of the Petition Date, the Debtors have approximately $657.17
million in aggregate outstanding principal amount of funded debt
obligations. Each of the Debtors in these chapter 11 cases are
obligors under the First Lien Indenture and the Second Lien Credit
Agreement.
Lannett Company, Inc., as issuer, certain subsidiaries of Lannett,
as guarantors from time to time, and Wilmington Trust, National
Association, as trustee and note collateral agent, are each party
to the certain Indenture, dated as of April 22, 2021, supplemented
April 22, 2021.
The First Lien Senior Secured Notes are guaranteed by Debtor
Kremers Urban Pharmaceuticals, Inc., Debtor Cody Laboratories,
Inc., and Debtor Silarx Pharmaceuticals, Inc., and are secured on a
first priority basis by substantially all of the Debtors' assets.
The First Lien Senior Secured Notes mature in April 2026, unless
earlier redeemed or repurchased in accordance with their terms, and
accrue interest at a rate of 7.750% per annum. As of the Petition
Date, approximately $350 million in principal amount of the First
Lien Senior Secured Notes are outstanding.
Lannett, as borrower, certain subsidiaries of Lannett, as
guarantors, the lenders party thereto, and Alter Domus (US) LLC, as
Administrative Agent and collateral agent, are each party to the
Second Lien Credit and Guaranty Agreement, dated as of April 22,
2021.
The Second Lien Term Loan is secured on a second-priority basis to
the First Lien Senior Secured Notes by substantially all of the
Debtors' assets. The Second Lien Term Loan Facility matures on July
21, 2026, and accrues interest at a rate of 10% per annum. As of
the Petition Date, approximately $221 million, plus applicable
interest, fees, costs and expenses remains outstanding under the
Second Lien Term Loan Facility.
Lannett, as issuer and Wilmington Trust, National Association, as
trustee, are each party to the certain Indenture, dated as of
September 27, 2019. The obligations under the Convertible Notes are
unsecured. Interest on the Convertible Notes is payable
semi-annually on each April 1 and October 1. The Convertible Notes
are scheduled to mature in October 2026. As of the Petition Date,
approximately $86.25 million in principal amount of the Convertible
Notes are outstanding.
As of the Petition Date, warrants to purchase up to 2.070 million
shares of common stock at an exercise price of $28 per share are
outstanding. As of the Petition Date, the Debtors have an aggregate
of approximately $23.4 million of cash on hand.
Prior to the Petition Date, the Debtors were party to a $45 million
revolving credit facility dated as of December 7, 2020 by and among
Debtor Lannett, the other credit parties party thereto, the lenders
party thereto and Wells Fargo Bank, National Association, as
administrative agent and collateral agent.
To facilitate the restructuring embodied under the Plan, on May 1,
2023, the Revolving Credit Agreement was terminated upon receipt by
Wells Fargo of a $1.95 million payment from Lannett, comprising (i)
a payoff amount representing principal, interest and expenses and
fees of Wells Fargo and the lenders and (ii) cash to collateralize
the outstanding Existing Letters of Credit to be held by Wells
Fargo for the benefit of the lenders with Revolving Commitments.
The payment made by Lannett in connection with the termination of
the Revolving Credit Agreement was pursuant to a payoff letter with
Wells Fargo.
As of the Petition Date, the Debtors have approximately $1.8
million of restricted cash that serves as collateral for the
Existing Letters of Credit.
As adequate protection, the Prepetition Secured Parties are granted
allowed superpriority administrative claims, which superpriority
claims will have priority over all administrative expenses of the
kind specified in, or ordered pursuant to, any provision of the
Bankruptcy Code.
The Debtors will use cash collateral in accordance with the Budget
for the period from the Petition Date through the date which is the
earliest to occur of (i) the Termination Date, (ii) the effective
date of any chapter 11 plan with respect to the Debtors confirmed
by the Court, (iii) the date on which all or substantially all of
the assets of the Debtors are sold in a sale under any chapter 11
plan or pursuant to section 363 of the Bankruptcy Code, (iv) the
occurrence of a Termination Event, or, and (v) five business days
from the Termination Declaration Date; provided that, until
expiration of the Remedies Notice Period, the Debtors may continue
to use cash collateral to make payments in respect of expenses
critical to keep the business of the Debtors operating in
accordance with the Approved Budget; provided, further, that the
Debtors may continue to use cash collateral during or after
expiration of the Remedies Notice Period solely to the extent
necessary to fund the Carve Out Reserves.
The Termination Events include:
(a) A Final Order reasonably acceptable to the Debtors and
Required Noteholders is not entered by the Court by 11:59 p.m. on
40 days after the Petition Date and otherwise consistent with the
milestones in the Restructuring Support Agreement;
(b) The violation of any term of this Interim Order by the
Debtors that is not cured within five business days of receipt by
the Debtors of notice of such default, violation or breach (which
may be provided to the Debtors by e-mail); and
(c) Entry of any order modifying, reversing, revoking, staying
for a period in excess of five business days, rescinding, vacating,
or amending this Interim Order in a manner materially adverse to
the rights, interests, priorities, or entitlements of the
Prepetition Secured Parties or that materially modifies any of the
Debtors’ obligations to the Prepetition Secured Parties, in each
case, without the express written consent of the Required
Noteholders.
A final hearing on the matter is set for June 8, 2023 at 2:30 p.m.
A copy of the motion is available at https://bit.ly/3NHYja3 from
PacerMonitor.com.
A copy of the order is available at https://bit.ly/3NL64Mr from
PacerMonitor.com.
About Lannett Company, Inc.
Lannett Company, Inc., together with its subsidiaries, is a
mid-size developer, manufacturer, marketer, and distributer of
generic versions of brand pharmaceutical products that address a
wide range of therapeutic areas.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10559) on May 2,
2023. In the petition signed by Timothy C. Crew, chief executive
officer, the Debtor disclosed $334,600,000 in total assets and
$708,940,000 in total debts.
Judge Kate Sickles oversees the case.
The Debtors tapped Kirkland and Ellis LLP and Kirkland and Ellis
International LLP as legal counsel, Fox Rothschild LLP as local
counsel, FTI Consulting, Inc. as financial advisor, Guggenheim
Securities, Inc. as investment banker, and Omni Agent Solutions as
claims and noticing agent.
LIFESCAN GLOBAL: $275M Bank Debt Trades at 42% Discount
-------------------------------------------------------
Participations in a syndicated loan under which LifeScan Global
Corp is a borrower were trading in the secondary market around 57.8
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $275 million facility is a Term loan that is scheduled to
mature on October 1, 2025. The amount is fully drawn and
outstanding.
Lifescan Global Corporation is a provider of blood glucose
monitoring systems for home and hospital us.
LINCOLN POWER: Hires Guggenheim Securities as Investment Banker
---------------------------------------------------------------
Lincoln Power, LLC and its debtor-affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire
Guggenheim Securities, LLC as their investment banker.
The firm's services include:
a. Review and analysis of the business, financial condition
and prospects of the Debtors;
b. Evaluation of the liabilities of the Debtors, its debt
capacity and its strategic and financial alternatives;
c. In connection with any Transaction:
i. Evaluation from a financial and capital markets point of
view of alternative structures and strategies for implementing the
Transaction;
ii. Preparation of offering, marketing or other transaction
materials concerning the Debtors and the Transaction for
distribution and presentation to the relevant Transaction
Counterparties;
iii. Development and implementation of a marketing plan with
respect to such Transaction;
iv. Identification and solicitation of, and the review of
proposals received from, prospective Transaction Counterparties;
and
v. Negotiation of the Transaction; and
d. In connection with the pursuit of any Transaction in a
Bankruptcy Case, evaluation, from a financial point of view, of
alternative strategies for implementing any such Transaction,
including pursuant to a Plan, which may be a plan under Chapter 11
of the Bankruptcy Code confirmed in connection with any Bankruptcy
Case in Bankruptcy Court.
The firm will be compensated as follows:
a. Monthly Fees.
i. The Debtors will pay Guggenheim Securities a
non-refundable cash fee of $100,000 per month (each, a "Monthly
Fee"), which will be due and paid by the Debtor in advance promptly
upon the signing of the Engagement Letter and, thereafter, on the
first day of each month during the period of Guggenheim Securities'
engagement thereunder, in each case, whether or not any Transaction
is consummated; provided, that, as of and following the
commencement of any Bankruptcy Case, the amount of each Monthly Fee
which will be due and paid by the Debtors on the first day of each
month during the period of Guggenheim Securities' engagement
thereunder shall equal $150,000 per month.
ii. Commencing with the first full Monthly Fee actually
paid under the Engagement Letter after the commencement of any
Bankruptcy Case, an amount equal to 50 percent of the Monthly Fees
actually paid to Guggenheim Securities shall be credited against
that portion of any Sale Transaction Fee payable on account of any
Excess Consideration that thereafter becomes payable pursuant to
Section 4(d)(i) of the Engagement Letter (it being understood that,
once credited against any such fee, any such amount of Monthly Fees
so credited cannot be credited again against any other fee payable
under the Engagement Letter).
b. Restructuring Transaction Fee(s).
i. If any Restructuring Transaction is consummated or
otherwise becomes effective, the Debtors will pay Guggenheim
Securities a cash fee (each, a "Restructuring Transaction Fee") in
an amount equal to $2,000,000.
ii. Any such Restructuring Transaction Fee will be payable
promptly upon the consummation of any Restructuring Transaction
(or, if earlier, upon such time as such Restructuring Transaction
becomes effective); provided, however, that the restructuring
Transaction Fee in connection with any Restructuring Transaction
that is contemplated to be effectuated pursuant to Section 3(a)(9)
of the Securities Act of 1933, as amended (the "Securities Act"),
will be fully earned and payable on the date that definitive offer
documents for the related exchange offer under Section 3(a)(9) of
the Securities Act are first distributed to creditors whose claims
would be affected thereby, without regard to the results of such
exchange offer or any other contingency. For the avoidance of
doubt, with respect to (and solely with respect to) any
Restructuring Transaction effectuated pursuant to Section 3(a)(9)
of the Securities Act, the only Restructuring Transaction Fee
payable under the Engagement Letter on account of each such
Restructuring Transaction shall be the fee payable pursuant to the
proviso clause of the immediately preceding sentence.
c. Financing Fee(s).
i. If any Financing Transaction is consummated, then, in
each case, the Debtors will pay Guggenheim Securities one or more
cash fees (each, a "Financing Fee") in an amount equal to the sum
of:
(A) 150 basis points (1.50 percent) of the aggregate face
amount of any debt obligations to be issued or raised by the
Debtors (including the face amount of any related commitments) in
any Debt Financing that is secured by first priority liens over the
Debtors' assets, plus
(B) 300 basis points (3.00 percent) of the aggregate face
amount of any debt obligations to be issued or raised by the
Debtors (including the face amount of any related commitments) in
any Debt Financing that is not covered by Section 4(c)(i)(A) of the
Engagement Letter, plus
(C) 500 basis points (5.00 percent) of the aggregate
amount of gross proceeds raised by the Debtors in any Equity
Financing (including the face amount of any related commitments);
plus
(D) With respect to any other securities or indebtedness
issued that is not otherwise covered by Sections 4(c)(i)(A) to
4(c)(i)(C) of the Engagement Letter, such financing fees,
underwriting discounts, placement fees or other compensation as
customary under the circumstances and mutually agreed in advance in
writing by the Debtors and Guggenheim Securities.
ii. Notwithstanding the foregoing,
(x) with respect to any consummated Debt Financing, to
the extent that any portion of the underlying debt obligations are
issued to or raised from Existing Stakeholders (each such portion
of debt obligations to be issued to or raised from any such
Existing Stakeholder to be referred to as "Excluded Debt"), then,
with respect to such Excluded Debt (and only on account thereof) no
Financing Fee shall be required to be paid thereon pursuant to
Section 4(c)(i) of the Engagement Letter; provided, that, if at any
time prior to such Financing Transaction having been consummated,
Guggenheim Securities conducted a marketing or solicitation process
(a "Marketing Process") pertaining to a potential Debt Financing,
then the amount of the Financing Fee required to be paid by the
Debtors to Guggenheim Securities on account of such Excluded Debt
shall equal 100 percent of the amounts required to be paid thereon
pursuant to Section 4(c)(i) of the Engagement Letter (without
regard for the terms set forth in this paragraph; it being
understood, for the avoidance of doubt, that, save to the extent
expressly stated otherwise in this clause (x) with respect to (and
solely with respect to) Excluded Debt, and regardless of whether or
not any Marketing Process has been conducted, at all times 100
percent of the amounts set forth in Section 4(c)(i) of the
Engagement Letter shall be due and payable by the Debtors to
Guggenheim Securities with respect to any and all other portions of
debt obligations (including any related commitments) to be issued
to or raised from any other Transaction Counterparty involved in
such Debt Financing.
(y) with respect to any Debt Financing constituting a
"debtor-in-possession financing" or an "exit financing" entered
into by the Debtors in connection with a Bankruptcy Case, no
Financing Fees shall be required to be paid pursuant to Section
4(c)(i) of the Engagement Letter on account of any portion of debt
obligations thereunder that consists, in the case of a
"debtor-in-possession" financing, of prepetition debt obligations
"rolled-up" from the Debtors' existing credit facility or, in the
case of an "exit financing," of debt obligations "rolled over" from
the Debtors' Bankruptcy Court-approved debtor-in-possession
financing facility; it being understood, for the avoidance of
doubt, that, save to the extent expressly stated otherwise in the
foregoing clause (x) with respect to (and solely with respect to)
Excluded Debt, 100 percent of the Financing Fees set forth in
Section 4(c)(i) of the Engagement Letter shall be due and payable
by the Debtors on account of all other (non-"rolled-up" or
non-"rolled over") debt obligations (including any related
commitments) to be issued or raised by the Debtors in connection
with such applicable "debtor-in-possession financing" or "exit
financing."
iii. Financing Fees for any Financing Transaction will be
payable upon the consummation of the related Financing Transaction.
d. Sale Transaction Fee(s).
i. If any Sale Transaction is consummated, then in each
case, the Debtors will pay Guggenheim Securities a cash fee (each,
a "Sale Transaction Fee") in an amount equal to the sum of: (x)
$2,000,000, plus (y) to the extent the Aggregate Sale Consideration
relating to such Sale Transaction exceeds $25,000,000 (the amount
of any such excess, the "Excess Consideration"), an amount equal to
5.0 percent of such Excess Consideration.
ii. Any such Sale Transaction Fee will be payable promptly
upon the consummation of any Sale Transaction.
e. Testimony Fee. In connection with any Live Testimony or
Written Testimony provided or delivered by Guggenheim Securities in
connection with (including in preparation for or in anticipation
of) any actual or potential Bankruptcy Case, the Debtors will pay
Guggenheim Securities a one-time testimony fee (the "Testimony
Fee") in an amount equal to $250,000. The Testimony Fee will be due
and paid by the Debtors promptly upon the occurrence of any one of
the following events: (i) a Representative (as defined in the Annex
attached to the Engagement Letter) of Guggenheim Securities having
provided testimony in connection with (including in preparation for
or in anticipation of) any actual or potential Bankruptcy Case
(including, without limitation, any such testimony provided in a
deposition conducted in connection therewith) ("Live Testimony"),
(ii) any written affidavit or expert report (including, without
limitation, any disclosure statement-related valuation analysis)
prepared by Guggenheim Securities (or any Representative thereof)
("Written Testimony") having been delivered in form reasonably
acceptable to the Debtors (or its Representatives) in connection
with (including in preparation for or in anticipation of) any
actual or potential Bankruptcy Case, or (iii) the withdrawal of a
request by the Debtors (or any of its Representatives) for Live
Testimony or Written Testimony, if Guggenheim Securities has, at
the time of such withdrawal, completed all or substantially all of
the work reasonably required to provide or deliver such Live
Testimony or Written Testimony.
f. Expense Reimbursement. In addition to any fees payable by
the Debtors to Guggenheim Securities under the Engagement Letter,
the Debtors will, whether or not any Transaction contemplated by
the Engagement Letter will be proposed or consummated, promptly
reimburse Guggenheim Securities, upon request, for its reasonable
and documented out-of-pocket expenses (including travel) incurred
in connection with or arising out of the Engagement Letter,
including Guggenheim Securities' entering into the Engagement
Letter, Guggenheim Securities' activities under or as contemplated
by the Engagement Letter or Guggenheim Securities' enforcing its
rights thereunder, including all reasonable and documented fees,
disbursements and other charges of (x) any legal counsel retained
by Guggenheim Securities (without the requirement that the
retention of such legal counsel be approved by the applicable
Insolvency Authority), and (y) any other consultants and advisors
retained by Guggenheim Securities, but, in connection with this
clause (y), only to the extent of any such other consultants or
advisors that have been retained with the consent of the Debtors
(such consent not to be unreasonably withheld, conditioned or
delayed).
Morgan Suckow, a senior managing director at Guggenheim Securities,
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 holds office at:
Morgan Suckow
Guggenheim Securities, LLC
330 Madison Avenue
New York, NY 10017
Phone: 212-518-9200
Email: GSinfo@GuggenheimPartners.com
About Lincoln Power
Headquartered in Charlotte, N.C., Lincoln Power, L.L.C. is a power
Debtors that owns two gas-fired power-generation facilities -- one
of which is located in Elgin, Illinois, and the other of which is
located in East Dundee, Illinois.
Lincoln Power, LLC and seven affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No.
23-10382) on March 31, 2023. In the petition signed by Justin D.
Pugh, chief restructuring officer, the Debtor disclosed up to $500
million in both assets and liabilities.
The Hon. Laurie Selber Silverstein oversees the cases.
Kara Hammond Coyle, Esq., at Young Conaway Stargatt & Taylor, LLP,
represents the Debtor as legal counsel.
Lawyers at Latham & Watkins LLP and Young Conaway Stargatt &
Taylor, LLP serve as the Debtors' bankruptcy counsel. The Debtors
tapped Guggenheim Securities, LLC as financial advisor and
investment banker. Omni Agent Solutions serves as the Debtors'
claims and noticing agent.
LINCOLN POWER: Hires Young Conaway as Bankruptcy Co-Counsel
-----------------------------------------------------------
Lincoln Power, LLC and its debtor-affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire Young
Conaway Stargatt & Taylor, LLP as
bankruptcy co-counsel.
The firm's services include:
a. providing legal advice and services regarding Local Rules,
practices, and procedures and providing substantive and strategic
advice on how to accomplish the Debtors' goals in connection with
the prosecution of these cases, bearing in mind that the Court
relies on co-counsel such as Young Conaway to be involved in all
aspects of each bankruptcy proceeding;
b. reviewing, commenting, and/or preparing drafts of documents
to be filed with the Court as co-counsel to the Debtors;
c. appearing in Court and at any meeting with the United
States Trustee for the District of Delaware (the "U.S. Trustee")
and any meeting of creditors at any given time on behalf of the
Debtors as their co-counsel;
d. performing various services in connection with the
administration of these cases, including, without limitation, (i)
preparing agenda letters, certificates of no objection,
certifications of counsel, notices of fee applications and
hearings, and hearing binders of documents and pleadings; (ii)
monitoring the docket for filings and coordinating with Latham &
Watkins LLP on pending matters that need responses; (iii) preparing
and maintaining critical dates memoranda to monitor pending
applications, motions, hearing dates, and other matters and the
deadlines associated with the same; (iv) handling inquiries and
calls from creditors and counsel to interested parties regarding
pending matters and the general status of the Chapter 11 Cases; and
(v) coordinating with Latham on any necessary responses; and
e. performing all other services assigned by the Debtors, in
consultation with Latham, to Young Conaway as co-counsel to the
Debtors; to the extent the Firm determines that such services fall
outside of the scope of services historically or generally
performed by Young Conaway as co-counsel in a bankruptcy
proceeding, Young Conaway will file a supplemental declaration
pursuant to Bankruptcy Rule 2014.
The firm's current standard hourly rates are:
Michael R. Nestor $1,240
Kara Hammond Coyle $925
Heather P. Smillie $505
Kristin L. McElroy $475
Troy Bollman (paralegal) $355
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Young Conaway is holding $6,097.80 as a retainer.
Kara Hammond Coyle, Esq., a partner at Young Conaway, 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.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Young
Conaway disclosed that:
-- it has not agreed to a variation of its standard or
customary billing arrangements for this engagement;
-- None of its professionals included in this engagement have
varied their rate based on the geographic location of the Chapter
11 Cases;
-- it was retained by the Debtors pursuant to an engagement
agreement dated as of February 9, 2023. The billing rates and
material terms of the prepetition engagement are the same as the
rates and terms described in the application; and
-- the Debtors have approved or will be approving a
prospective budget and staffing plan for Young Conaway's engagement
for the postpetition period, as appropriate. In accordance with the
U.S. Trustee Guidelines, the budget may be amended as necessary to
reflect changed or unanticipated developments.
The firm can be reached through:
Kara Hammond Coyle, Esq.
Young Conaway Stargatt & Taylor, LLP
1000 N. King Street
Wilmington, DE 19801
Tel: (302) 571-5007
Email: kcoyle@ycst.com
About Lincoln Power
Headquartered in Charlotte, N.C., Lincoln Power, L.L.C. is a power
company that owns two gas-fired power-generation facilities -- one
of which is located in Elgin, Illinois, and the other of which is
located in East Dundee, Illinois.
Lincoln Power, LLC and seven affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No.
23-10382) on March 31, 2023. In the petition signed by Justin D.
Pugh, chief restructuring officer, the Debtor disclosed up to $500
million in both assets and liabilities.
The Hon. Laurie Selber Silverstein oversees the cases.
Kara Hammond Coyle, Esq., at Young Conaway Stargatt & Taylor, LLP,
represents the Debtor as legal counsel.
Lawyers at Latham & Watkins LLP and Young Conaway Stargatt &
Taylor, LLP serve as the Debtors' bankruptcy counsel. The Debtors
tapped Guggenheim Securities, LLC as financial advisor and
investment banker. Omni Agent Solutions serves as the Debtors'
claims and noticing agent.
LINCOLN POWER: Seeks to Hire Omni Agent as Administrative Advisor
-----------------------------------------------------------------
Lincoln Power, LLC and its debtor-affiliates seeks approval from
the U.S. Bankruptcy Court for the District of Delaware to hire Omni
Agent Solutions, Inc. as their administrative advisor.
The firm will render these services:
a. assist in case administration matters including data entry,
preparation and management of the creditor matrix, claims
management, noticing, and the development and maintenance of an
informational website;
b. assist with any required solicitation, balloting,
tabulation and calculation of votes as well as preparing any
appropriate reports as required in furtherance of confirmation of
a
plan of reorganization;
c. generate an official ballot certification and testify, if
necessary, in support of the ballot tabulation results;
d. handle requests for documents;
e. develop and maintain a confidential virtual data room, if
requested; and
f. provide such other services as may be requested by the
Debtors or otherwise required by applicable law, governmental
regulations, and court rules or orders.
The Debtors provided Omni with an advance in the amount of
$50,000.
Paul Deutch, executive vice president of Omni, 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:
Paul H. Deutch
Omni Agent Solutions
5955 De Soto Avenue Suite 100
Woodland Hills, CA 91367
Tel: (818) 906-8300
Fax: 818-783-2737
Email: lacontact@omniagnt.com
About Lincoln Power
Headquartered in Charlotte, N.C., Lincoln Power, L.L.C. is a power
company that owns two gas-fired power-generation facilities -- one
of which is located in Elgin, Illinois, and the other of which is
located in East Dundee, Illinois.
Lincoln Power, LLC and seven affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No.
23-10382) on March 31, 2023. In the petition signed by Justin D.
Pugh, chief restructuring officer, the Debtor disclosed up to $500
million in both assets and liabilities.
The Hon. Laurie Selber Silverstein oversees the cases.
Kara Hammond Coyle, Esq., at Young Conaway Stargatt & Taylor, LLP,
represents the Debtor as legal counsel.
Lawyers at Latham & Watkins LLP and Young Conaway Stargatt &
Taylor, LLP serve as the Debtors' bankruptcy counsel. The Debtors
tapped Guggenheim Securities, LLC as financial advisor and
investment banker. Omni Agent Solutions serves as the Debtors'
claims and noticing agent.
LINCOLN POWER: Seeks to Tap FTI Consulting to Provide CRO, Staff
----------------------------------------------------------------
Lincoln Power, LLC and its debtor-affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire FTI
Consulting, Inc. to provide a chief restructuring officer and
certain additional supportive staff.
FTI will designate Justin D. Pugh as the Debtors' CRO and also
provide additional professionals.
FTI professionals will render these services:
(a) assist with the management of all aspects of the Debtors'
operations;
(b) evaluate cash and liquidity requirements;
(c) work with the Debtors' management to preserve and maximize
cash availability while preserving value in the business;
(d) assist with the evaluation of strategic alternatives;
(e) assist with the preparation of reports required by the
Bankruptcy Code and Bankruptcy Rules;
(f) assist the Debtors' management in responding to requests
from, and negotiation with, investors, lenders, creditors, any
official committees, and other stakeholders;
(g) assist in the Debtors' strategic communications with
employees, vendors and other stakeholders, as needed;
(h) direct the efforts of external professionals, consultants,
and advisors in connection with liquidation initiatives; and
(i) perform such other services as may be reasonably requested
by the Debtors.
The hourly rates charged by the firm for its services are as
follows:
Senior Managing Directors and Senior Advisors $1,045 - 1,495
Directors/Senior Directors/Managing Directors $785 - 1,055
Consultants/Senior Consultants $435 - 750
Administrative/Paraprofessionals $175 - 325
In addition, the firm will seek reimbursement for expenses
incurred.
FTI received an unapplied advance payment from the Debtors in the
amount of $250,000.
Justin Pugh, a senior managing director at FTI Consulting,
disclosed in a court filing that the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Justin D. Pugh
FTI Consulting, Inc.
999 17th Street, Suite 700
Denver, CO 80202
Telephone: +1 612 417 1486
Email: justin.pugh@fticonsulting.com
About Lincoln Power
Headquartered in Charlotte, N.C., Lincoln Power, L.L.C. is a power
Debtors that owns two gas-fired power-generation facilities -- one
of which is located in Elgin, Illinois, and the other of which is
located in East Dundee, Illinois.
Lincoln Power, LLC and seven affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No.
23-10382) on March 31, 2023. In the petition signed by Justin D.
Pugh, chief restructuring officer, the Debtor disclosed up to $500
million in both assets and liabilities.
The Hon. Laurie Selber Silverstein oversees the cases.
Kara Hammond Coyle, Esq., at Young Conaway Stargatt & Taylor, LLP,
represents the Debtor as legal counsel.
Lawyers at Latham & Watkins LLP and Young Conaway Stargatt &
Taylor, LLP serve as the Debtors' bankruptcy counsel. The Debtors
tapped Guggenheim Securities, LLC as financial advisor and
investment banker. Omni Agent Solutions serves as the Debtors'
claims and noticing agent.
LINCOLN POWER: Seeks to Tap Latham & Watkins as Bankruptcy Counsel
------------------------------------------------------------------
Lincoln Power, LLC and its debtor-affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire Latham &
Watkins, LLP as their bankruptcy counsel.
The firm will render these services:
a. give advice with respect to the powers and duties of the
Debtors in the continued management and operation of their
businesses and properties;
b. advise and consult on the conduct of the Debtors'
bankruptcy cases, including all of the legal and administrative
requirements of operating in Chapter 11;
c. advise the Debtors and take all necessary action to protect
and preserve the Debtors' estates, including prosecuting actions on
the Debtors' behalf, defending any action commenced against the
Debtors, and representing the Debtors' interests in negotiations
concerning litigation in which the Debtors are involved;
d. analyze proofs of claim filed against the Debtors and
object to such claims as necessary;
e. represent the Debtors in connection with obtaining
authority to continue using cash collateral and post-petition
financing;
f. attend meetings and negotiate with representatives of
creditors, interest holders, and other parties in interest;
g. analyze executory contracts and unexpired leases and
potential assumptions, assignments or rejections of such contracts
and leases;
h. prepare pleadings;
i. advise the Debtors in connection with any potential sale of
their assets;
j. take necessary actions to obtain approval of a disclosure
statement and confirmation of a Chapter 11 plan;
k. appear before the bankruptcy court or any appellate
courts;
l. advise on corporate, litigation, environmental, finance,
tax, employee benefits and other legal matters; and
m. perform all other necessary legal services for the Debtors.
The firm's current hourly rates are:
Partners $1,360 to $2,230
Counsel $1,300 to $1,690
Associates $705 to $1,400
Professional Staff $210 to $1,050
Paralegals $300 to $660
The firm holds a retainer in the amount of $229,765.75.
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, Latham &
Watkins 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;
-- up until the Petition Date, the following rates were used:
$1,565 to $2,565 for partners; $1,500 to $1,985 for counsel; $870
to $1,670 for associates; $220 to $1,320 for professional staff;
and $310 to $795 for paralegals. In addition, from time to time,
the firm provided courtesy discounts on these rates. During the
prior calendar year, the firm used the following rates for services
rendered on behalf of the Debtors: $1,455 to $2,385 for partners;
$1,395 to $2,385 for counsel; $810 to $1,555 for associates; $205
to $1,200 for professional staff; and $290 to $740 for paralegals;
and
-- the firm has approved the budget and staffing plan for the
period from the Petition Date to June 30, 2023.
George Davis, Esq., a partner at Latham & Watkins, 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.
Latham & Watkins can be reached through:
George A. Davis, Esq.
Latham & Watkins, LLP
355 South Grand Avenue, Suite 100
Los Angeles, CA 90071
Tel: (213) 485-1234
Fax: (213) 891-8763
Email: ted.dillman@lw.com
About Lincoln Power
Headquartered in Charlotte, N.C., Lincoln Power, L.L.C. is a power
company that owns two gas-fired power-generation facilities -- one
of which is located in Elgin, Illinois, and the other of which is
located in East Dundee, Illinois.
Lincoln Power, LLC and seven affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No.
23-10382) on March 31, 2023. In the petition signed by Justin D.
Pugh, chief restructuring officer, the Debtor disclosed up to $500
million in both assets and liabilities.
The Hon. Laurie Selber Silverstein oversees the cases.
Kara Hammond Coyle, Esq., at Young Conaway Stargatt & Taylor, LLP,
represents the Debtor as legal counsel.
Lawyers at Latham & Watkins LLP and Young Conaway Stargatt &
Taylor, LLP serve as the Debtors' bankruptcy counsel. The Debtors
tapped Guggenheim Securities, LLC as financial advisor and
investment banker. Omni Agent Solutions serves as the Debtors'
claims and noticing agent.
LONG & ASSOCIATE: Michael Markham Named Subchapter V Trustee
------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Michael Markham as
Subchapter V trustee for Long & Associate of Tampa, LLC.
Mr. Markham will be paid an hourly fee of $350 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Markham declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Michael C. Markham
401 E. Jackson Street, Suite 3100
Tampa, Florida 33602
Phone: (727) 480-5118
Email: Mikem@jpfirm.com
About Long & Associate
Long & Associate of Tampa, LLC, a company in Lytle, Texas, filed a
petition under Chapter 11, Subchapter V of the Bankruptcy Code
(Bankr. M.D. Fla. Case No. 23-01781) on May 2, 2023, with as much
as $50,000 in both assets and liabilities.
The Debtor is represented by Perry G. Gruman, Esq.
LPI LLC: Case Summary & 12 Unsecured Creditors
----------------------------------------------
Debtor: LPI, LLC
1040 Dale Street, NE
Albany, OR 97322
Business Description: The Debtor owns four real properties in
Oregon having a total current value of $1.63
million.
Chapter 11 Petition Date: May 10, 2023
Court: United States Bankruptcy Court
District of Oregon
Case No.: 23-60789
Judge: Hon. Thomas M. Renn
Debtor's Counsel: Theodore J. Piteo, Esq.
MICHAEL D. O'BRIEN & ASSOCIATES, P.C.
12909 SW 68th Parkway, Suite 160
Portland, OR 97223
Tel: 503-786-3800
Fax: 503-272-7796
Email: enc@pdxlegal.com
Total Assets: $2,064,118
Total Liabilities: $974,196
The petition was signed by Mahmood Almayah as member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 12 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/D2OVLYQ/LPI_LLC__orbke-23-60789__0001.0.pdf?mcid=tGE4TAMA
LYLES AND LEWIS: Richard Furtek Named Subchapter V Trustee
----------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Richard Furtek as
Subchapter V trustee for Lyles and Lewis Development, LLC.
Mr. Furtek will be paid an hourly fee of $295 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Furtek declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Richard Furtek
101 Lindenwood Drive, Malvern, PA 19335
Email: Rfurtek@furtekassociates.com
Telephone: 610 768 8030
About Lyles and Lewis Development
Lyles and Lewis Development, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. E.D. Pa. Case No.
23-11286) on May 2, 2023, with $100,001 to $500,000 in both assets
and liabilities. Judge Ashely M. Chan oversees the case.
Roger V. Ashodian, Esq., at Regional Bankruptcy Center of
Southeastern PA, P.C. represents the Debtor as counsel.
MADISON CLINIC: Cash Collateral Access, $15,000 DIP Loan OK'd
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Alabama,
Northern Division, authorized the Madison Clinic for Applied
Behavior Analysis, LLC, to continue using cash collateral and
obtain postpetition financing, on an interim basis.
The Debtor obtained a post-petition financing arrangement with
Huntsville Rental Property, LLC, who is a pre-petition lender and
an insider.
The Debtor requires the use of cash collateral and DIP financing to
preserve and maintain its business operations and assets as a going
concern.
The Debtor is authorized to (i) enter into the Post-Petition Loan
Agreement with Wellstone, Inc. and the other PostPetition Loan
Documents, and (ii) borrow funds, incur debt, reimbursement
obligations and other obligations, grant liens, and perform its
obligations solely in accordance with the terms and conditions of
the Post-Petition Loan Documents, including without limitation all
conditions to borrowing set forth in such Post-Petition Loan
Documents.
The Debtor is only authorized to borrow up to $15,000 under the
Post-Petition Loan Documents.
The Debtor's cash on hand and the proceeds of the Debtor's assets
subject to unavoidable liens as of the Filing Date may compromise
the cash collateral of, among others, US MED Capital, LLC.
US MED is provided with the following forms of adequate protection
pursuant to 11 U.S.C sections 361, 363(c) and 363(e) solely to the
extent of any diminution in value of its interests in cash
collateral resulting from, and as an inducement to consent to (a)
the Debtor's use of cash collateral, (b) the imposition of the
automatic stay, and (c) to the extent applicable, the subordination
to the Carve-Out:
a. Replacement Lien. The Debtor grants, assigns and pledges to
US MED post-petition replacement security interests and liens,
subject to the Carve-Out, in and on the Debtor's assets to the same
extent and priority as US MED’s liens existing as of the Filing
Date; provided, the Post-Petition Security Interests granted to the
Lender will be senior and prior to the US MED Replacement Liens
with respect to all "Accounts" and other Collateral that arise from
or relate to the Debtor's business operations on or after the
Filing Date; and (y) US MED will have no lien on claims or causes
of action. The US MED Replacement Liens will be valid, perfected
and enforceable without further filing or recording of any document
or instrument or the taking of any further actions;
b. Administrative Priority Claim. US MED is granted an
administrative claim equal to the amount of accounts receivable
paid to the Debtor that arise from services provided prior to the
Filing Date it is determined that the Debtor received and failed to
deliver to US MED post-petition, less a credit for any
post-petition account proceeds actually delivered to US MED by the
Debtor, that will have priority under 11 U.S.C sections 503(b) and
507(b) of the Bankruptcy Code over all unsecured claims against the
Debtor and its estates, now existing or hereafter arising;
provided, the DIP Super-Priority Claim will be senior and prior to
the US MED Administrative Claim for all purposes;
c. Funds on Deposit. The funds on deposit at Park National
Bank in the amount of $25,622 and held by counsel for US MED in the
amount of $13,492 will be turned over to US MED and applied to the
debts owing to US MED;
d. Segregation of Pre-Petition Accounts Receivable. The Debtor
will segregate and deposit in the Park National Bank account any
accounts receivable paid to the Debtor that arise from services
provided prior to the Filing Date; and
e. Accounts Receivable Reporting. The Debtor will provide US
MED reporting on the recovery of accounts receivable every week
until the closing of the proposed sale to Lender, and share any
reporting with Lender as well.
The DIP Loan will terminate on the earliest of (a) May 18, 2023,
unless a final order approving the Motion has been entered by such
date, in which event the foregoing date will be extended to June
30, 2023, (b) any non-compliance by the Debtor with any of the
terms or provisions of the Interim Order, (c) the termination of
the Lender's commitment to make advances upon the occurrence of an
Event of Default under the Post-Petition Loan Documents, (d) the
sale of all or substantially all of the assets of Debtor or
liquidation of the Debtor, (e) the termination of the Debtor's APA
with Lender, (f) the entry of an order modifying, reversing,
revoking, staying, rescinding, vacating, or amending the Interim
Order without the express prior written consent of Lender in its
sole discretion.
The Post-Petition Security Interests and DIP Super-Priority Claim
will be subordinate to the Debtor's fees and expenses, as set forth
in the Budget, and to the extent they do not exceed $10,000 in the
aggregate for (i) the amount of any allowed compensation for
services actually rendered or expenses actually incurred (whether
paid or unpaid) by the Debtor's professionals retained by final
order of 11 U.S.C. section 327, (ii) the amount of any allowed
compensation for services actually rendered or expenses actually
incurred by the Subchapter V Trustee, and (iii) the amount of any
allowed compensation for services actually rendered or expenses
actually incurred by the patient care ombudsman appointed in the
Debtor's case.
A final hearing on the matter is set for May 17, 2023 at 11 a.m.
A copy of the order is available at https://bit.ly/3LHTuee from
PacerMonitor.com.
About the Madison Clinic for Applied
Behavior Analysis, LLC
Madison Clinic for Applied Behavior Analysis, LLC sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ala. Case
No. 23-80259-CRJ11) on February 14, 2023. In the petition signed by
Lindsay Chapman, owner, the Debtor disclosed up to $50,000 in
assets and up to $1 million in liabilities.
Judge Clifton R. Jessup, Jr. oversees the case.
Stuart M. Maples, Esq., at Maples Law Firm, PC, represents the
Debtor as legal counsel.
MADISON SQUARE: June 26 Hearing on Plan and Disclosures
-------------------------------------------------------
Judge Sean H. Lane has entered an order conditionally approving the
Disclosure Statement of Madison Square Boys & Girls Club, Inc.
The combined hearing on the Plan and Disclosure Statement will be
held on June 26, 2023 at 2:00 p.m. (prevailing Eastern Time).
The following dates and deadlines are also approved:
* The Plan Supplement Deadline will be on May 29, 2023.
* The voting deadline will be on June 12, 2023 at 4:00 p.m.
(prevailing Eastern Time).
* The objection deadline will be on June 12, 2023 at 4:00 p.m.
(prevailing Eastern Time).
* The voting report deadline will be on June 19, 2023 at 12:00
p.m. (prevailing Eastern Time).
* The confirmation brief/reply deadline will be on June 19,
2023 at 12:00 p.m. (prevailing Eastern Time).
All General Unsecured Claims in Class 3 which were filed in
unliquidated amounts or as contingent shall be temporarily Allowed
in the amount of $1.00 in the aggregate per claimant solely for
purposes of voting to accept or reject the Plan and not for any
other purpose. The Rockefeller GUC Claim shall be temporarily
Allowed in the amount of $1.00 in the aggregate solely for purposes
of voting to accept or reject the Plan and not for any other
purpose.
All Abuse Claims in Class 4, which are each contingent and
unliquidated, shall be temporarily Allowed in the amount of $1.00
in the aggregate per claimant solely for purposes of voting to
accept or reject the Plan and not for any other purpose.
As Solicitation Agent in this chapter 11 case, Epiq Corporate
Restructuring, LLC, shall process and tabulate Ballots in
accordance with the Solicitation and Voting Procedures and file the
Voting Report no later than June 19, 2023, at 12:00 p.m.
(prevailing Eastern Time).
About Madison Square Boys & Girls Club
Madison Square Boys & Girls Club, Inc. --
https://www.madisonsquare.org -- was established to save and
enhance the lives of New York City boys and girls who by means of
economic or social factors are most in need of its services.
Madison Square Boys & Girls Club sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-10910) on
June 29, 2022. In the petition filed by its chief financial
officer, Jeffrey Dold, the Debtor reported $50 million to $100
million in assets and $100 million to $500 million in liabilities.
Judge Sean H. Lane oversees the case.
The Debtor tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP as
bankruptcy counsel; and Pillsbury Winthrop Shaw Pittman, LLP and
Friedman Kaplan Seiler & Adelman, LLP as special counsels. Epiq
Corporate Restructuring, LLC is the claims and noticing agent.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors on July 13, 2022. The committee tapped
Pachulski Stang Ziehl & Jones, LLP as legal counsel; and Dundon
Advisers, LLC and Island Capital Advisor, LLC as financial
advisors.
MANZELLA PROPERTIES: Court OKs Deal on Cash Collateral Access
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Santa Ana Division, authorized Karen Sue Naylor, the Chapter 11
trustee of Manzella Properties, LLC, to use cash collateral on an
interim basis in accordance with her agreement with Citizens
Business Bank.
As previously reported by the Troubled Company reporter, prior to
the Petition Date, the Debtor executed and delivered, among other
documents, a series of promissory notes and/or guarantees in favor
of the Lender, simultaneously granting to the Lender first and
second priority security interests in the Property pursuant to duly
recorded deeds of trust. The approximate outstanding balance owed
by the Debtor to the Lender in the aggregate is not less than
$4.150 million.
The Property at 101 East Imperial Highway, Brea, California, is
also encumbered by a secured property tax lien in favor of the
County of Orange, representing unpaid taxes for the 2020, 2021, and
2022 roll years.
The Property is improved with a single-tenant freestanding
restaurant building with a gross leasable area of 11,514 square
feet and a 2,614 square foot exterior patio dining area on a
0.38-acre site. The Debtor lets the Property to a related party,
South County Concepts, Inc., pursuant to the terms of a written
lease with a 15-year term commencing March 1, 2017. The Lender has
an interest in the income generated by the Property, including but
not limited to the rents tendered by South County to the Debtor.
Subsequent to the Trustee's appointment, the Debtor transferred to
the Trustee on behalf of the Estate all funds on hand in the
Debtor's operating account, in the sum of $56,795, inclusive of the
January 2023 rent tendered by South County. These funds are the
cash collateral of the Lender, and have been deposited by the
Trustee into a segregated account for the Lender's benefit pending
negotiation of a cash collateral agreement.
To date, the Trustee has expended, with the Lender's consent, the
sum of $640 in payment of the Trustee's bond in the case, and $250
to the Office of the United States Trustee in satisfaction of the
Debtor's quarterly fees owed to the OUST for the period ended
December 31, 2022. The Trustee has also tendered the aggregate sum
of $30,146 to the Lender, representing payments required by 11
U.S.C. Section 362(d)(3) in this single real estate case for the
month of February 2023 and March 2023.
The Lender consents to the Trustee's use of cash collateral from
the Effective Date for a period of 180 days after the Effective
Date for the purpose of remitting the payments specified in the
Budget. Should the Trustee discover additional expenses that must
be satisfied to ensure the maintenance and safe operation of the
Property pending confirmation of a plan or sale of the Property,
the Trustee will request Lender's consent to the payment of same.
A copy of the order is available at https://bit.ly/3plxnTv from
PacerMonitor.com.
About Manzella Properties
Manzella Properties, LLC, a company in Brea, Calif., filed its
voluntary petition for Chapter 11 protection (Bankr. C.D. Calif.
Case No. 22-11915) on Nov. 9, 2022, with $10 million to $50 million
in assets and $1 million to $10 million in liabilities. Joseph
Manzella signed the petition as the authorized person.
Judge Scott C. Clarkson oversees the case.
Fennemore Wendel and Sonoran Capital Advisors serve as the Debtor's
legal counsel and financial advisor, respectively.
On Jan. 20, 2023, Karen Sue Naylor was appointed as trustee in the
Debtor's Chapter 11 case. Ringstad & Sanders, LLP and Malcolm
Cisneros, A Law Corporation serve as her bankruptcy counsel and
special counsel, respectively.
MARKING IMPRESSIONS: Taps Lefkovitz & Lefkovitz as Legal Counsel
----------------------------------------------------------------
Marking Impressions, Corp. seeks approval from the U.S. Bankruptcy
Court for the Middle District of Tennessee to hire Lefkovitz &
Lefkovitz, PLLC as its bankruptcy counsel.
The firm's services include:
a. advising the Debtor as to its rights, duties and powers;
b. preparing and filing statements and schedules, Chapter 11
plans and other documents;
c. representing the Debtor at hearings, meetings of creditors,
conferences, trials, and any other proceedings; and
d. performing other necessary legal services in connection
with the Debtor's Chapter 11 case.
The firm will be paid at these rates:
Steven L. Leftkovitz $555 per hour
Associates $350 per hour
Paralegals $125 per hour
In addition, the firm will receive reimbursement for its
out-of-pocket expenses.
The retainer is $7,500.
Steven Leftkovitz, Esq., a partner at Lefkovitz & Lefkovitz,
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:
Steven L. Lefkovitz, Esq.
Lefkovitz & Lefkovitz, PLLC
908 Harpeth Valley Place
Nashville, TN 37221
Tel: (615) 256-8300
Fax: (615) 255-4516
Email: slefkovitz@lefkovitz.com
About Marking Impressions
Marking Impressions, Corp. filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Tenn. Case No.
23-01470) on April 24, 2023. The petition was signed by Wayne Todd
Pope as CEO. At the time of filing, the Debtor estimated $2,741,294
in assets and $5,499,299 in liabilities.
Judge Charles M. Walker presides over the case.
Steven L. Lefkovitz, Esq., at Lefkovitz & Lefkovitz, PLLC
represents the Debtor as counsel.
MONITRONICS INT'L: Moody's Cuts CFR to Ca, Outlook Stable
---------------------------------------------------------
Moody's Investors Service downgraded the corporate family rating
for Monitronics International, Inc. ("Monitronics", dba "Brinks
Home", "the company") to Ca from Caa1 and the probability of
default rating to C-PD from Caa1-PD. Moody's also affirmed the B1
rating on the company's senior secured super-priority debt, and
downgraded the ratings on the senior secured term loan to Ca from
Caa2. The outlook is stable.
The rating actions follow the company's May 9, 2023 announcement
that it intends to file for protection under Chapter 11 of the US
Bankruptcy Code. Governance issues were a key ESG consideration of
the rating action, including very risky financial policies as
reflected in the announced restructuring plan and expected
bankruptcy filing, as well as operational issues that have led to a
shrinking subscriber base. Monitronics is a Texas-based provider of
alarm monitoring services to primarily residential customers in the
US.
Downgrades:
Issuer: Monitronics International, Inc.
Corporate Family Rating, Downgraded to Ca from Caa1
Probability of Default Rating, Downgraded to C-PD from Caa1-PD
Senior Secured 1st Lien Term Loan, Downgraded to Ca from Caa2
Affirmations:
Issuer: Monitronics International, Inc.
Senior Secured Super Priority 1st Lien Term Loan, Affirmed B1
Senior Secured 1st Lien Revolving Credit Facility, Affirmed B1
Outlook Actions:
Issuer: Monitronics International, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
The Ca CFR and instrument ratings reflect Moody's view on recovery
expectations, following the company's announcement that it has
entered into a Restructuring Support Agreement ("RSA") with (i)
lenders holding approximately 78% of the Company's outstanding
funded debt and (ii) holders of a majority of the Company's equity
to support a restructuring transaction that would reduce
Monitronics' debt by approximately $500 million (per the company's
announcement). The company's $1.1 billion of debt became current in
March 2023 and its entirely floating-rate structure has become
unsustainable, given its exposure to benchmark rate increases which
have contributed to Moody's expectation for sustained negative free
cash flow. An increasing interest expense burden diminishes cash
flow available for subscriber acquisitions, which Moody's expects
will lead to declining revenue and subscribers in 2023.
Monitronics' leverage, as measured by debt-to-recurring monthly
revenue ("RMR"), was high at about 26.7x as of December 2022 and
Moody's expects it would increase towards unsustainable levels
around 30x in 2023 with the current capital structure, as the
number of total subscribers declines.
Monitronics faces operational risks as the company executes its
strategic shift to a hybrid direct-to-consumer ("DTC") and dealer
sales model, while simultaneously targeting higher quality,
upmarket subscribers. The company expects the diversification away
from the purely dealer sales model will improve operating metrics,
given that a higher proportion of DTC channels should support sales
and profitability strength, lower customer acquisition costs and
improved customer retention. In addition, Monitronics has also
focused in more recent years on higher credit quality accounts, and
has attempted to shift to become a more premium brand. However, the
company's evolving business model presents operating risks as it
competes with larger players in a highly fragmented market.
The stable outlook indicates that the ratings already reflect
Moody's recovery expectations in bankruptcy. The super-priority
senior secured credit facilities, which include a $145 million
revolver and a $150 million term loan are rated B1, reflecting
Moody's view of a likely full recovery. The $790 million (amortized
amount as of December 2022) senior secured takeback term loan
provides substantial support to the super-priority debt. The
takeback term loan's Ca rating reflects its size and subordinated
claim status relative to the smaller super-priority debt, which
drives Moody's expectation for a weak recovery.
Moody's considers Monitronics' liquidity profile to be weak, with
only $4 million of cash on the balance sheet as of December 31,
2022, and $49 million of available capacity under its $145 million
revolving credit facility. Access to the revolving credit facility
is restricted by its maturity date, which springs to March 2024 if
the takeback term loan is not refinanced. Moody's expects revolver
availability to diminish as the company is increasingly reliant on
the facility for liquidity, also incurring higher interest costs.
While Moody's expects Monitronics to generate negative free cash
flow in 2023, the standard industry assumption that an alarm
monitor can curtail its subscriber acquisition programs if
necessary to free up funds provides some support. The company also
has minimal cushion with respect to its financial maintenance
covenants. As of December 2022, debt-to-EBITDA leverage calculated
for covenant purposes was 3.8x, as compared with a covenant maximum
of 4.0x, representing only a 5% cushion and heightened default
risk. The company's second maintenance covenant, debt-to-RMR
leverage, was 27.89x as of December 2022 (per the Credit Agreement
definition), compared to a 30.75x maximum, representing only a 9%
cushion.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if: (1) Monitronics reduces its debt
and debt/RMR leverage; (2) Moody's expects Monitronics can sustain
improving operating trends, including revenue growth and
diminishing attrition; and (3) liquidity and free cash flow
improve.
The ratings could be downgraded if Moody's expects (1) lower than
anticipated recoveries in bankruptcy; (2) revenue growth to remain
negative or operating metrics to deteriorate; or (3) Monitronics'
liquidity position weakens further. Moody's will downgrade the PDR
rating to D-PD when the company files for Chapter 11 protection.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Doing business as Brinks Home Security, Monitronics International,
Inc. provides alarm monitoring services to 829,206 subscribers (as
of December 31, 2022), mainly residential customers in the US.
After Monitronics emerged from voluntary bankruptcy, in August
2019, a small group of lenders eventually held the majority of the
new company's equity.
NATIONAL CINEMEDIA: $270M Bank Debt Trades at 68% Discount
----------------------------------------------------------
Participations in a syndicated loan under which National CineMedia
LLC is a borrower were trading in the secondary market around 32.2
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $270 million facility is a Term loan that is scheduled to
mature on June 20, 2025. About $257.2 million of the loan is
withdrawn and outstanding.
National CineMedia, LLC owns and operates movie theaters. The
Company offers entertainment content, advertising, and movie
screening services.
NAUTILUS POWER: S&P Lowers Debt Rating to 'D', Off Watch Negative
-----------------------------------------------------------------
S&P Global Ratings lowered its rating on Nautilus Power LLC's
(Nautilus) non-extended tranche to 'D' from 'B' and removed the
rating from CreditWatch, where it was placed with negative
implications Feb. 16, 2023. The 'D' rating reflects its view of the
change in security and payment rights of the non-extended tranche
to a subordinated status from a senior secured position, which is
less than the original promised. S&P will publish the new rating on
the subordinated term loan B (TLB) in the upcoming days.
Nautilus executed an amend-and-extend transaction in April 2023
that has extended the maturity of about 98% of its debt outstanding
to November 2026. The applicable margin on the instrument is also
increasing to 5.25% from 4.25%.
The non-extended TLB will remain due in May 2024. The non-extended
tranche is now subordinated to the extended TLB from a payment
priority standpoint, as well as from a collateral package
perspective.
S&P Global Ratings also assigned its 'B' rating to the extended
(superpriority tranche) senior secured TLB due November 2026, and
to the $30 million senior secured working capital facility that
ranks pari passu with the superpriority facilities.
The stable outlook on the superpriority tranche reflects our
expectation of adequate operational and financial performance in
the next few years given the new debt structure, despite the
weakness in capacity prices.
S&P said, "Although we believe the transaction resolves near-term
liquidity risks; the inability to refinance in 2026 remains a key
credit risk. To address the initial term loan maturity in 2024,
Nautilus has executed an amend-and-extend transaction, receiving
consent from 98% of lenders. This constitutes about $486 million of
the TLB, which has now been extended to November 2026, and a
step-up in the interest rate to SOFR+5.25% + credit spread
adjustment from LIBOR+4.25%. The superpriority tranche continues to
have a 100% cash flow sweep, which we view as credit positive.
"The lenders of the remaining 2%, or the nonconsenting lenders, are
due to receive their principal share of the TLB ($13 million) as
per the original debt maturity (May 2024). However, they are now
subordinated in the payment waterfall and in the security package.
We see this as tantamount to default, given that there is a change
from the original promised without proper compensation. As a
result, we are lowering this subordinated tranche rating to 'D'. We
will publish in the upcoming days the revised rating of the
subordinated debt tranche.
"We see the extension of the superpriority tranche as credit
supportive because it addressed the near-term refinancing risk.
However, we believe that the portfolio's ability to execute a
timely refinancing for the superpriority tranche in 2026 is still
dependent on its financial performance and cash flow sweeps through
maturity, as with all TLB structures we rate that are exposed to
power market volatility.
"The project's sponsor, has taken certain credit supportive
measures. We acknowledge Carlyle Group's credit-supportive actions
to address increased leverage and the impact of the PJM penalty
related to the December storm by about $58 million through debt
reduction via equity infusion and debt cancellation. These measures
have restored lender confidence to a certain extent, and in our
opinion, played a crucial role in facilitating the amend-and-extend
transaction, averting a potential default. That said, in our base
case, we do not anticipate any further financial support from the
project's sponsor and believe that Nautilus will have to
demonstrate the ability to refinance on its own merit."
A new LC facility and additional sponsor working capital facility
support the project's liquidity position. In addition to a $54
million LC facility--which will cover the $26.5 million in required
six-month debt service reserve support--the sponsor is also
providing liquidity support with a $30 million working capital loan
for Nautilus. The additional liquidity support will allow the
project to address PJM penalties and meet its mandatory debt
service obligations over the next few years.
S&P's calculation of total debt outstanding at maturity
incorporates the $30 million working capital facility issued by the
sponsor, which it treats as 100% debt. The working capital loan
accrues interest periodically; however, under the credit agreement,
the payments will be deferred, which will ultimately increase the
amount due to the sponsors.
Portfolio's credit quality is exposed to evolving market
conditions. Because Nautilus has a diversified portfolio that has
combined-cycle units capable of dispatching energy, it can
capitalize on increased power prices and expanded spark spreads,
provided energy markets are supportive. However, this scenario is
subject to execution risk and market dynamics, which will
eventually determine cash generation and portfolio profitability.
This is especially relevant in the current market environment,
where capacity prices are at an all-time low, with limited
prospects for recovery, absent market reforms.
S&P said, "The level of deleveraging over time is also one of our
key credit considerations. We forecast Nautilus will pay down the
superpriority TLB by at least $25 million using excess cash this
year and a total of $65 million through the TLB period until
maturity, leading to a superpriority TLB balance of about $400
million in 2026. As a result, we now forecast a minimum debt
service coverage ratio (DSCR) of 1.11x in the post-refinancing
period, with median DSCRs of around 1.17x. For the post-refinancing
period, we model a fully amortizing TLB due 2041, even though we
note the sponsor could choose different refinancing alternatives.
"We understand that the amount of additional debt paydown through
excess cash can vary because of the need to allocate cash for other
uses such as working capital needs and reserve funding. However, we
generally view an issuer with a TLB unfavorably if it is unable to
deleverage meaningfully over the debt tenor. We will continue to
monitor market developments and the portfolio's performance during
the year.
"The stable outlook reflects our expectation of adequate
operational and financial performance in the near term given the
new capital structure, despite the weakness in capacity prices. We
expect the project will pay down at least $25 million in 2023 and a
total of $65 million on its superpriority before maturity,
resulting in a minimum DSCR of 1.1x in our assumed refinancing
case.
"We could lower the rating if we expect the project's minimum DSCR
to fall below 1.1x on a sustained basis. This could be a result of
several factors, including lower-than-forecast energy margins,
lower-than-expected sweeps, or a further decline in capacity
prices, which would lead to higher debt outstanding at TLB
maturity.
"We could take a positive rating action if the project achieves a
minimum DSCR of 1.2x through its life, including the refinancing
period, and we expect the project will have less than $400 million
outstanding on the term loan at maturity. This would be spurred by
improved capacity prices or higher-than-forecast energy margins."
NAVARRO PECAN: Unsecureds Get Share of Liquidating Trust
--------------------------------------------------------
Navarro Pecan Company, Inc., filed a Plan of Liquidation and a
Disclosure Statement.
Key terms of the Plan are:
* Payment in full of all Allowed Secured, Administrative, and
Priority Claims;
* Creation of the Liquidating Trust as further described in this
Disclosure Statement and the Plan; and
* Implementation of settlement terms with other parties.
The sources of funding for the Plan include cash on hand, Causes of
Action, and proceeds from the D&O Cause of Action.
If the Plan is approved, the remaining assets of the Debtor will be
placed into the Liquidating Trust, which will distribute funds to
Holders of Allowed Claims.
On Petition Date, the Debtor filed its Motion for Entry of an Order
(A) Authorizing the Sale of Subject Assets Free and Clear of Liens,
Claims, Encumbrances, and Other Interest, (B) Granting the Buyer
the Protections Afforded to a Good Faith Purchaser, (C) Approving
Buyer Protections in Connection with Sale of Asserts of the Debtor
and (D) Granting Related Relief (the "Sale Motion"), In relation to
the Sale Motion, the Debtor filed its Debtor's Emergency Motion for
an Interim and Final Order (I) Authorizing Debtor to Obtain
Post-Petition Financing, (II) Granting Liens on Debtor's Assets,
and (III) Scheduling a Final Hearing Pursuant to Bankruptcy Rule
4001(c) (the "DIP Motion"), which was financing that the Debtor
obtained in contemplation of its sale of substantially all of its
assets.
On February 22, 2023, the Debtor filed its Amended Motion for Entry
of an Order (A) Authorizing the Sale of Subject Assets Free and
Clear of Liens, Claims, Encumbrances, and Other Interest, (B)
Granting the Buyer the Protections Afforded to a Good Faith
Purchaser, (C) Approving Buyer Protections in Connection with Sale
of Asserts of the Debtor and (D) Granting Related Relief (the
"Amended Sale Motion").
On March 9 2023, the Court entered the Sale Order. The sale closed
on March 22, 2023.
Under the Plan, Class 5: Allowed Unsecured Claim shall receive
periodic pro rata distributions from the Liquidating Trust as
beneficiaries of the Liquidating Trust. The estimated recovery for
the Allowed Class 5 Claims is between $0.00 and an unknown amount.
Class 5 is Impaired under the Plan.
Counsel for the Debtor:
Joshua N. Eppich, Esq.
C. Joshua Osborne, Esq.
Bryan C. Assink, Esq.
BONDS ELLIS EPPICH SCHAFER JONES LLP
420 Throckmorton Street, Suite 1000
Fort Worth, TX 76102
Tel: (817) 405-6900
Fax: (817) 405-6902
E-mail: joshua@bondsellis.com
c.joshosborne@bondsellis.com
bryan.assink@bondsellis.com
A copy of the Disclosure Statement dated April 28, 2023, is
available at https://bit.ly/3Vqfv5D from PacerMonitor.com.
About Navarro Pecan Company
Founded in 1977, Navarro Pecan Company Inc. is a pecan sheller that
owns a state-of-the-art facility in Corsicana, Texas. Its pecans
are found in a variety of brand-name food products in the ice
cream, confectionery, cereal, snack food and bakery industries.
Navarro Pecan Company filed a petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. N.D. Texas Case No. 23-40266) on
Jan. 30, 2023. In the petition filed by its chief restructuring
officer, Brad Walker, the Debtor reported $10 million to $50
million in both assets and liabilities.
Judge Edward L. Morris oversees the case.
The Debtor tapped Joshua N. Eppich, Esq., at Bonds Ellis Eppich
Schafer Jones, LLP as bankruptcy counsel and Joann H. Means, Esq.,
a practicing attorney in Fort Worth, Texas, as special counsel.
NESV ICE: Unsecureds to Get Share of Plan Payment and Proceeds
--------------------------------------------------------------
NESV Ice, LLC, NESV Swim, LLC, NESV Tennis, LLC, NESV Land East,
LLC, NESV Field, LLC, NESV Hotel, LLC, and NESV Land, LLC, propose
with Ashcroft Sullivan Sports Village Lender, LLC and Shubh Patel,
LLC, a Joint Plan of Reorganization under Section 1121 of the
United States Bankruptcy Code.
Under the Plan, Class 6 General Unsecured Claims Against Ice will
receive a Pro Rata share of (a) the Plan Payment, and (b) 50% of
the Net Proceeds of any Avoidance Actions recovered by the
Reorganized Debtors. Class 6 is impaired.
The Plan will be funded by the Plan Loan, the Plan Contribution and
from the Debtors' continued operations. Upon the Effective Date,
the Debtors are authorized to take all action permitted by their
Organization Documents (as applicable) and by the law, including,
without limitation, to use their Cash and other Assets for all
purposes provided for in the Plan and in their operations, to
borrow funds, to obtain new financing secured by their Assets
(provided such financing is not secured by a Lien senior to the
Liens retained by certain creditors under the Plan), and to grant
liens on their unencumbered Assets. 83% of the Equity Interests in
NESV Holding shall be issued to SP, or its designee, on the
Effective Date.
Upon the entry of the Confirmation Order, the Reorganized Debtors
are authorized, pursuant to section 1123(a)(5) of the Bankruptcy
Code and without further court order, to sell any or all of their
Assets, including the real property owned by Swim, Land East and
Hotel; provided that any sale of real property owned by Tennis,
Field, Land or Ice must be for an amount of not less than the
applicable Release Price or such other price as may be agreed to by
the holders Liens on such property that are entitled under the Plan
to payment from the proceeds of such sale. All sales of Assets
shall (i) constitute legal, valid and effective transfers of
property of the Reorganized Debtors to the buyer, and (ii) vest in
the buyer all of the Reorganized Debtors' right, title and interest
in the Asset transferred free and clear of all Liens, Claims,
encumbrances and interests of any entity. Following any such sale,
all liens, claims, encumbrances and interests shall attach to the
Net Proceeds to the extent provided in the Plan.
Upon the entry of the Confirmation Order, the Reorganized Debtors
are authorized, pursuant to section 1123 of the Bankruptcy Code and
without further court order, to refinance any or all of their
Assets, including the real property owned by Swim, Land East and
Hotel; provided that, with respect to any financing that results in
the granting of a Lien on real property owned by Tennis, Field,
Land or Ice, such refinancing must be for an amount of not less
than the applicable Release Price or such other amount as may be
agreed to by the holders Liens on such property that are entitled
under the Plan to payment from the proceeds of such refinancing.
Co-Counsel for Shubh Patel, LLC:
Donald R. Lassman, Esq.
LAW OFFICE OF DONALD R. LASSMAN
P.O. Box 920385
Needham, MA 02492
Telephone: (781) 455-8400
E-mail: don@lassmanlaw.com
- and -
Harold B. Murphy, Esq.
D. Ethan Jeffery, Esq.
MURPHY& KING, P.C.
One Beacon Street Boston, MA 02108
Telephone: (617) 423-0400
Email: EJeffery@murphyking.com
Counsel for the Debtors:
Joseph M. Downes III, Esq.
William S. McMahon, Esq.
DOWNES MCMAHON LLP
215 Lewis Wharf
Boston, MA 02110
Telephone: (617) 600-8693
E-mail: jdownes@dmlawllp.com
Counsel for Ashcroft Sullivan Sports Village Lender, LLC:
Gary M. Hogan, Esq.
Baker, Braverman & Barbadoro,
P.C. 300 Crown Colony Drive,
Suite 500 Quincy, MA 02169-0904
Telephone: (781) 848-9610
E-mail: garyh@bbb-lawfirm.com
A copy of the Plan of Reorganization dated April 28, 2023, is
available at https://bit.ly/3LMdI7K from PacerMonitor.com.
About NESV Ice, LLC
NESV Ice, LLC and affiliates NESV Swim, LLC, NESV Field, LLC, NESV
Hotel, LLC, NESV Tennis, LLC, NESV Land, LLC, and NESV Land East,
LLC, offer fitness and sports training services. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Mass. Case No. 21-11226) on August 26, 2021. The petitions were
signed by Stuart Silberberg as manager.
Judge Christopher J. Panos oversees the case.
William McMahon, Esq., at Downes McMahon LLP is the Debtor's
counsel.
NEW CITY AUTO GROUP: Court Approves Disclosure Statement
--------------------------------------------------------
Judge James R. Ahler has entered an order approving the Amended
Disclosure Statement of New City Auto Group, Inc.
June 21, 2023, at 10:00 A.M., is fixed for the telephonic hearing
on confirmation of the Plan to the held before the Court at 5400
Federal Plaza, Courtroom No. 8, Hammond, Indiana, 46320.
May 31, 2023, is fixed as the last day for filing written ballots
accepting or rejecting of the Plan.
May 31, 2023, is fixed as the last day for filing and serving any
written objections to confirmation of the Plan.
About New City Auto Group
New City AUto Group, doing business as New City Nissan, was formed
by shareholders Michael Helmstetter, Benitta Berke, and Steven
Dobrofsky, to purchase in January 2018 a Nissan dealership in
Northwest Indiana and offer new and used automobiles for sale and
related services.
Unfortunately, the Debtor's principals did not obtain floor plan
financing, which was critical to its success. As a result, when
Nissan North America, Inc. delivered 50 new motor vehicles to the
Debtor in February and March 2018, the Debtor lacked the means to
pay for them. As a result of the Debtor's failure to pay Nissan,
Nissan delivered notice terminating the dealer agreement that
permitted the Debtor to operate as a Nissan dealership. To
forestall the termination, the Debtor filed a Chapter 11 case.
New City Auto Group, LLC, based in Schererville, IN, filed a
Chapter 11 petition (Bankr. N.D. Ind. Case No. 18-21890) on July
16, 2018. In the petition signed by CEO Michael Helmstetter, the
Debtor estimated $1 million to $10 million in assets and
liabilities. The Hon. James R. Ahler presides over the case. Gordon
E. Gouveia II, Esq., at Fox Rothschild LLP, is Debtor's bankruptcy
counsel.
NEXERA MEDICAL: Files Emergency Bid to Use Cash Collateral
----------------------------------------------------------
Nexera Medical, Inc. asks the U.S. Bankruptcy Court for the
Southern District of Florida, Fort Lauderdale Division, for
authority to use cash collateral.
The Debtor requires the use of cash collateral to fund day-to-day
operations and ultimately achieve a successful reorganization.
In early 2020 allegations as to kickbacks by members of the
company's previous Board of Directors arose and current director
James Magruder was brought in to manage the company.
Simultaneously, then President Donald Trump crippled the Debtor's
ability to import their brand of masks from China, which is where
they were previously being produced. Since then, their ability to
conduct business has been hampered by infighting with former board
members as well simply logistics. Recently, with one of the largest
shareholders providing financial support, the Debtor and the
current Board are seeking to resolve all outstanding Debts and
controversies and reorganize in the Chapter 11 proceeding.
The Debtor has no valid secured creditors. However, former board
member James Morrell filed a UCC-1 on June 8, 2021 with the State
of Florida reflecting financing of "all the debtors tangible and
intangible property, including intellectual property, cash on-hand,
future receivables, inventory, and office furniture." The Debtor
never authorized any such financing nor did it receive any funding
in return for granting such interests.
With knowledge of this erroneous UCC-1 filing and to avoid any
future cash collateral issues, counsel for the Debtor reached out
to Mr. Morrell who acknowledged the Debtor's position that the
UCC-1 was not valid. He further prepared and emailed counsel for
the Debtor a UCC-3 form terminating the original UCC-1 financing
statement.
An online search of the State of Florida UCC register does not
reflect that such filing has been received although it is
anticipated it will take a few days for the mailing to be completed
and for the form to be placed online.
A copy of the motion is available at https://bit.ly/3pl7TWl from
PacerMonitor.com.
About NEXERA Medical, Inc.
NEXERA Medical, Inc. is in the business of producing and selling
reusable antimicrobial respiratory masks.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-13388) on April 28,
2023. In the petition signed by James Magruder, director, the
Debtor disclosed $155,521 in assets and $1,902,367 in liabilities.
Judge Scott M. Grossman oversees the case.
Jordan L. Rappaport, Esq., at Rappaport Osborne and Rappaport,
PLLC, represents the Debtor as legal counsel.
NEXERA MEDICAL: Maria Yip Named Subchapter V Trustee
----------------------------------------------------
The U.S. Trustee for Region 21 appointed Maria Yip as Subchapter V
trustee for NEXERA Medical, Inc.
Ms. Yip will be paid an hourly fee of $450 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Yip declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Maria Yip
2 S. Biscayne Blvd., Suite 2690
Miami, FL 33131
Tel: (305) 569-0550
Email: myip@yipcpa.com
About NEXERA Medical
NEXERA Medical, Inc. filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-13388) on
April 28, 2023. In the petition signed by James Magruder, director,
the Debtor disclosed $155,521 in assets and $1,902,367 in
liabilities.
Judge Scott M. Grossman oversees the case.
Jordan L. Rappaport, Esq., at Rappaport Osborne & Rappaport, PLLC
is the Debtor's counsel.
NEXTPLAY TECHNOLOGIES: Corrects Annual Report Misstatements
-----------------------------------------------------------
NextPlay Technologies, Inc. filed a Current Report on Form 8-K to
correct certain disclosures included in that Annual Report on Form
10-K for the year ended Feb. 28, 2022, filed with the Securities
and Exchange Commission on June 21, 2022.
The Annual Report contains the following misstatements on page 57:
Since April 2017, Ms. Boonyawattanapisut has been serving as the
Managing Director of Axion Games, Inc., an online video gaming and
technology company, and leads the content investment arm of Axion
Games, Inc. She has also been serving as the Chief Executive
Officer and Chairperson of the Board at True Axion Interactive, a
game studio formed via a joint venture with True Corporation, a
major Thai telecommunication company, since she co-founded it in
March 2017.
The foregoing language was inaccurate as of the date that the
Annual Report was filed with the SEC, and should be replaced in its
entirety by the following language, which has been included in the
Company's filings with the SEC, where applicable, since filing of
the Annual Report:
Previously, from April 2017 to January 2021, Ms. Boonyawattanapisut
served as the Managing Director of Axion Games, Inc., an online
video gaming and technology company, where she lead the content
investment arm of Axion Games, Inc. She also served as the Chief
Executive Officer and Chairperson of the board of directors at True
Axion Interactive, a game studio formed via a joint venture with
True Corporation, a major Thai telecommunication company, from the
time she co-founded it in March 2017 to January 2021.
About NextPlay Technologies
NextPlay Technologies, Inc. (formerly known as Monaker Group Inc.)
-- nextplaytechnologies.com -- is a technology solutions company
offering games, in-game advertising, crypto-banking, connected TV
and travel booking services to consumers and corporations within a
growing worldwide digital ecosystem. NextPlay's engaging products
and services utilize innovative AdTech, Artificial Intelligence and
Fintech solutions to leverage the strengths and channels of its
existing and acquired technologies.
NextPlay reported a net loss of $40.41 million for the year ended
Feb. 28, 2022, compared to a net loss of $1.63 million for the
period from March 6, 2020 to February 28, 2021. As of Nov. 30,
2022, the Company had $103.85 million in total assets, $57.90
million in total liabilities, and $45.95 million in total
stockholders' equity.
Sugar Land, Texas-based TPS Thayer, LLC, the Company's auditor
since 2020, issued a "going concern" qualification in its report
dated June 17, 2022, citing that the Company has suffered recurring
losses from operations and has stockholders' deficit that raise
substantial doubt about its ability to continue as a going concern.
NIKOFAM INC: Files Emergency Bid to Use Cash Collateral
-------------------------------------------------------
Nikofam, Inc. asks the U.S. Bankruptcy Court for the District of
Massachusetts, Eastern Division, for authority to use the cash
collateral of secured creditor the Massachusetts Department of
Revenue.
The Debtor requires the use of cash collateral to fund certain
ongoing expenses, including payroll, by May 12, 2023.
MDOR is the Debtor's only secured creditor. The MDOR is owed
approximately $240,000 in unpaid meals taxes dating back to
approximately June 2020.
On April 19, 2023, the MDOR levied upon an execution for the unpaid
meals taxes and seized the Debtor's assets, including its
restaurant equipment, food inventory, cash and cash registers. The
Debtor has been locked out if its East Weymouth storefront since
the date of the Tax Seizure.
Prior to the Tax Seizure, the MDOR also seized funds from the
Debtor's operating account on at least two occasions.
The MDOR's enforcement actions precipitated the Chapter 11 case.
While the Debtor operates a popular and successful restaurant, it
has fallen behind because it lacked professional management to help
control expenses and run within budget. The Debtor has recently
retained a new manager with substantial experience in operating
successful restaurants. The manager is a former food and beverage
manager for Sheraton and Marriot hotels, and for the Flatley
Company. The manager has also owned and managed successful Burger
King and Dunkin Donuts franchises, having received corporate awards
and special recognition for his successes. The manager has already
taken significant steps toward reducing food and operational costs
and increasing sales.
The Debtor believes the new management will return it to its
previous profitability.
The Debtor asserts any cash collateral accessed will be used solely
to maintain business operations, and thus reduce the chance of any
possible diminution in value of the assets. However, in addition,
the Debtor also proposes to grant to the MDOR the following as
additional adequate protection:
a. The Debtor will grant to the MDOR a continuing replacement
lien and security interest in the post-petition accounts receivable
generated from operations to the same validity, extent and priority
that it would have had in the absence of the bankruptcy filing;
b. The Debtor will remain within its Budget, within an overall
margin of 10 percent; and
c. The Debtor will make weekly adequate protection payments to
the MDOR in the amount of $1,500. This amount is intended to
represent principal and interest payments that would be due over 60
months to repay the MDOR, although the allocation of such payments
is reserved for further order of the Court.
A copy of the motion is available at https://bit.ly/42eGxzD from
PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3nNyASO from
PacerMonitor.com.
The Debtor projects total expenses, on a weekly basis, as follows:
$18,647 for the week ending May 14, 2023;
$18,642 for the week ending May 21, 2023;
$19,588 for the week ending May 28, 2023;
$18,742 for the week ending June 4, 2023;
$18,967 for the week ending June 11, 2023;
$18,968 for the week ending June 18, 2023; and
$19,387 for the week ending June 25, 2023.
About Nikofam, Inc.
Nikofam, Inc. owns and operates the Athens Pizza pizzeria. Since
2005 the Restaurant has operated out of its leased storefront in
East Weymouth, Massachusetts.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 23-10719) on May 5, 2023.
In the petition signed by Kiriaki Nikolaidis, president, the Debtor
disclosed up to $500,000 in both assets and liabilities.
David B. Madoff, Esq., at Madoff & Khoury LLP, represents the
Debtor as legal counsel.
NORTHERN OIL: Moody's Ups CFR to B1 & Rates New Unsecured Notes B2
------------------------------------------------------------------
Moody's Investors Service upgraded Northern Oil and Gas, Inc.'s
(NOG) Corporate Family Rating to B1 from B2, Probability of Default
Rating to B1-PD from B2-PD and senior unsecured notes rating to B2
from B3. The Speculative Grade Liquidity (SGL) rating remains
SGL-2. Concurrently, Moody's assigned a B2 rating to NOG's proposed
senior unsecured notes due 2031. The rating outlook is stable.
NOG plans to use net proceeds from the proposed notes to pay down
its existing revolver borrowings and for general corporate
purposes.
"Northern Oil & Gas' upgrade reflects the company's increased scale
and diversification through recent acquisitions," said Amol Joshi,
Moody's Vice President and Senior Credit Officer. "While the
company is highly acquisitive, the company has maintained good
liquidity and leverage metrics that support its higher rating."
Upgrades:
Issuer: Northern Oil and Gas, Inc.
Corporate Family Rating, Upgraded to B1 from B2
Probability of Default Rating, Upgraded to B1-PD from B2-PD
Senior Unsecured Regular Bond/Debenture, Upgraded to B2 from B3
Assignments:
Issuer: Northern Oil and Gas, Inc.
Senior Unsecured Regular Bond/Debenture, Assigned B2
Outlook Actions:
Issuer: Northern Oil and Gas, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
The upgrade to B1 CFR follows NOG's increased scale and
diversification after closing acquisitions in 2022 and early 2023.
NOG's 2023 production should approach 90 thousand barrels of oil
equivalent (boe) per day, materially higher than 2021-22 average
volumes, and its exposure to prolific oil and gas basins should
support further growth. While the company funded these acquisitions
with additional debt, the company has maintained leverage metrics
that are supportive.
NOG's B1 CFR reflects the company's moderate leverage, and its
enhanced scale with good basin and commodity diversification. The
company's legacy Williston Basin asset base is oil-weighted and
benefits its unleveraged cash margins and cash flow at higher oil
prices, and the company also has a notable footprint in the Permian
Basin and the Marcellus Shale. NOG has an active hedging strategy
and has hedged a meaningful portion of its 2023-24 oil and gas
production, reducing volatility in its revenue and cash flow.
Moody's expects NOG's retained cash flow (RCF) to debt ratio to
remain solid into 2024. While NOG manages a well-diversified
portfolio of non-operated working interests in numerous producing
assets, it relies on the operating performance of its partners. The
company continues to be acquisitive, and NOG's growth strategy is
focused on participating in operator initiated wells and executing
bolt-on acquisitions, requiring a high degree of financial
flexibility.
NOG's senior unsecured notes are rated B2, one notch below the
company's B1 CFR reflecting the priority claim of its borrowing
base senior secured credit facility that is secured by most of
NOG's assets. If the proportion of revolver debt to senior
unsecured notes increases due to factors including sustained high
utilization of the revolver or increased revolver commitments,
NOG's notes could get downgraded.
NOG's SGL-2 rating reflects its good liquidity. At March 31, NOG
had $6.1 million of cash and $569 million of revolver borrowings.
The company's revolver has a borrowing base of $1.6 billion, with
an elected commitment of $1 billion. The revolver's financial
covenants include a maximum net debt to EBITDAX ratio of 3.5x (with
cash netting limited to $50 million), and a minimum current ratio
of 1x. The current ratio calculation allows certain adjustments and
the inclusion of unused amounts of the total bank commitments.
NOG's next significant debt maturity will be when its secured
revolver matures in June 2027. Substantially all of the company's
assets are pledged as security under the credit facility, which
limits the extent to which asset sales can provide a source of
additional liquidity.
NOG's stable outlook reflects the company's ability to grow
production and generate free cash flow in 2023, likely leading to
modestly improving leverage metrics.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if NOG significantly increases scale
and diversification with strong operators and the company
consistently generates positive free cash flow while balancing
leverage and any shareholder returns in line with actual results
and cash flow, while its RCF to debt is maintained above 50%. The
ratings could be downgraded if production volumes materially
decline, RCF to debt falls below 25%, liquidity deteriorates
significantly or the company borrows to fund acquisitions or
shareholder returns causing debt to grow materially faster than
cash flow.
Northern Oil and Gas, Inc., headquartered in Minnetonka, Minnesota,
is a publicly traded company that owns non-operated working
interests in oil and gas wells and acreage in the Williston Basin,
Permian Basin and Marcellus Shale.
The principal methodology used in these ratings was Independent
Exploration and Production published in December 2022.
NORTHWEST CHRISTIAN: Moody's Affirms Ba2 Rating on 2020A/B Bonds
----------------------------------------------------------------
Moody's Investors Service has affirmed Northwest Christian School,
AZ's (NCS) Ba2 revenue bond ratings on the Economic Development
Revenue Bonds (Northwest Christian School), Series 2020A and Series
2020B (Taxable). The bonds were issued through Phoenix Industrial
Development Authority, Arizona. NCS had approximately $7.4 million
of total debt outstanding as of June 30, 2022. The outlook is
stable.
RATINGS RATIONALE
The affirmation of Northwest Christian School's Ba2 revenue bond
ratings is driven by its good strategic position as a provider of
Christian-based education in the Phoenix, Arizona, metropolitan
area. Student demand for the school's K-12 programs remains strong
and is supported by growing online offerings. Demand and prospects
for net tuition revenue growth are further strengthened by the
State of Arizona's recently created Empowerment Scholarship Account
(ESA) program, which allows families to use a portion of their
education tax dollars for homeschool or private school related
costs. The ESA program, in conjunction with the state's existing
tax credits for donations made by individuals to school tuition
organizations (STO), provides a sizable subsidy for the cost of
private school education. The school does, however, remain
vulnerable to changes that could occur to the ESA and tax credit
programs.
Offsetting factors include very low total cash and investments of
$4.8 million and small $15 million scope of operations,
significantly weaker than rated independent school peers. The
school remains highly dependent on tuition and fees, which made up
89% of fiscal 2022 operating revenue. Fundraising, while low on an
absolute basis, has improved in the last three years and will
support planned capital projects in the future. NCS's leverage
profile remains elevated relative to total wealth, but generally
good operating performance will continue to provide for good annual
debt service coverage.
RATING OUTLOOK
The stable outlook reflects Moody's expectations of continued
strong student demand and very good operating performance. The
outlook also incorporates expectations that total cash and
investments and liquidity will remain at least stable and no
additional debt issuance.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Material increase in total cash and investments and liquidity
-- Sustained improvement in operating performance that contributes
to financial reserve growth
-- Successful expansion of online school programs, with
substantial increase in tuition revenue and scale
-- Substantial increase in gift revenue
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Deterioration of student demand and declining net tuition
revenue
-- Weakened operating performance
-- Additional debt issuance absent accompanying growth in total
cash and investments and operating scale
LEGAL SECURITY
NCS's bonds are an unconditional obligation of the school, secured
by a lien on the school's receipts and revenues, a mortgage on the
school's land and facilities, and a debt service reserve fund.
PROFILE
Founded in 1980, Northwest Christian School (NCS) is a private
Christian school in Phoenix, Arizona. The school offers a
religious-based curriculum with both in-person and online programs
that span early education (pre-kindergarten) through twelfth grade.
In fall 2022, the school reported total enrollment of 1,595
students.
METHODOLOGY
The principal methodology used in these ratings was Nonprofit
Organizations (Other Than Healthcare and Higher Education)
published in May 2019.
NP LEHI: To Seek Plan Confirmation on June 7, 2023
--------------------------------------------------
Judge Theodor C. Albert has entered an order that the Disclosure
Statement of NP Lehi, LLC is approved as containing "adequate
information" as defined in section 1125(a)(1) of the Bankruptcy
Code.
The objection of BCP Lehi, LLC, to approval of the Disclosure
Statement is overruled; provided, however, that BCP Lehi, LLC
reserves all rights to object to confirmation of the Plan in
accordance with the deadlines set forth in this Order.
A hearing to consider confirmation of the Plan will be held on June
7, 2023 at 10:00 a.m. (PST) before the Bankruptcy Court.
Any objections to confirmation of the Plan shall be filed with the
Court and served on the Debtor no later than May 24, 2023.
The Debtor shall file with the Court, and serve on all
parties-in-interest, an executed loan commitment with either the
Replacement Lender or the Alternate Lender (as defined in the Plan)
by no later than May 26, 2023.
The Debtor shall file a brief in support of confirmation of the
Plan (which may reply to any objections to confirmation of the
Plan) by no later than May 31, 2023.
Chapter 11 Plan
The Debtor, a Delaware limited liability company, owns
approximately 13.2 acres of vacant land (the "Property") in Lehi,
Utah, a rapidly growing city of approximately 75,000 residents
located approximately 30 miles south of Salt Lake City.
According to the First Amended Disclosure Statement, the Plan seeks
approval of a refinancing transaction that will permit the Debtor
to pay, in full, the allowed secured claims of BCP Lehi, LLC, as
well as all other administrative, priority, and general unsecured
claims, thereby facilitating the Debtor's future development and
monetization of the Property.
Under the Plan, Class 1 Priority Unsecured Claims estimated $0.00
are not impaired and to be paid in full on the Effective Date of
the Plan.
Class 3 General Unsecured Claims estimated at $0.00 are not
impaired. The Allowed Class 3 Claims, if any, shall be paid in full
on the late of the (i) Effective Date of the Plan or (ii) the date
on which the Claim becomes an Allowed Claim.
The Plan proposes to pay all creditors in full from proceeds gained
through the Debtor's refinance of the Property. On or before the
Effective Date of the Plan, all Allowed Secured Claims will be paid
in full. The Debtor will refinance the existing secured
indebtedness on its Property, currently held by BCP Lehi, LLC, and
will pay BCP Lehi, LLC's Allowed Claim in full from the proceeds
thereof. Upon the Effective Date, the membership of the
Reorganized Debtor will remain 100% with Patrick Nelson.
By this Plan, the Debtor seeks approval of a refinancing
transaction ("Refinancing") with Park 49 or its designee
("Replacement Lender"), or an Alternate Lender (defined below),
pursuant to which Replacement Lender agrees to provide a loan in
the principal amount of $910,000,000 ("Replacement Loan"), the
repayment of which will be secured by the grant of first-priority
liens and security interests in the Debtor's Property.
The Replacement Loan is for a term of 18 months which is sufficient
to bridge the Debtor to a long-term Housing and Urban Development
(HUD)/FHA Mortgage Insurance loan that has been negotiated in an
amount exceeding $104 million, but cannot be closed in sufficient
time given the circumstances of this chapter 11 case. Specifically,
while the Debtor would prefer to enter directly into the HUD loan
– which will provide for a longer term and more attractive
interest rate – it is informed that the HUD loan underwriting
process generally takes between nine (9) and twelve (12) months,
and further, the institution expected to provide the HUD loan
(Trust Mortgage Company, Inc.) is unwilling to provide a bridge
loan product in light of the Debtor's pending bankruptcy. As such,
the Debtor is required to seek bridge financing as set forth in
this Plan.
The Plan provides for Debtor's continued efforts to identify other
refinancing lenders that are willing to provide a Replacement Loan
at terms equal to or better than those of Replacement Lender, or
that can close more quickly than Replacement Lender (the proceeds
of which loan shall be sufficient to satisfy in full all Secured,
Administrative, Priority, and General Unsecured Claims). Debtor
shall continue to exercise commercially reasonable efforts in
negotiating the terms of a Replacement Loan with other lenders, and
may, in its discretion, seek approval of a Replacement Loan with
such other lender (an "Alternate Lender").
No later than 10 days prior to a Confirmation Hearing with respect
to the Plan, Debtor shall file with the Court, and serve on all
parties-in-interest, an executed loan commitment with either the
Replacement Lender or the Alternate Lender. Such executed loan
commitment shall provide for a closing of the Replacement Loan by
no later than 60 days after the Confirmation Date of the Plan.
At the closing of the Refinancing, Replacement Lender or Alternate
Lender shall: (i) remit to BCP Lehi, LLC an amount equal to its
Allowed Secured Claim; and (ii) remit the remaining proceeds of the
Replacement Loan to the Debtor (the "Remaining Proceeds"). The
Remaining Proceeds shall be allocated as follows: (i) first, to
payment of Allowed Administrative Claims, Priority Tax Claims, and
United States Trustee Fees; (ii) second, to payment of Allowed
Unsecured Priority Claims (if any); (iii) third, to payment of
Allowed General Unsecured Claims (if any); and (iv) fourth, all
Remaining Proceeds shall be retained by the Reorganized Debtor.
The source of the funds to pay creditors on the Effective Date will
be from the Debtor's refinance of its Loan Agreement using its
Property as collateral. More than sufficient funds will be
available to pay all claims, in full.
Counsel to the Debtor:
Matthew I. Kaplan, Esq.
TUCKER ELLIS LLP
515 South Flower Street, Forty-Second Floor
Los Angeles, CA 90071
Telephone: (213) 430-3400
Facsimile: (213) 430-3409
E-mail: matthew.kaplan@tuckerellis.com
- and -
Thomas R. Fawkes, Esq.
233 S. Wacker Dr. Suite 6950
Chicago, IL 60606
Telephone: (312) 256-9425
Facsimile: (312) 624-6309
E-mail: thomas.fawkes@tuckerellis.com
A copy of the Order dated April 28, 2023, is available at
https://bit.ly/41491e8 from PacerMonitor.com.
A copy of the Disclosure Statement dated April 28, 2023, is
available at https://bit.ly/3nm0zZO from PacerMonitor.com.
About NP Lehi
NP Lehi, LLC is a single asset real estate (as defined in 11 U.S.C.
Sec. 101(51B)). It owns approximately 13.2 acres of vacant land in
Lehi, Utah.
NP Lehi sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. C.D. Cal. Case No. 22-11399) on Aug. 19, 2022, with
between $10 million and $50 million in assets and between $1
million and $10 million in liabilities. Patrick S. Nelson,
manager, signed the petition.
Judge Theodor Albert oversees the case.
Daniel J. Kelly, Esq., at Tucker Ellis, LLP, is the Debtor's
counsel.
NS FOA: Wins Final Cash Collateral Access
-----------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
West Palm Beach Division, authorized NS FOA LLC to use the cash
collateral of the U.S. Small Business Administration on a final
basis in accordance with the budget, with a 10% variance.
As adequate protection for the use of cash collateral and for any
diminution in value of the Lender's prepetition collateral, the
Lender is granted a valid, perfected lien upon, and security
interest in, to the extent and in the order of priority of any
valid lien pre-petition, all cash generated post-petition by the
"Property" and all collateral acquired post-petition.
The postpetition liens and security interests granted to the Lender
will be valid and perfected post-petition, to the same extent,
validity, and priority of the Lender's prepetition lien(s), without
the need for execution or filing of any further documents or
instruments otherwise required to be filed or be executed or filed
under non-bankruptcy law.
The postpetition liens and security interests granted will be valid
and perfected post-petition, to the same extent, validity, and
priority of the Lender's prepetition lien(s), without the need for
execution or filing of any further documents or instruments
otherwise required to be filed or be executed or filed under
non-bankruptcy law.
These events constitute an "Event of Default":
a. If the Debtor breaches any term or condition of the
Order or any of the Lender's loan documents, other than defaults
existing as of the Petition Date;
b. If the Case is converted to a case under Chapter 7 of
the Bankruptcy Code;
c. If the case is dismissed; or
d. If any violation or breach of any provision of the
Order occurs.
A copy of the order is available at https://bit.ly/3LHKANQ from
PacerMonitor.com.
About NS FOA LLC
NS FOA LLC owns the largest covered shrimp farm in the U.S.,
supplying fresh-frozen shrimp year round. The Company distributes
products, including fresh-frozen ballyhoo (rigged and unrigged),
bonita strips and more.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-11183) on February
14, 2023. In the petition signed by Congwei "Allan" Xu as managing
member, the Debtor disclosed $1,180,942 in assets and $931,850 in
liabilities.
Judge Mindy A. Mora oversees the case.
Aaron A. Wernick, Esq., at Wernick Law, PLLC, is the Debtor's legal
counsel.
OUR COMMUNITY: Monique Almy Named Subchapter V Trustee
------------------------------------------------------
John Fitzgerald, III, Acting U.S. Trustee for Region 4, appointed
Monique Almy, Esq., as Subchapter V trustee for Our Community
Wellness & Compassionate Care Center.
Ms. Almy, a partner at Crowell & Moring, LLP, will be paid an
hourly fee of $750 for her services as Subchapter V trustee and
will be reimbursed for work-related expenses incurred.
Ms. Almy declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Monique D. Almy, Esq.
Crowell & Moring, LLP
1001 Pennsylvania Avenue, NW
Washington, DC 20004
Phone: (202) 624-2935
Email: malmy@crowell.com
About Our Community Wellness
Our Community Wellness & Compassionate Care Center filed a petition
under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D.
Md. Case No. 23-12874) on April 26, 2023, with as much as $50,000
in assets and $500,001 to $1 million in liabilities. Judge Lori S.
Simpson oversees the case.
The Debtor is represented by Donald L. Bell, Esq., at The Law
Office of Donald L. Bell, LLC.
OUTPUT SERVICES: $180.3M Bank Debt Trades at 52% Discount
---------------------------------------------------------
Participations in a syndicated loan under which Output Services
Group Inc is a borrower were trading in the secondary market around
48.3 cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $180.3 million facility is a Term loan that is scheduled to
mature on June 27, 2026. The amount is fully drawn and
outstanding.
Output Services Group, Inc. offers printing services.
OUTPUT SERVICES: $369.8M Bank Debt Trades at 52% Discount
---------------------------------------------------------
Participations in a syndicated loan under which Output Services
Group Inc is a borrower were trading in the secondary market around
47.9 cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $369.8 million facility is a Term loan that is scheduled to
mature on June 27, 2026. The amount is fully drawn and
outstanding.
Output Services Group, Inc. offers printing services.
OZ NATURALS: Court OKs Cash Collateral Access Thru May 19
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
West Palm Beach Division, authorized OZ Naturals LLC to use the
cash collateral of the U.S. Small Business Administration on an
interim basis in accordance with the budget, with a 10% variance,
through May 19, 2023.
The Debtor requires the use of cash collateral for the continued
operation of its business in the ordinary course.
As adequate protection for the use of cash collateral and for any
diminution in value of the Lender's prepetition collateral as
described in the loan documents between the Debtor and the Lender,
the Lender is granted a valid, perfected lien upon, and security
interest in, to the extent and in the order of priority of any
valid lien pre-petition, all cash generated post-petition by the
"Property" and all collateral acquired post-petition.
The postpetition liens and security interests granted to the Lender
will be valid and perfected post-petition, to the extent and
priority of the prepetition lien(s), without the need for execution
or filing of any further documents or instruments otherwise
required to be filed or be executed or filed under non-bankruptcy
law.
These events constitute an "Event of Default":
a. If a trustee is appointed in the Chapter 11 Case;
b. If the Debtor breaches any term or condition of the Order
or any of the Lender's loan documents, other than defaults existing
as of the Petition Date;
c. If the Case is converted to a case under Chapter 7 of the
Bankruptcy Code;
d. If the case is dismissed; or
e. If any violation or breach of any provision of the Order
occurs.
A further hearing on the matter is set for May 16 at 1:30 p.m.
A copy of the court's order and the Debtor's budget is available at
https://bit.ly/3NJIRKw from PacerMonitor.com.
The Debtor projects $576,000 in gross income and $446,018 in total
expenses for one month.
About OZ Naturals, LLC
OZ Naturals, LLC manufactures natural skin care products. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. S.D. Fla. Case No. 23-13005) on April 18, 2023. In the
petition signed by CFO Michael D. Small, the Debtor disclosed
$633,123 in assets and $1,482,356 in liabilities.
Judge Mindy A. Mora oversees the case.
Aaron A. Wernick, Esq., at Wernick Law, PLLC, represents the Debtor
as legal counsel.
PACKERS HOLDINGS: $1.24B Bank Debt Trades at 57% Discount
---------------------------------------------------------
Participations in a syndicated loan under which Packers Holdings
LLC is a borrower were trading in the secondary market around 42.8
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $1.24 billion facility is a Term loan that is scheduled to
mature on March 9, 2028. The amount is fully drawn and
outstanding.
Packers Holdings, LLC, known as "PSSI", founded in 1972 and
headquartered in Kieler, Wisconsin, is a provider of contract
sanitation services to the food processing industry in the U.S. and
Canada.
PARKER MEDICAL: Court OKs Final Cash Collateral Access
------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia,
Atlanta Division, authorized Mark A. Smith, the Chapter 11 trustee
of Parker Medical Holding Co. Inc. and affiliates, to use cash
collateral on a final basis in accordance with the budget, through
August 31, 2023.
The Chapter 11 Trustee requires the use of cash collateral to
continue collecting accounts receivable, paying vendors and
suppliers for post-petition obligations, and meeting ordinary
expenses.
First-Citizens Bank and Trust Co. asserts that as of the Petition
Date the Debtors were indebted to FCB under the PrePetition Loan
Documents for loans to the Debtors in excess of $4 million. As
security for the payment of the Pre-Petition Debt, FCB asserts the
Debtors granted to FCB pursuant to the Pre-Petition Loan Documents
security interests in and liens upon all of the Debtors’
interests in certain personal property and certain accounts,
payment intangibles, instruments, intercompany claims, and other
rights to receive payments of the Debtors, together with all cash
and non-cash proceeds thereof.
As adequate protection for any diminution in the value of FCB's
interests in the Pre-Petition Collateral, including, without
limitation, any diminution resulting from the use of cash
collateral, FCB is granted valid, binding, enforceable and
automatically perfected liens on and security interests in all
personal property of the Debtors that is of a kind or nature
described as Collateral in the Pre-Petition Loan Documents.
A copy of the order and the Debtor's budget for the period from May
to August 2023 is available at https://bit.ly/3LI2qAm from
PacerMonitor.com.
The Debtor projects total operating expenses, on a monthly basis,
as follows:
$90,950 for May 2023;
$6,950 for June 2023;
$6,950 for July 2023; and
$13,750 for August 2023.
About Parker Medical Holding Company
Parker Medical Holding Company, Inc. and affiliates, Midwest
Medical Associates, Inc. and Peachtree Medical Products, LLC, filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ga. Lead Case No. 22-50369) on Jan. 14, 2022.
At the time of filing, Parker and Midwest listed up to $50 million
in assets and up to $10 million in liabilities. Meanwhile,
Peachtree listed up to $1 million in assets and up to $500,000 in
liabilities.
Jimmy L. Paul, Esq., and Drew V. Greene, Esq., at Chamberlain
Hrdlicka White Williams & Aughtry, are the Debtors' attorneys.
Mark A. Smith is the Chapter 11 trustee appointed in the Debtors'
cases. The trustee is represented by Scroggins & Williamson, P.C.
PETES AUTO: George Purtill Named Subchapter V Trustee
-----------------------------------------------------
The U.S. Trustee for Region 2 appointed George Purtill as
Subchapter V trustee for Petes Auto Sales & Service, LLC.
Mr. Purtill will be paid an hourly fee of $420 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Purtill declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
George M. Purtill
19 Water Street, P. O. Box 50
South Glastonbury, CT 06073
Email: george.m.purtill@snet.net
Office: (860)659-0569
Cell: (860)918-5442
About Petes Auto Sales
Petes Auto Sales & Service, LLC, also known as Pete's Auto Sales &
Service, LLC, filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. D. Conn. Case No. 23-20344) on May 5,
2023. At the time of the filing, the Debtor reported $100,001 to
$500,000 in both assets and liabilities.
Judge James J. Tancredi oversees the case.
The Debtor is represented by Gregory F. Arcaro, Esq., at Grafstein
& Arcaro, LLC.
PRECISION DRILLING: Moody's Ups CFR to B1 & Unsecured Bond to B2
----------------------------------------------------------------
Moody's Investors Service upgraded Precision Drilling Corporation's
corporate family rating to B1 from B2, probability of default
rating to B1-PD from B2-PD and senior unsecured rating to B2 from
B3. Precision's SGL-2 speculative grade liquidity rating is
unchanged. The outlook remains positive.
"The upgrade reflects strengthened resiliency following steady debt
reduction that will enable Precision to better weather industry
cycles," said Whitney Leavens, Moody's analyst. "The positive
outlook incorporates Moody's expectations of further debt
repayments through 2023 underpinned by strong free cash flow and
stable industry conditions," she added.
Upgrades:
Issuer: Precision Drilling Corporation
Corporate Family Rating, Upgraded to B1 from B2
Probability of Default Rating, Upgraded to B1-PD
from B2-PD
Senior Unsecured Regular Bond/Debenture, Upgraded
to B2 from B3
Outlook Actions:
Issuer: Precision Drilling Corporation
Outlook, Remains Positive
RATINGS RATIONALE
Precision's rating benefits from: (1) solid market positions and a
high-quality drilling rig fleet; (2) stable industry conditions
supported by modest E&P production growth and tight drilling
capacity due to lack of new builds; (3) robust free cash flow that
has been used to reduce debt and improve financial leverage; and
(4) good liquidity. The rating is challenged by: (1) exposure to
cyclical nature of the land drilling industry leading to cash flow
volatility and a slow recovery out of down cycles; (2) geographic
concentration in North American land drilling market; and (3) small
scale in terms of total assets.
Precision's liquidity is good (SGL-2). At Q1-23, the company had
about C$40 million in cash and about C$390 million (US$289 million)
available after letters of credit (US$56 million) under its US$447
million secured revolving credit facility expiring June 2025.
Moody's expects Precision to generate free cash flow of around $240
million over the next twelve months through Q1-24. Moody's
forecasts the company will have ample cushion with its financial
covenants (senior debt to EBITDA less than 2.5x and interest
coverage more than 2.5x) over the same period. Alternative sources
of liquidity are limited principally to the sale of Precision's
existing drilling rigs and well service rigs, which are largely
encumbered.
Precision's senior unsecured notes are rated B2, one notch below
the B1 CFR, reflecting the priority ranking of the secured credit
facilities in the capital structure.
The positive outlook reflects Moody's expectation that the company
will continue to benefit from solid industry conditions, sustain
low leverage and continue allocating free cash flow toward debt
reduction.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Precision is able to increase
EBITDA, maintain positive free cash flow and good liquidity, while
executing on debt reduction targets and sustaining adjusted debt to
EBITDA under 3x.
The ratings could be downgraded if adjusted debt to EBITDA is
sustained above 5x, EBITDA to interest declines to under 3x, the
company generates sustained negative free cash flow or liquidity
weakens.
Precision Drilling Corporation is a Calgary, Alberta-based onshore
driller that also provides well completion and production services
to exploration and production companies in major hydrocarbon basins
across North America and the Middle East.
The principal methodology used in these ratings was Oilfield
Services published in January 2023.
PRETIUM PKG: $350M Bank Debt Trades at 43% Discount
---------------------------------------------------
Participations in a syndicated loan under which Pretium PKG
Holdings Inc is a borrower were trading in the secondary market
around 56.9 cents-on-the-dollar during the week ended Friday, May
5, 2023, according to Bloomberg's Evaluated Pricing service data.
The $350 million facility is a Term loan that is scheduled to
mature on October 1, 2029. The amount is fully drawn and
outstanding.
Pretium PKG Holdings, Inc. Is a manufacturer of rigid plastic
containers for variety of end markets, including food and beverage,
chemicals, healthcare, wellness and personal care. Pretium PKG
Holdings, Inc. is a portfolio company of Clearlake since January
2020.
PROMEDICA HEALTH: Moody's Affirms 'Ba2' Rating, Outlook Negative
----------------------------------------------------------------
Moody's Investors Service has affirmed ProMedica Health System's
(OH) Ba2 rating. The outlook remains negative. ProMedica had $2.3
billion in debt at fiscal yearend 2022.
RATINGS RATIONALE
The affirmation of the Ba2 rating reflects the material reduction
in cashflow losses and operating leases from the transfer of
nursing homes, benefits from the expected divestiture of hospice
and home care, reduction of near-term covenant and acceleration
risk following a bank consent letter and suspension of covenants,
planned elimination of bank debt and covenants, and the ongoing
recovery of the well-positioned provider business. If the various
initiatives are successfully concluded, absolute cash in 2023 will
be close to the fiscal yearend 2022 level; also, days cash on hand
will modestly increase due to the smaller enterprise. The core
provider business, which will account for the largest share of
revenue, will be well positioned in northwest Ohio given its size,
prior facilities investments and physician alignment, and renewed
focus on growth.
Nevertheless, ProMedica will continue to face risks this year while
most business lines are in transition or undergoing restructuring.
Further, combined operating cashflow will be minimal in fiscal
2023. Improvement of modest margins for the provider business will
be slow due to higher, although declining, labor costs. Senior care
will lose profitable hospice and home care services with likely
cashflow losses this year from lower than historical occupancy
levels at the assisted living facilities. Health plan losses will
be driven by the expiration of a transition services agreement with
Anthem. The health plan's long-term strategic viability is
questionable given its low remaining membership and high
competition for commercial and Medicare products.
RATING OUTLOOK
The negative outlook reflects continued execution risk on multiple
strategic initiatives, the potential for cash to be below Moody's
current expectations, and risks related to the ability to improve
operating cashflow in 2024 and beyond. A stable outlook would be
considered if the hospice and home care sale is completed as
planned, bank debt and/or bank-related covenants are eliminated,
and cash remains relatively stable.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Significantly higher and sustained operating cashflow margin
-- Sustained and notable increase in absolute cash and
investments and days cash on hand for both the system
and obligated group
-- Meaningful improvement in leverage metrics
-- Reduction of execution and transition risks
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Failure to complete sale of hospice and home care
business as planned and on time
-- Increased risk of covenant breach and/or acceleration
-- Meaningful decline in cash from FYE 2022 level
-- Inability to produce at least breakeven cashflow in
fiscal 2023 and a have credible plan to notably improve
in fiscal 2024
LEGAL SECURITY
Bonds have a joint and several pledge of gross revenues of the
obligated group. In addition, the bonds are secured by a mortgage
and security interest in and assignment of rents from ProMedica
Toledo Hospital and ProMedica Flower Hospital. The obligated group
consists of the following corporations: Toledo Hospital, ProMedica
Continuing Care Services, Bay Park Hospital, Defiance Hospital,
Fostoria Hospital, Fremont Hospital, Monroe Hospital, Bixby
Hospital, Provincial House and HCR ManorCare, Inc. The parent
ProMedica Corporation, Paramount Insurance, ProMedica Physician
Group and the HCR operating entities, as well as other smaller
subsidiaries, are not obligated group members. HCR ManorCare, Inc.
is a holding company with no operations. Through a transfer
agreement with HCR and its subsidiaries, consolidated cash on hand
in excess of 14 days of operating expenses is transferred monthly
to the Obligated Group. The parent ProMedica Corporation is the
guarantor under the second amended and restated master lease
obligation with Welltower, effective December 31, 2022; the lease
does not have a note on parity with the obligated group.
Material transfers from the obligated group to non-obligated group
entities have reduced cash held in the obligated group. At December
30, 2022 only 41% of the system's unrestricted cash is in the
obligated group due to transfers to support cashflow losses in the
senior care business and reflecting cash held by Paramount. The
obligated group accounted for 49% of system revenue for the fiscal
year ended December 30, 2022. Also, the Second Amended and Restated
MTI, effective with the issuance of the Series 2018A&B bonds,
allows for a substitution of notes, which could lead to a different
security in the future.
PROFILE
ProMedica operates a health plan, a physician group, 11 hospitals
(and one joint venture hospital), and continues to operate 188
senior care locations including 120 hospice and home health care
agencies, 59 assisted living and memory care facilities, and 9
skilled nursing and rehabilitation centers. The Paramount health
plan has 88 thousand medical members and 304 thousand dental
members. Effective December 22, 2022, ProMedica and certain of its
affiliates transferred their leasehold interest in the real estate
relating to, and the operations of, 147 skilled nursing facilities
and exited operations of those facilities.
ProMedica signed an asset purchase agreement in February 2023 for
substantially all of its hospice and home health businesses for a
sale price of $710 million. Management plans to use the proceeds
from the sale to pay down approximately $452 million of various
series of direct placement debt. ProMedica's lenders for this debt
have executed a consent/suspension related to certain covenants
applicable to this direct placement debt designed to allow
ProMedica time to complete the hospice/home health sale and pay-off
the private placement debt -- thus eliminating private bank
covenants. The sale agreement calls for an outside closing date of
December 31, 2023 to accommodate potential FTC approval, and
ProMedica expects the closing to occur well before that outside
date.
METHODOLOGY
The principal methodology used in these ratings was Not-For-Profit
Healthcare published in December 2018.
PROTECH METALS: Daniel Bruton Named Subchapter V Trustee
--------------------------------------------------------
The U.S. Bankruptcy Administrator for the Middle District of North
Carolina appointed Daniel Bruton, Esq., as Subchapter V trustee for
Protech Metals, LLC.
Mr. Bruton, a practicing attorney in Winston-Salem, N.C., will be
paid an hourly fee of $375 for his services as Subchapter V trustee
and will be reimbursed for work-related expenses incurred.
Mr. Bruton declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
About Protech Metal Finishing
Protech Metal Finishing, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. M.D.N.C. Case No.
23-80078) on April 27, 2023, with up to $50,000 in assets and up to
$500,000 in liabilities. William Rickey Hall, member-manager,
signed the petition.
Judge Benjamin A. Kahn oversees the case.
Erik M. Harvey, Esq., at Bennett Guthrie PLLC, represents the
Debtor as legal counsel.
REVERSE MORTGAGE: Court Confirms Liquidating Plan
-------------------------------------------------
Judge Mary F. Walrath has entered an order approving the Disclosure
Statement and approving and confirming the Third Amended Joint
Chapter 11 Plan of Liquidation of Reverse Mortgage Investment Trust
Inc., et al.'s.
All parties have had a full and fair opportunity to litigate all
issues raised in the objections to Confirmation of the Plan, or
which might have been raised, and the objections have been fully
and fairly litigated or resolved, including by agreed-upon
reservations of rights as set forth in this Confirmation Order. Any
resolution of objections to Confirmation explained on the record at
the Confirmation Hearing is hereby incorporated by reference. All
unresolved objections, statements, informal objections, and
reservations of rights (except as agreed in writing with respect to
any unresolved Cure amounts), if any, related to the Disclosure
Statement, the Plan, or Confirmation are overruled on the merits in
all respects, unless otherwise set forth in this Confirmation
Order. All objections to Confirmation not Filed and served prior to
the deadline for filing objections to the Plan set forth in the
Confirmation Hearing Notice, if any, are deemed waived and shall
not be considered by the Court.
The Plan Modifications do not materially adversely affect the
treatment of any Claim against or Interest in any of the Debtors
under the Plan, and are approved pursuant to section 1127(a) of the
Bankruptcy Code and Bankruptcy Rule 3019. After giving effect to
the Plan Modifications, the Plan continues to meet the requirements
of Sections 1122 and 1123 of the Bankruptcy Code. The filing with
the Court on April 24, 2023 of the Second Amended Joint Chapter 11
Plan of Liquidation and the disclosure of additional Plan
Modifications in subsequent versions of the Plan filed prior to
this Confirmation Order and on the record at the Confirmation
Hearing, if any, constitute due and sufficient notice thereof.
The Debtors or the Wind-Down Debtors, as applicable, are authorized
to enter into and effectuate the Wind-Down Transactions, including
the entry into and consummation of the transactions contemplated
thereunder, and may take any actions as may be necessary,
advisable, or appropriate to effectuate the Wind-Down Transactions,
as and to the extent provided in the Plan.
Pursuant to section 1123 of the Bankruptcy Code, and in
consideration for the classification, distributions, releases, and
other benefits provided under the Plan, on the Effective Date, the
provisions of the Plan shall constitute a good-faith compromise and
settlement of all Claims, Interests, Causes of Action, and
controversies released, settled, compromised, discharged,
satisfied, or otherwise resolved pursuant to the Plan; provided,
however, that the provisions of the Plan shall not constitute a
good-faith compromise and settlement of Administrative Claims
asserted by Leadenhall unless and until such Claims are paid in
full to the extent Allowed, regardless of whether such Claims are
Allowed before or after the Effective Date (unless the applicable
parties consent otherwise); provided, that any provisions under the
Plan that are subject to the effective date of the Leadenhall
Claims Status Notice shall not be deemed effective until the
effective date of the Leadenhall Claims Status Notice.
As described in the Solicitation Affidavit, the Voting Report, and
the Declarations, as applicable, following the Petition Date, the
Solicitation Packages, and the Confirmation Hearing Notice were
transmitted and served, including to all Holders of Claims in Class
3, Class 4, Class 5, Class 6, Class 7, Class 8, and Class 9
(collectively, the "Voting Classes"), in compliance with the
Bankruptcy Code.
Holders of Claims in Class 1 and Class 2 (collectively, the "Deemed
Accepting Classes") are Unimpaired and conclusively presumed to
accept the Plan and, therefore, did not vote to accept or reject
the Plan. Holders of Intercompany Interests in Class 11 either are
Unimpaired and conclusively presumed to have accepted the Plan (to
the extent Reinstated) or Impaired and conclusively presumed to
have rejected the Plan, and, therefore, are not entitled to vote to
accept or reject the Plan. Holders of Claims in Class 10 and
Holders of Interests in Class 12 (the "Deemed Rejecting Classes")
are Impaired under the Plan, are entitled to no recovery
thereunder, and are therefore deemed to have rejected the Plan.
As evidenced by the Voting Report, Class 3, Class 4, Class 5, Class
6, Class 7, Class 8, and Class 9 voted to accept the Plan in
accordance with section 1126 of the Bankruptcy Code.
The Plan satisfies the requirements of Sections 1122(a) and
1123(a)(1) of the Bankruptcy Code. Article III of the Plan provides
for the separate classification of Claims and Interests into 12
Classes. Valid business, factual, and legal reasons exist for the
separate classification of such Classes of Claims and Interests.
The classifications were not implemented for any improper purpose
and do not unfairly discriminate between, or among, Holders of
Claims or Interests. Each Class of Claims and Interests contains
only Claims or Interests that are substantially similar to the
other Claims or Interests within that Class.
Additionally, Article II of the Plan specifies that Allowed
Administrative Claims (including all fees and charges assessed
against the Estates under 28 U.S.C. Sec. 1930), Allowed DIP Secured
Claims, Allowed Professional Fee Claims, and Allowed Priority Tax
Claims will be paid in full (unless a Holder of such claims
consents to alternative treatment) in accordance with the terms of
the Plan, although these Claims are not separately classified under
the Plan; provided, however, that the recoveries on account of any
Allowed Administrative Claims of TCB, Leadenhall (if any), and the
WARN Claimants may be materially impacted by the ongoing issues
between TCB and GNMA, as set forth in the Disclosure Statement;
provided further that such parties have communicated on the record
at the Confirmation Hearing that they consent to the entry of the
Confirmation Order notwithstanding this possibility.
The Plan satisfies the requirements of section 1123(a)(5) of the
Bankruptcy Code. The provisions in Article IV and elsewhere in the
Plan, and in the exhibits and attachments to the Plan and the
Disclosure Statement provide, in detail, adequate and proper means
for the Plan's implementation, including regarding: (a) the
consummation of the Plan, including the Wind-Down
Transactions and the vesting of assets in the Wind-Down Debtors;
(b) the sources of consideration for Plan distributions; (c) the
authorization for the Debtors, the Wind-Down Debtors, and the Plan
Administrator, as applicable, to take all actions contemplated
under or necessary, advisable, or appropriate to implement or
effectuate the Plan; (d) the settlement and discharge of Claims and
Interests as set forth in the Plan; and (e) the preservation and
vesting of certain Causes of Action in the Plan Administrator.
The Plan satisfies the requirements of Section 1129(a)(3) of the
Bankruptcy Code. The Debtors have proposed the Plan in good faith
and not by any means forbidden by law. In so determining, the Court
has examined the totality of the circumstances surrounding the
filing of these Chapter 11 Cases, the Plan itself, the 9019
Settlement, the Celink Settlement, the process leading to
Confirmation, including the support of Holders of Claims and
Interests for the Plan, and the transactions to be implemented
pursuant thereto. These Chapter 11 Cases were filed, and the Plan
was proposed, with the legitimate purpose of allowing the Debtors
to implement the Wind-Down Transactions and all other contemplated
actions and transactions and maximize the value of the Estates and
the recoveries to Holders of Claims and Interests.
Classes 1, 2, and 11 (to the extent Reinstated) are Unimpaired
under the Plan and are deemed to have accepted the Plan pursuant to
section 1126(f) of the Bankruptcy Code. Nevertheless, because the
Plan has not been accepted by the Deemed Rejecting Classes, the
Debtors seek Confirmation under section 1129(b), solely with
respect to the Deemed Rejecting Classes, rather than section
1129(a)(8) of the Bankruptcy Code. Although section 1129(a)(8) has
not been satisfied with respect to the Deemed Rejecting Classes,
the Plan is confirmable because the Plan does not discriminate
unfairly and is fair and equitable with respect to the Deemed
Rejecting Classes and thus satisfies section 1129(b) of the
Bankruptcy Code with respect to such Classes. As a result, the
requirements of section 1129(b) of the Bankruptcy Code are
satisfied.
The Debtors have acted in "good faith" within the meaning of
section 1125(e) of the Bankruptcy Code and in compliance with the
applicable provisions of the Bankruptcy Code and Bankruptcy Rules
in connection with all of their respective activities relating to
support and consummation of the Plan, including the solicitation
and receipt of acceptances of the Plan, and are entitled to the
protections afforded by section 1125(e) of the Bankruptcy Code.
The Debtors, the Released Parties, and the Releasing Parties have
been and will be acting in good faith if they proceed to: (a)
consummate the Plan and the agreements, settlements, transactions,
and transfers contemplated thereby; and (b) take the actions
authorized and directed by this Confirmation Order, including with
respect to the Wind-Down Transactions. The Released Parties have
made a substantial contribution to these Chapter 11 Cases and with
respect to the Plan and the actions and transactions contemplated
thereby.
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 CONSUMER: $1.80B Bank Debt Trades at 79% Discount
--------------------------------------------------------
Participations in a syndicated loan under which Revlon Consumer
Products Corp is a borrower were trading in the secondary market
around 21.4 cents-on-the-dollar during the week ended Friday, May
5, 2023, according to Bloomberg's Evaluated Pricing service data.
The $1.80 billion facility is a Term loan that is scheduled to
mature on September 7, 2023. About $862.5 million of the loan is
withdrawn and outstanding.
Revlon, Inc is an American multinational company dealing in
cosmetics, skin care, fragrance, and personal care.
ROCKING M: Court Grants Non-Material Modification to Plan
---------------------------------------------------------
Judge Dale L. Somers has approved the First Motion to Modify
Combined Joint Chapter 11 Plan of Reorganization and Disclosure
Statement by the Debtors, Rocking M Media, LLC, et al., for entry
of an Order pursuant to 11 U.S.C. s 1127(a), to modify their
Combined Joint Chapter 11 Plan of Reorganization and Disclosure
Statement. There were no objections filed.
Judge Dale L. Somers approved the Motion and ordered that the Plan
is modified to correct certain non-material errors and omissions
pursuant to 11 U.S.C. Sec. 1127(a), and its implementing rules as
set forth in the Motion.
Attorneys for the Debtors:
Sharon L. Stolte, Esq.
SANDBERG PHOENIX & von GONTARD P.C.
4600 Madison Avenue, Suite 1000
Kansas City, MO 64112
Tel: (816) 627-5543
Fax: (816) 627-5532
E-mail: sstolte@sandbergphoenix.com
About Rocking M Media
Rocking M Media, LLC and its affiliates own and operate radio
stations, radio networks, and digital media platforms that provide
music, news, sports, and weather to its listeners and viewers.
Rocking M Media supports local, regional, and national businesses
and organizations across the State of Kansas as well as Nebraska,
Colorado, Oklahoma, and Texas.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Kan. Case No. 22-20242) on March 26,
2022. In the petition signed by Monte M. Miller, chief executive
officer, the Debtors disclosed up to $1 million in assets and up to
10 million in liabilities.
Judge Dale L. Somers oversees the cases.
The Debtors tapped Sharon L. Stolte, Esq., at Sandberg Phoenix &
von Gontard PC as legal counsel and AdamsBrown, LLC as accountant.
Creditors Kansas State Bank of Manhattan, Belate LLC, and Farmers
and Merchants Bank of Colby are represented by Stinson LLP, Spencer
Fane LLP, and Hite, Fanning & Honeyman LLP, respectively.
The U.S. Trustee for Region 20 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on July 7,
2022. Loeb & Loeb, LLP and Dundon Advisers, LLC serve as the
committee's legal counsel and financial advisor, respectively.
RODAN & FIELDS: Moody's Affirms Caa3 CFR & Alters Outlook to Stable
-------------------------------------------------------------------
Moody's Investors Service affirmed Rodan & Fields, LLC's (R + F)
Caa3 Corporate Family Rating and upgraded the company's Probability
of Default Rating to Caa3-PD/LD from Ca-PD following the completion
of the debt exchange. Moody's appended a limited default
designation (/LD) to the Caa3-PD PDR as Moody's considered the
transaction as a distressed exchange default due to the exchange of
debt at a discount to par. Concurrently, Moody's assigned a B2
rating to the new $136.5 million super priority second out term
loan that matures in May 2027, and a Ca rating to the new $413
million super priority extended third out term loan due May 2027.
In addition, Moody's downgraded the non-extended first lien term
loan rating to Ca from Caa3 due to the effects of the debt
exchange. Moody's also withdrew the Caa3 rating on the existing
revolver as the revolving credit facility is fully exchanged and
terminated. Moody's changed the outlook to stable from negative.
Moody's will remove the "/LD" designation from the company's PDR in
approximately three business days.
The Caa3 CFR affirmation reflects that the completion of the
exchange offer to extends the debt maturities to May 2027 addresses
the liquidity pressure from the 2025 term loan maturity and reduces
debt. Nevertheless, Moody's expects R + F's operating performance
will continue to be weak in the next 12 to 18 months, including
declining revenue and earnings, negative free cash flow, and
relatively high leverage, hurt by declines in the company's
independent sales consultants. R + F has generated incremental
sales from the hair care product launch in 2022 but there is
execution risk related to the company's strategic initiatives to
sustainably reverse declining sales consultant trends and turn
around the business. Moody's estimates R + F's financial leverage
remains high for the business at 6.5x debt-to-EBITDA as of December
31, 2022 pro forma for the transactions. Higher interest expense
associated with the new term loan notwithstanding a reduction in
debt as part of the refinancing also creates some urgency to
improve EBITDA by enough to generate positive free cash flow in
2024. Moody's views changes in consumer shopping patterns and the
reduced attractiveness of the business opportunity as an
independent consultant are negatively affecting the company's
direct selling model. R + F is facing ongoing competition from
large well capitalized competitors as well as a large number of
independent brands. R + F is executing on plans to stabilize the
consultant base including recent category expansion to haircare.
The downgrade of the non-extended first lien term loans to Ca
reflects that the term loan now has a subordinated collateral
position relative to all other debt in the capital structure and
this weakens recovery in the event of a default.
The rating outlook was changed to stable as R + F is expected to
have adequate liquidity for the next 12-18 months to continue its
business turnaround plans. The adequate liquidity will be supported
by approximately $25 million of cash at closing and $19 million
availability under the $50 million committed new revolver following
the refinancing. The company also has the option to pay-in-kind
interest on up to 40% of the extended third priority term loan for
three quarters subsequent to the closing, which would preserve
approximately $16 million of cash. The liquidity will be sufficient
to cover $10-15 million projected negative free cash flow (assuming
full cash pay) as well as about $6 million term loan annual
amortization in the 12 months following closing. Moody's estimates
free cash flow would be temporarily break even or slightly positive
if the company exercises the PIK option.
Affirmations:
Issuer: Rodan & Fields, LLC
Corporate Family Rating, Affirmed Caa3
Upgrades:
Issuer: Rodan & Fields, LLC
Probability of Default Rating, Upgraded to Caa3-PD /LD (/LD
appended) from Ca-PD
Assignments:
Issuer: Rodan & Fields, LLC
Senior Secured Term Loan Second Out, Assigned B2
Senior Secured Term Loan Third Out, Assigned Ca
Downgrades:
Issuer: Rodan & Fields, LLC
Senior Secured 1st Lien Term Loan B, Downgraded to Ca from Caa3
Withdrawals:
Issuer: Rodan & Fields, LLC
Senior Secured 1st Lien Revolving Credit Facility, Withdrawn,
previously rated Caa3
Outlook Actions:
Issuer: Rodan & Fields, LLC
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
The Caa3 CFR reflects R + F's reduced revenue scale of below $700
million, flat to declining earnings, and relatively high
debt-to-EBITDA leverage estimated at 6.5x for fiscal 2022 proforma
for the April 2023 debt exchange. The high interest burden
following the debt exchange and declining EBITDA leads to negative
free cash flow. The company has limited geographic diversity and
faces high and increasing competition from larger and better
capitalized competitors. Products are somewhat discretionary and
vulnerable to consumer spending pullbacks and focused largely
within the skincare segment. While R + F is implementing strategies
to turn around the business, the consultant base has not stabilized
yet. The rating is supported by the company's good brand name
recognition in niche markets and well-regarded skincare products.
The company's recent category expansion to haircare is credit
positive and expands its total addressable market.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's view that R + F has adequate
liquidity for the next 12 months to support its negative free cash
flow and execute its plans to stabilize the sales consultant base
and turn around the business.
The ratings could be downgraded if R + F does not stabilize sales
representative counts, revenue and earnings. A deterioration in
liquidity could also lead to a downgrade.
Before Moody's would consider an upgrade, R + F would need to
materially improve its operating performance, restore positive free
cash flow, and maintain at least adequate liquidity.
The super priority term loan provides incremental debt capacity up
to $15.0 million (plus an amount equal to any upfront fee or
premium paid in connection with the issuance thereof). No portion
of the incremental may be incurred with an earlier maturity than
the initial term loans.
The extended term loan provides incremental debt capacity up to the
greater of $25.0 million to the extent the proceeds of such
Incremental Loans are used to finance working capital and general
corporate purposes, plus unlimited amounts to the extent that the
proceeds of such Incremental Loans are used to fund repurchases,
prepayments, exchanges, or refinancing of Existing Loans or Junior
Indebtedness. No portion of the incremental may be incurred with an
earlier maturity than the initial term loans.
The super priority credit agreement and extended term loan credit
agreement do not permit the designation of unrestricted
subsidiaries, preventing collateral "leakage" to unrestricted
subsidiaries. Non-wholly-owned subsidiaries are not required to
provide guarantees; dividends or transfers resulting in partial
ownership of subsidiary guarantors could jeopardize guarantees
subject to protective provisions which only permit guarantee
releases if such transaction is for a bona fide business purpose
with third party non-affiliates. There are no express protective
provisions prohibiting an up-tiering transaction.
The principal methodology used in these ratings was Consumer
Packaged Goods published in June 2022.
Based in San Francisco, CA, Rodan & Fields, LLC is a direct seller
of skin and hair care products. The company operates through a
multi-level marketing system that consists of about 163,000
consultants, largely in the US. R + F is majority owned by TPG
Capital since November 2022 following an increase in TPG's
ownership position. The founders of the business, Dr. Katie Rodan
and Dr. Kathy Fields, own a minority interest and are actively
involved to support the company, including with respect to R&D and
company strategy. The company generated about $700 million in
revenue for the 12-month ending December 31, 2022.
RYMAN HOSPITALITY: New Secured Loans No Impact on Moody's Ba3 CFR
-----------------------------------------------------------------
Moody's Investors Service says that RHP Hotel Properties, LP's
("RHP") new senior secured term loan B and senior secured revolving
credit facility will not impact the Ba3 senior secured bank credit
facility rating, Ryman Hospitality Properties, Inc's Ba3 Corporate
Family Rating, or stable outlook at this time.
The transaction includes a new $700 million revolving credit
facility due in 2027 and a new $375 million term loan B due in
2030. Ryman intends to use net proceeds from the offering to
refinance its existing revolving credit facility and Term Loan B.
Ryman Hospitality Properties, Inc. (NYSE: RHP) is a REIT
specializing in group-oriented, destination hotel assets in urban
and resort markets. The Company's owned assets include a network of
five upscale, meetings-focused resorts and suites that are managed
by lodging operator Marriott International, Inc. under the Gaylord
Hotels brand.
SAS AB: Apollo Wants Majority Stake in Chapter 11 Rescue Plan
-------------------------------------------------------------
Jacob Gronholt-pedersen, Greg Roumeliotis and Marie Mannes of
Reuters report that U.S. asset manager Apollo Global Management Inc
(APO.N) plans to apply for approval from Swedish and Danish
regulators to take a majority stake in SAS AB (SAS.ST) as part of
the Scandinavian airline's rescue plan, a source familiar with the
matter said.
The news of interest from the U.S. asset manager sent the embattled
carrier's shares up as much as 14% in Wednesday, May 3, 2023,
morning trading. At 1011 GMT, they were up 5.9%.
SAS has lost almost 60% of its value since it filed for Chapter 11
bankruptcy protection last July 2023, seeking to slash costs and
debt after wage talks with pilots collapsed.
A deal with the U.S. private equity giant, which has also invested
in U.S. and Mexican airlines, would be a test of European Union
rules, which prevent more than 50% of an airline being held outside
the bloc of 27 members.
Given a large part of Apollo's capital originates from Europe-based
investors, the fund is hoping to get approval for a deal, according
to the source, who declined to be identified because the matter is
confidential.
No final decision has yet been made on a possible investment,
according to two sources familiar with the matter. The first source
said a deal could be done before the year-end.
Apollo and SAS declined to comment.
Apollo will mainly work with aviation regulators in Sweden and
Denmark to secure approval, the first source said.
The European Commission would also be involved, but the national
regulators would be responsible for giving the go-ahead for a
change of ownership.
The move comes as the airline looks for large investors and seeks
to raise equity as part of its Chapter 11 bankruptcy plan.
It has also secured a $700 million debtor-in-possession (DIP) loan
from Apollo to fund it through process. The U.S. company could
become a major shareholder in SAS by converting that loan to equity
at the end of the process.
The airline has struggled to compete in Europe's fragmented
aviation sector, like other national carriers such as Italy's ITA
Airways and Portugal's TAP, which are to be bought by larger groups
to revive their balance sheets.
Any deal would likely need support from Sweden and Denmark, which
each own about 22% of SAS. The remainder is controlled by private
shareholders.
Denmark's finance ministry told Reuters it was looking for one or
more shareholders to take a majority stake in SAS. Any bailout
would require the airline to maintain Copenhagen as a key passenger
hub, it said.
Sweden has said it won't inject more cash in SAS.
The sources said SAS would maintain its Scandinavian identity,
playing down speculation it could get a new hub or be transformed
into a low-cost carrier under a new owner.
This wouldn't be Apollo's first foray into the airline industry.
In 2018, it invested in Sun Country Airlines (SNCY.O) in an effort
to help turn it around, helping it go public in 2021.
The company also became the largest shareholder in Mexican airline
Aeromexico (GRPAF.PK) in 2020 following Chapter 11 bankruptcy
proceedings. Those experiences show it can approach long-term
investments flexibly, the two sources said.
About Scandinavian Airlines
SAS SAB, Scandinavia's leading airline, with main hubs in
Copenhagen, Oslo and Stockholm, is flying to destinations in
Europe, USA and Asia. Spurred by a Scandinavian heritage and
sustainable values, SAS aims to be the global leader in sustainable
aviation. The airline will reduce total carbon emissions by 25% by
2025, by using more sustainable aviation fuel
and its modern fleet with fuel-efficient aircraft. In addition to
flight operations, SAS offers ground handling services, technical
maintenance and air cargo services. SAS is a founder member of the
Star Alliance, and together with its partner airlines offers a wide
network worldwide. On the Web: https://www.sasgroup.net
SAS AB and its subsidiaries, including Scandinavian Airlines
Systems Denmark-Norway-Sweden and Scandinavian Airlines of North
America Inc., sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 22-10925) on July 5,
2022. In the petition filed by Erno Hilden, as authorized
representative, SAS AB estimated assets between $10 billion and $50
billion and liabilities between $1 billion and $10 billion.
Judge Michael E Wiles oversees the cases.
The Debtors tapped Weil, Gotshal & Manges, LLP as global legal
counsel; Mannheimer Swartling Advokatbyra AB as special counsel;
FTI Consulting, Inc. as financial advisor; and Seabury Securities,
LLC and Skandinaviska Enskilda Banken AB as investment bankers.
Seabury is also serving as restructuring advisor. Kroll
Restructuring Administration, LLC is the claims agent and
administrative advisor.
SHOPS@BIRD & 89: Tarek Kiem Named Subchapter V Trustee
------------------------------------------------------
The U.S. Trustee for Region 21 appointed Tarek Kiem as Subchapter V
trustee for Shops@Bird & 89, LLC.
Mr. Kiem, a practicing attorney in Lake Worth, Fla., will be paid
an hourly fee of $275 for his services as Subchapter V trustee and
will be reimbursed for work-related expenses incurred.
Mr. Kiem declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Tarek Kiem, Esq.
Kiem Law, PLLC
8461 Lake Worth Road, Suite 114
Lake Worth, Florida 33467
Tel: (561) 600-0406
Email: tarek@kiemlaw.com
About Shops@Bird & 89
Shops@Bird & 89, LLC, a Miami-based company, filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Fla.
Case No. 23 13358) on April 28, 2023, with $10,093,000 in assets
and $5,577,772 in liabilities. Jose Graibe, managing member of
Shops@Bird & 89, signed the petition.
Judge Robert A. Mark oversees the case.
Robert C. Meyer, Esq., at Robert C. Meyer, P.A. is the Debtor's
counsel.
SIO2 MEDICAL: Appointment of Examiner Sought
--------------------------------------------
SiO2 Medical Products, Inc.'s former chief executive officer has
filed a motion to appoint an examiner in the company's Chapter 11
case to investigate allegations involving the owner of Patiro
Holdings AG.
In his motion, Robert Abrams asked the U.S. Bankruptcy Court for
the District of Delaware to authorize the appointment of an
independent examiner who will investigate the alleged misconduct of
Thomas Strungmann and Patiro Holdings' management during the months
leading up to SiO2's Chapter 11 filing.
In July 2022, Mr. Abrams executed a proxy ceding voting control of
his controlling common and preferred stock interests in SiO2 to
Patiro Holdings in exchange for $200 million in new capital. Mr.
Strungmann, however, did not only fail to provide SiO2 the funding
he had promised; he also actively hindered SiO2's fundraising
efforts by instructing Mr. Abrams to break off talks with other
potential investors for Si02.
"Mr. Strungmann then used his board seats and ill-gotten proxy to
authorize the filing of this bankruptcy proceeding and commence a
rushed post-petition process. Absent bidders, Oaktree Capital
Management L.P. and its affiliates, the pre-bankruptcy, the
post-petition debtor-in-possession, and the proposed plan sponsor,
will acquire Si02's business in a transaction that provides zero
recovery to unsecured creditors and wipes out equity holders," Mr.
Summers said.
Ballard Spahr can be reached through:
Matthew G. Summers, Esq.
Laurel D. Roglen, Esq.
Ballard Spahr, LLP
919 N. Market Street, 11th Floor
Wilmington, DE 19801
Telephone: (302) 252-4465
Facsimile: (302) 252-4466
Email: summersm@ballardspahr.com
roglenl@ballardspahr.com
-- and --
James P. Menton, Jr. Esq.
Robins Kaplan, LLP
2121 Avenue of the Stars, Suite 2800
Los Angeles, CA 90067
Telephone: (310) 229-5813
Facsimile: (310) 229-5800
Email: jmenton@robinskaplan.com
About SiO2 Medical Products
SiO2 Medical Products, Inc. is a material life sciences company
that is at the precipice of mass-commercialization of its
breakthrough materials science technology that is poised to
revolutionize the pharmaceutical industry. Major pharmaceutical
players are testing the company's vials, syringes, tubes, and other
offerings, and the Company anticipates large-scale adoption in the
relative near term.
SiO2 Medical Products and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10366) on March 29, 2023. In the petition signed by its
chief executive officer, Yves Steffen, SiO2 Medical Products
disclosed $100 million to $500 million in assets and $500 million
to $1 billion in liabilities.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Kirkland Ellis, LLP and Kirkland & Ellis
International, LLP as general bankruptcy counsels; Cole Schotz P.C.
as local bankruptcy counsel; Alvarez & Marshal North America, LLC
as financial and restructuring advisor; and Lazard as investment
banker. Donlin, Recano and Co., Inc. is the claims, noticing,
solicitation and administrative agent.
SIO2 MEDICAL: Seeks Approval to Hire Cole Schotz as Co-Counsel
--------------------------------------------------------------
SiO2 Medical Products, Inc. and its affiliates seek approval from
the U.S. Bankruptcy Court for the District of Delaware to employ
Cole Schotz P.C. as their co-counsel.
Justin R. Alberto, a member of Cole Schotz,
The firm will render these services:
(a) advise the Debtor with respect to its powers and duties in
the continued management and operation of its business and
property;
(b) advise and consult on the conduct of this Chapter 11
case;
(c) attend meetings and negotiate with representatives of
creditors and other parties in interest;
(d) take all necessary actions to protect and preserve the
Debtor's estate;
(e) prepare pleadings in connection with this Chapter 11
case;
(f) represent the Debtor in connection with obtaining
authority to continue using cash collateral and obtaining
post-petition financing;
(g) advise the Debtor in connection with any potential sale of
assets;
(h) appear before this court and any appellate courts to
represent the interests of the Debtor's estate;
(i) advise the Debtor regarding tax matters;
(j) take any necessary action on behalf of the Debtor to
negotiate, prepare, and obtain approval of a disclosure statement
and confirmation of a Chapter 11 plan and all documents related to
the foregoing; and
(k) perform all other necessary legal services for the Debtor
in connection with the prosecution of this Chapter 11 case.
The hourly rates of the firm's counsel and staff are as follows:
Members $475 to $1,200
Special Counsel $300 to $730
Associates $325 to $570
Paralegals $245 to $410
Litigation Support Specialists $380 to $475
In addition, the firm will seek reimbursement for expenses
incurred.
The firm received a retainer in the amount of $100,000.
The firm also provided the following in response to the request for
additional information set forth in Paragraph D.1. of the U.S.
Trustee Guidelines:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: Cole Schotz has not agreed to a variation of its
standard or customary billing arrangements for this engagement.
Question: Do any of the professionals included in this engagement
vary their rate based on the geographic location of the bankruptcy
case?
Response: None of Cole Schotz's professionals included in this
engagement have varied their rate based on the geographic location
of this Chapter 11 case.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference?
Response: Cole Schotz was retained by the Debtor pursuant to an
engagement letter dated as of Feb 2, 2023. The material terms of
the prepetition engagement are the same as the terms described in
the application, and the billing rates have not changed other than
periodic annual increases as provided in the engagement letter and
explained in the application.
Question: Has your client approved your prospective budget and
staffing plan, and, if so, for what budget period?
Response: The Debtor has approved or will be approving a
prospective budget and staffing plan for Cole Schotz's engagement
for the post-petition period as appropriate. The budget may be
amended as necessary to reflect changed or unanticipated
developments.
Justin Alberto, Esq., a partner at Cole Schotz, disclosed in a
court filing that the firm is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Seth Van Aalten, Esq.
Justin R. Alberto, Esq.
Patrick J. Reilley, Esq.
Stacy L. Newman, Esq.
COLE SCHOTZ P.C.
500 Delaware Avenue, Suite 1410
Wilmington, DE 19801
Telephone: (302) 652-3131
Facsimile: (302) 652-3117
Email: svanaalten@coleschotz.com
jalberto@coleschotz.com
preilley@coleschotz.com
snewman@coleschotz.com
About SiO2 Medical Products
SiO2 Medical Products, Inc. is a material life sciences company
that is at the precipice of mass-commercialization of its
breakthrough materials science technology that is poised to
revolutionize the pharmaceutical industry. Major pharmaceutical
players are testing the company's vials, syringes, tubes, and other
offerings, and the Company anticipates large-scale adoption in the
relative near term.
SiO2 Medical Products and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10366) on March 29, 2023. In the petition signed by its
chief executive officer, Yves Steffen, SiO2 Medical Products
disclosed $100 million to $500 million in assets and $500 million
to $1 billion in liabilities.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Kirkland Ellis, LLP and Kirkland & Ellis
International, LLP as general bankruptcy counsels; Cole Schotz P.C.
as local bankruptcy counsel; Alvarez & Marshal North America, LLC
as financial and restructuring advisor; and Lazard as investment
banker. Donlin, Recano and Co., Inc. is the claims, noticing,
solicitation and administrative agent.
SMITH & SONS: Thomas Willson Named Subchapter V Trustee
-------------------------------------------------------
David Asbach, Acting U.S. Trustee for Region 5, appointed Thomas
Willson, Esq., as Subchapter V trustee for Smith & Sons Trucking,
LLC.
Mr. Willson, a practicing attorney in Alexandria, La., will be paid
an hourly fee of $350 for his services as Subchapter V trustee and
will be reimbursed for work-related expenses incurred.
Mr. Wilson declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Thomas R. Willson, Esq.
1330 Jackson Street
Alexandria LA 71301
Phone: 318-442-8658
Email: Rocky@rockywillsonlaw.com
About Smith & Sons
Smith & Sons Trucking, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. W.D. La. Case No.
23-30467) on April 25, 2023, with $100,001 to $500,000 in both
assets and liabilities. Judge John S. Hodge oversees the case.
The Debtor is represented by James W. Spivey II, Attorney At Law.
SOUND INPATIENT: $200M Bank Debt Trades at 29% Discount
-------------------------------------------------------
Participations in a syndicated loan under which Sound Inpatient
Physicians Holdings LLC is a borrower were trading in the secondary
market around 70.9 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 June 28, 2025. About $186 million of the loan is
withdrawn and outstanding.
Sound Inpatient Physicians Holdings, LLC, through its subsidiaries,
provides healthcare services.
SOUND INPATIENT: $215M Bank Debt Trades at 36% Discount
-------------------------------------------------------
Participations in a syndicated loan under which Sound Inpatient
Physicians Holdings LLC is a borrower were trading in the secondary
market around 63.7 cents-on-the-dollar during the week ended
Friday, May 5, 2023, according to Bloomberg's Evaluated Pricing
service data.
The $215 million facility is a Term loan that is scheduled to
mature on June 28, 2026. The amount is fully drawn and
outstanding.
Sound Inpatient Physicians Holdings, LLC, through its subsidiaries,
provides healthcare services.
SOUND INPATIENT: $610M Bank Debt Trades at 29% Discount
-------------------------------------------------------
Participations in a syndicated loan under which Sound Inpatient
Physicians Holdings LLC is a borrower were trading in the secondary
market around 71.1 cents-on-the-dollar during the week ended
Friday, May 5, 2023, according to Bloomberg's Evaluated Pricing
service data.
The $610 million facility is a Term loan that is scheduled to
mature on June 28, 2025. About $593.8 million of the loan is
withdrawn and outstanding.
Sound Inpatient Physicians Holdings, LLC, through its subsidiaries,
provides healthcare services.
SPECTRUM HOLDINGS III: Moody's Puts Caa1 CFR on Review for Upgrade
------------------------------------------------------------------
Moody's Investors Service placed the Caa1 Corporate Family Rating,
B3 rating on the senior secured first lien bank credit facilities
and the Caa3 rating on the senior secured second lien bank credit
facility of Spectrum Holdings III Corp. ("Spectrum Plastics" or
"Spectrum") under review for upgrade. The outlook, previously
stable, was changed to rating under review.
The ratings review follows DuPont de Nemours, Inc.'s (Baa1 stable)
("DuPont") announcement on May 2 that it entered into a definitive
agreement to purchase Spectrum from private equity firm AEA
Investors LP for $1.75 billion. The deal is expected to close by
the end of third quarter 2023 and will be funded with cash.
On Review for Upgrade:
Issuer: Spectrum Holdings III Corp.
Corporate Family Rating, Placed on Review for Upgrade,
currently Caa1
Probability of Default Rating, Placed on Review for Upgrade,
currently Caa1-PD
Backed Senior Secured 1st Lien Bank Credit Facility, Placed
on Review for Upgrade, currently B3
Backed Senior Secured 2nd Lien Bank Credit Facility, Placed
on Review for Upgrade, currently Caa3
Outlook Actions:
Issuer: Spectrum Holdings III Corp.
Outlook, Changed To Rating Under Review From Stable
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
Notwithstanding the ratings review, Spectrum's Caa1 CFR reflects
the company's modest scale, high leverage and modest interest
coverage. Total revenue is under $500 million despite solid growth,
particularly in the healthcare segment, following restructuring and
COVID-19 induced lows. Moody's expect debt/EBITDA to remain above
7.0x over the near term despite the improved performance.
Liquidity, which Moody's view as adequate to support operations,
will not improve materially due to working capital investments and
higher interest expense due to rising interest rates. Moody's
expect break-even to modestly positive free cash flow in 2023 with
most cash generation realized in the second half of the year. The
rating is also constrained by the less specialized nature of
certain products in the films business which are subject to greater
competition and customer insourcing.
The Caa1 CFR is supported by the company's defendable market
position with solid margins and good product diversification. Many
of the company's products used for medical procedures require
regulatory certifications that create barriers to entry and support
longstanding customer relationships.
Moody's ratings review will focus on the execution of the
transaction which is expected to close this year. Moody's will also
consider changes to financial policy, including financial leverage
and strategy, under new ownership.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
Headquartered in Alpharetta, GA, Spectrum Holdings III Corp. is a
manufacturer and provider of a wide variety of engineered specialty
plastics products used in medical, food, and industrial end
markets. The company is owned by private equity firm AEA Investors
LP. Revenue for the year ended December 31, 2022 was $451 million.
SPEIDEL CONSTRUCTION: Taps Lefkovitz & Lefkovitz as Legal Counsel
-----------------------------------------------------------------
Speidel Construction, Inc. d/b/a Speidel Airfield Marking, seeks
approval from the U.S. Bankruptcy Court for the Middle District of
Tennessee to hire Lefkovitz & Lefkovitz, PLLC as its bankruptcy
counsel.
The firm's services include:
a. advising the Debtor as to its rights, duties and powers;
b. preparing and filing statements and schedules, Chapter 11
plans and other documents;
c. representing the Debtor at hearings, meetings of creditors,
conferences, trials, and any other proceedings; and
d. performing other necessary legal services in connection
with the Debtor's Chapter 11 case.
The firm will be paid at these rates:
Steven L. Leftkovitz $555 per hour
Associates $350 per hour
Paralegals $125 per hour
In addition, the firm will receive reimbursement for its
out-of-pocket expenses.
The retainer is $7,500.
Steven Leftkovitz, Esq., a partner at Lefkovitz & Lefkovitz,
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:
Steven L. Lefkovitz, Esq.
Lefkovitz & Lefkovitz, PLLC
908 Harpeth Valley Place
Nashville, TN 37221
Tel: (615) 256-8300
Fax: (615) 255-4516
Email: slefkovitz@lefkovitz.com
About Speidel Construction
Speidel Construction, Inc. operates a specialized painting and
resurfacing business in Murfreesboro, Tennessee. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.
D. Tenn. Case No. 23-01473) on April 24, 2023. In the petition
signed by Wayne Todd Pope, as owner, the Debtor disclosed $712,222
in assets and $$1,683,616 in liabilities.
Judge Marian F. Harrison oversees the case.
Steven L. Lefkovitz, Esq., at Lefkovitz and Lefkovitz, represents
the Debtor as legal counsel.
SPINE GROUP: Files Emergency Bid to Use Cash Collateral
-------------------------------------------------------
The Spine Group, PLLC asks the U.S. Bankruptcy Court for the
Western District of Texas, San Antonio Division, for authority to
use cash collateral and provide adequate protection.
The Debtor requires the use of cash collateral to continue the
Debtor's ongoing operations.
The Debtor has an immediate need to use the cash collateral of
Frost Bank, CRT Capital Partners 1, LTD, Frederick Duval, The LCF
Group, Inc., and Cloudfund, LLC, the Debtor's secured creditors
claiming liens on the Debtor's personal property including cash and
accounts.
The Debtor can adequately protect the interests of the Secured
Lenders as set forth in the proposed Interim Order for Use of Cash
Collateral by providing the Secured Lenders with post-petition
liens, a priority claim in the Chapter 11 bankruptcy case, and cash
flow payments.
The Debtor asserts that this is an emergency matter since it has no
outside sources of funding available to it and must rely on the use
of cash collateral to continue its operations.
A copy of the motion is available at https://bit.ly/3B0r2iR from
PacerMonitor.com.
A copy of the budget is available at https://bit.ly/42lhxqA from
PacerMonitor.com.
The Debtor projects $80,000 in income and $78,768 in expenses for
one month.
About The Spine Group, PLLC
The Spine Group, PLLC is an interventional pain management practice
located throughout Texas in Kyle, Floresville, San Antonio, La
Vernia, and Gonzales, Texas. The interventional pain management
practice specializes in treating numerous pain conditions such as
back and neck pain, sciatica, and facet arthritis.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-50554) on May 2,
2023. In the petition signed by Eric Miller, M.D., president, the
Debtor disclosed up to $50,000 in assets and up to $10 million in
liabilities.
Judge Craig A. Gargotta oversees the case.
Joyce W. Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC,
represents the Debtor as legal counsel.
STERLING CAPITAL VIII: Fitch Affirms 'BB' IDR on Preferred Notes
----------------------------------------------------------------
Fitch Ratings has affirmed the Long- and Short-Term Issuer Default
Ratings (IDRs) of Columbia Banking System, Inc. (COLB) and its
operating subsidiary, Umpqua Bank, at 'BBB+' and 'F2',
respectively. The Rating Outlook remains Stable. The Viability
Ratings (VRs) of each were also affirmed at 'bbb+'.
KEY RATING DRIVERS
Affirmation Reflects Company's Strengths: The affirmation reflects
COLB's solid business profile driven by its customer-focused
culture and consistent asset quality performance. Additionally,
Fitch expects the strategic and financial benefits of the recent
merger with Umpqua Holdings Corporation (UMPQ) to offset the risks
associated with the transaction.
Completed Merger Enhances Solid Franchise: COLB's solid business
profile is driven by its customer-focused culture, diversified loan
portfolio, and experienced management team. The completed merger
between Umpqua and COLB allows the combined entity to improve the
density and expand its footprint into other Western markets. COLB
is expected to benefit from a full suite of commercial products,
new business opportunities, and the application of recent
technology investments to a larger scale. Fitch expects the
execution on integration will be effective, evidenced by historical
track record and nominal turnover at key management positions.
Risk Profile Supports Rating: COLB's credit culture is expected to
remain sound as underwriting standards at both legacy banks have
been appropriate and proven through solid asset quality performance
over time. Fitch anticipates this performance continuing
post-merger as both have traditionally achieved superior credit
performance compared to peers. Moreover, the combined entity is
expected to continue operating under conservative credit
administration practices and risk controls.
Asset Quality Remains Sound: COLB's asset quality is expected to
remain sound, both in terms of impaired loans to gross loans and
net charge-offs (NCOs). Legacy COLB and UMPQ both demonstrated
strong asset quality metrics, illustrating a conservative approach
to underwriting in the commercial loan book. While Fitch expects
normalization in credit quality, given the current economic
outlook, COLB has headroom with regards to its asset quality factor
score.
Earnings Improve on Margin Expansion: Pro forma earnings for COLB
outperformed peer median as both legacy banks benefited from
expanding net interest margins (NIM). Additionally, COLB projects
$135 million in realized cost savings, related to deal synergies,
by the end of 3Q23. As a combined entity, Fitch expects COLB to
remain more spread reliant than peers and, as such, earnings
remains a constraint on COLB's overall rating. Fitch believes COLB
could experience NIM compression in 2023, due to rising funding
costs, which could pressure earnings.
Capital Levels Impacted by Merger: The closing of the merger
between COLB and UMPQ required the company to take fair value marks
driven by rapid rise in interest rates against Columbia Bank's
securities portfolio, resulting in the bank realizing $1 billion in
losses and decreasing the common equity Tier 1 ratio (CET1) to 8.9%
at 1Q23. Fitch expects the capital impact to reverse over time,
flowing through earnings as the instruments mature, with CET1
approaching 10% by YE23.
Liquidity Tightens: COLB's liquidity profile remains sound and
supportive of the rating. COLB experienced declines in deposits in
1Q23 as rates increased and excess deposits were allowed to leave
the bank. The pro forma loan-to-deposit ratio remains in line with
peers and COLB's cost of funds is expected to remain below peer
median given the larger portion of noninterest bearing deposits.
Holding Company Equalized: COLB's IDRs and VR are equalized with
those of its operating company, Umpqua Bank, reflecting its role as
the banking holding company, which is mandated in the U.S. to act
as a source of strength for its bank subsidiaries. The ratings are
also equalized to reflect the very close correlation between
holding company and subsidiary default probabilities.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
COLB's ratings are sensitive to the potential for complications in
integration between UMPQ and COLB. To the extent that Fitch
observes significant leadership turnover, it could create negative
rating momentum. Additionally, a failure to successfully achieve
deal economic forecasts, such as targeted returns and cost
takeouts, could pressure the rating.
Downward pressure could also emerge if impaired loans to gross
loans migrate above 3% and are expected to remain above that
threshold for an extended period. A material increase in credit
costs, out of line with peers, could also pressure the rating.
Fitch expects COLB's CET1 ratio to build to approximately 10.0%
over the next several quarters. Deterioration in COLB's CET1 could
prompt negative rating action.
Fitch does not expect COLB to announce additional whole bank
acquisitions in the near term. If the company were to make such an
announcement prior to the completion of integration with COLB and
demonstrable progress towards deal objectives, it could trigger
negative rating action.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
COLB's ratings are currently well situated, with upside potential
limited over the rating horizon. Over the longer term, if the
transaction results in an enhanced company profile, as evidenced by
a stronger franchise and improved market share, positive rating
momentum could occur. This would also be predicated on improved and
sustainable earnings performance while maintaining sound capital
levels and credit metrics, in line with higher rated peers.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
Subordinated Debt: COLB's subordinated debt rating is one notch
below the entity's VR of 'bbb+'. In accordance with Fitch's bank
rating criteria, this reflects alternative notching to the base
case of two notches due to Fitch's view of U.S. regulators'
resolution alternatives for an entity like COLB as well as early
intervention options available to banking regulators under U.S.
law.
Trust Preferred Securities: COLB's trust preferred securities are
notched four levels below its VR, twice for loss severity and twice
for non-performance. These ratings are assigned in accordance with
Fitch's criteria and assessment of the instrument's non-performance
and loss severity risk profiles and their affirmation follows the
affirmation of the VR.
Long- and Short-Term Deposit Ratings: Umpqua Bank's long-term
uninsured deposits are rated one notch higher than the bank's IDR,
as U.S. uninsured deposits benefit from depositor preference. U.S.
depositor preference gives deposit liabilities superior recovery
prospects in the event of default. Fitch rates Umpqua Bank's
short-term uninsured deposits 'F2' in accordance with its Bank
Rating Criteria based on the bank's long-term deposit rating and
Fitch's assessment of its funding and liquidity profile.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
Subordinated Debt: The ratings for COLB's subordinated debt are
sensitive to any negative change to the respective entity's VR.
Trust Preferred Securities: The ratings of COLB's trust preferred
securities are sensitive to any negative change to the VR.
Long- and Short-Term Deposit Ratings: Umpqua Bank's long-term
deposit rating is sensitive to any negative change to the bank's
Long-Term IDR. Umpqua Bank's short-term deposit rating is sensitive
to negative changes to the company's long-term deposit rating and
Fitch's assessment of the bank's funding and liquidity profile.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
Subordinated Debt: The ratings for COLB's subordinated debt are
sensitive to any positive change to the respective entity's VR.
Trust Preferred Securities: The ratings of COLB's trust preferred
securities are sensitive to any positive change to the VR.
Long- and Short-Term Deposit Ratings: Umpqua Bank's long-term
deposit rating is sensitive to any positive change to the bank's
Long-Term IDR. Umpqua Bank's short-term deposit rating is sensitive
to positive changes to the company's long-term deposit rating and
Fitch's assessment of the bank's funding and liquidity profile.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Prior
----------- ------ -----
Sterling
Capital
Trust VIII
Preferred LT BB Affirmed BB
Umpqua
Statutory
Trust II
preferred LT BB Affirmed BB
Columbia
Banking
System, Inc LT IDR BBB+ Affirmed BBB+
ST IDR F2 Affirmed F2
Viability bbb+ Affirmed bbb+
Government Support ns Affirmed ns
Umpqua Bank LT IDR BBB+ Affirmed BBB+
ST IDR F2 Affirmed F2
Viability bbb+ Affirmed bbb+
Government Support ns Affirmed ns
long-term
deposits LT A- Affirmed A-
short-term
deposits ST F2 Affirmed F2
Sterling
Capital
Trust III
preferred LT BB Affirmed BB
Humboldt
Bancorp
Statutory
Trust II
preferred LT BB Affirmed BB
Umpqua
Statutory
Trust IV
preferred LT BB Affirmed BB
Western
Sierra
Statutory
Trust I
preferred LT BB Affirmed BB
Klamath First
Capital
Trust I
preferred LT BB Affirmed BB
Sterling
Capital
Trust IV
preferred LT BB Affirmed BB
Western
Sierra
Statutory
Trust IV
preferred LT BB Affirmed BB
Humboldt
Bancorp
Statutory
Trust III
preferred LT BB Affirmed BB
Sterling
Capital
Trust IX
Preferred LT BB Affirmed BB
Umpqua
Statutory
Trust V
preferred LT BB Affirmed BB
HB Capital
Trust I
preferred LT BB Affirmed BB
Western
Sierra
Statutory
Trust II
preferred LT BB Affirmed BB
Sterling
Capital
Trust VI
preferred LT BB Affirmed BB
Western
Sierra
Statutory
Trust III
preferred LT BB Affirmed BB
Umpqua
Statutory
Trust III
preferred LT BB Affirmed BB
Lynnwood
Financial
Statutory
Trust I
preferred LT BB Affirmed BB
Umpqua
Master
Trust I
preferred LT BB Affirmed BB
Sterling
Capital
Statutory
Trust V
preferred LT BB Affirmed BB
CIB Capital
Trust
preferred LT BB Affirmed BB
Humboldt
Bancorp
Statutory
Trust I
preferred LT BB Affirmed BB
Sterling
Capital
Trust VII
preferred LT BB Affirmed BB
Umpqua
Master
Trust IB
preferred LT BB Affirmed BB
Lynnwood
Financial
Statutory
Trust II
preferred LT BB Affirmed BB
STRUCTURLAM MASS: Broadhead Appointed as New Committee Member
-------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Broadhead Operating
as new member of the official committee of unsecured creditors in
the Chapter 11 cases of Structurlam Mass Timber U.S., Inc. and its
affiliates.
The committee is now composed of:
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
3. Broadhead Operating d/b/a HMH Agency
Attn: Stacey Davies
411 Washington Ave. N. STE 500
Minneapolis, MN 55401
Phone: (612) 532-7311
Email: sdavies@broadheadco.com
About Structurlam Mass Timber Corporation
Structurlam -- http://structurlam.com/-- is a North American
provider of mass timber solutions for construction and industrial
markets in Canada and the U.S. Established in 1962, 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.
The Debtors have sought recognition of the Chapter 11 proceedings
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.
TALKING TADPOLES: Areya Holder Aurzada Named Subchapter V Trustee
-----------------------------------------------------------------
The U.S. Trustee for Region 6 appointed Areya Holder Aurzada, Esq.,
as Subchapter V trustee for Talking Tadpoles, LLC.
Ms. Aurzada, attorney at Holder Law, will be paid an hourly fee of
$495 for her services as Subchapter V trustee and will be
reimbursed for work-related expenses incurred.
Ms. Aurzada declared that she is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Areya Holder Aurzada
Holder Law
901 Main Street, Ste. 5320
Dallas, TX 75202
972-438-8800-office
817-907-4140-mobile
About Talking Tadpoles
Talking Tadpoles, LLC filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. N.D. Texas Case No. 23-41165) on
April 26, 2023, with $100,001 to $500,000 in assets and $500,001 to
$1 million in liabilities. Judge Mark X. Mullin oversees the case.
The Debtor is represented by Robert Lane, Esq., at The Lane Law
Firm.
TEMPUR SEALY: S&P Places 'BB+' ICR on CreditWatch Negative
----------------------------------------------------------
S&P Global Ratings placed all of its ratings on U.S.-based Tempur
Sealy International Inc. (Tempur) on CreditWatch with negative
implications, including the 'BB+' issuer credit rating.
The CreditWatch placement with negative implications reflects the
probability that S&P could lower the ratings if it believes the
company will sustain leverage above 3x following the close of the
transaction.
Tempur announced on May 9, 2023, its intent to acquire mattress
retailer Mattress Firm Inc. for approximately $4 billion. The
transaction is expected to be funded with about $2.7 billion of
cash and $1.3 billion in stock.
Tempur plans to fund the cash portion of the transaction using cash
on hand and proceeds from a new secured and unsecured financing, a
portion of which it will use to repay Mattress Firm's outstanding
debt. S&P estimates S&P Global Rating-adjusted leverage could
approach 4x on a lease-adjusted basis based on latest 12-month
results; however, if performance improves this could decline into
the 3x to 3.5x area by the close of the transaction, which is
expected in the second half of 2024, subject to regulatory
approvals. Tempur reiterated its commitment to its long-term net
leverage target of 2x to 3x.
S&P believes the transaction is transformative for Tempur and the
mattress industry.
The acquisition would be the largest in the company's history. The
company expects the business combination to accelerate its
omni-channel strategy, streamline operations, facilitate
innovation, and generate at least $100 million in annual run-rate
synergies by the end of year four after closing. S&P believes the
acquisition could bolster Tempur's market position in the mattress
industry, making it the leader in wholesale and retail. However,
the combined business would remain highly cyclical. The addition of
Mattress Firm would modestly increase Tempur's fixed cost
structure, which reduces some flexibility in a downturn.
S&P said, "We will resolve the CreditWatch placement after we
receive additional information. Specifically, we will review the
company's strategic rationale, reassess the combined business risk,
analyze its financial plan, and discuss financial policies with
management. Upon resolution of our CreditWatch listing, we could
affirm the ratings or lower them, likely up to one notch."
ESG credit indicators: E-2, S-2, G-2
TRINSEO PLC: Moody's Lowers CFR to B1, Outlook Remains Negative
---------------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family Rating of
Trinseo PLC ("Trinseo") to B1 from Ba3, the Probability of Default
Rating was downgraded to B1-PD from Ba3-PD. The senior secured bank
credit facility ratings and senior unsecured notes ratings for
Trinseo's subsidiary, Trinseo Materials Operating S.C.A., were also
downgraded to Ba3 from Ba2 and to B3 from B2 respectively. These
actions follow the company's weaker than expected first quarter
results and management's lowering their expectation for the full
year EBITDA by $100 million. The rating outlook is negative.
"Although the company raised free cash flow guidance and cut the
dividend, they materially reduced expectations for full year
EBITDA, which will lead to weaker credit metrics in 2023, and
implies that the return of leverage to below 5.0x will take longer
than previously expected," stated John Rogers, Senior Vice
President at Moody's and lead analyst on Trinseo.
Downgrades:
Issuer: Trinseo PLC
Corporate Family Rating, Downgraded to B1 from Ba3
Probability of Default Rating, Downgraded to B1-PD from Ba3-PD
Issuer: Trinseo Materials Operating S.C.A.
Backed Senior Secured Bank Credit Facility, Downgraded to Ba3 from
Ba2
Backed Senior Unsecured Regular Bond/Debenture, Downgraded to B3
from B2
Senior Unsecured Regular Bond/Debenture, Downgraded to B3 from B2
Outlook Actions:
Issuer: Trinseo PLC
Outlook, Remains Negative
Issuer: Trinseo Materials Operating S.C.A.
Outlook, Remains Negative
RATINGS RATIONALE
Trinseo's B1 Corporate Family Rating reflects the company's weak
credit metrics offset by a diversified portfolio of businesses that
have substantial intrinsic value. Its exposure to commodity
chemicals in Europe at a time when margins for styrene, methyl
methacrylate ("MMA") and ammonium sulfate are particularly weak is
severely stressing credit metrics. Demand for many of the company's
products was also weak as destocking at customers extended from the
fourth quarter of 2022 into the first quarter of 2023. While
seasonal demand should improve in the second and third calendar
quarters, margins on their commodity products may be slower to
rebound. However, natural gas hedging losses should decline,
especially in the fourth quarter of 2023. Assuming lower commodity
margins through the rest of 2023 and only a modest increase in
volumes from first quarter levels, Moody's expects leverage to be
approaching 8x and Retained Cash Flow/Debt ("RCF/Debt") to be 5% at
year end 2023.
Trinseo's earnings have continued to struggle after a difficult
second half of 2022. Weaknesses in demand and commodity prices,
especially in Europe, as well as natural gas hedging have
negatively impacted the company's first quarter earnings. Given
the weakness in the second half of 2022 and the expected slow
rebound in profitability in the first half of 2023, credit metrics
are expected to be stressed throughout the remainder of 2023.
Moody's expects that metrics should start improving by the end of
the third quarter. Financial performance in the fourth quarter of
2023 is highly dependent on economic conditions and expectations
for economic growth in 2024. If the outlook for 2024 is uncertain
or expected to be weaker, the company will still be able to
generate free cash flow due to lower levels of working capital.
The negative outlook reflects the extended weakness in financial
performance as evidenced by first quarter results and management's
reduction in its full year guidance, protracted end market weakness
in building and construction and the slow recovery in styrene and
European MMA margins. The negative outlook is likely to remain in
place until quarterly EBITDA rises to $100 million per quarter on a
sustained basis.
The weakness in the first quarter results for the Engineered
Materials segment was of particular concern, although it did
reflect a large portion of the natural gas hedging losses, lower
production volumes to reduce working capital and the lag between
purchases of raw materials and sales of finished goods in a
declining price environment. However, it is clear that MMA and
ammonium sulfate margins in Europe are having a more sizable impact
on profitability than more value added polymethyl methacrylate
("PMMA") products.
On a positive note, the rebound in Plastic Solutions EBITDA from a
loss in the fourth quarter with only a 7% sequential increase in
volumes was a good sign that profits should increase in this
segment in the next few quarters, despite the anticipation of year
over year volume declines. Also, management's focus on conserving
cash and significantly increasing their full year free cash flow
estimate is another factor that may limit further downside to the
rating.
Trinseo's liquidity is adequate with $217 million of cash on the
balance sheet and just over $250 million of available borrowing
under its credit facility and accounts receivable facility. Moody's
expects the company to be able to generate meaningful free cash
flow of roughly $50 million in 2023; however, the amount of free
cash flow that the company will generate is highly dependent on
market conditions in the fourth quarter of 2023. Lower free cash
flow generation would likely be associated with better market
conditions in the fourth quarter requiring a greater amount of
working capital and likely result in modestly better credit
metrics.
Trinseo has a $375 million revolving credit facility with no
outstanding balances at March 31, 2023; however there is a
springing financial covenant when more than 30% of the facility is
outstanding. This covenant limits secured leverage to 3.5x. As of
the end of the first quarter, this covenant was 4.85x limiting
borrowing under the facility to $100.5 million net of $12 million
of letters of credit. The company also has access to a $150 million
accounts receivable facility, which is fully available and matures
in November 2024; also it has no financial maintenance covenants.
Trinseo restarted its Dutch styrene plant in January due to lower
energy costs, even though styrene margins for the first quarter are
still very low. Additionally, the warm winter in Europe has reduced
the potential for a spike in energy costs in 2023, increasing the
probability that commodity margins could improve as demand
increases.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade to the rating is unlikely over the next 2 years due to
Trinseo's weak financial metrics and upcoming debt maturities.
However, the CFR could be upgraded if Trinseo's businesses
consistently generate EBITDA of over $125 million per quarter,
balance sheet debt falls by $200-300 million, free cash flow
remains above $100 million per annum and the company refinances its
2024 and 2025 maturities. The rating could be downgraded, if
leverage remains above 5x for an extended period and free cash flow
is below $50 million.
ESG CONSIDERATIONS
Environmental, social and governance (ESG) factors are important
considerations in Trinseo's credit quality but are not drivers of
the actions. Trinseo's CIS-3 score reflects significant
environmental and social risks due to the nature of the chemicals
used and produced at its facilities. The E-5 score reflects the
amount of waste and pollution generated on an annual basis relative
to most other industries. However, Trinseo's reported emissions are
at the lower end of most commodity chemical companies. The S-4
score reflects responsible production and health and safety risks
owing to the use, or production of, hazardous, flammable or noxious
chemicals. Among other products, Trinseo has exposure to stryene,
which is "reasonably anticipated to be a human carcinogen" by the
US regulatory authorities. Trinseo's G-3 score reflects the
management's desire to lower leverage and improve its credit
rating, despite current adverse market conditions.
Trinseo PLC is the world's largest producer of styrene butadiene
(SB) latex, the third largest global producer of polystyrene and a
sizable producer of PMMA and engineered polymer blends. Trinseo
typically has revenues of $4-6 billion depending on petrochemical
feedstock prices. It has 26 manufacturing sites around the world,
and over 3,400 employees.
The principal methodology used in these ratings was Chemicals
published in June 2022.
TURBO COMPONENTS: Scott Chernich Named Subchapter V Trustee
-----------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Scott Chernich,
Esq., as Subchapter V trustee for Turbo Components, Inc.
Mr. Chernich, a practicing attorney in Lansing, Mich., will be paid
an hourly fee of $325 for his services as Subchapter V trustee and
will be reimbursed for work-related expenses incurred.
Mr. Chernich declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Scott Chernich, Esq.
313 S. Washington Square
Lansing, MI 48933
Phone: 517-371-8133
Email: schernich@fosterswift.com
About Turbo Components
Turbo Components, Inc. is a producer and supplier of casted and
machined aluminum parts. The company is based in Fruitport, Mich.
Turbo Components sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Mich. Case No. 23-01005) on April 28,
2023, with $2,420,069 in assets and $4,647,278 in liabilities. Brad
Fortenbacher, president of Turbo Components, signed the petition.
Judge James W. Boyd oversees the case.
A. Todd Almassian, Esq., at Keller and Almassian, PLC, represents
the Debtor as legal counsel.
UNITED PF HOLDINGS: $100M 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
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $100 million facility is a Term loan that is scheduled to
mature on November 12, 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.
VALCAL INC: Aaron Cohen Named Subchapter V Trustee
--------------------------------------------------
The U.S. Trustee for Region 21 appointed Aaron Cohen as Subchapter
V trustee for Valcal Inc.
Mr. Cohen will be paid an hourly fee of $300 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Cohen declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Aaron R. Cohen
P.O. Box 4218
Jacksonville, FL 32201
Telephone Number: (904) 389-7277
Email: aaron@arcohenlaw.com
About Valcal Inc.
Valcal Inc., a company in Altamonte Springs, Fla., filed a petition
under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D.
Fla. Case No. 23-01675) on May 2, 2023, with $970,720 in assets and
$2,055,075 in liabilities. Giovanni Martinez, president of Valcal,
signed the petition.
Judge Tiffany P. Geyer oversees the case.
Jeffrey S. Ainsworth, Esq., at Bransonlaw, PLLC is the Debtor's
legal counsel.
VALCAL INC: Seeks Cash Collateral Access
----------------------------------------
Valcal Inc. asks the U.S. Bankruptcy Court for the Middle District
of Florida, Orlando Division, for authority to use cash collateral
and provide adequate protection to Bishek S. Sallapudi, Allegiant
Partners, Ascentium Capital LLC, Channel Partners, Financial
Pacific Leasing LLC, North Mills Credit Trust, Oakmont Capital,
River Capital Finance LLC, Credibly of Arizona LLC, and Corporation
Service Company, as representative.
The Debtor requires the use of cash collateral to pay
debtor-in-possession expenses.
Although the Debtor's current routes are profitable, the Debtor
previously had a third route in Alabama that the Debtor had
acquired, but the operating expenses for the third route in Alabama
turned out to be astronomical and ended up swallowing all of the
Debtor's revenues. The Debtor was previously losing approximately
$30,000 per month on the third Alabama route due to the fact that
it was in a rural area with long distances between each delivery
stop, often on dirt roads that were in bad condition, which made it
difficult for vehicles to navigate and caused undue wear and tear
to the vehicles. Once the Debtor determined in its business
judgment that operating the Alabama route was unsustainable due to
the extraordinarily high operating costs, the Debtor terminated its
contract for the third Alabama route with Fed Ex.
To attempt to address these issues, the Debtor attempted to sell
one of its two remaining routes to a third party and use the
proceeds to pay the outstanding debt. The potential buyer put down
a deposit with a third-party broker and then gave the Debtor an
unsolicited additional $150,000 as a deposit, which the Debtor used
to pay the company's debts, but then FedEx unexpectedly refused to
approve the sale. In the meantime, prior to the cancellation of the
third Alabama route becoming effective, the massive operating
expenses for the Alabama route resulted in net operating losses,
resulting in cash flow issues for the Debtor. To attempt to address
the cash flow issues, the Debtor resorted to various predatory
merchant cash advance lenders that have burdened the Debtor with
usurious and unconscionable loans, drastically exacerbating the
Debtor's financial and cash flow issues due to the massive and
unnecessary fees, interest, and other costs charged by the MCA
lenders that are spiraling to become unmanageable.
The MCA lenders' ability to unilaterally take funds from the
Debtor's bank accounts has completely depleted the Debtor's cash
reserves and working capital, which makes it difficult for the
Debtor to operate.
As of the Petition Date, the Debtor has approximately $121 of cash
in deposit accounts; and the Debtor expects to receive weekly
deposits from FedEx in the approximate amount of $40,000, which the
Debtor intends to use for the weekly payroll.
The Debtor owes approximately $300,000 to Bishek S. Sallapudi,
which is secured by five vehicles valued at $107,000.
The Debtor has five loans with Allegiant Partners for an aggregate
amount of approximately $300,000, secured by vehicles with an
aggregate value of approximately $275,000.
The Debtor has two loans with Ascentium Capital LLC for an
aggregate amount of approximately $19,182 that are secured by
ground cloud cameras with a value of $8,000 and handheld Xebra
scanners with an aggregate value of approximately $5,400.
The Debtor has five loans with Bush Truck Leasing for an aggregate
amount of approximately $300,000, secured by vehicles with an
aggregate value of approximately $275,000.
The Debtor owes $56,000 to Channel Partners, secured by a vehicle
valued at $50,000.
The Debtor has two loans with Financial Pacific Leasing LLC for an
aggregate amount of approximately $106,775, secured by vehicles
with an aggregate value of approximately $85,000.
The Debtor owes North Mills Credit Trust approximately $140,000,
secured by a vehicle valued at approximately $27,000.
The Debtor owes Oakmont Capital an aggregate amount of $167,153,
secured by four vehicles valued at approximately $122,000.
The Debtor owes River Capital Finance LLC approximately $6,848,
secured by seven Xebra scanners valued at approximately $5,200.
UCC Statements have been filed by Credibly of Arizona LLC (UCC
Filing No. 202109654269); and Corporation Service Company, as
representative (UCC Filing No. 202201957876).
The Debtor reserves all rights and remedies with respect the MCA
Lenders, including the right to challenge the validity, priority,
and extent of any claimed lien; avoid any lien under the Chapter 5
of the Bankruptcy Code or other applicable law; and value the
secured status of these claims pursuant to 11 U.S.C. section 506.
As adequate protection for the use of any cash collateral, the
Debtor proposes to grant all Secured Creditors a replacement lien
with the same validity, extent, and priority as their respective
prepetition lien(s), if any.
A copy of the motion and the Debtor's budget is available at
https://bit.ly/42DhuGh from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$190,533 for May 2023;
$200,883 for June 2023;
$205,656 for July 2023; and
$205,656 for August 2023.
About Valcal Inc.
Valcal Inc. manages and operates two delivery routes for FedEx
Ground. One of the routes is in Jacksonville, Florida; and the
other is near Ocoee, Florida.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-01675) on May 2,
2023. In the petition signed by Giovanni Martinez, president, the
Debtor disclosed $970,720 in assets and $2,055,075 in liabilities.
Jeffrey S. Ainsworth, Esq., at Bransonlaw, PLLC, represents the
Debtor as legal counsel.
VALCOUR PACKAGING: $160M Bank Debt Trades at 37% Discount
---------------------------------------------------------
Participations in a syndicated loan under which Valcour Packaging
LLC is a borrower were trading in the secondary market around 62.9
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $160 million facility is a Term loan that is scheduled to
mature on September 30, 2029. The amount is fully drawn and
outstanding.
Valcour Packaging LLC, doing business as Mold-Rite Plastics,
provides high-quality plastic packaging components.
VINTAGE WEST: Kevin Heard Named Subchapter V Trustee
----------------------------------------------------
The U.S. Bankruptcy Administrator for the Northern District of
Alabama appointed Kevin Heard, Esq., as Subchapter V trustee for
Vintage West, LLC.
Mr. Heard is the managing member of Heard, Ary & Dauro, LLC. The
attorney has over 25 years of experience in representing business
in restructuring their debts both in bankruptcy as well as outside
bankruptcy.
The Subchapter V trustee can be reached at:
Kevin D. Heard, Esq.
Heard, Ary & Dauro, LLC
303 Williams Avenue SW
Park Plaza Suite 921
Huntsville, AL 35801
Telephone No. (256) 535-0817
Fax No. (256) 535-0818
Email: kheard@heardlaw.com
About Vintage West
Vintage West, LLC offers Chalk Paint Decorative Paint by Annie
Sloan. It is also a purveyor of several other highly sought after
home goods and name brands including Magnolia Home by a Joanna
Gaines, Norwalk furniture, Sam Moore, Four Seasons, and Hooker
Furniture.
Vintage West filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Ala. Case No. 23-80809) on May 3,
2023. In the petition signed by its manager, Ron M. Roberson, Sr.,
the Debtor disclosed $1 million to $10 million in both assets and
liabilities.
Judge Clifton R. Jessup, Jr. oversees the case.
Richard L. Collins Attorney at Law is the Debtor's legal counsel.
VYERA PHARMACEUTICALS: 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.
------ --------
Vyera Pharmaceuticals, LLC (Lead Debtor) 23-10605
600 3rd Avenue
19th Floor
New York NY 10016
Phoenixus AG 23-10606
Orpha Labs AG 23-10607
Oakrum Pharma, LLC 23-10608
SevenScore Pharmaceuticals, LLC 23-10609
Dermelix Biotherapeutics, LLC 23-10610
Business Description: The Debtors develop and commercialize
branded products and launch and
commercialize generic products that treat
orphan diseases.
Chapter 11 Petition Date: May 9, 2023
Court: United States Bankruptcy Court
District of Delaware
Debtors'
Bankruptcy
Counsel: R. Craig Martin, Esq.
Matthew S. Sarna, Esq.
DLA PIPER LLP
1201 North Market Street
Wilmington, DE 19801
Tel: (302) 468-5700
Fax: (302) 397-2336
Email: craig.martin@dlapiper.com
matthew.sarna@dlapiper.com
- and -
John K. Lyons, Esq.
DLA PIPER LLP
444 West Lake Street, Suite 900
Chicago, IL 60606-0089
Tel: (312) 368-4000
Fax: (312) 236-7516
Email: john.lyons@dlapiper.com
Debtors'
Financial
Advisor: SIERRA CONSTELLATION PARTNERS LLC
Debtors'
Investment
Banker: ALVAREZ & MARSAL SECURITIES, LLC
Debtors'
Notice,
Claims &
Balloting
Agent and
Administrative
Advisor: EPIQ CORPORATE RESTRUCTURING, LLC
Vyera's
Estimated Assets: $10 million to $50 million
Vyera's
Estimated Liabilities: $1 million to $10 million
The petitions were signed by Lawrence R. Perkins as chief
restructuring officer.
A full-text copy of the Lead Debtor's petition is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/WZFNWCQ/Vyera_Pharmaceuticals_LLC__debke-23-10605__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Duane Morris LLP Litigation $2,127,923
30 S. 17th Street
Philadelphia, PA 19103
Contact: Cynthia Baldwin,
President & General Counsel
Tel: 215-979-1000
Fax: 215-979-1020
Email: alabbonizio@duanemorris.com
2. Cardinal Health, Inc. Trade Payable $452,547
7000 Cardinal Place
Dublin, OH 43017
Contact: General Counsel
Tel: 614-757-5000
Email: kevin.moran@cardinalhealth.com;
erich.timmerman@cardinalhealth.com
3. Ani Pharmaceuticals Inc. Royalty Payable $439,696
210 Main St West
Baudette, MN 56623
Contact: Nikhil Lalwani, CEO
Tel: 218-634-3500
Fax: 218-634-3540
Email: info@anipharmaceuticals.com
4. Aucta Pharmaceuticals, Inc. Royalty Payable $288,705
71 Suttons Lane
Piscataway, NJ 08854
Contact: Shoufeng Li, CEO
Tel: 909-342-4793
Fax: 732-605-6902
Email: shoufeng.li@auctapharma.com
5. Connecticut Department of Trade Payable $265,583
Public Health
Attn: Connecticut Drug
Assistance Program
410 Capitol Avenue
MS#13ACT
Hartford, CT 06134
Contact: General Counsel
Tel: 860-509-8000
Fax: 860-509-7160
Email: ask.dph@ct.gov
6. ASD Specialty Healthcare Inc. Trade Payable $203,977
5025 Plano Parkway
Carrollton, TX 75010
Contact: General Counsel
Tel: 800-547-9413
Email: service@asdhealthcare.com
7. Eversana Life Science Trade Payable $148,458
Services, LLC
190 N. Milwaukee Street
Milwaukee, WI 53202
Contact: Jim Lang, CEO
Tel: 414-299-4900
Email: india@eversana.com
8. Commonwealth of Massachusetts Trade Payable $107,212
Masshealth Druge Rebate
Prog-FFS Program
P.O. Box 3070
Boston, MA 02241-3070
Contact: General Counsel
Tel: 800-841-2300
Email: masshealthdruglist@state.ma.us
9. Department of Health Care Trade Payable $101,330
Services
Dept of Health Care Services,
Accounting
Medical Drug Rebate AR, MS 1101
P.O. Box 997415
Sacramento, CA 95899-7413
Contact: General Counsel
Tel: 888-452-8609
Email: mmcdombudsmanoffice@dhcs.ca.gov
10. Integrichain, Inc. Trade Payable $73,838
8 Penn Center, 3rd Floor
1628 JFK Blvd
Philadelphia, PA 19103
Contact: Leigh Anne Siino,
Executive Director, Sales
Tel: 609-806-5005
Email: isiino@integrichain.com
11. Walgreens Specialty Trade Payable $72,178
500 Noblestown Road
Attn: Kristen Berger
Carnegie, PA 15106
Contact: General Counsel
Tel: 888-347-3416
Fax: 412-325-6505
Email: media@walgreens.com
12. McKesson Trade Payable $70,180
401 Mason Road
Lavergne, TN 37086
Contact: Brian Tyler, CEO
Tel: 972-446-4800
Email: mediarelations@mckesson.com
13. Department of Medical Trade Payable $69,000
Assistance, Commonwealth of
Virginia
CMS Medicaid Drug Rebate Unit
Attn: Fiscal Unit
600 E. Broad St., Suite 1300
Richmond, VA 23219-1857
Contact: General Counsel
Tel: 888-221-1590
Email: vamedicaidmediaquests@dmas.virginia.gov
14. Treasurer State of FL Trade Payable $65,547
Agency for Healthcare
Administration Finance & Accounting
2727 Mahan Drive, Mail Stop #14
Tallahassee, FL 32308
Contact: General Counsel
Tel: 850-413-2761
Email: webmaster@ahca.myflorida.com
15. OptumRX, Inc. Trade Payable $63,000
5701 Katella Avenue, CA120-0308
Cypress, CA 90630
Contact: Melanie Freeman,
Compliance and Privacy Officer
Tel: 714-825-3600
Email: melanie.freeman@optum.com
16. CBIZ Accounting, Tax & Trade Payable $52,500
Advisory of New York, LLC
1065 Avenue of the Americas
10th Floor
New York, NY 10018
Contact: Erik Linn,
Managing Partner
Tel: 212-790-5790
Fax: 703-563-9318
Email: info@crosscountryconsulting.com
17. Propharma Group Trade Payable $51,905
2635 University Avenue West
Suite 195
St. Paul, MN 55114
Contact: Michael Stomberg, CEO
Tel: 916-663-2729
Email: info@propharmagroup.com
18. Agency For Health Care Trade Payable $48,978
Administration Finance
and Accounting/Drug Rebate
2727 Mahan Dr. Mail Stop #14
Tallahassee, FL 32308
Contact: General Counsel
Tel: 888-419-3435
Email: webmaster@ahca.myflorida.com
19. Treasurer State of Ohio Trade Payable $48,752
Medicaid Drug Rebate
30 E. Broad Street - 9th Floor
Columbus, OH 43215
Contact: General Counsel
Tel: 800-324-8680
Email: constituentaffairs@tos.ohio.gov;
economicdevelopment@tos.ohio.gov
20. Department of Human Trade Payable $36,823
Services/Drug Rebate Program
P.O. Box 780634
Philadelphia, PA 19178-0634
Contact: General Counsel
Tel: 717-787-2500
Email: ra-pwdhspressoffice@pa.gov;
bcwalina@pa.gov;
alfogarty@pa.gov
WP CPP HOLDINGS: $276M Bank Debt Trades at 21% Discount
-------------------------------------------------------
Participations in a syndicated loan under which WP CPP Holdings LLC
is a borrower were trading in the secondary market around 78.7
cents-on-the-dollar during the week ended Friday, May 5, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $276 million facility is a Term loan that is scheduled to
mature on April 30, 2026. The amount is fully drawn and
outstanding.
Headquartered in Cleveland, Ohio, WP CPP Holdings, LLC, d/b/a
Consolidated Precision Products, is a castings manufacturer of
engineered components and subassemblies for the commercial
aerospace, military and defense and energy markets. The company is
majority-owned in equal parts by private equity firm Warburg Pincus
and Berkshire Partners.
Z NEWS SERVICE: David Klauder Named Subchapter V Trustee
--------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed David Klauder, Esq.,
as Subchapter V trustee for Z News Service, Inc.
Mr. Klauder, a member of Bielli & Klauder, LLC, will be paid an
hourly fee of $400 for his services as Subchapter V trustee and
will be reimbursed for work-related expenses incurred.
Mr. Klauder declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
David M. Klauder, Esq.
Bielli & Klauder, LLC
1204 N. King Street
Wilmington, DE 19801
Phone: (302) 803-4600
Fax: (302) 397-2557
Email: dklauder@bk-legal.com
About Z News Service
Z News Service, Inc. filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. D. Del. Case No. 23-10470) on
April 17, 2023, with as much as $50,000 in assets and $500,001 to
$1 million in liabilities. Judge Brendan Linehan Shannon oversees
the case.
The Debtor is represented by The Rosner Law Group, LLC.
ZHANG MEDICAL: Eric Huebscher Named Subchapter V Trustee
--------------------------------------------------------
The U.S. Trustee for Region 2 appointed Eric Huebscher as
Subchapter V trustee for Zhang Medical P.C.
Mr. Huebscher will be paid an hourly fee of $425 for his services
as Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Huebscher declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Eric Huebscher
301 East 87th Street
New York, New York 10128
Telephone: (646) 584-3141
Telecopy: 212-202-3503
Email: ehuebscher@huebscherconsulting.com
About Zhang Medical
Zhang Medical P.C., doing business as New Hope Fertility Clinic,
specializes in low and no-drug infertility solutions that help
women conceive with minimal invasiveness.
Zhang Medical filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-10678) on April
30, 2023, with $1 million to $10 million in both assets and
liabilities. Dr. John Zhang, president of Zhang Medical, signed the
petition.
Joseph D. Nohavicka, Esq., of Pardalis & Nohavicka, LLP is the
Debtor's counsel.
ZHANG MEDICAL: Fertility Clinic Starts Case Over Unused Floors
--------------------------------------------------------------
Zhang Medical P.C. filed for chapter 11 protection in the Southern
District of New York. The Debtor elected on its voluntary petition
to proceed under Subchapter V of chapter 11 of the Bankruptcy
Code.
Dr. John Zhang, sole shareholder of Zhang Medical P.C., is a
medical doctor with a specialty in reproductive medicine.
Dr. John Zhang formed Zhang Medical, a New York Sub-Chapter S, in
2001. The Debtor leased two floors of Four Columbus Circle in
Manhattan and commenced operating a full-service fertility clinic.
The clinic maintains a team of highly trained specialists and
offers a comprehensive range of fertility services, including egg
freezing, preimplantation genetic testing, and fertility
preservation for cancer patients. It also provides treatment for
complex cases of infertility, such as recurrent pregnancy loss,
male factor infertility, and diminished ovarian reserves.
Debtor's Lease
The Debtor entered into a lease with GLL BVK Columbus Circle LLS
that has subsequently been amended and modified. The Debtor's
prior lease originally provided that the Debtor would occupy the
third and fourth floors of Four Columbus Circle. In 2018, the
Landlord approached the Debtor and stated that unless the Debtor
leased the second and fifth floors, the Landlord would be forced to
lease the entire building to another entity. During negotiations,
it was contemplated that the Debtor would sub-lease the two
additional floors: the Debtor did not require this additional
space. Under the Lease, the Debtor's approximate monthly fixed
rent obligation to the Landlord is $100,000 per floor. The Debtor
agreed to the Landlord's request and entered into the Lease. The
Lease expires in 2035.
The cessation of business that resulted from COVID significantly
affected the Debtor's business and revenue during that time and its
ability to meet its obligations under the Lease. Moreover, with
the glut in commercial space in Manhattan and the reduction in
market rates for commercial space, the Debtor has been unable to
sublet the two empty floors. One of the floors was a former
showroom, with little to no enclosed office space, and it can not
be rented without a complete build-out. The Lease requires the
Debtor to pay for the build-out of this floor, and subsequently
seek reimbursement from the Landlord for the cost. The Debtor
commenced the build-out but did not have the revenue to complete
the project. The contractor that commenced the build-out for this
work, Skyland Development Corp., ceased rendering services to the
Debtor and filed a mechanic's lien against the building.
The Debtor made numerous attempts to surrender the empty floors and
negotiate a resolution with the Landlord but was unable to do so.
The Debtor was forced to stop meeting its rental obligations to the
Landlord last year. The Landlord filed a Summons and Complaint
against the Debtor on April 18, 2023, in the New York Supreme
Court, New York County, that includes claims for breach of contract
and specific performance. The complaint seeks a judgment for
$3,046,893, with interest, for breach of the Lease, an award of
unspecified attorney's fees and disbursements, and requests that
the Debtor replenish its security deposit.
Debtor's Current Operations
The Debtor is fully operational and hopes to expand its business
once it can resolve the Landlord's claim and the claims of other
creditors. One of the benefits of the business cessation that
occurred during COVID was my discovery that the Debtor could render
Mini-IVF services virtually and complete the process with one
office visit. As a result, the Debtor began to attract patients
from other states. About thirty percent of the Debtor's revenue is
presently generated from services rendered virtually and I expect
this number to increase. Once the Debtor's business is stabilized,
the Debtor intends to market to patients nationally.
The Debtor has approximately 88 employees that include doctors,
nurse practitioners, lab technicians, other medical personnel, and
administrative and support staff.
The Debtor has an array of medical and laboratory equipment and
stores over 40,000 embryos in its clinic. The Debtor has no lien
or restriction on its use of cash and no secured debt. It has an
unpaid tax obligation to the City of New York that has not been
assessed and the amount due is unknown.
Simply stated, the Debtor has a robust practice that has changed
the lives of many families but it can not sustain its business with
the economic drain caused by its obligations under the Lease. If
the Debtor is unable to rid itself of the unused floors, it will be
forced to reject the Lease and relocate to a more affordable
space.
About Zhang Medical P.C.
Zhang Medical P.C., doing business as New Hope Fertility Clinic,
specializes in low and no-drug infertility solutions that help
women conceive with minimal invasiveness.
Zhang Medical P.C. filed a petition for relief under Subchapter V
of Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No.
23-10678) on April 30, 2023. In the petition filed by Dr. John
Zhang, as president, the Debtor reported assets and liabilities
between $1 million and $10 million each.
The Debtor is represented by:
Joseph D. Nohavicka, Esq.
Pardalis & Nohavicka LLP
4 Columbus Circle
4th Floor
New York, NY 10019
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Bar B Quing With My Honey Restaurant & Bar LLC
Bankr. S.D. Ala. Case No. 23-11005
Chapter 11 Petition filed May 2, 2023
See
https://www.pacermonitor.com/view/4ZARBKQ/Bar_B_Quing_With_My_Honey_Restaurant__alsbke-23-11005__0001.0.pdf?mcid=tGE4TAMA
represented by: James D. Patterson, Esq.
JAMES PATTERSON LLC
E-mail: jdp@jamespattersonlaw.com
In re Fremont316, LLC
Bankr. N.D. Cal. Case No. 23-40503
Chapter 11 Petition filed May 2, 2023
See
https://www.pacermonitor.com/view/SCSZ45Y/Fremont316_LLC__canbke-23-40503__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Long & Associate of Tampa, LLC
Bankr. M.D. Fla. Case No. 23-01781
Chapter 11 Petition filed May 2, 2023
See
https://www.pacermonitor.com/view/O3WVCKY/Long__Associate_of_Tampa_LLC__flmbke-23-01781__0001.0.pdf?mcid=tGE4TAMA
represented by: Perry G. Gruman, Esq.
PERRY G. GRUMAN, PA
E-mail: ross@grumanlaw.com
In re Deyo Enterprises, Inc. d/b/a Supercuts
Bankr. S.D.N.Y. Case No. 23-22323
Chapter 11 Petition filed May 2, 2023
See
https://www.pacermonitor.com/view/6BLYF6A/Deyo_Enterprises_Inc_dba_Supercuts__nysbke-23-22323__0001.0.pdf?mcid=tGE4TAMA
represented by: James J. Rufo, Esq.
LAW OFFICE OF JAMES J. RUFO
E-mail: jrufo@jamesrufolaw.com
In re H&R De Paris Boutique Formal and Bridal Corp
Bankr. S.D.N.Y. Case No. 23-71530
Chapter 11 Petition filed May 2, 2023
See
https://www.pacermonitor.com/view/LDBKWZI/HR_De_Paris_Boutique_Formal_and__nyebke-23-71530__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Kenneth D. Laub
Bankr. S.D.N.Y. Case No. 23-10689
Chapter 11 Petition filed May 2, 2023
represented by: Gabriel Del Virginia, Esq.
In re Peter J. Ladka
Bankr. S.D.N.Y. Case No. 23-35350
Chapter 11 Petition filed May 2, 2023
represented by: Douglas Tabachnik, Esq.
DOUGLAS T. TABACHNIK, P.C.
In re Lyles and Lewis Development LLC
Bankr. E.D. Pa. Case No. 23-11286
Chapter 11 Petition filed May 2, 2023
See
https://www.pacermonitor.com/view/KAOZM6Y/Lyles_and_Lewis_Development_LLC__paebke-23-11286__0001.0.pdf?mcid=tGE4TAMA
represented by: Roger V. Ashodian, Esq.
REGIONAL BANKRUPTCY CENTER OF
SOUTHEASTERN PA, P.C.
E-mail: ecf@schollashodian.com
In re Francisco Sandoval
Bankr. N.D. Tex. Case No. 23-41294
Chapter 11 Petition filed May 2, 2023
represented by: Eric Liepins, Esq.
In re Silicon Valley Taxi Drivers, Inc.
Bankr. N.D. Cal. Case No. 23-50478
Chapter 11 Petition filed May 3, 2023
See
https://www.pacermonitor.com/view/5D5QC2Q/Silicon_Valley_Taxi_Drivers_Inc__canbke-23-50478__0001.0.pdf?mcid=tGE4TAMA
represented by: Rattan Dev S. Dhaliwal, Esq.
DHALIWAL LAW GROUP, INC.
In re Awad Musa Odeh and Julia H. Salameh
Bankr. N.D. Ill. Case No. 23-05875
Chapter 11 Petition filed May 3, 2023
represented by: Jeffrey Paulsen, Esq.
In re Leona Transportation Inc.
Bankr. E.D.N.Y. Case No. 23-41546
Chapter 11 Petition filed May 3, 2023
See
https://www.pacermonitor.com/view/QOBI6AQ/Leona_Transportation_Inc__nyebke-23-41546__0001.0.pdf?mcid=tGE4TAMA
represented by: Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
E-mail: alla@kachanlaw.com
In re Dato A/C Inc.
Bankr. E.D.N.Y. Case No. 23-41547
Chapter 11 Petition filed May 3, 2023
See
https://www.pacermonitor.com/view/QSRWKEA/Dato_AC_Inc__nyebke-23-41547__0001.0.pdf?mcid=tGE4TAMA
represented by: Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
E-mail: alla@kachanlaw.com
In re Mazel On Del LLC
Bankr. E.D.N.Y. Case No. 23-41562
Chapter 11 Petition filed May 3, 2023
See
https://www.pacermonitor.com/view/L5HM7VQ/Mazel_On_Del_LLC__nyebke-23-41562__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Leona Transportation Inc.
Bankr. E.D.N.Y. Case No. 23-41546
Chapter 11 Petition filed May 3, 2023
See
https://www.pacermonitor.com/view/QOBI6AQ/Leona_Transportation_Inc__nyebke-23-41546__0001.0.pdf?mcid=tGE4TAMA
represented by: Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
E-mail: alla@kachanlaw.com
In re Maria Cecilia Granville
Bankr. S.D.N.Y. Case No. 23-10698
Chapter 11 Petition filed May 3, 2023
represented by: Debra Hoskins, Esq.
In re Eric James Miller
Bankr. W.D. Tex. Case No. 23-50557
Chapter 11 Petition filed May 3, 2023
represented by: Joyce Lindauer, Esq.
In re Jong Uk Byun
Bankr. C.D. Cal. Case No. 23-12747
Chapter 11 Petition filed May 4, 2023
represented by: Giovanni Orantes, Esq.
In re Robinson & Robinson Estates
Bankr. N.D. Ga. Case No. 23-54230
Chapter 11 Petition filed May 4, 2023
See
https://www.pacermonitor.com/view/RVGLNDY/Robinson__Robinson_Estates__ganbke-23-54230__0001.0.pdf?mcid=tGE4TAMA
Case Opened
In re Elaine Pryce
Bankr. E.D.N.Y. Case No. 23-71560
Chapter 11 Petition filed May 4, 2023
In re 614 Ministries
Bankr. S.D. Ohio Case No. 23-51503
Chapter 11 Petition filed May 4, 2023
See
https://www.pacermonitor.com/view/3MXOY2Y/614_Ministries_Inc__ohsbke-23-51503__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Petes Auto Sales & Service, LLC
Bankr. D. Conn. Case No. 23-20344
Chapter 11 Petition filed May 5, 2023
See
https://www.pacermonitor.com/view/XS2DKCQ/Petes_Auto_Sales__Service_LLC__ctbke-23-20344__0001.0.pdf?mcid=tGE4TAMA
represented by: Gregory F. Arcaro, Esq.
ADVANCED BANKRUPTCY LEGAL SERVICES OF
CONNECTICUT
E-mail: garcaro@grafsteinlaw.com
In re Nikofam, Inc.
Bankr. D. Mass. Case No. 23-10719
Chapter 11 Petition filed May 5, 2023
See
https://www.pacermonitor.com/view/76GX6WQ/Nikofam_Inc__mabke-23-10719__0001.0.pdf?mcid=tGE4TAMA
represented by: David B. Madoff, Esq.
MADOFF & KHOURY LLP
E-mail: alston@mandkllp.com
In re Extreme Clean Janitorial, LLC
Bankr. N.D. Miss. Case No. 23-11385
Chapter 11 Petition filed May 5, 2023
See
https://www.pacermonitor.com/view/ER6RRQY/Extreme_Clean_Janitorial_LLC__msnbke-23-11385__0001.0.pdf?mcid=tGE4TAMA
represented by: Kevin F. O'Brien, Esq.
O'BRIEN LAW FIRM, LLC
E-mail: bankruptcy@obrienfirm.com
In re AMO TX 1, LLC
Bankr. E.D. Tex. Case No. 23-40812
Chapter 11 Petition filed May 5, 2023
See
https://www.pacermonitor.com/view/YBQXOYI/AMO_TX_1_LLC__txebke-23-40812__0001.0.pdf?mcid=tGE4TAMA
represented by: Eric A. Liepins, Esq.
ERIC A. LIEPINS
E-mail: eric@ealpc.com
In re AMO TX 2, LLC
Bankr. E.D. Tex. Case No. 23-40813
Chapter 11 Petition filed May 5, 2023
See
https://www.pacermonitor.com/view/YM2QXSI/AMO_TX_2_LLC__txebke-23-40813__0001.0.pdf?mcid=tGE4TAMA
represented by: Eric A. Liepins, Esq.
ERIC A. LIEPINS
E-mail: eric@ealpc.com
In re AMO TX 3, LLC
Bankr. E.D. Tex. Case No. 23-40814
Chapter 11 Petition filed May 5, 2023
See
https://www.pacermonitor.com/view/HUQYMLA/AMO_TX_3_LLC__txebke-23-40814__0001.0.pdf?mcid=tGE4TAMA
represented by: Eric A. Liepins, Esq.
ERIC A. LIEPINS
E-mail: eric@ealpc.com
In re August Lilly, LLC
Bankr. N.D. Fla. Case No. 23-30314
Chapter 11 Petition filed May 5, 2023
See
https://www.pacermonitor.com/view/63KPTNI/August_Lilly_LLC__flnbke-23-30314__0001.0.pdf?mcid=tGE4TAMA
represented by: Byron W. Wright III, Esq.
BRUNER WRIGHT, P.A.
E-mail: twright@brunerwright.com
In re Marc Steven Goodman and Esther Eckerling Goodman
Bankr. S.D. Fla. Case No. 23-13553
Chapter 11 Petition filed May 5, 2023
represented by: Brian Behar, Esq.
In re Lisa Christine Burton
Bankr. D. Idaho Case No. 23-40206
Chapter 11 Petition filed May 5, 2023
represented by: J. Justin May, Esq.
In re Kali's Court, LLC
Bankr. D. Md. Case No. 23-13178
Chapter 11 Petition filed May 6, 2023
See
https://www.pacermonitor.com/view/PVRLHUY/Kalis_Court_LLC__mdbke-23-13178__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert B. Scarlett, Esq.
SCARLETT & CROLL, P.A.
E-mail: rscarlett@scarlettcroll.com
In re Gerard Martin Coffey
Bankr. S.D.N.Y. Case No. 23-22345
Chapter 11 Petition filed May 6, 2023
represented by: Christopher Martone, Esq.
In re 5752 NW 1st Avenue LLC
Bankr. S.D. Fla. Case No. 23-13586
Chapter 11 Petition filed May 7, 2023
See
https://www.pacermonitor.com/view/RRMO24Y/5752_NW_1ST_AVENUE_LLC__flsbke-23-13586__0001.0.pdf?mcid=tGE4TAMA
represented by: Joel Aresty, Esq.
JOEL M. ARESTY PA
E-mail: aresty@icloud.com
In re Mayberry Funeral Home LLC
Bankr. S.D. Ala. Case No. 23-11052
Chapter 11 Petition filed May 8, 2023
See
https://www.pacermonitor.com/view/VZJUD4Y/Mayberry_Funeral_Home_LLC__alsbke-23-11052__0001.0.pdf?mcid=tGE4TAMA
represented by: James D. Patterson, Esq.
JAMES PATTERSON LLC
E-mail: jdp@jamespattersonlaw.com
In re Schultz Investments 21, Inc.
Bankr. C.D. Cal. Case No. 23-10618
Chapter 11 Petition filed May 8, 2023
See
https://www.pacermonitor.com/view/FUKU6AY/Schultz_Investments_21_Inc__cacbke-23-10618__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Multec Industrial Packaging, Inc.
Bankr. N.D. Ga. Case No. 23-10535
Chapter 11 Petition filed May 8, 2023
See
https://www.pacermonitor.com/view/YMO3GUQ/Multec_Industrial_Packaging_Inc__ganbke-23-10535__0001.0.pdf?mcid=tGE4TAMA
represented by: Leslie Pineyro, Esq.
JONES & WALDEN, LLC
E-mail: info@joneswalden.com
In re Cynthia Ann Warren
Bankr. D. Md. Case No. 23-13194
Chapter 11 Petition filed May 8, 2023
represented by: Marc Ominsky, Esq.
In re Immergent Investments
Bankr. D. Nev. Case No. 23-11835
Chapter 11 Petition filed May 8, 2023
See
https://www.pacermonitor.com/view/A2ZHYVI/Immergent_Investments__nvbke-23-11835__0001.0.pdf?mcid=tGE4TAMA
represented by: Mitchell S. Bisson, Esq.
LAW OFFICES OF MITCHELL S. BISSON
E-mail: mbisson@bissonlegal.com
In re Aaron D. Fischman
Bankr. S.D.N.Y. Case No. 23-35368
Chapter 11 Petition filed May 8, 2023
represented by: Kendra Harris, Esq.
In re SNinfotech Corp.
Bankr. D. Ore. Case No. 23-31035
Chapter 11 Petition filed May 8, 2023
See
https://www.pacermonitor.com/view/LCKUJ6I/SNinfotech_Corp__orbke-23-31035__0001.0.pdf?mcid=tGE4TAMA
represented by: Ted A. Troutman, Esq.
TROUTMAN LAW FIRM P.C.
E-mail: tedtroutman@sbcglobal.net
In re New Jerusalem Faith Apostolic Church, Inc.
Bankr. W.D. Tenn. Case No. 23-10574
Chapter 11 Petition filed May 8, 2023
See
https://www.pacermonitor.com/view/5M6XG6I/New_Jerusalem_Faith_Apostolic__tnwbke-23-10574__0001.0.pdf?mcid=tGE4TAMA
represented by: C. Jerome Teel Jr., Esq.
TEEL & GAY, PLC
E-mail: jerome@tennesseefirm.com
In re Owen Lombardi
Bankr. E.D. Va. Case No. 23-10769
Chapter 11 Petition filed May 8, 2023
represented by: Lilian Palacios, Esq.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
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
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Monthly Operating Reports are summarized in every Saturday edition
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