/raid1/www/Hosts/bankrupt/TCR_Public/230524.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, May 24, 2023, Vol. 27, No. 143
Headlines
178-45 120TH: Taps Law Office of Narissa A. Joseph as Counsel
246-18 REALTY: Seeks to Use $22,000 of Cash Collateral
2ND CHANCE: Proposes Liquidating Plan
4924 S MARTIN: Court OKs Cash Collateral Access Thru June 15
824 NORTH DIXIE: Taps Law Offices of Scott Alan Orth as Counsel
AI SILVER BIRCH: Foreclosure Sale Set for May 24
ALIERA COS: To Liquidate in Chapter 11 to Settle With Creditors
ALLDRIN ORCHARDS: Voluntary Chapter 11 Case Summary
AMERIGAS PARTNERS: Moody's Rates New $500MM Unsecured Notes 'B1'
ATRIX TRUCKING: Seeks Cash Collateral Access
BCP V EVERISE: Moody's Assigns B3 CFR & Alters Outlook to Positive
BIG DADDY GUNS: Taps Moecker Auctions as Inventory Specialist
BOSTON BIOPHARM: Unsecureds to Get 100 Cents on Dollar in 3 Years
CASA SYSTEMS: Moody's Cuts CFR & Senior Secured Term Loan to Caa2
CENPORTS COMMERCE: Taps Michael Jay Berger as Legal Counsel
CODIAK BIOSCIENCES: Taps Colliers International as Consultant
CURITEC LLC: Court OKs Interim Cash Collateral Access
CURO GROUP: Moody's Cuts CFR to Caa2 & Alters Outlook to Negative
DIOCESE OF BUFFALO: Taps KWL as Real Estate Appraiser
ELEVATE PFS: S&P Downgrades ICR to 'CCC+' on Tightening Liquidity
FB DEBT FINANCING: Taps Carroll Services to Wind Down Assets
FCT-MM LLC: Case Summary & Five Unsecured Creditors
FIRST REPUBLIC: CEO Says Collapse Due to Other Banks' Failure
FOUNDATIONAL EDUCATION:S&P Alters Outlook to Neg, Affirms 'B-' ICR
GEORGE XENAKIS D.D.S.: Case Summary & 11 Unsecured Creditors
GRUPO TELEVISA: $95 Million Settlement Hearing Set for August 8
HIGHPOINT ASSOCIATES: Case Summary & One Unsecured Creditor
HOBBY LOBBY: Court OKs Cash Collateral Access Thru June 9
HYRECAR INC: Zukin Partners Served as Adviser in Section 363 Sale
INMAR INC: Moody's Affirms B3 CFR & Rates New First Lien Loans B3
INTERNAP HOLDING: Seeks to Hire Saul Ewing as Legal Counsel
INTERNAP HOLDING: Taps FTI as Financial Advisor
INTERNAP HOLDING: Taps Jenner & Block as Legal Counsel
INTERNAP HOLDING: Taps Stretto as Administrative Advisor
IVANTI SOFTWARE: $465M Bank Debt Trades at 18% Discount
JAJE ONE: July 13 Disclosure Statement Hearing Set
KARAFIN SCHOOL: Taps Pryor & Mandelup as Legal Counsel
KDP LLC: Case Summary & 14 Unsecured Creditors
KIDDE-FENWAL INC: May 25 Deadline Set for Panel Questionnaires
KIDDE-FENWAL: Uses Chapter 11 to Search for New Owner
LATHAM GROUP: S&P Alters Outlook to Negative, Affirms 'B+' ICR
LIFE BY ALICE: Taps Homesmart as Real Estate Broker
LIFESCAN GLOBAL: Moody's Appends 'LD' Designation to Caa2-PD PDR
LIFESCAN GLOBAL: S&P Downgrades ICR to 'SD' on Distressed Exchange
MESA TERRACE: Gets OK to Hire Fennemore Craig as Legal Counsel
MICROGEM US: Hits Chapter 11 Bankruptcy Protection
MILLERS HOME: Business Revenue to Fund Plan Payments
MISS BRENDA: Wins Interim Cash Collateral Access
MONITRONICS INT'L: Gets Court Nod for $399M Chapter 11 Finance Dea
NAI ENTERTAINMENT: Reduced Dividend No Impact on Moody's B3 CFR
NORTH CHANNEL ASSISTANCE: Court OKs Cash Collateral Access
OFFICE INTERIORS: COO Miller Has $1.37-Mil. Stalking Horse Bid
PARADOX RESOURCES: Case Summary & 30 Largest Unsecured Creditors
PDC ENERGY: Moody's Puts 'Ba2' CFR on Review for Upgrade
PDC ENERGY: S&P Places 'BB' Issuer Credit Rating on Watch Positive
PHARMASTRATEGIES LLC: Taps Hutchinson as Counsel in RXDC Suit
PHILADELPHIA SCHOOL: Fitch Affirms IDR at 'BB+', Outlook Stable
PHINIA INC: S&P Assigns 'BB+' Issuer Credit Rating, Outlook Stable
PRECISION FORGING: Seeks to Hire Master Plan as Accountant
QUORUM: Moody's Lowers CFR to Caa2 & Alters Outlook to Negative
RBJ PROPERTIES: Case Summary & One Unsecured Creditor
REMOTEMD LLC: Unsecured Claims Under $2,500 to Recover 41%
ROCKET MORTGAGE: Moody's Affirms Ba1 CFR & Alters Outlook to Stable
SAHENE CONSTRUCTION: Creditors to Get Proceeds From Liquidation
SAMSONITE INT'L: Fitch Hikes LongTerm IDR to 'BB', Outlook Stable
SILVER CREEK INDUSTRIES: Case Summary & 6 Unsecured Creditors
SILVER CREEK: Case Summary & One Unsecured Creditor
SKYLIGHT PARTNERS: June 7 Auction for NY Property Set
SL GREEN: Moody's Puts 'Ba1' CFR on Review for Downgrade
SONAVATION INC: Case Summary & 20 Largest Unsecured Creditors
SOUTH TOWN: Rental Income to Fund Plan Payments
STAGE LIGHTING: Court OKs Interim Cash Collateral Access
STORCENTRIC INC: Shifts from Chapter 11 to Chapter 7 Liquidation
SVN FINANCIAL: Gets Court' Approval to Sell SVB Securities
SYSTEM ENERGY: Moody's Assigns Ba1 Issuer Rating, Outlook Negative
TRUCK DYNASTY: Taps Law Firm of Toni Campbell Parker as Counsel
VENATOR MATERIALS: Gets Court OK to Seek Quick Bankruptcy Exit
VENATOR MATERIALS: June 26 Plan & Disclosure Hearing Set
VIAVI SOLUTIONS: S&P Alters Outlook to Negative, Affirms 'BB+' ICR
VICE MEDIA: DIP Financing Has Interim Approval
WATSON/ALTERNATIVE: Voluntary Chapter 11 Case Summary
WB MAINTENANCE: Unsecureds Will Get 100% of Claims in Plan
WHO DAT?: Unsecured Creditors to Get Share of Income for 3 Years
WILSON COLLEGE: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
[*] Christine K. Lane Joins Crowell & Moring Tax Group Co-Chair
[*] Peter Walsh Elected Potter Anderson Executive Committee Chair
[*] Ravich Meyer Law Firm Partners Join Felhaber Larson
*********
178-45 120TH: Taps Law Office of Narissa A. Joseph as Counsel
-------------------------------------------------------------
178-45 120th Avenue, LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of New York to employ the Law Office
of Narissa A. Joseph as counsel.
The firm's services include:
(a) consulting with the Debtor concerning the administration
of its Chapter 11 case;
(b) investigating the Debtor's past transactions, commencing
actions with respect to its avoiding powers under the Bankruptcy
Code, and advising the Debtor with respect to transactions entered
into during the pendency of the case;
(c) assisting the Debtor in the formulation of a Chapter 11
plan; and
(d) other legal services as may be required by the Debtor in
the interest of the estate.
The firm will be paid at these rates:
Partner $350 to 400 per hour
Associate $275 to 300 per hour
Paralegal $75 to $100 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received compensation in the amount of $5,000 from the
Debtor's principal, Sharme D' Andrade.
Narissa Joseph, Esq., a partner at the Law Office of Narissa A.
Joseph, disclosed in a court filing that her firm is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached at:
Narissa A. Joseph, Esq.
Law Office of Narissa A. Joseph
305 Broadway, Suite 1001
New York, NY 10007
Tel: (212) 233-3060
Email: njosephlaw@aol.com
About 178-45 120th Avenue
178-45 120 Avenue, LLC filed a Chapter 11 bankruptcy petition
(Bankr. E.D.N.Y. Case No. 22-42770) on Nov. 3, 2022, with as much
as $1 million in both assets and liabilities. Judge Elizabeth S.
Stong oversees the case.
The Debtor is represented by the Law Office of Narissa A. Joseph.
246-18 REALTY: Seeks to Use $22,000 of Cash Collateral
------------------------------------------------------
246-18 Realty LLC asks the U.S. Bankruptcy Court for the Southern
District of New York for authority to use cash collateral and
provide adequate protection.
The Debtor requires the use of cash collateral to continue its
business operations in the ordinary course.
The Debtor estimates that, in accordance with the Interim Budget,
it will require the use of $21,930 for the next 30 days.
The Debtor is indebted to 244 246 W 18 SME LLC by virtue of a Loan
Agreement, Amended, Restated, and Consolidated Note, Mortgage, and
Assignment of Leases and Rents and related documents executed by
and between the Debtor and Emerald Creek Capital 3 LLC, as
administrative agent and various other lenders, dated October 30,
2020, in the principal amount of $8 million.
Emerald assigned the Loan Documents to the Pre-Petition Lender. The
indebtedness to the Pre-Petition Lender as of the Petition Date is
no less than $8 million.
The Debtor, along with its corporate parent, 244/246 Holdco LLC,
commenced their Chapter 11 cases to preserve their interest in the
Property in advance of the proposed sale of Holdco's membership
interests, previously pledged to Emerald and scheduled to be sold
by the Pre-Petition Lender pursuant to Article 9 of the Uniform
Commercial Code.
The Debtor collects rent on or after the 1st of each respective
month and anticipates collecting an amount of rent for the June
2023 month of approximately $26,500.
As adequate protection, SME will receive a Replacement Lien to the
extent of any diminution in the value of their interest.
To the extent the Replacement Lien and other relief granted to SME
in the Interim Order do not provide SME with adequate protection of
its interest in the cash collateral, SME will have a super-priority
administrative expense claim.
The Replacement Lien(s) and the Super-Priority Claim will be
subordinate to the fees and expenses of the Clerk of the Court and
the Office of the United States Trustee pursuant to 28 U.S.C.
section 1930(a) plus applicable interest on any such fees.
These events constitute an "Event of Default":
(i) Entry of any order dismissing the within proceeding or
converting the within proceeding to Chapter 7 of the Bankruptcy
Code;
(ii) Entry of an order authorizing the appointment of a Chapter
11 trustee, or examiner with expanded powers;
(iii) At 5 p.m. on the date of the Final Hearing, or by Order
of the Court.
A copy of the motion is available at https://rb.gy/hdf4t from
PacerMonitor.com.
A copy of the budget is available at https://rb.gy/ac26j from
PacerMonitor.com.
The Debtor projects $21,930 in total expenses for one month.
About 246-18 Realty LLC
246-18 Realty LLC owns real property located at 244-246 West 18th
Street, New York, New York. The Property is comprised of two real
estate parcels. The first parcel, located at 244 West 18th Street,
is a building comprised of single residential occupancy units and
is currently vacant. The second parcel is located at 246 West 18th
Street, New York, New York and is a multi-family residential
apartment building comprising of 14 residential apartments units.
Currently 13 of these units are rented.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. N. Y. Case No. 23-10796) on May 19,
2023. In the petition signed by Joseph Nabavi, authorized signatory
for 244,246 Holdco LLC, managing member, the Debtor disclosed up to
$50 million in both assets and liabilities.
Judge Philip Bentley oversees the case.
Clifford A. Katz, Esq., at Platzer, Swergold, Goldberg, Katz and
Jaslow, LLP, represents the Debtor as legal counsel.
2ND CHANCE: Proposes Liquidating Plan
-------------------------------------
2nd Chance Investment Group, LLC, submitted a Chapter 11
Liquidating Plan and a Disclosure Statement on May 10, 2023.
This Plan is a liquidating Plan. On the Effective Date, the Debtor
shall create and enter a liquidating trust for the benefit of
creditors, as set forth in the Plan.
Under the Plan, Class 4 General Unsecured Claims total $9,636,686.
C laims 2, 3, 4, 5, 27, 28, 20, 30, 31, 32, 33, 34, 35 ,36, 37, 38,
39, 40, 41, 42, 43, 44, 45, 47, 49, 52, 53, and 54 are included in
this class. The exact amount of Class 4 Allowed Claims will not be
known until the claims process has been completed. Each holder of
an allowed Class 4 claim will receive a pro rata share of the
unencumbered cash remaining in the Liquidating Trust after the
payment of all other Allowed Claims such as administrative claims
(including the fees and costs of the Liquidating Trust), and all
allowed priority claims, which are not classified, including
priority tax claims. The Debtor projects that General Unsecured
Claims will be paid in 2023 to 2026 from funds received the sale of
real property and assets of the bankruptcy estate. Class 4 is
impaired.
The Disclosure Statement Hearing will be held on July 19, 2023 at
1:30 pm in United States Bankruptcy Court1 411 West Fourth Street,
Suite 5130 / Courtroom 5C Santa Ana, CA 92701-4593.
Attorneys for the Debtor:
Andy C. Warshaw, Esq.
FINANCIAL RELIEF LAW CENTER, APC
1200 Main St., Suite C
Irvine, CA 92614
Tel: (714) 442-3319
Fax: (714) 361-5380
E-mail: awarshaw@bwlawcenter.com
A copy of the Disclosure Statement dated May 10, 2023, is available
at https://bit.ly/3I72WXA from PacerMonitor.com.
About 2ND Chance Investment Group
2ND Chance Investment Group, LLC owns in fee simple title 13 real
properties located in various locations in California and
Washington having an aggregate value of $7.02 million.
2ND Chance Investment Group sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-12142) on
Dec. 21, 2022. In the petition signed by its managing member,
Rayshon A. Foster, the Debtor disclosed $7,221,261 in assets and
$11,002,949 in liabilities.
Judge Scott C. Clarkson oversees the case.
Amanda G. Billyard, Esq., at Financial Relief Law Center, APC and
Grobstein Teeple, LLP serve as the Debtor's legal counsel and
financial advisor, respectively.
The U.S. Trustee for Region 16 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee is represented by Goe Forsythe & Hodges, LLP.
4924 S MARTIN: Court OKs Cash Collateral Access Thru June 15
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized 4924 S. Martin Luther King LLC to use
cash collateral on an interim basis in accordance with the budget,
through June 15, 2023.
As previously reported by the Troubled Company Reporter, the Debtor
requires the use of cash collateral to pay its expenses.
The Debtor believes there may be pre-petition liens on its real
estate property in favor of U.S. Bank in a sum that exceeds the
value of all assets at the time of the filing for relief pursuant
to a foreclosure action filed in the Circuit Court of Cook County,
Illinois.
As adequate protection, U.S. Bank is granted a lien on the proceeds
of the cash collateral subsequent to the filing of the Chapter 11
petition subject to the extent and validity of the lien.
The Debtor is also directed to make an adequate protection payment
to U.S. Bank on or before June 8, 2023 and each month thereafter of
$7,500.
A hearing on the matter is set for June 14, 2023 at 10 a.m.
A copy of the Court's order and the Debtor's budget is available at
https://rb.gy/1w0qa from PacerMonitor.com.
The Debtor projects $10,000 in net sales and $2,498 in total
expenses for one month.
About 4924 S. Martin Luther King LLC
4924 S. Martin Luther King LLC is a Single Asset Real Estate. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N.D. Ill. Case No. 23-04726) on April 10, 2023. In the
petition signed by Faris Faycurry, president, the Debtor disclosed
up to $10 million in both assets and liabilities.
Judge Janet S. Baer oversees the case.
Paul M. Bach, Esq., at Bach Law Offices, Inc., represents the
Debtor as legal counsel.
824 NORTH DIXIE: Taps Law Offices of Scott Alan Orth as Counsel
---------------------------------------------------------------
824 North Dixie, Inc. and 826 North Dixie, Inc. received approval
from the U.S. Bankruptcy Court for the Southern District of Florida
to employ the Law Offices of Scott Alan Orth, P.A.
The Debtors require legal counsel to:
a. give advice with respect to the powers and duties of the
Debtors in the continued management of their business operations;
b. give advice with respect to the responsibilities of the
Debtors in complying with the U.S. Trustee's Operating Guidelines
and Reporting Requirements and with the rules of the court;
c. prepare legal documents;
d. protect the interest of the Debtors in all matters pending
before the court; and
e. represent the Debtor in negotiation with creditors in the
preparation of a Chapter 11 plan.
The firm will be paid based upon their normal and usual hourly
billing rates and will be reimbursed for out-of-pocket expenses
incurred.
Scott Alan Orth, Esq., a partner at the Law Offices of Scott Alan
Orth, disclosed in a court filing that his firm is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Scott Alan Orth, Esq.
Law Offices of Scott Alan Orth, P.A.
3860 Sheridan St STE A
Hollywood, FL 33021
Tel: (305) 757-3300
Email: scott@orthlawoffice.com
About 826 North Dixie
824 North Dixie, Inc. and 826 North Dixie, Inc. filed Chapter 11
bankruptcy petitions (Bankr. S.D. Fla. Lead Case No. 23-12439) on
March 30, 2023. At the time of the filing, the Debtors reported as
much as $1 million in both assets and liabilities.
Judge Scott M. Grossman oversees the cases.
The Debtors are represented by the Law Offices of Scott Alan Orth,
P.A.
AI SILVER BIRCH: Foreclosure Sale Set for May 24
------------------------------------------------
Arena Special Opportunities Fund LP, as agent for Ai Silver Birch
Holding LLC and its successor, will offer for sale, at a public
auction foreclosure sale to be held on May 24, 2023, at 2:00 p.m.
prevailing Eastern Time, via zoom at link to be provided to
interested parties, all collateral includes but is not limited to:
all accounts, books and records including legal files, cash and
currency, chattel paper, all claims and causes of action against
any party of any nature including but not limited to commercial
tort claims, deposit accounts including any collateral account,
documents, equipment, fixtures, general intangibles, goods,
instruments, intellectual property, inventory, investment property,
latter of credit rights, pledged equity, rights to insurance
recoveries, and all other personal property.
The public sale is being held to enforce secured party's rights in
the collateral in order to satisfy the indebtedness of the
borrowers to secured party and the lenders. The collateral secures
the repayment of indebtedness of the borrowers to secured party and
lenders in the amount of excess $10 million.
Attorneys for the secured party:
Parker Hudson Rainer & Dobbs LLP
303 Peachtree St. NE, Suite 3600
Atlanta, GA 30308
Tel: (404) 523-5300
Email: ArenaForeclosure@phrd.com
The secured party can be reached at:
Arena Special Opportunities Fund LP
405 Lexington Avenue
59th Floor
New York, NY 10174
Email: assetmanagement@arenaco.com
ALIERA COS: To Liquidate in Chapter 11 to Settle With Creditors
---------------------------------------------------------------
Alex Wolf of Bloomberg Law reports that Aliera Companies Inc., the
former operator of a Christian medical cost-sharing service deemed
to have sold faulty health insurance products, filed a plan to
liquidate in bankruptcy and settle with creditors.
Aliera submitted the Chapter 11 plan Monday, May 15, 2023, with the
US Bankruptcy Court for the District of Delaware, advancing efforts
to wrap up the company's insolvency proceedings.
Aliera estimates the wind-down plan will repay up to 5% to medical
care claimants owed about $660 million, and allow trade creditors
to recover as much as 35% on their claims valued at up to $15
million.
About Aliera Cos. Inc.
Aliera Cos. Inc. is focused on providing a full spectrum of
revolutionary options and services to a multitude of industries
that fit every need and budget. The company provides services to
support its subsidiaries which focus on the unique aspects of the
health care industry.
Plaintiffs in a case -- docketed as Hanna Albina and Austin
Willard, individually and on behalf of others similarly situated,
Plaintiffs, v. The Aliera Companies, Inc., Trinity Healthshare,
Inc. and Oneshare Health, LLC Unity Healthshare, LLC, Case No.
20-CV-00496, (E.D. Ky., Dec. 11, 2020) -- filed an involuntary
petition under Chapter 11 of the Bankruptcy Code against Aliera
(Bankr. D. Del. Case No. 21-11548) on Dec. 5, 2021.
Joseph H. Huston, Jr., Esq., of Stevens & Lee, P.C., is the
petitioners and plaintiffs' counsel.
On Dec. 21, 2021, Aliera filed a voluntary Chapter 11 petition
(Bankr. N.D. Ga. Case No. 21-59493), disclosing assets of $1
million to $10 million and liabilities of $500 million to $1
billion. Advevo LLC and three other Aliera affiliates -- Ensurian
Agency LLC, Tactic Edge Solutions LLC and USA Benefits &
Administrators LLC -- also filed voluntary Chapter 11 petitions on
Dec. 21, 2021.
On Jan. 25, 2022, the petitioning creditors obtained an order
granting their motion to transfer the voluntary Chapter 11 cases to
the Delaware Bankruptcy Court, which has been overseeing the
liquidation of Aliera's affiliated corporation, Trinity
Healthshare, Inc., now known as Sharity Ministries, Inc.
On Feb. 16, 2022, Judge John T. Dorsey of the Delaware Bankruptcy
Court ordered the consolidation of Aliera's voluntary Chapter 11
proceeding with the involuntary case filed by the petitioning
creditors (with Case No. 21-11548 being the surviving case number)
and terminated the company's voluntary proceeding.
Meanwhile, Judge Dorsey ordered the joint administration of the
involuntary proceeding and the four other voluntary cases filed by
the Aliera affiliates, with Case No. 21-11548 as the lead
bankruptcy case.
The Debtors tapped J. Robert Williamson, Esq., at Scroggins &
Williamson, P.C. and Monzack Mersky and Browder, PA as bankruptcy
counsels; SeatonHill Partners, LP as financial advisor; and Katie
Goodman, managing member of GGG Partners, LLC, as chief liquidation
officer. Epiq Corporate Restructuring, LLC is the claims and
noticing agent and administrative advisor.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors on Feb. 21, 2022. The committee is represented
by Greenberg Traurig, LLP.
ALLDRIN ORCHARDS: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Alldrin Orchards, Inc.
584 Hi Tech Parkway
Oakdale, CA 95361
Chapter 11 Petition Date: May 22, 2023
Court: United States Bankruptcy Court
Eastern District of California
Case No.: 23-90224
Judge: Hon. Ronald H. Sargis
Debtor's Counsel: David C. Johnston, Esq.
DAVID C. JOHNSTON
1600 G Street, Suite 102
Modesto, CA 95354
Tel: (209) 579-1150
Email: david@johnstonbusinesslaw.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Lisa J. Alldrin as secretary.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the Debtor's petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/Q4S54MQ/Alldrin_Orchards_Inc__caebke-23-90224__0001.0.pdf?mcid=tGE4TAMA
AMERIGAS PARTNERS: Moody's Rates New $500MM Unsecured Notes 'B1'
----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to AmeriGas
Partners, L.P.'s proposed $500 million of senior unsecured notes
due 2028. AmeriGas' other ratings, including the Ba3 Corporate
Family Rating, Ba3-PD Probability of Default Rating, SGL-3
Speculative Grade Liquidity Rating (SGL) and negative outlook
remain unchanged.
AmeriGas is refinancing its $675 million of senior unsecured notes
due 2024 with net proceeds from its proposed offering of senior
unsecured notes, a $150 million capital contribution from UGI
Corporation (AmeriGas' parent company), cash from its balance sheet
and revolver borrowings. As part of the transaction, AmeriGas is
making a tender offer for its senior unsecured notes due 2024 at
approximately 101% of par.
"AmeriGas' bond refinancing transaction extends its debt maturity
profile, while the capital contribution from UGI Corporation
reduces financial leverage," commented Jonathan Teitel, a Moody's
analyst. "However, AmeriGas' negative outlook continues to reflect
execution risks to further reducing leverage to levels consistent
with the company's ratings."
Assignments:
Issuer: AmeriGas Partners, L.P.
Senior Unsecured Regular Bond/Debenture, Assigned B1
RATINGS RATIONALE
AmeriGas senior unsecured notes are rated B1. The notes are not
guaranteed by AmeriGas Propane, L.P., the principal operating
subsidiary. Consequently, the notes are structurally subordinated
to AmeriGas Propane, L.P.'s $600 million senior unsecured revolver
which results in the notes being rated one notch below the Ba3
CFR.
AmeriGas' Ba3 CFR reflects high financial leverage, a limited
product offering, and weather-dependent volumes offset by large
size, a strong market position and a broad geographic footprint in
US propane distribution that supports economies of scale. AmeriGas
benefits from diversification across customers and end markets. Key
to offsetting longer-term decline in propane demand and to increase
market share are continued long-term growth in volumes from
AmeriGas Cylinder Exchange (ACE), Cynch home delivery and National
Accounts programs, and reversing customer churn following efforts
to address customer service issues. Challenging organic growth is
the highly competitive nature of the propane distribution market.
AmeriGas benefits from UGI Corporation's (AmeriGas' parent company)
$150 million equity contribution to reduce debt as part of the
refinancing transaction. However, operating performance remains
challenged and pro forma leverage remains high, continuing to
pressure ratings.
The SGL-3 rating reflects Moody's expectation that AmeriGas will
maintain adequate liquidity through 2024. AmeriGas Propane, L.P.'
$600 million revolver due September 2026 (unrated) has a springing
maturity 91 days prior to the maturity of the senior notes due May
2025 or August 2026 if more than $150 million of any of these notes
are outstanding 91 days prior to their maturities. Consequently,
maintaining adequate liquidity is predicated in part on the company
continuing to proactively refinance its senior notes, thereby
avoiding the springing maturity of its revolver. Pro forma for the
transaction, AmeriGas will have about $44 million of borrowings on
its $600 million revolver (and $2 million in letters of credit).
However, availability is constrained by financial covenants.
Revolver financial covenants are comprised of maximum leverage
ratios and a minimum interest coverage ratio. UGI Corporation
contributed about $31 million as an equity cure to address what
would have otherwise been an EBITDA shortfall for the quarter ended
March 31, 2023.
The negative outlook reflects execution risks in AmeriGas reducing
financial leverage and the accompanying negative implications of
higher interest rates on cash flow.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Factors that could lead to a downgrade include debt/EBITDA
remaining above 5x; weakening liquidity; significant negative free
cash flow; or larger than expected distributions to UGI
Corporation.
Factors that could lead to an upgrade include debt/EBITDA declining
toward 4x on a sustained basis; growth of less weather-dependent
volumes; and conservative financial policies. Financial policies
and liquidity at AmeriGas' parent company, UGI Corporation, will
also be considered.
AmeriGas Partners, L.P. (AmeriGas) is a distributor of propane and
related equipment and supplies in the US. It is a subsidiary of
publicly traded UGI Corporation, a holding company.
The principal methodology used in this rating was Business and
Consumer Services published in November 2021.
ATRIX TRUCKING: Seeks Cash Collateral Access
--------------------------------------------
Atrix Trucking Corp. seeks approval from the U.S. Bankruptcy Court
for the Middle District of Florida to use cash collateral
retroactive to the Petition Date and provide adequate protection.
The Debtor requires the use of cash collateral to fund its
operating expenses and costs of administration in the Chapter 11
case.
The creditors that may claim blanket liens against the Debtor's
assets are Synovus Bank, U.S. Small Business Administration, and
Energy 122 Trust.
The Debtor estimates that the collective claims of the Secured
Creditors are secured by $901. The Secured Creditor Assets include
$901 in cash.
As adequate protection for the use of cash collateral, the Debtor
offers the Secured Creditors:
a. Post-petition replacement liens on the Secured Creditor
Assets to the same extent, validity, and priority as existed
pre-petition;
b. The right to inspect the Secured Creditor Assets on 48
hours' notice, provided that said inspection does not interfere
with the Debtor's operations; and
c. Copies of monthly financial documents generated in the
ordinary course of business and other information as the Secured
Creditors reasonably request with respect to the Debtor's
operations.
A copy of the motion is available at https://rb.gy/fkmcf from
PacerMonitor.com.
About Atrix Trucking Corp.
Atrix Trucking Corp., a company in Maitland, Fla., filed its
voluntary petition for Chapter 11 protection (Bankr. M.D. Fla. Case
No. 23-01540) on April 25, 2023, with $500,000 to $1 million in
assets and $1 million to $10 million in liabilities. Charles E.
Joseph, president of Atrix Trucking, signed the petition.
Judge Grace E. Robson oversees the case.
Buddy D. Ford, P.A. serves as the Debtor's legal counsel.
BCP V EVERISE: Moody's Assigns B3 CFR & Alters Outlook to Positive
------------------------------------------------------------------
Moody's Investors Service affirmed the existing B3 instrument
ratings on the senior secured credit facilities of BCP V Everise
Acquisition LLC ("Everise"), a global provider of
technology-enabled, omni-channel customer management services to
healthcare and fast growth technology businesses. Moody's also
assigned a B3 corporate family rating and a B3-PD probability of
default rating to BCP V Everise Acquisition LLC, the entity at
which financials are reported, and withdrew Everise Holding Pte.
Ltd.'s B3 CFR, B3-PD PDR ratings and the stable outlook. The rating
outlook for Everise is positive.
Assignments:
Issuer: BCP V Everise Acquisition LLC
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Affirmations:
Issuer: BCP V Everise Acquisition LLC
Backed Senior Secured Bank Credit Facility, Affirmed B3
Withdrawals:
Issuer: Everise Holdings Pte. Ltd.
Corporate Family Rating, Withdrawn, previously rated B3
Probability of Default Rating, Withdrawn, previously rated B3-PD
Outlook Actions:
Issuer: BCP V Everise Acquisition LLC
Outlook, Changed To Positive From Stable
Outlook Actions:
Issuer: Everise Holdings Pte. Ltd.
Outlook, Changed To Rating Withdrawn From Stable
RATINGS RATIONALE
The change to a positive outlook from stable recognizes Everise's
strong operating performance and faster than expected improvement
in financial metrics. Financial leverage, as expressed by debt to
EBITDA, has considerably reduced to 3.2x for 2022, which is strong
for the B3 CFR. For 2023, Moody's projects financial leverage to
decline below 2.5x, supported by at least 10% organic growth driven
by expanding wallet share with existing clients and new logo wins.
Moody's also expects free cash flow generation of at least 5%
relative to debt for 2023 despite rising interest rates.
All financial metrics cited reflect Moody's standard adjustments.
Everise's B3 CFR benefits from strong organic revenue growth in
fast-growing verticals, including healthcare and insurance, further
supported by the positive growth aspects of the customer experience
business process outsourcing industry, growing clients that value
Everise's ability to represent their brand culture to customers,
strong net promoter scores that support high customer retention and
growing wallet share of existing clients.
The company is pressured by elevated, but declining, financial
leverage, as expressed by debt-to-EBITDA, of 3.2x as of December
31, 2022, low barriers to entry for larger, global players to
replicate Everise's business strategy, and small scale and high
customer concentration, with its top 10 customers accounting for
about 75% of 2022 revenue. The company's high concentration in the
highly regulated healthcare and insurance vertical leave Everise
vulnerable to regulatory changes that could limit demand for its
services. Further constraints include an adequate liquidity profile
and a potentially aggressive financial policy under private equity
ownership that could lead to shareholder-friendly transactions,
including debt-funded acquisitions and shareholder distributions.
The company's adequate liquidity profile reflects Moody's
expectation of modestly positive free cash flow over the next 12 to
18 months and $40 million of availability under its $50 million
revolver as of December 31, 2022. The outstanding revolver balance
was repaid during the first quarter of 2023. Moody's expects free
cash flow above $10 million during the next 12 months and $8
million cash on hand as of December 31, 2022, which will cover the
$10.5 million of annual mandatory debt amortization. The company's
floating rate debt with no interest rate hedges in place leave the
company vulnerable to rising interest rates that could pressure
cash flow from operations. The $50 million revolver expiring in May
2027 may be used occasionally to support working capital swings but
is expected to remain largely available.
Debt capital is comprised of a $50 million revolving credit
facility expiring in May 2027 and a $210 million term loan B due
May 2027. The B3 credit facility ratings, the same as the B3 CFR,
reflect the preponderance of debt represented by the term loan and
revolver. The term loan and revolver are guaranteed by Everise
Holdings Pte. Ltd. and wholly-owned U.S. restricted subsidiaries of
BCP V Everise Acquisition LLC other than any excluded subsidiary as
defined by the credit agreement. The term loan and revolver also
have a first priority security interest in substantially all assets
of the borrower and guarantors.
The positive outlook reflects Moody's expectations that Everise
will further improve its operating performance and improve earnings
through EBITDA growth leading to debt-to-EBITDA declining below
2.5x over the next 12 months. The positive outlook also reflects
Moody's expectation that the company will maintain at least
adequate liquidity.
Moody's has decided to withdraw the ratings for its own business
reasons.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Everise's ratings could be upgraded if debt-to-EBITDA does not
increase from current levels and liquidity improves such that free
cash flow to debt is sustained above 5% while the company is able
to diversify its customer base and industry verticals.
The ratings could be downgraded if liquidity weakens, operating
performance declines materially due to major customer losses or
other competitive pressures, or if debt-to-EBITDA is sustained
above 7x.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Everise, domiciled in Singapore but with a US-based headquarter and
management team, is a global provider of technology-enabled,
omni-channel customer management services to healthcare and fast
growth technology businesses. The company is majority owned by
Brookfield Asset Management Inc.
BIG DADDY GUNS: Taps Moecker Auctions as Inventory Specialist
-------------------------------------------------------------
Big Daddy Guns, Inc. and Big Daddy Guns 2, Inc. received approval
from the U.S. Bankruptcy Court for the Northern District of Florida
to employ Moecker Auctions, Inc.
The Debtors require an inventory specialist to verify those items
seized by their lender, Redstone Advance, Inc., which carried out
three replevins of their inventory via assistance with the local
sheriff's department and Alachua County, Florida State Court.
The Debtors intend to utilize Moecker's verification of the seized
items for future litigation, debtor-in-possession lending, and
drafting of a plan of reorganization.
Moecker Auctions will be paid at these rates:
Inspection and inventory verification $175 per hour
Administrative/Clerical $110 per hour
Travel $75 per hour
Inventory verification $10,680 to $16,880
Eric Rubin, vice president of Moecker Auctions, disclosed in a
court filing that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Eric Rubin, Vice-President
Moecker Auctions, Inc.
1885 W State Rd 84 Suite 103
Fort Lauderdale, FL 33315
Tel: (954) 252-2887
About Big Daddy Guns
Big Daddy Guns Inc. is a gun shop in Florida.
Big Daddy Guns and its affiliate, Big Daddy Guns 2 Inc., filed
petitions for relief under Subchapter V of Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Fla. Lead Case No. 23-10053) on March
21, 2023. At the time of the filing, the Debtors reported
assets between $1 million and $10 million and liabilities between
$10 million and $50 million.
Judge Karen K. Specie oversees the cases.
Jose I. Moreno, P.A. is the Debtors' legal counsel.
BOSTON BIOPHARM: Unsecureds to Get 100 Cents on Dollar in 3 Years
-----------------------------------------------------------------
Boston BioPharm, Inc., filed with the Northern District of Texas a
Plan of Reorganization for Small Business dated May 16, 2023.
The Debtor owns significant intellectual property assets and
patents related to various pharmaceutical products that have been
developed, and others that are in the process of development.
Unfortunately, in light of the Covid-19 pandemic, the Debtor and
its affiliate(s) Southlake Diagnostics pivoted from developing the
Debtor's intellectual property application(s) and focused on
diagnostic testing related to Covid-19 positivity rates, etc. In
light of the decrease in reimbursements for Covid-19 related
testing and diagnostic analytics, the income stream from Southlake
Diagnostics began to dry up.
This Plan of Reorganization proposes to pay creditors of the Debtor
from funds upstreamed from Southlake Diagnostics, as well as an
equity infusion or a sale of some of Debtor's assets.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the Proponent of this Plan has valued
at approximately 100 cents on the dollar. This Plan also provides
for the payment of administrative and priority claims.
Class 3(A) General Unsecured Claims are impaired and will be paid
in full, with interest, over a term of three (3) years.
The Class 3(B) claims held by Donald Stables Jr. will be
voluntarily subordinated to the claims of all other unsecured
creditors.
Class 4 Interest Holders. All current interest holders are
unimpaired and will retain their percentage equity membership in
the Debtor that they held as of the Petition Date.
This case is a 100% pay case. Donald Stables, Jr., as the largest
creditor, sole director and largest shareholder in the related
entities (including Southlake Diagnostics), agrees to subordinate
its debt in Boston BioPharm to that of other unsecured creditors.
Southlake Diagnostics will upstream funds as set forth the in the
projections for 3 years. Those funds will be used to make
distributions to creditors at the discretion of the Disbursing
Agent. Distributions will be made pro rata. All payments will be
due by the 25th day of the relevant month. There will be a balloon
payment in month 36 or earlier that pays all remaining amounts.
A full-text copy of the Plan of Reorganization dated May 16, 2023
is available at https://bit.ly/3OwVRn7 from PacerMonitor.com at no
charge.
Attorney for the Plan Proponent:
David A. Wood, Esq.
Marshack Hays, LLP
870 Roosevelt
Irvine, CA 92620
Tel: (949) 333-7777
Fax: (949) 333-7778
Email: dwood@marshackhays.com
About Boston Biopharm
Boston BioPharm, Inc. owns significant intellectual property assets
and patents related to various pharmaceutical products. The Debtor
filed a Chapter 11 bankruptcy petition (Bankr. N.D. Texas Case No.
23-40429) on Feb. 15, 2023, with as much as $1 million in both
assets and liabilities. Judge Mark X. Mullin oversees the case.
The Debtor tapped Marshack Hays, LLP as legal counsel.
CASA SYSTEMS: Moody's Cuts CFR & Senior Secured Term Loan to Caa2
-----------------------------------------------------------------
Moody's Investors Service downgraded Casa Systems, Inc.'s ratings,
including the Corporate Family Rating to Caa2 from Caa1 and
Probability of Default Rating to Caa3-PD from Caa1-PD. Moody's also
downgraded the rating on the senior secured term loan due December
2023 (Existing Term Loan) to Caa2 from Caa1. The outlook is
negative.
On May 9th, Casa announced that it entered into a Transaction
Support Agreement (TSA) with lenders holding 60% of principal
amount of the Existing Term Loan (Existing Lenders). The Existing
Term Loan had $223 million outstanding as of March 31, 2023. The
TSA would provide for Existing Lenders to exchange their holdings
for the same principal amount of a new Superpriority Term Loan
maturing December 2027 (or December 2025 if financial leverage is
not reduced below certain thresholds as of September 2025). The
Superpriority Term Loan would rank senior to the Existing Term
Loan, which would only have a second lien in the collateral. Thus,
any holder of Existing Term Loans who opts not to participate in
the exchange contemplated by the TSA, would see the liens on their
debt holding subordinated to the liens backing the Superpriority
Term Loan.
At the time of the announcement, the terms of the TSA had been
agreed between Casa and 60% of the aggregate principal amount of
the Existing Term Loans, which exceeds the 50% consent required to
approve the amendments. Upon closing of the exchange, Casa will
make a $40 million principal repayment on the Superpriority Term
Loan, reducing the outstanding balance to $183 million.
Moody's considers the exchange of Existing Term Loans for the new
Superpriority Term Loans to be a distressed exchange default.
Moody's will append a limited default ("/LD") designation to Casa's
Caa3-PD PDR upon closing of the transaction. Moody's may further
downgrade the rating on the Existing Term Loan should there remain
non-extended loans upon closing of the exchange. The distressed
exchange reflects Moody's view that the lenders under the Existing
Term Loan will incur a loss relative to the original principal.
Downgrades:
Issuer: Casa Systems, Inc.
Corporate Family Rating, Downgraded to Caa2 from Caa1
Probability of Default Rating, Downgraded to Caa3-PD from Caa1-PD
Senior Secured Bank Credit Facility, Downgraded to Caa2 from Caa1
Outlook Actions:
Issuer: Casa Systems, Inc.
Outlook, Remains Negative
RATINGS RATIONALE
The Caa2 CFR reflects Casa's unsustainable debt capital structure
due to the depressed revenues, which has resulted in negative
EBITDA (Moody's adjusted) and thus very high financial leverage.
Casa's small revenue scale also negatively impacts the credit
profile, since it magnifies the impact of the cyclical
infrastructure spending pattern of Casa's large customers, causing
revenue volatility within segments. For the quarter ended March 31,
2023, Casa's revenues declined 30% compared to the prior year due
to weak demand and delayed customer orders across segments, with
product revenue down 33% and service revenues down 15%. By segment,
Cable revenues declined 46% and Access revenues declined by 23%.
Cloud segment revenue increased significantly, though this segment
only accounted for 9% of total revenues for the quarter. Due to the
weak revenue, profitability has eroded, with negative EBITDA and
cash consumption during the quarter.
The negative outlook reflects Moody's expectation that Casa will
consume cash over the next quarter or two as Casa progresses to a
breakeven quarterly FCF later in 2023 due to a growing revenue
base. With near term cash consumption, Casa's liquidity is weak.
This presumes that over 90% of Existing Lenders participate in the
debt exchange as required under the TSA. This would limit the
required principal payment at maturity of the Existing Term Loan on
December 20th to no more than $23 million.
Casa's ESG Credit Impact Score is CIS-5. This reflects governance
risks as indicated by the G-5 governance score. Governance risks
include an aggressive financial policy that has resulted in the
high financial leverage and the proposed debt exchange transaction,
which Moody's views as a distressed exchange. Governance risks also
include a concentrated ownership and risks related to weaknesses in
internal control over financial reporting as noted in the 2022 Form
10K dated March 15, 2023. Environmental risks as indicated by the
E-3 environmental score, reflect the longer-term environmental
risks of Casa's manufacturing partners. The S-3 social score
reflect Casa's dependence on highly skilled technical and
engineering talent characteristic of the Semiconductor & Technology
Hardware sector broadly.
The Caa2 rating on the Existing Term Loan reflects the single class
debt structure and the seniority of this debt instrument in the
capital structure. The rating also reflects the collateral package
and the loss absorption provided by the unsecured liabilities.
Collateral includes a first priority interest in Casa's assets and
those of certain of its subsidiaries, and a stock pledge of certain
other subsidiaries. Following closing, the rating of the Existing
Term Loan may be further downgraded due to contractual
subordination to the Superpriority Term Loan.
Casa's weak Speculative Grade Liquidity (SGL) rating of SGL-4
reflects the company's weak liquidity. Casa had cash of $112.5
million as of March 31, 2023 ($72.5 million proforma for the $40
million loan repayment upon closing of the transactions) and the
company's Existing Term Loan outstanding amount totaled $223
million. For the full year 2023, Moody's expects that Casa will
consume cash due to weak demand and the impact of the higher
interest expense on the Superpriority Term Loan following closing.
This will be partially offset by the anticipated improvement in
operating expenses following the reduction-in-force actions taken
in April. Thus, Moody's anticipate that FCF will improve to a
breakeven run rate by the third quarter of 2023. Casa does not have
a revolving credit facility to provide an alternative source of
liquidity.
Participating lenders in the exchange will be rewarded with a
higher all-in interest rate than the Existing Term Loan. The
interest rate on the Superpriority Term Loan will be set initially
at adjusted SOFR plus a margin of 650 basis points. To encourage
early refinancing of the Superpriority Term Loan, both the interest
margin and the prepayment premium ("exit fee") will step up over
time. The margin will settle at 1300 basis points to the extent
there is any remaining loan balance after June 30, 2025. (The
Existing Term Loan interest rate is set at LIBOR plus 400 basis
points for a total interest rate of 8.84% as of March 31, 2023.)
Lenders who opt to participate in the Superpriority Term Loan will
also receive $0.01 warrants initially comprising 10% of the equity
of Casa. Under certain circumstances, which are detailed in the TSA
term sheet, the warrants may vest up to 19.99% of Casa's equity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if:
-- Casa demonstrates consistent revenue growth and sustained free
cash flow
-- Free cash flow (FCF) to debt (Moody's adjusted) is maintained
at about 5%
The ratings could be downgraded if:
-- The debt exchange as outlined in the TSA fails to close
-- Revenues continue to decline and FCF remains negative
-- Liquidity erodes with deteriorating cash to debt coverage
Casa Systems, Inc., based in Andover, Massachusetts, provides
networking products and services to the cable, wireless, and
telecommunications service provider industries. Products include
Converged Cable Access Platform (CCAP) equipment, distributed and
virtual networking solutions, and fixed wireless networking
equipment. Casa became a public company in December 2017 but
remains majority owned and controlled by including Summit Partners,
Jerry Guo (Chairman and Chief Executive Officer), and former
shareholders and insiders, who collectively own over 60% of the
shares as of September 30, 2022.
The principal methodology used in these ratings was Diversified
Technology published in February 2022.
CENPORTS COMMERCE: Taps Michael Jay Berger as Legal Counsel
-----------------------------------------------------------
Cenports Commerce Inc., seeks approval from the U.S. Bankruptcy
Court for the Northern District of California to employ the Law
Offices of Michael Jay Berger to handle its Chapter 11 bankruptcy
case.
The firm will be paid at these rates:
Michael Berger, Partner $595 per hour
Sofya Davtyan, Partner $545 per hour
Carolyn M. Afari, Associate Attorney $435 per hour
Robert Poteete, Associate Attorney $435 per hour
Angeline Smirnoff, Associate Attorney $395 per hour
Senior Paralegals and Law Clerks $250 per hour
Bankruptcy Paralegals $200 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The retainer fee is $20,000.
Michael Jay Berger, Esq., a partner at the Law Offices of Michael
Jay Berger, disclosed in a court filing that his firm is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached at:
Michael Berger, Esq.
Law Offices of Michael Jay Berger
9454 Wilshire Boulevard, 6th Floor
Beverly Hills, CA 90212
Tel: (310) 271-6223
Facsimile: (310) 271-9805
Email: michael.berger@bankruptcypower.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.
CODIAK BIOSCIENCES: Taps Colliers International as Consultant
-------------------------------------------------------------
Codiak BioSciences, Inc. and Codiak Securities Corporation seek
approval from the U.S. Bankruptcy Court for the District of
Delaware to employ Colliers International New England, LLC as
special real estate consultant.
The Debtors have determined, in consultation with their advisors,
that the services from Colliers will enhance their efforts to
dispose of their property at 35 Cambridgepark Drive, Cambridge,
Mass. These services include:
a. representing the Debtors in connection with the disposition
assignment, license, sale, recapture, buyout, surrender,
termination, cancellation, occupancy agreement or otherwise of the
Debtors' lease; and
b. providing advisory services in connection with the
decommissioning of the premises.
The firm will be paid as follows:
(a) With respect to a disposition of the lease obtained by
Colliers on behalf of the Debtors by disposition assignment,
license, sale, recapture, buyout, surrender, termination,
cancellation, occupancy agreement or otherwise, Colliers will get a
commission equal to 5 percent of the amount of the current letter
of credit returned to the Debtors (which totals $3,729,924.00).
(b) With respect to a disposition procured in connection with a
replacement tenant introduced by a cooperating broker, Colliers
will get the same amount, plus $1.50 per square foot per year of
the applicable term of the disposition. Upon receipt of the
commission from the Debtors, Colliers will compensate the
cooperating broker pursuant to the terms of a separate agreement
between the firm and the cooperating broker.
(c) The Debtors will pay Colliers a fee of $35,000 per month for
the advisory services.
David Goodhue, a partner at Colliers, disclosed in a court filing
that his firm is a "disinterested person" pursuant to Section
101(14) of the Bankruptcy Code.
The firm can be reached at:
David Goodhue
Colliers International New England LLC
100 Federal Street, 33rd Floor
Boston, MA 02110
Tel: (617) 330-8000
Email: David.Goodhue@colliers.com
About Codiak BioSciences
Codiak BioSciences, Inc. is a clinical-stage biopharmaceutical
company focused on pioneering the development of exosome-based
therapeutics, a new class of medicines with the potential to
transform the treatment of a wide spectrum of diseases with high
unmet medical need.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-10350) on March 27,
2023. In the petition signed by its chief restructuring officer,
Paul Huygens, the Debtor disclosed $106,167,706 in assets and
$85,374,781 in liabilities.
Judge Mary F. Walrath oversees the case.
The Debtor tapped Ryan M. Bartley, Esq., at Young Conaway Stargatt
& Taylor, LLP as legal counsel; Stretto, Inc. as claims, noticing
agent and administrative advisor; and Province, LLC as
restructuring advisor.
CURITEC LLC: Court OKs Interim Cash Collateral Access
-----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Curitec, LLC to use cash collateral on
an interim basis in accordance with its agreement with RGH
Enterprises, Inc., a wholly owned subsidiary of Cardinal Health,
Inc.
The authority to use cash collateral is granted in accordance with
the budget, with a 10% variance, through and including the date of
a final hearing, or, if no Final Hearing is held, upon further
Court order.
Prior to the Petition Date, the Parties entered into one or more
agreements pursuant to which RGH provided medical supplies to the
Debtor for sale to the Debtor's customers.
Pursuant to one or more of the Agreements, RGH claims an interest
in the Debtor's cash collateral.
On April 27, 2022, RGH filed a UCC-1 Financing Statement, which
purported to perfect a security interest in the assets described
thereon, including all accounts and accounts receivable.
Following the Petition Date, the Parties have worked together in
good faith and at arm's-length to reach a consensual resolution
regarding the use of cash collateral.
Any interest of RGH in cash collateral is adequately protected by
virtue of the Debtor's use of cash collateral pursuant to the
Order.
As additional adequate protection for the post-petition use by the
Debtor of cash collateral in which RGH holds a valid and
enforceable interest, and to the extent of any diminution in RGH's
interests in the Debtor's cash collateral, RGH will be granted
security interests in and liens on the Debtor's postpetition
property and the proceeds thereof, with the same validity,
enforceability, and priority that it held in the Debtor's
prepetition property. Replacement Liens will only be granted in
property of the same type as any prepetition collateral of RGH to
the extent of any diminution in value, and will not extend to any
unencumbered assets.
In the event of a failure of adequate protection, RGH will have a
claim to the extent provided for under 11 U.S.C. section 507(b) and
the RGH Adequate Protection Claim will, if allowed, be granted in
pari passu status with any allowed claim of the Centers for
Medicare and Medicaid Services under section 507(b), pursuant to a
Stipulation and Agreed Order Regarding Suspension of Medicare
Payments to the Debtor by the United States Department of Health
and Human Services. Payment of any RGH Adequate Protection Claim
will be subordinate to the Carve Out.
The Carve Out includes (i) all money and property subject to a
valid and perfected lien; (ii) all ordinary course expenses owed or
owing to administrative creditors, including employees but other
than professional fees, in the amounts described in the Budget; and
(iii) amounts required to be paid, if any, to the Clerk of the
Court and to the Office of the U.S. Trustee pursuant to 28 U.S.C.
section 1930(a).
The final hearing on the matter is set for July 28, 2023 at 1 p.m.
A copy of the order is available at https://rb.gy/fkal7 from
PacerMonitor.com.
About Curitec LLC
Curitec LLC -- https://curitec.com/ -- is a Medicare accredited
Part B provider of durable medical supplies (DMEPOS). Its services
include the delivery of advanced wound care products as well as
ostomy, urological, and tracheostomy supplies to long term care
facilities and hospice.
Curitec LLC filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90108) on March 3,
2023. In the petition filed by Nicholas Percival as manager and
chief operating officer, the Debtor reported assets and liabilities
between $1 million and $10 million each.
The case is overseen by the Honorable Bankruptcy Judge Christopher
M. Lopez.
The Debtor is represented by Casey William Doherty, Jr, Esq., and
Samuel R. Maizel, Esq., at Dentons US LLP.
CURO GROUP: Moody's Cuts CFR to Caa2 & Alters Outlook to Negative
-----------------------------------------------------------------
Moody's Investors Service has downgraded Curo Group Holdings
Corp.'s corporate family rating to Caa2 from Caa1 and its existing
senior secured debt rating to Caa3 from Caa1, which now ranks
senior unsecured. Moody's also assigned a Caa1 senior secured debt
rating to its new $682 million 1.5 lien senior secured notes.
Curo's outlook was changed to negative from stable.
RATINGS RATIONALE
On May 16, the company announced that it had completed a new senior
secured $150 million term loan facility, the proceeds of which were
in part used to fully repay its $40 million revolver with $40
million outstanding as of March 31, 2023, and that approximately
68% of the principal in its outstanding $1 billion senior secured
notes would receive an equivalent amount ($682 million) in new
notes subordinated to the new term loan facility. The remaining
$317 million in senior secured notes that has not been exchanged
now ranks junior in priority to the new notes. Moody's considers
the transaction to be a distressed exchange and a limited default.
The downgrade of Curo's CFR to Caa2 from Caa1 was driven by
deterioration in the company's credit profile over the past year
following the acquisitions of Heights Finance and First Heritage,
two near prime installment businesses, and the sale of its legacy
US deep subprime lending business. The company also acquired a
Canadian point-of-sale (POS) financing business, Flexiti, which has
also pressured earnings given the rapid growth in that business.
These debt-funded transactions have pressured earnings and
increased leverage, resulting in a weaker credit profile. Net debt
to EBITDA by the company's measure has risen from 8.2x as of Q1
2022 to 12.2x as of Q1 2023. The firm has also long operated with
negative tangible equity, a key credit constraint.
The downgrade of the CFR reflects Moody's expectation that Curo
will continue to experience weak profitability and high leverage.
In addition, the downgrade reflects a higher likelihood that newly
proposed Canadian rate caps may negatively impact the company's
direct lending business in that country, which accounts for
approximately half of the firm's consumer loan portfolio. While the
company may be able to offset the negative impact of the proposed
policy by introducing new products, improving cost efficiency and
tightening underwriting standards, this transition in strategy will
necessarily entail operational risks.
The ratings also reflect potential mitigants, namely the firm's
adequate liquidity and time to execute its strategic plan. The new
term loan facility will mature in 2027 while the new senior secured
notes and old notes will mature in 2028. Pro-forma for the
transaction, the firm expects to have $464 million in available
liquidity, including $195 million in unrestricted cash and $146
million in capacity under various funding facilities, enabling it
to meet liquidity needs in the short term and finance growth in its
core businesses. Nevertheless, the company's financial flexibility
is further limited by its high reliance on secured funding, leaving
few unencumbered assets, and its lack of a committed revolving
credit facility. The existing $40 million revolving facility has
been paid off and terminated following this transaction.
The Caa1 and Caa3 instrument ratings reflect the volume and
priority of each of these instruments within Curo's debt capital
structure.
The negative outlook reflects Moody's expectation that the firm
will experience weak financial performance in the next 12-18
months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Curo's ratings could be upgraded if profitability sustainably
improves whereby the ratio of net income/average managed assets
exceeds 0.5% and the ratio of debt/EBITDA improves and remains
below 7.5x.
Curo's ratings could be downgraded if the firm's liquidity position
significantly deteriorates or if profitability materially
deteriorates further.
The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.
DIOCESE OF BUFFALO: Taps KWL as Real Estate Appraiser
-----------------------------------------------------
The Diocese of Buffalo, N.Y. seeks approval from the U.S.
Bankruptcy Court for the Western District of New York to employ KWL
Appraisal Group, Inc.
The Debtor requires an appraiser and valuation expert to conduct a
valuation of its real properties.
Each property that is selected by the Debtor for valuation by KLW
will be addressed in a separate appraisal report. The initial
report for each such property will be in a restricted report
format. For each restricted report, the firm will receive fees
ranging from $750 to $2,250 per property.
If there is a need to prepare for a contested valuation proceeding,
KLW will prepare a separate, self-contained comprehensive report
for any property identified by the Debtor. The fees for each such
report range from $750 to $4,500 per property.
Gregory Klauk, a partner at KWL Appraisal Group, disclosed in a
court filing that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Gregory C. Klauk
KWL Appraisal Group, Inc.
247 Cayuga Road,
Road 40 Buffalo, NY 14225
Tel: (716) 632-2100
Fax: (716) 632-1062
About The Diocese of Buffalo, N.Y.
The Diocese of Buffalo, N.Y., is home to nearly 600,000 Catholics
in eight counties in Western New York. The territory of the
diocese is co-extensive with the counties of Erie, Niagara,
Genesee, Orleans, Chautauqua, Wyoming, Cattaraugus, and Allegany in
New York State, comprising 161 parishes. There are 144 diocesan
priests and 84 religious priests who reside in the Diocese.
The diocese through its central administrative offices (a) provides
operational support to the Catholic parishes, schools, and certain
other Catholic entities that operate within the territory of the
Diocese "OCE"; (b) conducts school operations through which it
provides parish schools with financial and educational support; (c)
provides comprehensive risk management services to the OCEs; (d)
administers a lay pension trust and a priest pension trust for the
benefit of certain employees and priests of the OCEs; and (e)
provides administrative support for St. Joseph Investment Fund,
Inc.
Dealing with sexual abuse claims, the Diocese of Buffalo sought
Chapter 11 protection (Bankr. W.D.N.Y. Case No. 20-10322) on Feb.
28, 2020. The diocese was estimated to have $10 million to $50
million in assets and $50 million to $100 million in liabilities as
of the bankruptcy filing.
The Honorable Carl L. Bucki is the case judge.
Bond, Schoeneck & King, PLLC, led by Stephen A. Donato, Esq., is
the diocese's counsel; Connors LLP and Lippes Mathias Wexler
Friedman LLP are its special litigation counsel; and Phoenix
Management Services, LLC is its financial advisor. Stretto is the
claims agent, maintaining the page:
https://case.stretto.com/dioceseofbuffalo/docket
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on March 12, 2020. The committee is represented by
Pachulski Stang Ziehl & Jones, LLP and Gleichenhaus, Marchese &
Weishaar, PC.
ELEVATE PFS: S&P Downgrades ICR to 'CCC+' on Tightening Liquidity
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating to 'CCC+' from
'B-' on Elevate PFS Parent Holdings Inc. At the same time, S&P
lowered its issue-level rating on the company's secured debt to
'CCC+'. The '3' recovery rating remains unchanged.
The negative outlook reflects S&P's expectation that cash flow
deficits will continue over the next 12 months, leaving the company
with a decreased liquidity cushion.
The downgrade reflects Elevate's declining liquidity at a time of
business uncertainty related to a challenging operating and
macroeconomic environment. The company faced strong operational
headwinds in 2022, related to the elongated public health
emergency, slower-than-expected new business sales, and a systems
migration late in the year. S&P doesn't expect these pressures will
ease until the back half of 2023, causing the company to further
draw on its revolver, diminishing its liquidity. The drawn revolver
also leaves less room for underperformance in the form of
slower-than-expected volume returns, a longer ramp up periods for
sales, additional migration costs, or other potential operational
headwinds.
The COVID-19 public health emergency (PHE) began in March 2020 and
was extended on Jan. 11, 2023, until mid-May. Congress initiated
several provisions tied to the PHE as part of the 2020 Family First
Act (FFA), including a provision that Medicaid programs keep people
continuously enrolled through the end of the PHE, with no
redetermination of eligibility, resulting in less volume for the
company. In December 2022, as part of the Consolidated
Appropriation Act, Congress delinked the continuous enrollment
provision from the PHE, ending continuous enrollment on March 31,
2023. States could thus resume disenrollment as of April 1, 2023.
According to an April 2023 letter from the Department of Health and
Human Services (HHS) to the states, about 15 million Medicaid
enrollees could leave Medicaid due to loss of eligibility and will
need to transition to another source of coverage. HHS estimates
nearly 7 million people will lose Medicaid coverage despite still
being eligible ("administrative churning"), but it is taking steps
to reduce this outcome. States are directly responsible for
eligibility redeterminations, though HHS is working with states to
facilitate enrollment in alternative sources of health coverage and
minimize administrative churning.
Elevate is narrowly focused on eligibility in the highly fragmented
and competitive revenue cycle management (RCM) industry. More than
60% of its revenue stems from screening patients for Medicaid
programs and assisting with application and enrollment processes as
they seek care in a hospital setting. With administrative churning
coming to a halt during the PHE due to continuous enrollment, the
company's volumes were suppressed. As states resume disenrollment
following the end of the continuous enrollment provision, the
people expected to lose coverage despite still being eligible will
eventually need to be re-enrolled when they seek care at a
hospital, restimulating Elevate's volume growth. However, revenue
visibility remains limited, as the timing of states'
redetermination processes and the subsequent return of patients
seeking to re-enroll in Medicaid to seek care at a hospital is
uncertain. S&P expects volumes may not return until late 2023, with
certain states expected to begin disenrollment immediately and
others taking longer to do so.
Additionally, the pandemic affected its new business sales cycle,
with hospitals delaying new vendor selections. While the company
had a stronger new business cycle in the final quarter of 2022 and
the beginning of 2023, which should allow for some cash flow
generation in 2023, the new business will take time to ramp up to
maturity (with eligibility taking four to six months, third-party
liabilities taking 12 months, patient pay taking three months, and
AR taking four months to reach maturity). With the company fronting
some of the costs necessary to ramp up new business, the company
faces some uncertainty as to the time it will take to produce cash
flow from these new contracts.
Finally, the company has spent $18 million on a systems migration
in 2022, eliminating nearly all non-supported systems, negatively
affecting its 2022 performance as customers learn new systems. S&P
expects the company to complete this migration in 2023, with
roughly $8 million more in spending, and the company to see mid- to
high-single-digit synergies from the project. Nevertheless, there
is execution risk, and the timing of the cost synergies is
uncertain.
The negative outlook reflects S&P's expectation for cash flow
deficits to continue over the next 12 months, leaving it with
decreased liquidity cushion.
S&P could lower the rating should volume demand be further delayed
and cash outflows worsen, leading to increased use of the line and
liquidity pressures rising such that it believes the company is
unable to meet commitments and potentially defaulting over the next
twelve months.
S&P could revise its outlook on Elevate to stable if there is
sustained growth in revenues and free cash flow generation,
resulting in meaningfully better liquidity. However, given the
extended sales cycle and the uncertainty surrounding the timing and
strength of the return of volume demand, the revision to stable is
likely beyond 2023.
ESG credit indicators: E-2, S-2, G-3
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis of Elevate PFS. Our
assessment of the company's financial risk profile as highly
leveraged reflects corporate decision-making that prioritizes the
interests of the controlling owners, in line with our view of most
rated entities owned by private-equity sponsors. Our assessment
also reflects the generally finite holding periods and a focus on
maximizing shareholder returns."
FB DEBT FINANCING: Taps Carroll Services to Wind Down Assets
------------------------------------------------------------
FB Debt Financing Guarantor, LLC and its affiliates seek approval
from the U.S. Bankruptcy Court for the District of Delaware to tap
the services of Carroll Services, LLC as part of their efforts to
wind down their assets.
The firm's services include:
a. reviewing and evaluating the terms and conditions, and
determining the advisability, of any proposed transaction involving
the liquidation of the Debtor's assets and the settlement, payment
and discharge of the Debtor's liabilities;
b. regularly providing updates to the Debtors' regarding the
firm's activities and the status of the Debtors' liquidation;
c. preparing, filing, delivering and recording necessary
documents and instruments on behalf of the Debtors; and
d. in consultation with the Debtors, taking all such other
actions as may be necessary or appropriate in the judgment of the
firm including, without limitation, initiating or defending
litigation on behalf of the Debtors.
Carroll Services will be paid an hourly fee of $495.
The retainer fee is $25,000.
James Carroll, a partner at Carroll Services, disclosed in a court
filing that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
James Carroll
Carroll Services LLC
7431 2nd Avenue
Sykesville, MD 21784
Tel: (410) 795-3721
About FB Debt Financing Guarantor
FB Debt Financing Guarantor, LLC, formerly known as Morphe Debt
Financing Guarantor, LLC, is a builder of beauty brands anchored in
innovative and high-quality products, marketing and operations. Its
multi-branded and multi-category portfolio includes Morphe, Morphe
2, Jaclyn Cosmetics, and Born Dreamer. The company's products are
sold through top beauty retailers worldwide, including Ulta Beauty,
Sephora, Mecca, Douglas, Selfridges, and Target.
FB Debt and its affiliates sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10025) on
Jan 11, 2023.
In the petition signed by their chief restructuring officer,
Stephen Marotta, the Debtors disclosed $500 million to $1 billion
in both assets and liabilities.
The Debtors tapped Ropes & Gray, LLP and Bayard, P.A. as bankruptcy
counsels; Configure Partners, LLC and Configure Partners
Securities, LLC as investment bankers; and Ankura Consulting Group,
LLC as restructuring advisor. Kroll Restructuring Administration,
LLC is the Debtors' claims, noticing and solicitation agent and
administrative advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors in the Debtors' cases on Jan. 24,
2023. The committee is represented by Cole Schotz, P.C. and Kelley
Drye & Warren, LLP.
FCT-MM LLC: Case Summary & Five Unsecured Creditors
---------------------------------------------------
Debtor: FCT-MM, LLC
276 Seven Dwarfs Road
Las Vegas, NV 89124
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: May 19, 2023
Court: United States Bankruptcy Court
District of Nevada
Case No.: 23-12048
Judge: Hon. Mike K. Nakagawa
Debtor's Counsel: Matthew L. Johnson, Esq.
JOHNSON & GUBLER, P.C.
Lakes Business Park
8831 W Sahara Ave
Las Vegas, NV 89117-5865
Tel: (702) 471-0065
Fax: (702) 471-0075
Email: mjohnson@mjohnsonlaw.com
Total Assets: $4,084,250
Total Liabilities: $362,885
The petition was signed by Barry Cohen, president, 21st Century
Communities, Inc., managing membe.
A full-text copy of the petition containing, among other items, a
list of the Debtor's five unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/UWVARDQ/FCT-MM_LLC__nvbke-23-12048__0001.0.pdf?mcid=tGE4TAMA
FIRST REPUBLIC: CEO Says Collapse Due to Other Banks' Failure
-------------------------------------------------------------
Adam Haigh of Bloomberg Law reports that former CEO of First
Republic says that the company's collapse is attributed to other
banks failing.
Former First Republic Bank Chief Executive Officer Michael Roffler
said his bank's collapse was due to the contagion from other
regional bank failures that triggered deposit outflows.
"To be clear, no one at First Republic could have predicted the
collapse of Silicon Valley Bank and Signature Bank, the speed at
which it happened, or the catastrophic effects these events had on
the banking industry and consumer confidence," Roffler said in
prepared testimony ahead of his appearance Wednesday before a House
of Representatives committee on financial services.
About First Republic Bank
First Republic Bank is a commercial bank and provider of wealth
management services headquartered in San Francisco. It caters to
high-net-worth individuals. It operates 93 offices in 11 states
primarily in New York, California, Massachusetts, and Florida.
CBS News reports that the sudden collapse of Silicon Valley Bank
(SVB) on March 10, 2023, along with New York's Signature Bank two
days later, has shaken investor confidence in regional lenders like
$213 billion First Republic. In particular, concern has focused on
such lenders' uninsured deposits, or account funds exceeding the
Federal Deposit Insurance Corp.'s $250,000 cap.
First Republic Bank on March 16, 2023, received a $30 billion
rescue package from 11 of the biggest U.S. banks in an effort to
prevent its collapse. JPMorgan Chase, Bank of America, Citigroup
and Wells Fargo have agreed to each put $5 billion in uninsured
deposits into First Republic. Meanwhile Morgan Stanley and Goldman
Sachs would deposit $2.5 billion each into the bank. The remaining
$5 billion would consist of $1 billion contributions from BNY
Mellon, State Street, PNC Bank, Truist and US Bank.
First Republic has tapped investment bank Lazard Ltd to help it
explore strategic options, the Wall Street Journal reported.
The Federal Deposit Insurance Corporation announced May 1, 2023,
that First Republic Bank, San Francisco, California, was closed by
the California Department of Financial Protection and Innovation,
which appointed the FDIC as receiver. To protect depositors, the
FDIC entered into a purchase and assumption agreement with JPMorgan
Chase Bank, National Association, Columbus, Ohio, to assume all of
the deposits and substantially all of the assets of First Republic
Bank.
FOUNDATIONAL EDUCATION:S&P Alters Outlook to Neg, Affirms 'B-' ICR
------------------------------------------------------------------
S&P Global Ratings revised its outlook on Foundational Education
Group Inc.'s (d/b/a Teaching Strategies') to negative from stable
and affirmed its 'B-' issuer credit rating on the company.
The negative outlook reflects S&P's view that challenging secular
dynamics and uncertain macroeconomic conditions may lead to further
profitability and liquidity deterioration over the next 12 months.
Nationwide teacher shortages have slowed the company's revenue
growth. Stagnating wages, soaring higher education costs, and
challenging classroom and school conditions have contributed to
increasing job dissatisfaction among educators in recent years. The
COVID-19 pandemic exacerbated many of the staffing challenges
schools were facing, and the booming post-pandemic job market led
teachers to leave in droves in search of new and more lucrative
career opportunities. Large public school districts and head start
programs, two of Teaching Strategies' core end markets, experienced
the largest disruption, with many customers opting to postpone
purchases until staffing levels normalized. This translated to
implementation delays and elongated sales cycles for the company in
2022, and ultimately resulted in revenue growth below previous
expectations, finishing in the low teens for the year compared with
2021. Annual Recurring Revenue (ARR), however, remained solid,
growing approximately 20% year-over-year in the first quarter of
2023 as digital adoption continues to accelerate across Teachings
Strategies' end-markets. S&P expects staffing challenges to ease
modestly over the next 12 months as the job market cools down,
resulting in low- to mid-teens revenue growth off the company's
small revenue base, which is expected near $140 million at the end
of 2023.
Rising business investments and interest rate headwinds have
weakened the company's credit profile and liquidity. Teaching
Strategies accelerated its growth investments in fiscal 2022,
driven by sales personnel additions, the continued buildout of its
Partner Success team, and increased capitalized software
expenditures due to a re-platforming initiative. Certain
nonoperating expenses also rose meaningfully in the year, tied to
large consulting projects. Consequently, EBITDA margins
deteriorated, finishing 2022 in the mid-teens percent area compared
with the high-20% area the year prior. Cash flow suffered as well
due to both weaker EBITDA performance and rising interest rates,
and FOCF at the end of fiscal 2022 totaled $7 million versus $27
million in 2021. S&P said, "While we expect EBITDA margins to
improve over the next 12 months as investment spending stabilizes
and nonrecurring costs roll off, we forecast modestly negative FOCF
in 2023, underpinned by a meaningful increase in interest expense,
which is anticipated near $40 million. With seasonal education
cycles affecting cash collection, Teaching Strategies typically
experiences a cash burn in the first two quarters of the fiscal
year. We expect cash shortfalls in the first half to be
supplemented by revolver draws, and by the end of the second
quarter, expect the company to have almost one-third of its $50
million line of credit drawn. Nevertheless, we still view the
company's liquidity as adequate."
The company's core business remains intact, but continued
end-market disruptions, business investments, and interest expense
headwinds could compromise the sustainability of its capital
structure. Despite a challenging 2022 and a modest 2023 outlook, we
believe that Teaching Strategies' operating profile is still sound.
As a leader in the early childhood education (ECE) space, the
company faces limited direct competition and is the only provider
that offers a comprehensive ecosystem approach for educators on a
national scale. S&P said, "Moreover, digitization tailwinds
catalyzed by the pandemic continue to proliferate the ECE market,
and we believe the company is well positioned to capitalize on the
modernization of classroom learning given its cloud-native platform
and differentiated content. Teaching Strategies also recently
closed a deal for the largest contract in company history with the
New York City Department of Education, becoming the city's sole ECE
platform provider, which further affirms its value proposition.
While we recognize certain competitive advantages and favorable
developments within the business, our rating action is chiefly a
reflection of the company's weaker 2022 and expected 2023
performance, as well as risks related to ongoing teacher staffing
challenges and elevated operating and interest expenses. Over the
next 12 months, we will be closely monitoring the company's revenue
growth, profitability, and liquidity, and updating our view
accordingly as it progresses through an uncertain operating
environment."
S&P said, "The negative outlook reflects our view that continued
teacher staffing challenges, increased business investments, and
interest expense headwinds could further deteriorate the company's
already weakened credit profile and liquidity position.
"We could downgrade Teaching Strategies to 'CCC+' if we believe the
company's capital structure is unsustainable. This could be due to
ongoing operating weakness leading to negative free cash flow
beyond fiscal 2023. We would also consider lowering the rating if
the company continues drawing on its revolver beyond current
projections, or issues debt to fund an acquisition.
"We could revise our outlook on Teaching Strategies to stable if
the company can navigate the challenging macroeconomic environment
while generating sustained revenue growth and positive FOCF,
thereby enhancing its liquidity position. We could also revise the
outlook if Teaching Strategies is able to manage its operating
expenses such that EBITDA margins improve and positive FOCF is
consistently generated.
"Governance factors are a moderately negative consideration in our
credit rating analysis of Teaching Strategies, as is the case for
most rated entities owned by private-equity sponsors. We believe
the company's highly leveraged financial risk profile points to
corporate decision-making that prioritizes the interests of its
controlling owners. This also reflects private-equity owners'
generally finite holding periods and focus on maximizing
shareholder returns."
ESG credit indicators: E-2, S-2, G-3
GEORGE XENAKIS D.D.S.: Case Summary & 11 Unsecured Creditors
------------------------------------------------------------
Debtor: George Xenakis D.D.S., Palisades Park LLC
d/b/a United Dental Group
d/b/a U&D Dental
261a Broad Ave
Palisades Park, NJ 07650
Business Description: The Debtor operates a dental clinic.
Chapter 11 Petition Date: May 21, 2023
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 23-14320
Debtor's Counsel: Rocco A. Cavaliere, Esq.
TARTER KRINSKY & DROGIN LLP
1350 Broadway
11th Floor
New York, NY 10018
Tel: (212) 216-8000
Fax: (212) 216-8001
Email: rcavaliere@tarterkrinsky.com
Estimated Assets: $50,000 to $100,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Dr. George Xenakis as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 11 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/MVMTP4Y/George_Xenakis_DDS_Palisades_Park__njbke-23-14320__0001.0.pdf?mcid=tGE4TAMA
GRUPO TELEVISA: $95 Million Settlement Hearing Set for August 8
---------------------------------------------------------------
The Hon. Louis L. Stanton of the U.S. District Court for the
Southern District of New York will hold a hearing on Aug. 8, 2023,
at 2:30 p.m., at Daniel Patrick Moynihan United States Courthouse,
500 Pearl Street, New York, New York 10007, to determine whether
(1) the proposed settlement set forth in the stipulation of
settlement dated April 4, 2023 for $95 million in cash should be
approved but the Court as fair, reasonable and adequate; (2) the
judgment as provided under the stipulation should be entered
dismissing the litigation with prejudice; (3) to award Boies
Schiller Flexner LLP, on behalf of itself and Sugarman Susskind
Braswell & Herrera, attorneys' fees, cost and expenses out of the
settlement fund and class representative an incentive award out of
the settlement fund and, if so, in what amount; and (4) the plan of
allocation should be approved the the Court as fair, reasonable and
adequate.
To share in the distribution of the settlement fund, you must
establish you rights by submitting a proof of claim and release
form by mail or electronically.
If you have not received a copy of the notice, which more
completely describes the settlement and your rights thereunder and
a proof of claim and release, you may obtain these documents, as
well as a copy of the stipulation and other settlement documents,
online at https://www.grupotvsecuritieslitigation.com, or by
writing to:
Grupo Televisa Securities Litigation
c/o Kroll Settlement Administration
PO Box 225391
New York, New York 10150-5391
Inquiries, other than requests for the notice or proof of claim and
release, may be made to lead counsel:
John T. Zach, Esq.
Lauren M. Goldman, Esq.
Boies Schiller Flexner LLP
55 Hudson Yards
20th Floor
New York New York 10001
Tel: 866-276-2377 (Toll-Free)
Email: televisasettlement@bsfllp.com
HIGHPOINT ASSOCIATES: Case Summary & One Unsecured Creditor
-----------------------------------------------------------
Debtor: Highpoint Associates XV, LLC
315 E 56th St
New York, NY 10022-3730
Business Description: Highpoint owns cooperative units located at
315 E 56th St, New York, NY 10022-3730
valued by the Debtor at $8 million.
Chapter 11 Petition Date: May 21, 2023
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 23-10805
Debtor's Counsel: H Bruce Bronson, Esq.
BRONSON LAW OFFICES P.C.
480 Mamaroneck Ave
Harrison, NY 10528-1621
Email: hbbronson@bronsonlaw.net
Total Assets: $8,000,000
Total Liabilities: $741,963
The petition was signed by Dan Shalom as president of Manager of
Debtor.
A full-text copy of the petition containing, among other items, a
list of the Debtor's one unsecured creditor is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/KAFLR6I/Highpoint_Associates_XV_LLC__nysbke-23-10805__0001.0.pdf?mcid=tGE4TAMA
HOBBY LOBBY: Court OKs Cash Collateral Access Thru June 9
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey authorized
Hobby Lobby Marine LLC to use cash collateral on an interim basis
in accordance with the budget, with a 15% variance, through June 9,
2023.
The Debtor requires the use of cash collateral to continue
operating its business.
In addition to Hanover Bank's security interests, liens, rights,
and other interests in and with respect to its collateral, as
adequate protection for and to secure the payment of an amount
equal to any diminution in the value of its collateral, the Debtor
grants the Bank postpetition replacement liens and security
interests under 11 U.S.C. section 361(2) on all property of the
Debtor and its estate. The Replacement Liens granted to the Bank
are valid, enforceable, and fully perfected liens without any
action by the Debtor or the Bank, and no filing or recordation or
other act that otherwise may be required under federal or state law
in any jurisdiction will be necessary to create or perfect such
liens and security interests.
The Replacement Liens will survive the entry of any order: (i)
converting the Chapter 11 Case to a case under Chapter 7 of the
Bankruptcy Code; (ii) dismissing the Chapter 11 Case; (iii)
appointing a Chapter 11 trustee (other than a Subchapter V trustee)
or examiner with expanded powers; and any Replacement Lien granted
pursuant to the Interim Order will continue in full force and
effect notwithstanding the entry of such an order, and such
replacement Lien will maintain any priority granted in the Interim
Order. The Replacement Liens will be senior to any other security
interests, liens, or encumbrances, subject only to, in the
following order of priority (a) valid, perfected, and enforceable
prepetition liens which were senior to the Bank's respective liens
or security interests as of the Petition Date and (b) the payment
of the United States Trustee's fees, pursuant to 28 U.S.C. section
1930 and any court-approved fees owed to the Subchapter V Trustee.
As additional adequate protection to the Bank: (a) by April 20,
2023 and no later than the 20th day of every month thereafter, the
Debtor will provide the Bank with an "actual to budget"
reconciliation of all inflows and expenses listed in the Budget for
first two weeks of the month; (b) by April 20, 2023 and no later
than the 20th day of every month thereafter, the Debtor will
provide the Bank with an "actual to budget" reconciliation of all
inflows and expenses listed in the Budget for the prior month and
copies of bank statements for the prior month (other than for bank
accounts at the Bank); and (c) the Debtor will make the adequate
protection payments to the Bank as set forth in the Budget.
In addition, each month, the Debtor will pay to the Bank the
monthly amount set forth in the budget for real estate taxes, to be
held in escrow by the Bank.
A further interim hearing on the matter is set for June 5, 2023 at
4 p.m.
A copy of the order and the Debtor's budget is available at
https://rb.gy/xvmz4 from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$24,268 for May 2023; and
$9,423 for June 2023.
About Hobby Lobby Marine LLC
Hobby Lobby Marine LLC operates a successful and long-standing
family-owned marina that has operated in Toms River, N.J. since
1961. In addition to selling new and used watercraft and boating
equipment, the Debtor rent 84 slips to customers, provide storage
solutions, and provide repair and other customary marine services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. N.J. Case No. 22-19381) on November 28,
2022. In the petition signed by Robert Tweer, co-managing member,
the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge Kathryn C. Ferguson oversees the case.
The Law Offices of Douglas T. Tabachnik, P.C., is the Debtor's
counsel.
HYRECAR INC: Zukin Partners Served as Adviser in Section 363 Sale
-----------------------------------------------------------------
Zukin Partners represented HyreCar, Inc., in its sale to Getaround,
the world's first connected carsharing marketplace, via a
Bankruptcy Court supervised 11 U.S.C. Section 363 Sale. The auction
was concluded on May 8, 2023 and the sale was finalized at a
Bankruptcy Court hearing on May 15, 2023.
Zukin Partners was instrumental in steering HyreCar's sale process
to a successful conclusion. After HyreCar secured a stalking horse
bid, Zukin was hired to reach out to a broader set of alternative
potential buyers. After reaching out to over 100 prospective
buyers, where 9 met with management, Zukin conducted a robust
auction process that resulted in an incremental 20% premium to the
stalking horse bid.
"Our role advising on this complex and high-profile transaction
demonstrates the strengths of our E-commerce, technology, M&A, and
restructuring expertise," said Zukin Partners' Managing Partner Jim
Zukin. "We expect the expanded use of the Bankruptcy Code's 363
Sale Process to be an important tool for transferring assets
throughout the remainder of 2023."
HyreCar, Inc., headquartered in Los Angeles, CA, is a national
carsharing marketplace for the gig economy including ridesharing,
food, and package delivery via its proprietary technology
platform.
San Francisco-based Getaround (NYSE: GETR) makes sharing cars and
trucks simple through its proprietary cloud and in-car Connect®
technology.
Zukin Partners representation of HyreCar, Inc. was led by Partners
Jim Zukin and Ari Schottenstein.
About Hyrecar Inc.
HyreCar Inc. is a nationwide leader operating a carsharing
marketplace for ridesharing and food and package delivery
nationwide via its proprietary technology platform.
HyreCar filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 23-10259) on Feb. 25,
2023, with $10 million to $50 million in both assets and
liabilities. Mark Allen, manager, signed the petition.
The Debtor tapped Greenberg Glusker Fields Claman & Machtinger LLP
and Cole Schotz, PC as legal counsel; and Zukin Partners, LLC as
investment banker. Donlin, Recano & Company, Inc. is the claims and
noticing agent and administrative advisor.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case.
Blank Rome, LLP and Dundon Advisers, LLC serve as the committee's
legal counsel and financial advisor, respectively.
INMAR INC: Moody's Affirms B3 CFR & Rates New First Lien Loans B3
-----------------------------------------------------------------
Moody's Investors Service affirmed Inmar, Inc.'s B3 corporate
family rating and B3-PD probability of default rating, following
the company's proposed capital structure refinancing. Moody's also
assigned a B3 instrument rating to the new senior secured first
lien credit facilities, including the $950 million term loan and
the $100 million revolving credit facility. The outlook remains
stable. Inmar is a North Carolina-based technology-enabled provider
and partner in facilitating and optimizing workflows for retailers,
manufacturers, pharmacies, hospitals, and other trading partners
through the use of data analytics and tech enabled logistics
capabilities.
The proposed transaction will amend and extend the company's first
lien senior secured credit facilities, including the first lien
term loan and the revolving credit facility, now maturing in May
and January of 2026, respectively. Moreover, the company will
receive a PIK preferred equity injection of $485 million, from
existing sponsor and new investors, which will be largely used to
pay down the $175 million senior secured second lien term loan, a
portion of the first lien term loan, transaction fees, earn-outs
from recent acquisitions, and existing preferred equity.
The ratings affirmation reflects Inmar's substantial leverage
reduction following the transaction, given the repayment of the
company's second lien debt and a portion of its first lien term
loan, as well as the extension of its debt instruments maturities.
The ratings affirmation also reflects Moody's expectations of
low-to-mid single digit revenue growth, EBITDA expansion and
preservation of an adequate liquidity profile.
Assignments:
Issuer: Inmar, Inc.
Senior Secured 1st Lien Term Loan, Assigned B3
Senior Secured 1st Lien Revolving Credit Facility, Assigned B3
Affirmations:
Issuer: Inmar, Inc.
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Outlook Actions:
Issuer: Inmar, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
The B3 corporate family rating reflects Inmar's modest scale, high
financial leverage, and aggressive debt-funded growth strategy.
Moody's expects pro-forma debt-to-EBITDA to be approximately 5.5
times for the Q1 2023 LTM period, Moody's adjusted including
capitalized software costs (debt-to-EBITDA would be 4.6 times if
capitalized software costs were to be excluded).
The ratings also take into consideration Inmar's solid competitive
position, robust customer base with long-tenured contracts, highly
recurring and predictable revenue stream, good profit margins, and
favorable trends in digital offerings and e-commerce. Moreover, the
ratings are supported by the company's liquidity, marked by good
availability under its revolving credit facility, long-dated
capital structure, and modest free cash flow generation.
Moody's views Inmar as having adequate liquidity. At close,
approximately half of the proposed $100 million revolving credit
facility will be drawn, since some of its funds were utilized to
finance a portion of the transaction. Enhancing the liquidity
profile is the proposed capital structure, which will extend the
maturity of the term loan and revolving credit facility to May and
January of 2026, respectively. Moreover, Moody's expects Inmar to
generate free cash flow over the next 12-18 months, with FCF/Debt
expected to be in the mid-single digit. There are no financial
maintenance covenants under the proposed term loan, but the
revolver is subject to a springing maximum first lien net leverage
ratio. Moody's expects Inmar to maintain a strong cushion in the
case of covenant testing.
The stable outlook reflects Moody's expectations of continued
revenue growth driven by new customer signings, industry tailwinds
and higher adoption of Inmar's tools. The stable outlook also takes
into consideration Moody's forecast of gradual leverage reduction,
through EBITDA expansion, over the next 12-18 months, driven by
increased revenue contribution from Inmar's more profitable
businesses and cost improvements around SG&A.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Moody's expects Inmar to sustain
good liquidity while maintaining financial leverage below 5.0
times, and free cash flow-to-debt in the high single digits.
The ratings could be downgraded if revenue or profitability is
diminished due to customer losses or debt-to-EBITDA sustained above
7.0 times. The ratings could also be downgraded if liquidity were
to weaken, underpinned by negative free cash flow or excessive
revolver usage.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
INMAR, INC. (Inmar), headquartered in Winston-Salem, North
Carolina, is a provider of technology-enabled services including
retail driven incentives through digital publishing and settlement,
healthcare service offerings including a return pharmaceutical
platform and credit recapturing program, as well as, a host of SAAS
offerings to drive back-office efficiencies, a suite of media tools
including a dynamic creative video offering, and a growing
e-commerce reverse supply chain platform. The Company is a
portfolio company of OMERS Private Equity with stakes also held by
ABRY Partners, Inmar management, and other institutional investors.
INTERNAP HOLDING: Seeks to Hire Saul Ewing as Legal Counsel
-----------------------------------------------------------
Internap Holding LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Saul Ewing,
LLP as co-counsel with Jenner & Block, LLP.
The firm's services include:
a. providing legal advice with respect to the Debtors' powers
and duties in the continued operation of their businesses and
management of their properties;
b. if appropriate, preparing and pursuing approval of a
disclosure statement and confirmation of a Chapter 11 plan;
c. preparing legal papers;
d. appearing in court;
e. assisting in the investigation of the assets, liabilities and
financial condition of the Debtors that may be required under
local, state or federal law or orders of the bankruptcy court or
any other court of competent jurisdiction;
f. providing counseling and representation with respect to the
assumption or rejection of executory contracts and leases, sales of
assets and other bankruptcy-related matters arising from the
Chapter 11 cases; and
g. performing all other services assigned by the Debtors, in
consultation with Jenner & Block.
The firm will be paid at these rates:
Mark Minuti, Partner $860 per hour
Monique B. DiSabatino, Partner $540 per hour
Turner N. Falk, Associate $396 per hour
Sabrina Espinal, Associate $325 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Saul Ewing received a retainer in the amount of $75,000 in
connection with preparation of the Chapter 11 cases. On April 27,
the firm received an additional $25,000 retainer to cover fees and
expenses incurred as well as Chapter 11 filing fees.
Monique DiSabatino, Esq., a partner at Saul Ewing, disclosed in a
court filing that her firm is a "disinterested person" pursuant to
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, Saul
Ewing disclosed the following:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: Other than the 10 percent discount, Saul Ewing did
not agree to any variations from or alternatives to, 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: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed pos-tpetition, explain the
difference and the reasons for the difference.
Response: Saul Ewing was retained by the Debtors on or about
March 21 and the billing rates and material terms of the
pre-bankruptcy engagement are the same as the rates and terms
proposed by the firm.
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: Yes, in connection with the budget attached to the
court's interim cash collateral order approved on May 2, 2023,
professionals proposed to be retained by the Debtors provided
monthly estimates of fees and expenses incurred in these Chapter 11
cases.
The firm can be reached at:
Monique B. DiSabatino, Esq.
Saul Ewing, LLP
1201 North Market Street, Suite 2300
Wilmington DE USA, 19899
Tel: (302) 421-6806
Fax: (215) 972-2297
Email: monique.disabatino@saul.com
About Internap Holding
Internap Holding, LLC and affiliates provide compute resources
(i.e., an IT industry term referring to the ability to process
data) and storage services on demand via an integrated platform.
The Debtors' services include: (a) bare metal which are dedicated,
single-tenant servers utilizing Intel and AMD processors enabling
high-performance compute with rapid deployment, increased control,
enhanced security, and flexible configurations); (b)hosted private
cloud environments; (c) cloud computing backup services; and (d)
managed security to keep customer data secure and in alignment with
compliance requirements.
On March 16, 2020, Internap Technology Solutions Inc. and six
affiliated debtors, including INAP Corporation each filed a
voluntary petition for relief under Chapter 11 of the United States
Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-22393).
Internap Corporation, now INAP, and its U.S. subsidiaries
successfully emerged from Chapter 11 bankruptcy protection in May
2020. The court-approved bankruptcy exit plan significantly
strengthened the Company's financial position by reducing debt,
extending maturities and enhancing liquidity substantially.
Internap Holding and three affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10529) on April 28, 2023. In the petition filed by Michael
T. Sicoli, as chief executive officer, Internap Holding reported
between $100 million and $500 million in both assets and
liabilities.
The new cases are overseen by Honorable Bankruptcy Judge Craig T.
Goldblatt.
Internap tapped Jenner & Block, LLP and Saul Ewing, LLP as legal
counsels; and FTI Consulting, Inc. as financial advisor. Stretto,
Inc. is the claims agent and administrative advisor.
INTERNAP HOLDING: Taps FTI as Financial Advisor
-----------------------------------------------
Internap Holding, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ FTI
Consulting, Inc. as their financial advisor.
The firm's services include:
Contingency Planning
a. assisting in overall project management of the contingency
planning and Chapter 11 workstreams;
b. assisting with developing accounting and operating procedures
to segregate pre-bankruptcy and post-petition business
transactions;
c. supporting the preparation of first day motions and
developing procedures and processes necessary to implement such
motions;
d. assisting in the development of a creditor matrix;
e. developing training materials and assisting in training
personnel with respect to Chapter 11 procedures;
f. assisting in the identification of executory contracts and
unexpired leases;
e. preparing the Debtors with respect to financial-related
disclosures that will be required in Chapter 11;
g. assisting in preparing required disclosures for the plan of
reorganization and disclosure statement;
h. assisting in the development of a Key Employee Incentive
Plan, if needed; and;
i. other restructuring and general business consulting
services.
Business Plan Review
a. reviewing and assessing go forward business plan and the
underlying assumptions and drivers that will serve as basis for the
valuation and plan of reorganization;
b. unless requested by the Debtors or counsel, the scope does
not include preparing a formal report on the business plan.
Cash Flow Forecasting
a. review and assess the 13-week cash flow forecast;
b. assisting with sizing cash collateral and DIP financing
requirements;
c. assisting with developing weekly flash reports to present the
Debtors' actual results versus cash flow forecasts on a weekly
basis;
d. assisting in review and negotiation of contracts for
potential rejection.
Strategic Communications
a. providing strategic communications counsel and material
development in coordination with current and incoming leadership,
including;
b. developing messaging and outreach strategy to customers,
vendors and employees;
c. building stakeholder materials (e.g. talking points, press
release, question and answer);
d. engaging with business, trade and restructuring media on the
Debtors' behalf;
e. coordinating with claims agent regarding call center and
other communications-related services; and
f. supporting communications training for relevant
stakeholder-facing employees.
Valuation
a. prepare an enterprise-level valuation of the Debtors on a
consolidated basis.
The firm will be paid at these rates:
Senior Managing Director $1,045 to $1,495 per hour
Director/Senior Director/
Managing Director $785 to $1,055 per hour
Consultants/Senior Consultants $435 to $750 per hour
Administrative Professionals/
Paraprofessionals $175 to $325 per hour
Prior to the petition date, the Debtors paid the firm $884,324 for
professional services performed and expenses incurred.
Tim McDonagh, a partner at FTI, disclosed in a court filing that
the firm is a "disinterested person" pursuant to Section 101(14) of
the Bankruptcy Code.
FTI can be reached at:
Tim McDonagh
FTI Consulting, Inc.
1166 Avenue of the Americas 15th Floor
New York, NY 10036
Tel: (212)247-1010
Email: tim.mcdonagh@fticonsulting.com
About Internap Holding
Internap Holding, LLC and affiliates provide compute resources
(i.e., an IT industry term referring to the ability to process
data) and storage services on demand via an integrated platform.
The Debtors' services include: (a) bare metal which are dedicated,
single-tenant servers utilizing Intel and AMD processors enabling
high-performance compute with rapid deployment, increased control,
enhanced security, and flexible configurations); (b)hosted private
cloud environments; (c) cloud computing backup services; and (d)
managed security to keep customer data secure and in alignment with
compliance requirements.
On March 16, 2020, Internap Technology Solutions Inc. and six
affiliated debtors, including INAP Corporation each filed a
voluntary petition for relief under Chapter 11 of the United States
Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-22393).
Internap Corporation, now INAP, and its U.S. subsidiaries
successfully emerged from Chapter 11 bankruptcy protection in May
2020. The court-approved bankruptcy exit plan significantly
strengthened the Company's financial position by reducing debt,
extending maturities and enhancing liquidity substantially.
Internap Holding and three affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10529) on April 28, 2023. In the petition filed by Michael
T. Sicoli, as chief executive officer, Internap Holding reported
between $100 million and $500 million in both assets and
liabilities.
The new cases are overseen by Honorable Bankruptcy Judge Craig T.
Goldblatt.
Internap tapped Jenner & Block, LLP and Saul Ewing, LLP as legal
counsels; and FTI Consulting, Inc. as financial advisor. Stretto,
Inc. is the claims agent and administrative advisor.
INTERNAP HOLDING: Taps Jenner & Block as Legal Counsel
------------------------------------------------------
Internap Holding, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ Jenner
& Block, LLP as their legal counsel.
The firm's services include:
a. advising the Debtors with respect to their powers and
duties in the continued management and operation of their
businesses and properties;
b. advising and consulting on the Debtors' conduct in these
Chapter 11 cases, including all of the legal and administrative
requirements of operating in chapter 11;
c. attending meetings and negotiating with representatives of
creditors and other parties involved in the Debtors' bankruptcy
cases;
d. taking all necessary actions 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 in negotiations concerning litigation in
which they are involved, including objections to claims filed
against the estates;
e. preparing pleadings;
f. representing the Debtors in connection with obtaining
authority to continue using cash collateral and post-petition
financing;
g. appearing before the bankruptcy court and any appellate
courts;
h. advising the Debtors regarding tax matters;
i. taking any necessary action on behalf of the Debtors to
negotiate, prepare, and obtain approval of a disclosure statement
and confirmation of a Chapter 11 plan and all documents related
thereto; and
j. other necessary legal services including: (i) analyzing the
Debtors' leases and contracts and the assumption and assignment or
rejection thereof; (ii) analyzing the validity of liens against the
Debtors; and (iii) advising the Debtors on corporate and litigation
matters.
The firm will be paid at these rates:
Partners $1,155 to $2,130 per hour
Of Counsel $730 to $1,800 per hour
Associates $695 to $1,235 per hour
Paraprofessionals $295 to $590per hour
In addition, the firm will seek reimbursement for out-of-pocket
expenses incurred.
The firm received an advanced retainer in the amount of
$1,320,755.88.
Catherine Steege, Esq., a partner at Jenner & Block, disclosed in a
court filing that her firm is a "disinterested person" pursuant to
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, Jenner
& Block disclosed the following:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Response: The current hourly rates for services rendered on
behalf of the Debtors for 2023 range as follows: Partners, $1,155
to $2,130; Of Counsel, $730 to $1,800; Associates, $695 to $1,235;
Paraprofessionals, $295 to $590.
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: Yes, in connection with the budget attached to the
court's cash collateral order, professionals proposed to be
retained by the Debtors provided monthly estimates of fees and
expenses incurred in these Chapter 11 cases.
The firm can be reached at:
Catherine Steege, Esq.
Jenner & Block, LLP
353 N. Clark Street
Chicago, IL 60654
Tel: (312) 923-2952
Fax: (312) 840-7352
Email: csteege@jenner.com
About Internap Holding
Internap Holding, LLC and affiliates provide compute resources
(i.e., an IT industry term referring to the ability to process
data) and storage services on demand via an integrated platform.
The Debtors' services include: (a) bare metal which are dedicated,
single-tenant servers utilizing Intel and AMD processors enabling
high-performance compute with rapid deployment, increased control,
enhanced security, and flexible configurations); (b)hosted private
cloud environments; (c) cloud computing backup services; and (d)
managed security to keep customer data secure and in alignment with
compliance requirements.
On March 16, 2020, Internap Technology Solutions Inc. and six
affiliated debtors, including INAP Corporation each filed a
voluntary petition for relief under Chapter 11 of the United States
Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-22393).
Internap Corporation, now INAP, and its U.S. subsidiaries
successfully emerged from Chapter 11 bankruptcy protection in May
2020. The court-approved bankruptcy exit plan significantly
strengthened the Company's financial position by reducing debt,
extending maturities and enhancing liquidity substantially.
Internap Holding and three affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10529) on April 28, 2023. In the petition filed by Michael
T. Sicoli, as chief executive officer, Internap Holding reported
between $100 million and $500 million in both assets and
liabilities.
The new cases are overseen by Honorable Bankruptcy Judge Craig T.
Goldblatt.
Internap tapped Jenner & Block, LLP and Saul Ewing, LLP as legal
counsels; and FTI Consulting, Inc. as financial advisor. Stretto,
Inc. is the claims agent and administrative advisor.
INTERNAP HOLDING: Taps Stretto as Administrative Advisor
--------------------------------------------------------
Internap Holding LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Stretto,
Inc. as administrative advisor.
The Debtors require an administrative advisor to:
a. assist with, among other things, solicitation, balloting
and tabulation of votes, prepare any related reports in support of
confirmation of a Chapter 11 plan, and process requests for
documents from parties involved in the Debtors' Chapter 11 cases;
b. prepare an official ballot certification and, if necessary,
testify in support of the ballot tabulation results;
c. assist with the preparation of the Debtors' schedules of
assets and liabilities and statements of financial affairs and
gather data in conjunction therewith;
d. provide a confidential data room, if requested; and
e. manage and coordinate any distributions pursuant to a
Chapter 11 plan.
The firm received an advanced retainer in the amount of $10,000.
Sheryl Betance, senior managing director at Stretto, disclosed in a
court filing that her firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Sheryl Betance
Stretto, Inc.
410 Exchange, Ste. 100
Irvine, CA 92602
Telephone: (714) 716-1872
Email: sheryl.betance@stretto.com
About Internap Holding
Internap Holding, LLC and affiliates provide compute resources
(i.e., an IT industry term referring to the ability to process
data) and storage services on demand via an integrated platform.
The Debtors' services include: (a) bare metal which are dedicated,
single-tenant servers utilizing Intel and AMD processors enabling
high-performance compute with rapid deployment, increased control,
enhanced security, and flexible configurations); (b)hosted private
cloud environments; (c) cloud computing backup services; and (d)
managed security to keep customer data secure and in alignment with
compliance requirements.
On March 16, 2020, Internap Technology Solutions Inc. and six
affiliated debtors, including INAP Corporation each filed a
voluntary petition for relief under Chapter 11 of the United States
Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-22393).
Internap Corporation, now INAP, and its U.S. subsidiaries
successfully emerged from Chapter 11 bankruptcy protection in May
2020. The court-approved bankruptcy exit plan significantly
strengthened the Company's financial position by reducing debt,
extending maturities and enhancing liquidity substantially.
Internap Holding and three affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10529) on April 28, 2023. In the petition filed by Michael
T. Sicoli, as chief executive officer, Internap Holding reported
between $100 million and $500 million in both assets and
liabilities.
The new cases are overseen by Honorable Bankruptcy Judge Craig T.
Goldblatt.
Internap tapped Jenner & Block, LLP and Saul Ewing, LLP as legal
counsels; and FTI Consulting, Inc. as financial advisor. Stretto,
Inc. is the claims agent and administrative advisor.
IVANTI SOFTWARE: $465M Bank Debt Trades at 18% Discount
-------------------------------------------------------
Participations in a syndicated loan under which Ivanti Software Inc
is a borrower were trading in the secondary market around 82.1
cents-on-the-dollar during the week ended Friday, May 19, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $465 million facility is a Term loan that is scheduled to
mature on December 1, 2027. About $456 million of the loan is
withdrawn and outstanding.
Ivanti Software, Inc. provides information technology services. The
Company offers IT asset management, security, endpoint, and supply
chain solutions.
JAJE ONE: July 13 Disclosure Statement Hearing Set
--------------------------------------------------
Judge Robert A. Mark has entered an order within which July 13,
2023 is the hearing to consider approval of the Disclosure
Statement of Jaje One LLC.
Judge Mark further ordered that July 6, 2023 is the deadline for
filing objections to Disclosure Statement.
A copy of the order dated May 16, 2023 is available at
https://bit.ly/3Ox4uhF from PacerMonitor.com at no charge.
The Debtor is represented by:
Joel M. Aresty, Esq.
Joel M. Aresty, P.A.
309 1st Ave S
Tierra Verde FL 33715
Tel: (305) 904-1903
Fax: (800) 899-1870
Email: Aresty@Mac.com
About Jaje One
JAJE One, LLC, a company in Miami Beach, Fla., sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case
No. 22-16629) on Aug. 28, 2022, with up to $10 million in assets
and up to $1 million in liabilities. Judge Robert A. Mark oversees
the case.
The Debtor is represented by Joel M. Aresty, Esq., at Joel M.
Aresty, P.A.
KARAFIN SCHOOL: Taps Pryor & Mandelup as Legal Counsel
------------------------------------------------------
The Karafin School, Inc. seeks approval from the U.S. Bankruptcy
Court for the Southern District of New York to employ Pryor &
Mandelup, LLP as its legal counsel.
The firm's services include:
a. legal advice with respect to the powers and duties of the
Debtor in the continued management of its business and property;
b. representing the Debtor before the bankruptcy court and at
all hearings;
c. assisting the Debtor in the negotiation with its creditors
and the preparation of a Chapter 11 plan of reorganization;
d. preparing legal papers; and
e. other necessary legal services.
The firm will be paid at these rates:
Partner $575 per hour
Counsel $525 per hour
Associates $450 per hour
Paralegals $175 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The retainer fee is $30,000.
Scott Mandelup, Esq., a partner at Pryor & Mandelup, disclosed in a
court filing that the firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Scott Mandelup, Esq.
Pryor & Mandelup, LLP
675 Old Country Road
Westbury, NY 11590
Tel: (516) 997-0999
Email: asm@pryormandelup.com
About The Karafin School
The Karafin School, Inc. is a special education school in Mount
Kisco, N.Y.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. N.Y. Case No. 23-22281) on April 18,
2023, with $90,000 in total assets and $2,595,369 in total
liabilities. Renee Donow, president of Karafin School, signed the
petition.
Judge Sean H. Lane oversees the case.
A. Scott Mandelup, Esq., at Pryor & Mandelup, LLP, represents the
Debtor as legal counsel.
KDP LLC: Case Summary & 14 Unsecured Creditors
----------------------------------------------
Three affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
KDP, LLC (Lead Case) 23-10662
24 Elm Street
Montpelier, VT 05602
KDP Asset Management, Inc. 23-10663
KDP Investment Advisors, Inc. 23-10664
Business Description: KDP Asset Management, Inc. is an investment
adviser registered with the SEC specializing
in the management of high yield bonds and
leveraged loans with a strong focus on
rigorous, bottom-up credit analysis.
Chapter 11 Petition Date: May 21, 2023
Court: United States Bankruptcy Court
District of Delaware
Judge: Hon. J. Kate Stickles
Debtors' Counsel: David Klauder, Esq.
Melissa M. Hartlipp, Esq.
BIELLI & KLAUDER, LLC
1204 N. King Street
Wilmington, DE 19801
Tel: (302) 803-4600
Email: dklauder@bk-legal.com
mhartlipp@bk-legal.com
Lead Debtor's
Estimated Assets: $1 million to $10 million
Lead Debtor's
Estimated Liabilities: $1 million to $10 million
The petitions were signed by Kingman D. Penniman as president and
chief executive officer.
Full-text copies of the petitions containing, among other items,
consolidated lists of the Debtors' 14 unsecured creditors are
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/M6AGX7Q/KDP_LLC__debke-23-10662__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/N3ISNCI/KDP_Asset_Management_Inc__debke-23-10663__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/SKDMVWA/KDP_Investment_Advisors_Inc__debke-23-10664__0001.0.pdf?mcid=tGE4TAMA
KIDDE-FENWAL INC: May 25 Deadline Set for Panel Questionnaires
--------------------------------------------------------------
The United States Trustee is soliciting members for committee of
unsecured creditors in the bankruptcy case of Kidde-Fenwal, Inc.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a questionnaire
available at https://bit.ly/3onphJLand return by email it to
Timothy Fox -- Timothy.Fox@usddoj.gov -- at the Office of the
United States Trustee so that it is received no later than 5:00
p.m., on May 25, 2023.
If the U.S. Trustee receives sufficient creditor interest in the
solicitation, it may schedule a meeting or telephone conference for
the purpose of forming a committee.
About Kidde-Fenwal
Kidde-Fenwal Inc. -- https://www.kidde-fenwal.com/ -- manufactures
fire protection systems. The Company offers products such as fire
control systems, explosion aircraft protection, laser-based smoke
detection devices, electronic gas ignitions, and fire suppressions.
Kidde-Fenwal markets its products to mining, manufacturing,
education, and commercial sectors.
Kidde-Fenwal Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-10638) on May 14, 2023.
In the petition filed by James Mesterharm, as chief transformation
officer, the Debtor reported assets between $100 million and $500
million and estimated liabilities between $1 billion and $10
billion.
Sullivan & Cromwell LLP and Morris Nichols Arsht & Tunnell LLP are
the Debtor's counsel. Stretto is the claims agent.
KIDDE-FENWAL: Uses Chapter 11 to Search for New Owner
-----------------------------------------------------
Jonathan Randles of Bloomberg Law reports that the fire-suppression
company Kidde-Fenwal Inc. scouts for new owner in Chapter 11
bankruptcy protection.
Kidde-Fenwal Inc., a maker of fire-suppression products, is using
bankruptcy to scout for a new owner.
It also plans to use Chapter 11 to determine if it can access
valuable insurance coverage related to a former subsidiary accused
of making a type of foam that contained a cancer-causing "forever
chemical."
The Ashland, Massachusetts-based company has a good business and a
"strong, healthy cash flow," KFI bankruptcy lawyer Andrew
Dietderich said Tuesday. But it's struggling because of substantial
litigation over fire-suppressing foam sold by a former subsidiary
that allegedly contained trace amounts of a chemical called
perfluorooctanoic acid.
About Kidde-Fenwal
Kidde-Fenwal Inc. -- https://www.kidde-fenwal.com/ -- manufactures
fire protection systems. The Company offers products such as fire
control systems, explosion aircraft protection, laser-based smoke
detection devices, electronic gas ignitions, and fire suppressions.
Kidde-Fenwal markets its products to mining, manufacturing,
education, and commercial sectors.
Kidde-Fenwal Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-10638) on May 14, 2023.
In the petition filed by James Mesterharm, as chief transformation
officer, the Debtor reported assets between $100 million and $500
million and estimated liabilities between $1 billion and $10
billion.
SULLIVAN & CROMWELL LLP and MORRIS NICHOLS ARSHT & TUNNELL LLP are
the Debtor's counsel. STRETTO is the claims agent.
LATHAM GROUP: S&P Alters Outlook to Negative, Affirms 'B+' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based swimming pool
manufacturer Latham Group Inc. to negative from stable and affirmed
all of its ratings, including its 'B+' issuer credit rating.
The negative outlook reflects the potential S&P will downgrade the
company over the next 12 months if it underperforms our
expectations because of a more-severe pull back in pool
installations that causes its leverage to rise above 4.5x and
remain at that level on a sustained basis.
The outlook revision reflects the risk that weakening economic
conditions could further depress the company's demand and,
subsequently, its performance.
S&P said, "Lower consumer demand and channel inventory destocking
caused Latham's S&P Global Ratings-adjusted leverage to increase
rapidly to 3.7x as of the 12 months ended April 1, 2023, from 2.5x
as of Dec. 31, 2022. In addition, we forecast the company's
leverage could increase above our 4.5x downside threshold in the
upcoming quarters, as it laps its strong performance during 2022,
before improving below 4.0x by the end of 2023 on a combination of
debt repayment and margin stabilization. We expect Latham's S&P
Global Ratings-adjusted EBITDA margins will decline by 300 basis
points (bps)-400 bps in 2023 due to lower fixed-cost absorption
from the anticipated decline in its volume and continued cost
inflation (for resins and labor), which will likely begin to
moderate in the latter part of the year. We believe the company's
cost-reduction program, optimization of its production and
staffing, and slow ramp up of its new Oklahoma and Kingston
facilities will help it sequentially improve its margins in the
second half of the year."
However, the weakening macroeconomic environment and the potential
for increasing layoffs of higher-income employees, as companies
look to cut costs, could have an outsize effect on new pool demand
because consumers would likely reduce spending on home renovations.
Moreover, Latham is more exposed to new pool installs that its more
replacement-demand oriented equipment peers, given that it derives
approximately 70% of its sales from new pool installs. Therefore,
the negative outlook reflects the risk that the improvement in the
company's operating performance will be weaker than expected in the
coming quarters and cause its leverage to remain above 4.5x into
2024 if its demand does not stabilize.
S&P forecasts the company will generate positive free operating
cash flow (FOCF) in 2023 due to its working capital management.
Despite using about $24 million of cash in its seasonally weak
first quarter, Latham's FOCF outflow in the first quarter of 2023
(ended April 1, 2023) was lower than during the same period in 2022
due to its reduced working capital usage. Moreover, S&P expects the
company will further work through its existing inventory as dealer
de-stocking abates. It has also slowed down the pace of production
at its new manufacturing facilities in Oklahoma and Kingston to
algin with current demand levels. As such, S&P forecasts minimal
working capital usage in 2023 and project the company will generate
positive FOCF of above $15 million. This will likely enable Latham
to maintain leverage below our 4.5x downgrade trigger, though not
without significant downside risk stemming from the potential for
an unexpected spike in cancellations amid its otherwise heathy
order backlog for the summer installation season.
Despite near-term growth headwinds, Latham's long-term outlook is
underpinned by favorable demographic trends and the improving
penetration of fiberglass pools.
The company increased its revenue by 10% in 2022, which reflected
its ability to take market share and expand the household
penetration of its fiberglass pools. Fiberglass pools are generally
cheaper than traditional concrete pools and feature shorter
delivery lead times. Still, Latham weathered an industry slowdown
in the fourth quarter of 2022 that led its revenue to decline by
23% year over year, which has accelerated to a 28% decline in the
first quarter of 2023. S&P forecasts the decline in the company's
revenue could increase to the 30% area over the next two quarters
before stabilizing in the fourth quarter, after it laps its very
weak results in the fourth quarter of 2022, because it expects its
demand will start to normalize. Although the coronavirus pandemic
led to some pull-forward pool purchases, Latham's long-term outlook
is healthy and supported by the accelerating population growth in
the southern U.S., where pools are more prevalent, and the
lower-priced and faster-to-install features of its fiberglass pool
products.
S&P said, "The negative outlook reflects the potential that we will
downgrade Latham over the next 12 months if it underperforms our
expectations and sustains leverage of more than 4.5x. This could
occur if a worsening macroeconomic environment constrains the
discretionary spending of higher-income consumers, further reducing
pool demand."
S&P could lower its ratings if the company increases its leverage
above 4.5x and sustains it at that level well into 2024. This could
occur if:
-- Pool demand continues to worsen and does not stabilize over the
next 12 months;
-- The company is unable to manage its costs and working capital
to generate positive FOCF; or
-- Management prioritizes acquisitions or shareholder returns over
debt reduction prior to a rebound in its EBITDA.
S&P could revise our outlook on Latham to stable if pool demand
stabilizes, enabling it to generate positive FOCF and maintain
leverage of below 4.5x. This could occur if:
-- Pool installations are in line with our expectations, pool
equipment demand remains stable over the coming quarters, and S&P
sees further signs of stabilization toward the end of 2023; and
-- The company maintains a prudent capital allocation policy by
not pursing shareholder returns or mergers and acquisitions (M&A)
until it stabilized its operations.
ESG credit indicators: E-2, S-2, G-3
LIFE BY ALICE: Taps Homesmart as Real Estate Broker
---------------------------------------------------
Life By Alice, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Georgia to employ Homesmart Realty
Partners to market and sell its residential real property located
at 376 Wellington St., Atlanta, Ga.
The firm will get a 6 percent commission of the gross sales price.
Tunisia Thorne, a partner at Homesmart, disclosed in a court filing
that the firm is a "disinterested person" pursuant to Section
101(14) of the Bankruptcy Code.
The firm can be reached at:
Tunisia Thorne
Homesmart Realty Partners
9755 Dogwood Rd Suite 250
Roswell, GA 30075
Tel: (678) 643-4222
Fax: (678) 905-9095
Email: tunisiathorne@gmail.com
About Life by Alice
Life by Alice, LLC, is a Georgia-based company that buys distressed
properties and then renovates and sells them.
The Debtor sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-51225) on Feb. 6,
2023, with $500,001 to $1 million in both assets and liabilities.
Judge Barbara Ellis-Monro oversees the case.
Will B. Geer, Esq., at Rountree, Leitman, Klein & Geer, LLC
represents the Debtor as counsel.
LIFESCAN GLOBAL: Moody's Appends 'LD' Designation to Caa2-PD PDR
----------------------------------------------------------------
Moody's Investors Service appended a limited default "/LD"
designation to LifeScan Global Corporation's Caa2-PD probability of
default rating, changing it to Caa2-PD/LD. The "/LD" designation
follows the change in terms under the company's recently amended
and extended 2nd lien term loan that incorporates triggering events
for interest to be paid-in-kind ("PIK"). Moody's will remove the
"/LD" designation from the company's PDR in three business days. At
the same time, Moody's affirmed the Caa2 corporate family rating
and Caa2-PD.
Concurrently, Moody's has assigned B1 ratings to LifeScan's new
super priority revolver tranches due in July 2025 and Oct. 2026, a
Caa1 rating to the new first lien term loan due Dec. 2026, and a
Caa3 rating to the new second lien term loan due Mar. 2027. At the
same time, Moody's downgraded the non-exchanged 1st lien term loan
due Oct. 2024 (approximately $27 million) to Ca from Caa1 due to
its subordination to all other debt in the payment waterfall
following the amend and extend transaction. There is no action on
the existing super priority revolver tranche due July 2024, which
remains pari passu ranked to the extended revolver tranches. The
outlook is stable.
These rating actions follow a $50 million equity injection from
current owners Platinum equity, as well as the completion of an
amend and extend transaction of the company's full debt capital
structure. All debt was exchanged at par, but terms of the
newly-borrowed 2nd lien term loan provide LifeScan with a
paid-in-kind (PIK) interest trigger that would become effective if
certain leverage and liquidity thresholds are met (through April
2025). In April 2025, a portion or all of the company's 2nd lien
term loan interest will become PIK. In Moody's view, the
transaction constitutes default avoidance due to PIK interest
triggers added to the 2nd lien term loan.
While Moody's notes that the transaction modestly improves
LifeScan's liquidity by extending the substantial majority of its
maturity wall, the company's overall liquidity remains weak.
LifeScan remains solely concentrated on blood glucose monitoring
(BGM), a business that remains in structural decline. The
affirmation of the Caa2 CFR reflects Moody's view that LifeScan's
capital structure may be unsustainable unless the company improves
its business diversity, liquidity, and growth prospects in the next
couple of years.
Affirmations:
Issuer: LifeScan Global Corporation
Corporate Family Rating, Affirmed Caa2
Probability of Default Rating, Affirmed Caa2-PD /LD (/LD
appended)
Assignments:
Issuer: LifeScan Global Corporation
Backed Senior Secured 1st Lien Term Loan, Assigned Caa1
Backed Senior Secured 2nd Lien Term Loan, Assigned Caa3
Backed Senior Secured 1st Lien Revolving Credit Facility, Assigned
B1
Downgrades:
Issuer: LifeScan Global Corporation
Backed Senior Secured 1st Lien Term Loan B, Downgraded to Ca from
Caa1
Outlook Actions:
Issuer: LifeScan Global Corporation
Outlook, Remains Stable
RATINGS RATIONALE
LifeScan's Caa2 Corporate Family Rating is constrained by Moody's
expectations that revenues will continue to decline for BGM
products as volume and pricing will remain pressured. Moody's
expects that CGM products -- a category where LifeScan is currently
working with a partner on a possible product, but does not yet
generate revenue -- will continue to gain share over time.
LifeScan's ratings also reflect the company's weak liquidity,
including Moody's expectation that the company will generate flat
to negative cash flow over the next 12 to 18 months after required
term loan amortization.
LifeScan benefits from its leading market position in BGM products
and its global presence with a majority of revenue generated
outside North America. The prevalence of diabetes continues to
grow, particularly in emerging markets, which is a partial offset
for inroads by CGM products in developed markets.
The company has weak liquidity, with $61 million of cash, and $62
million available in its $125 million revolver, for a total of $124
million of liquidity as of March 31, 2023, pro forma for the
transaction. Moody's expects that the company's liquidity cushion
will continue to be pressured by mandatory amortization
requirements (approximately $85 million annually pro forma as
recently amended, reduced from $103 million previously). The
company's leverage is high with debt/EBITDA in the mid-5 times
range on Moody's adjusted basis, which does not give EBITDA credit
for a significant portion of add-backs including restructuring
items, CGM spend, and certain other expenses.
LifeScan's CIS-5 indicates that the rating is lower than it would
have been if ESG risk exposures did not exist and that the negative
impact is more pronounced than for issuers scored CIS-4. LifeScan
has exposure to governance risks (G-5), driven by the company's
aggressive financial policies under private equity ownership,
including a transaction that Moody's considered to be a distressed
exchange. The score also reflects exposure to social risks,
primarily due to regulatory oversight of blood glucose products.
The stable outlook reflects Moody's view that LifeScan possesses
sufficient cash and revolver capacity to fund operations over the
next 12-18 months, though the overall liquidity profile is weak.
The B1 rating assigned to the super priority revolving credit
facility tranches reflects their senior position in the capital
structure, such that these lenders would be repaid in full before
any distributions to the other first lien lenders. The Caa1 rating
assigned to the first-lien term loan is one notch higher than the
Caa2 CFR. This reflects the facilities' first priority lien on
substantially all assets and the loss absorption provided by junior
debt. The Caa3 rating assigned to the new second-lien term loan is
two notches below the CFR. This reflects the effective
subordination of the second lien term loan to the senior secured
credit facilities. The Ca rating on the non-exchanged 1st lien term
loan (approximately $27 million) reflects its subordinated rankings
to all exchanged debt tranches in the payment waterfall.
As proposed, the new credit facilities provide covenant flexibility
that if utilized could negatively impact creditors. Notable terms
include the following:
Incremental debt capacity up to $25 million, in aggregate for
incremental facilities (if pari passu secured). No portion of the
incremental may be incurred with an earlier maturity than the
initial term loans.
The credit agreement permits the transfer of assets to unrestricted
subsidiaries, up to the carve-out capacities, subject to "blocker"
provisions which will include restrictions on the transfer to or
ownership by non-guarantor subsidiaries and affiliates of certain
material assets and property; amendments to these provisions are
subject to consent of each affected lender.
Subsidiaries must provide guarantees whether or not wholly-owned,
eliminating the risk that guarantees will be released because they
cease to be wholly-owned.
The credit agreement provides some limitations on up-tiering
transactions, including the requirement that each affected lender
must consent to amendments or waivers permitting the subordination
of the liens or obligations securing the exchanged first lien or
exchanged second lien credit facilities (other than in connection
with any super senior uptier or new money financings that are
offered to all lenders on a pro rata basis).
The company has also added a covenant to its new first lien credit
facility to maintain minimum liquidity of at least $60 million,
tested as of the last business day of each calendar month, subject
to equity cure rights. This covenant is an addition to the existing
financial maintenance covenant on the company's revolver, which
remains subject to a maximum consolidated first lien net leverage
covenant of 4.9 times, if more than 35% of its revolving credit
facility is utilized.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if liquidity improves, including
sustained positive cash flow after amortization requirements and
reduced utilization of the company's revolver. In addition, an
improvement in the company's operating performance, including a
stabilization of both revenues and margins, would also support an
upgrade. Finally, demonstration of improved business
diversification outside of BGM could also support an upgrade.
Ratings could be downgraded if liquidity further erodes, operating
performance deteriorates or the probability of default, including
by way of a transaction that Moody's would deem a distressed
exchange, were to rise.
The principal methodology used in these ratings was Medical
Products and Devices published in October 2021.
Headquartered in Malvern, PA, LifeScan Global Corporation is a
global manufacturer and distributor of BGM products including
meters, testing strips, lancets, point of care testing systems and
related monitoring software. Fiscal 2022 revenues were
approximately $910 million. LifeScan, previously a division of
Johnson & Johnson, was acquired by affiliates of Platinum Equity in
October 2018.
LIFESCAN GLOBAL: S&P Downgrades ICR to 'SD' on Distressed Exchange
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on LifeScan
Global Corp. to 'SD' (selective default) from 'CC' and its
issue-level rating on its second-lien term loan to 'D' from 'C'.
S&P's 'B' issue-level rating on the revolver and 'CCC+' issue-level
rating on the first-lien term loan are unchanged.
S&P will reassess its issuer credit rating and assign ratings to
the new debt over the coming days.
On May 19, 2023, LifeScan exchanged its $1.04 billion outstanding
first-lien term loan due October 2024 for a new first-lien term
loan due December 2026, its $275 million second-lien term loan due
October 2025 for a new second-lien term loan due March 2027, and
its $125 million super-priority revolving credit facility due July
2024 for a new super-priority revolving credit facility due
September 2026.
S&P said, "We lowered our ratings on LifeScan following the
completion of its distressed exchange. As part of the transaction,
the company exchanged all of its outstanding second-lien term loan
due October 2025 with the consenting holders for a new second-lien
term loan due March 2027. We view the transaction as distressed
because the second-lien debtholders received less value than they
were originally promised. Although LifeScan paid the lenders a
consent fee, the interest margin on the term loan is unchanged, and
it would partially or fully replace the cash interest with
pay-in-kind interest if its leverage increases.
"Additionally, we believe there was a realistic probability of a
conventional default in the near term without the transaction
because the company faces ongoing headwinds to its core blood
glucose monitoring (BGM) product, deteriorating liquidity, and
heightened refinancing risk amid its approaching debt maturities.
"We believe that LifeScan's business will remain challenged for the
next 12-24 months, given the uncertainty around the approval and
commercialization of its continuous glucose monitoring (CGM)
products, as well as the declining demand for its traditional
static BGM product, which could pressure its margins and free cash
flow.
"We plan to reevaluate the issuer credit rating in the near term
based on the company's new capital structure and near-term business
prospects. Our review will focus on the long-term viability of
LifeScan's capital structure, recent events, and our
forward-looking opinion of its creditworthiness."
MESA TERRACE: Gets OK to Hire Fennemore Craig as Legal Counsel
--------------------------------------------------------------
Mesa Terrace Condominium Association received approval from the
U.S. Bankruptcy Court for the District of Arizona to employ
Fennemore Craig, P.C. to handle its Chapter 11 case.
The firm will be paid at these rates:
Heather Macre, Esq. $520 per hour
Anthony W. Austin, Esq. $525 per hour
Jason Thomas, Esq. $390 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Anthony Austin, Esq., a partner at Fennemore Craig, disclosed in a
court filing that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Anthony W. Austin, Esq.
Fennemore Craig, P.C.
2394 E. Camelback Rd., Suite 600
Phoenix, AZ 85016
Tel: (602) 916-5000
Email: aaustin@fennemorelaw.com
About Mesa Terrace Condominium Association
Mesa Terrace Condominium Association filed a petition under Chapter
11, Subchapter V of the Bankruptcy Code (Bankr. D. Ariz. Case No.
22-04590) on July 14, 2022, with up to $1 million in both assets
and liabilities. Michael W. Carmel has been appointed as Subchapter
V trustee.
Judge Brenda Moody Whinery oversees the case.
D. Lamar Hawkins, Esq., at Guidant Law, PLC and Vial Fotheringham,
LLP serve as the Debtor's bankruptcy counsel and special counsel,
respectively.
MICROGEM US: Hits Chapter 11 Bankruptcy Protection
--------------------------------------------------
MicroGEM US Inc. filed for chapter 11 protection in the Western
District of Virginia.Â
The Debtor sought and obtained an order extending by 14 days until
June 5, 2023, its deadline to file its schedules of assets and
liabilities and statement of financial affairs.
On or about April 27, 2023, the Debtor retained Heather Williams of
CR3
Partners, LLC to provide it with a Chief Restructuring Officer.
Prior to the Petition Date, the CRO's focus was on preparing the
creditor matrix, which contains approximately 880 creditors and
parties in interest, and other documents necessary for filing the
bankruptcy case. The CRO is in the process of gathering the
information needed for the Schedules and SOFA.
According to court filings, MicroGEM estimates between $50 million
and $100 million in debt to 200 to 999 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 13, 2023, at 12:00 PM at crmtg CVL.
About MicroGEM US Inc.
MicroGEM US Inc. offers scientific research and development
services.
MicroGEM US Inc. filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. W.D. Va. Case No. 23-60528) on May 8,
2023. In the petition filed by Mark Allen, as manager, the Debtor
reported assets between $1 million and $10 million and liabilities
between $50 million and $100 million.
The case is overseen by Honorable Bankruptcy Judge William J.
Fisher.
The Debtor is represented by:
Brandy M. Rapp, Esq.
Whiteford Taylor & Preston LLP
705D Dale Avenue
Charlottesville, VA 22903
MILLERS HOME: Business Revenue to Fund Plan Payments
----------------------------------------------------
Millers Home Repair Remodeling & Design, LLC, filed with the U.S.
Bankruptcy Court for the District of Colorado a Plan of
Reorganization for Small Business under Subchapter V dated May 16,
2023.
The Debtor is a home remodeling and repair business headquartered
in Aurora, Colorado. The business is structured as a single member
limited liability company formed under the laws of the State of
Colorado. Walter Kevin Miller is the sole member of the Debtor.
Two negative developments hampered the business operations of the
Debtor. Those unforeseen events resulted in the Debtor borrowing
substantial sums which cannot be paid in the ordinary course of
business and which is the focus of the Plan. The national COVID
crises led the Debtor to applying for and accepting two EIDL loans
from the United States Small Business Administration (the "SBA").
The second unforeseen development was a serious truck accident
involving Mr. Miller in the Summer of 2022. Due to the need for
emergency financing, the Debtor borrowed money at a high interest
rate from On Deck Capital which has filed two proofs of claim in
the respective amounts of $50,192 and $88,545.
As of the petition date and per the Debtor's schedules, the value
of the tangible personal property is approximately $37,000. Such
property is subject to the senior lien of the SBA and, therefore,
the SBA claim based upon the 2020 financing is bifurcated into a
secured portion of $37,000 and an unsecured portion of $115,390.
Class 1(a) consists of the claim of the SBA with respect to its
$152,390 Proof of Claim will be bifurcated into a secured claim in
the amount of $37,000 and an unsecured claim of $115,390. The
unsecured portion of the claim will be paid pro rata with all other
allowed unsecured claims in Class 4. The secured portion of the SBA
claim will be paid in monthly installments for the first 39 months
of the Plan in the amount of $715 with a balloon payment of $13,582
in Month 40 of the Plan. The secured portion is to be paid at 6%
interest based upon a 5-year amortization with a 40-month term.
Class 1(b) consists of the unsecured portion of the SBA's claim in
the amount of $152,390 is calculated to be $115,390. The unsecured
portion will be paid together with all other unsecured claims in
Class 4 on a pro rata basis based upon a percentage of the Debtor's
gross income during Months 5 through 40 of the Plan (36 months).
Class 1 (b) is deemed to be impaired.
Class 2 consists of the $421,128 claim of the SBA. Although the
loan made by the SBA to the Debtor in January 2022 was structure as
a secured loan in the amount of $399,000, the Debtor has
insufficient collateral to secure such loan in any amount. Thus,
the $421,128 proof of claim filed by the SBA is considered to be
unsecured and shall be paid pro rata with all such other unsecured
claims in Class 4. Class 2 is deemed to be impaired.
Class 3 consists of the claims of ODK Capital in the respective
amount of $50,192 and $88,545. Although the merchant cash advance
financing obtained by the Debtor in the Fall of 2022 were intended
to be secured, as of the petition date the Debtor held insufficient
collateral for any portion of the claims filed by ODK Capital to be
considered secured. Thus, the total claims filed by ODK Capital in
the amount of $138,737 are deemed to be unsecured and shall be paid
pro rata together will all such other unsecured claims in Class 4.
Class 3 is deemed to be impaired.
Class 5 includes Interests in the Debtor held by the sole pre
confirmation member, Walter Kevin Miller. Class 5 is unimpaired by
this Plan. On the Effective Date of the Plan, Class 4 Interest
Holder shall retain his Interest in the Debtor which he owned prior
to the Confirmation Date, subject to the terms of the Plan.
On the Effective Date of the Plan, Dieyleh shall be appointed
pursuant to Section 1142(b) of the Bankruptcy Code for the purpose
of carrying out the terms of the Plan, and taking all actions
deemed necessary or convenient to consummating the terms of the
Plan.
The Debtor has requested that its financial professionals appointed
by the Court prepare a projection of revenues and expenses for a 40
month Plan term. Although the margins for the Debtor are somewhat
limited, the projection reflects that the Debtor should be
profitable for the term of the Plan and be capable of making
payments to those creditors entitled to receive distributions
hereunder.
A full-text copy of the Plan of Reorganization dated May 16, 2023
is available at https://bit.ly/3WsomnL from PacerMonitor.com at no
charge.
Co-Counsel to The Debtor:
Stuart J. Carr
2851 S. Parker Rd., Suite 710
Aurora, CO 80014
(303) 369-1915; (303) 369-0277 FAX
E-Mail: stuartjcarr@hotmail.com
- and -
Jan L. Hammerman, Esq.
Law Office of Jan L. Hammerman
PO Box 3446
Englewood, CO 80155
Telephone: (720) 261-8013
Email: jlhammerman111@msn.com
About Millers Home Repair Remodeling & Design
Millers Home Repair Remodeling & Design sought protection for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo.
Case No. 23-10347) on Feb. 1, 2023, with up to $50,000 in assets
and $500,001 to $1 million in liabilities.
Stuart J. Carr, P.C. and SL Briggs, A Division of SingerLewak, LLP,
serve as the Debtor's legal counsel and financial advisor,
respectively.
MISS BRENDA: Wins Interim Cash Collateral Access
------------------------------------------------
The U.S. Bankruptcy Court for the District of Alaska at Anchorage
authorized Miss Brenda LLC and Sea West, Inc. to use cash
collateral on an interim basis.
The Court said the Debtors are permitted to use the Bank Account
Funds to pay insurance premiums.
In order to protect Trident Seafood Corporation from any
post-petition diminution in the value of its prepetition cash
collateral, Trident is granted a replacement lien in any
post-petition cash collateral generated by Miss Brenda LLC to the
same extent and in the same validity and priority as Trident's lien
in prepetition collateral.
As previously reported by the Troubled Company Reporter, Trident
holds an interest in the cash collateral of Miss Brenda. Trident is
the assignee of a loan from the People's Bank to the Debtor in the
original principal amount of $750,000. The People's Bank Loan
documents include a Commercial Security Agreement providing a grant
of a security interest by the Debtor Miss Brenda in the
substantially all of its personal property.
A UCC-1 financing statement was filed to perfect the People's Bank
security interest with the Alaska Department of Natural Resources
on April 25, 2018, recording number 20180072125 for which a
continuation statement was filed on December 8, 2022, recording
number 20220190364. In addition, the People's Bank loan included a
first position preferred ship mortgage on the fishing vessel Miss
Brenda, which had a survey value of $1.2 million as of May 2021.
As of the Petition Date, the Debtor calculated the outstanding
balance on the People's Bank Loan as $626,934. The loan agreement
provides for non-default interest at the rate of 6% per annum and a
default rate of 12% per annum.
Debtor Sea West is obligated to Trident on a separate loan in
amount that Debtor Sea West calculated as $255,223 as of the
Petition Date. Trident calculated the loan balance as higher, with
the difference due to the application or non-application of
approximately $70,000 in funds held by Trident on account of Sea
West.
The Sea West loan is secured by a first position preferred ship
mortgage on Debtor Sea West's vessel, Northern Dawn, and a second
position preferred ship mortgage on Miss Brenda.
As of the Petition Date, Debtor Miss Brenda held $41,304 in its
bank account, constituting Trident's prepetition cash collateral to
secure the People's Bank Loan.
Insurance premium payments for the vessels Miss Brenda and Northern
Dawn was due May 1, 2023, in the respective amounts of $13,448 and
$8,923 (half of the annual premium for each.
A copy of the order is available at https://rb.gy/5zlur from
PacerMonitor.com.
About Miss Brenda LLC
Miss Brenda LLC is in the fishing industry. Miss Brenda LLC and Sea
West, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Alaska Lead Case No. 23-00041) on March
16, 2023.
In the petition signed by Jack D. Berntsen, manager, Miss Brenda
LLC disclosed $1,530,826 in assets and $626,933 in liabilities.
Judge Gary Spraker oversees the case.
Christine M. Tobin-Presser, Esq., at Bush Kornfeld LLP, represents
the Debtors as legal counsel.
MONITRONICS INT'L: Gets Court Nod for $399M Chapter 11 Finance Dea
------------------------------------------------------------------
Rick Archer of Law360 reports that a Texas federal bankruptcy judge
Tuesday, May 16, 2023, let home security company Monitronics
International Inc. move forward with its Chapter 11 case, allowing
its proposed plan to go to a vote and approving $398.6 million in
bankruptcy financing.
As reported in the TCR, Monitronics International has struck an
agreement with lenders to cut its debt by about $500 million and
will initiate chapter 11 proceedings this May 2023.
Existing lenders have committed about $387 million worth of
funding. That includes $90 million to fund the chapter 11 process
and $297 million to refinance its existing revolving credit
facility and term loan.
The Debtors have entered into the Restructuring Support Agreement,
with (i) certain senior secured term and revolving loan lenders
(the "Consenting 2019 Exit Facility Lenders") under that certain
Senior Secured Credit Agreement, dated as of August 30, 2019, by
and among Monitronics, as borrower.
Under the terms of the Restructuring Support Agreement, the
Restructuring Support Parties agreed to deleveraging transactions
that would restructure the existing debt obligations of the Debtors
through the Plan. The Restructuring Support Parties include a
significant majority of the Holders of the Debtors' funded debt
(lenders holding in the aggregate 100% of the 2019 Takeback Term
Loan Facility and approximately 71.9% of the 2019 Exit Credit
Facilities as of May 15, 2023) as well as a significant majority of
the Holders of Monitronics Equity Interests (approximately 72.75%
as of May 9, 2023). Such parties represent the requisite voting
majorities under
the Bankruptcy Code for both Class 3 (2019 Takeback Term Loan
Claims) and Class 7 (Monitronics Equity Interests). All other
classes of Claims or Equity Interests in the Plan are Unimpaired.
The Restructuring proposed by the Debtors will leave the Debtors'
businesses intact and substantially de-levered, providing for the
reduction of approximately $500 million of debt upon emergence.
This de-leveraging will enhance the Debtors' long-term growth
prospects and competitive position and allow the Debtors to emerge
from the Chapter 11 Cases as reorganized entities better positioned
to withstand the competitive security and alarm services industry.
About Monitornics International
Farmers Branch, Texas-based Monitronics International, Inc. (doing
business as Brinks Home) is an American company that offers home
security systems. It is primarily engaged in the business of
providing residential and commercial customers with monitored home
and business security systems, as well as interactive and home
automation services.
After reaching a deal with lenders on a restructuring plan,
Monitronics International and its affiliates sought Chapter 11
protection (Bankr. S.D. Tex. Lead Case No. 23-90332) on May 15,
2023.
In the petitions signed by CEO William E. Niles, Monitronics
International disclosed $1 billion to $10 billion in assets and
liabilities.
The Hon. Christopher M. Lopez oversees the cases.
The Debtors tapped HUNTON ANDREWS KURTH LLP and LATHAM & WATKINS
LLP as counsel; ALVAREZ & MARSAL NORTH AMERICA, LLC, as financial
advisor; PJT PARTNERS LP as investment banker; and KROLL
RESTRUCTURING ADMINISTRATION, LLC as claims agent.
NAI ENTERTAINMENT: Reduced Dividend No Impact on Moody's B3 CFR
---------------------------------------------------------------
Moody's Investors Service said NAI Entertainment Holdings LLC's
("NAIEH" or the "company") B3 Corporate Family Rating, B3 rating on
the senior secured term loan and stable outlook are not immediately
impacted by the announcement earlier this month that Paramount
Global will slash its dividend by 79%. On May 4, 2023, Paramount
said it would reduce its quarterly dividend per share from 24 cents
to 5 cents, which will decrease the dividend income on NAIEH's
owned Paramount shares, a credit negative. The dividend cut takes
effect July 1, 2023.
Prior to the dividend cut, Moody's estimated that NAIEH would
receive approximately $22.3 million in dividend income this year
($5.6 million per quarter) from its pledged and unpledged shares of
Paramount common stock, which consisted of roughly 9.7 million
shares of Class A stock and 13.6 million shares of Class B stock.
Pro forma for the 79% dividend cut, Moody's originally estimated
NAIEH's annual dividend income would decrease about $17.7 million
to roughly $4.6 million in 2023 ($1.16 million per quarter).
However, keeping in mind that NAIEH's 2022 fiscal year ended on
December 29, 2022 and the dividend cut takes effect on July 1st,
combined with the increase in its owned Paramount shares by roughly
3.4 million in February, the company effectively received the
former $0.24/share quarterly dividend on January 1, 2023 ($5.6
million) and April 1, 2023 ($6.4 million, based on expanded share
ownership); and will receive the new $0.05/share quarterly dividend
on July 1, 2023 ($1.33 million), October 1, 2023 ($1.33 million)
and January 1, 2024 ($1.33 million). Hence, in fiscal 2023 (ends on
January 4, 2024), Moody's estimated total dividend income is
revised to approximately $16 million, a 28% year-over-year (yoy)
decline, which will decrease to around $4 million in fiscal 2024.
While the dividend reduction will reduce NAIEH's annual dividend
income, offsetting this is the better-than-expected box office
performance in North America, which Moody's expects will lead to
higher profitability this year for NAIEH and the entire cinema
industry. Moody's previously estimated that North American ticket
sales would increase 15%-20% in 2023 to around $8.5 - $9 billion.
However, given the strong movie slate consisting of several big
franchise and blockbuster films debuting this year (more than 25),
the industry has already experienced a robust 37% yoy increase in
box office receipts through April, even before arrival of the
seasonally strong summer moviegoing period. With at least 12 big
tentpoles scheduled to debut between May and September, Moody's
expect this trend will continue and now conservatively estimate
domestic ticket sales will increase roughly 30% this year to $9.4 -
$9.6 billion. Given the company's solid operating leverage, as
revenue expands, Moody's expect improved margins and significantly
higher pre-dividend EBITDA compared to Moody's prior forecast.
Consequently, Moody's new forecast continues to expect leverage
improving to the 10x-11x range at the end of this year and
advancing further to the 8x area by year end 2024 (all leverage
metrics calculated and adjusted by Moody's and include NAIEH's
dividend income). Though Moody's expect liquidity to remain
adequate, Moody's now estimate FCF to improve to the -$5 million to
-$12 million range compared to -$15 million to -$20 million in
Moody's earlier forecast.
On February 24, 2023, NAIEH raised a $50 million incremental term
loan, which was collateralized by 3.22 million of NAIEH's unpledged
Paramount common shares, comprising 1.4 million of the company's
Class A stock and 1.82 million of its Class B stock, and a
contribution of an additional 780,000 shares of Class B stock owned
by NAIEH's parent, National Amusement, Inc. ("NAI"). Currently,
approximately 6.1 million of NAIEH's Class A stock and 13.2 million
of its Class B stock are pledged as collateral for the $257.5
million outstanding term loan and new $50 million term loan add-on.
Notably, at the time of the debt raise, NAI amended its revolver to
reduce the commitment to $75 million from $90 million and extend
the maturity to November 2024. In connection with this
modification, roughly 3.4 million shares of Paramount Class A stock
that were previously pledged as collateral for the NAI revolver
were released and returned to NAIEH, and are no longer pledged.
Headquartered in Norwood, Massachusetts, NAI Entertainment Holdings
LLC is a wholly-owned subsidiary of National Amusements, Inc., a
private media holding company 100% owned and controlled by the
Redstone family, and operates a significant proportion of NAI's
cinema assets through its 71 theatres and 700 screens across a
global footprint with18 theatres in the US and 53 theatres overseas
(17 in the UK and 36 in Latin America). Revenue totaled
approximately $277 million for the fiscal year ended December 29,
2022.
NORTH CHANNEL ASSISTANCE: Court OKs Cash Collateral Access
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized North Channel Assistance Ministries to
use cash collateral to pay Goebel Properties, d/b/a/ Surplus Sales
and Affordable Homes from the Debtor's DIP Account the sum of
$8,950.
The Court said the Debtor's Chapter 11 bankruptcy case is
dismissed.
As previously reported by the Troubled Company Reporter, prior to
the filing, the Debtor owed:
-- Goebel Properties, d/b/a Surplus Sales and Affordable Homes
as Mortgage Holder, $22,155 of which $8,950 is arrearages; and
-- the Texas Work Force Commission $124 in unemployment
taxes.
The Debtor has received a commitment from The Shrimp Connection
LLC, to pay $13,000 at increments of $1,000 a month to the Mortgage
Holder in order for the Debtor to obtain a mortgage lien release.
This offer is conditional upon the Debtor obtaining court authority
to pay from the Debtor's own funds the $8,950 arrearage payment.
The Debtor has such funds available in its Debtor in Possession
Account. The Debtor contended the payment would not unduly
prejudice its obligation to any other creditor.
One of the Debtor's main impediments in obtaining local donor
support has been the inability to require parties to provide proof
of income before any type of assistance was granted. Pursuant to
UADA or EFSP, government funding required the Debtor to distribute
without verifying their income. The Debtor has now implemented a
policy that it will no longer rely on USDA or EFSP funding and
allow distribution to families that have verified an income below
the U.S. poverty guidelines. The result of this change will have
the immediate effect of increasing funding from the Debtor's
traditional donor community which was lost due to the COV1D-19
emergency.
A copy of the order is available at https://rb.gy/llyxd from
PacerMonitor.com.
About North Channel Assistance Ministries
North Channel Assistance Ministries owns in fee simple title three
buildings located on 1.5 acres of land located at 13837 Bonham St.,
Houston, TX 77015 valued at $750,000.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-31204) on April 3,
2023. In the petition signed by Rodney Reford, president/executive
director, the Debtor disclosed $1,090,675 in assets and $86,155 in
liabilities.
Judge Christopher Lopez oversees the case.
Jack N. Fuerst, Esq. represents the Debtor as legal counsel.
OFFICE INTERIORS: COO Miller Has $1.37-Mil. Stalking Horse Bid
--------------------------------------------------------------
Michael Schwartz of Richmond BizSense reports that a potential
white knight has swooped in to pull a local office furniture
company out of bankruptcy – and he comes from within the ranks of
the company itself.
William Ray Miller, COO of Henrico-based Office Interiors of
Virginia, is bidding to buy his employer, which is currently in
Chapter 11 bankruptcy.
OIVA sought bankruptcy protection on April 16, 2023 stating in
court records that it took a financial hit from a combination of
factors prompted by the pandemic.
Its plan going into bankruptcy was to keep creditors at bay and
remain open for business while either reorganizing its debts or
finding a buyer.
Court records this month show that its bankruptcy attorneys and
bankruptcy trustee are focused on a sale of the company's assets
and have received an initial offer from Miller with a proposed
purchase price of $1.37 million.
That price includes Miller's assuming $1.25 million worth of the
company's debts owed to First Community Bank, plus $150,000 in
cash.
While court records state that Miller is not an owner of OIVA, he
is personally obligated as guarantor on some of the company's
debts. The money owed to First Community Bank accounts for the
largest secured debt on OIVA's balance sheet.
If approved by the court, Miller's bid would become the so-called
stalking horse bid, which would set a floor price that could be
increased by other potential bidders.
Court records state that if other bids come in, an auction would be
held on June 14, 2023.
Brittany Falabella, an attorney with the Hirschler law firm
representing OIVA in its Chapter 11 case, said Miller's offer has
not yet been formally established as the stalking horse bid by the
bankruptcy court and the OIVA bankruptcy estate is "still actively
soliciting for any interested parties."
"There has been interest in this company. We're trying to reach as
many potentially interested parties as possible," Falabella said.
Miller could not be reached for comment by press time.
OIVA was founded in Ashland in 1988, offering office furniture,
office space design and construction, office moving and other
services.
The 35-year-old company has around 35 employee and reported assets
of $1.8 million and $3.84 million in liabilities, $2 million of
which is owed to secured creditors.
OIVA said in earlier court filings that its troubles began shortly
after its cofounders both died unexpectedly and it was sold to new
ownership in February 2020. The company's current owner is listed
in filings as Othniel Glenwood Jordan, who is also its CEO. He owns
100 percent of the company, filings state.
Falabella previously said the timing of that 2020 sale couldn't
have been worse, as the pandemic threw the future of office space
into an unprecedented gray area, parts of which continue to
linger.
According to its latest filings, the company reported revenue of
$4.57 million in 2021, $7.8 million in 2022 and $845,000 through
the first quarter of 2023.
About Office Interiors of Virginia
Office Interiors of Virginia, Inc., was founded in 1988 in Ashland,
Virginia, and provides an array of services to central Virginia and
beyond, including office space design and construction, office
moving services, general construction, and data migration.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Va. Case No. 23-31324) on April 16,
2023. In the petition signed by Othniel Glenwood Jordan, chief
executive officer, the Debtor disclosed up to $10 million in both
assets and liabilities.
Judge Keith L. Phillips oversees the case.
Brittany B. Falabella, Esq., at Hirschler Fleischer, PC, is serving
as the Debtor's legal counsel.
PARADOX RESOURCES: Case Summary & 30 Largest Unsecured Creditors
----------------------------------------------------------------
Lead Debtor: Paradox Resources, LLC
500 Dallas Street, Suite 1650
Houston, TX 77002
Business Description: Paradox Resources is an integrated energy
company that now owns multiple producing oil
and gas fields.
Chapter 11 Petition Date: May 22, 2023
Court: United States Bankruptcy Court
Southern District of Texas
Seven affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Paradox Resources, LLC (Lead Case) 23-90558
Paradox Midstream, LLC 23-90559
Paradox Upstream, LLC 23-90560
Capital Commercial Development, Inc. 23-90561
Neuhaus Barrett Investments, LLC 23-90562
Four Corners Energy, LLC 23-90563
Four Corners Pipeline, LLC 23-90564
Judge: Hon. David R. Jones
Debtors' Counsel: Matthew Okin, Esq.
David L. Curry, Jr., Esq.
Ryan A. O'Connor, Esq.
OKIN ADAMS BARTLETT CURRY LLP
1113 Vine St., Suite 240
Houston, TX 77002
Tel: (713) 228-4100
Fax: 888-865-2118
Email: info@okinadams.com
mokin@okinadams.com
dcurry@okinadams.com
roconnor@okinadams.com
Debtors'
Restructuring
Advisor: STOUT RISIUS ROSS, LLC
Debtors'
Notice,
Claims &
Balloting
Agent: DONLIN, RECANO & COMPANY, INC.
Lead Debtor's
Estimated Assets: $50 million to $100 million
Lead Debtor's
Estimated Liabilities: $50 million to $100 million
The petition was signed by Todd A. Brooks as CEO.
A full-text copy of the Lead Debtor's petition is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/DIV7WGY/Paradox_Resources_LLC__txsbke-23-90558__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Office Of Natural Resources Government $1,500,311
PO Box 25165
Denver CO 80225-0165
Michael Marchetti
Tel: 303-819-6304
Email: Michael.Marchetti@onrr.gov
2. Elk Petroleum Aneth, LLC Trade $1,341,666
1700 Lincoln Street
Suite 2550
Denver CO 80203
Jeff Roedell
Tel: 970-646-6696
Email: jroedell@elkpetroleum.com
3. San Juan County Tax Tax $846,487
Assessor
PO Box 817
Monticello UT 84535-0817
Bruce Adams
Tel: 435-587-3223
4. Rocky Mountain Power Utilities $564,781
1033 Ne 6th Avenue
Portland OR 97256-0001
5. US Small Business Bank Loan $500,000
Administration
PO Box 3918
Portland OR 97208-3918
6. Rocky Mountain Natural Gas Utilities $459,426
PO Box 1400
Rapid City SD 57709
Nick Clark
Tel: 303-243-3501
Nick.Clark@blackhillscorp.com
7. Spn Well Services, Inc Trade $402,784
779 Valley Ct
Grand Junction CO 81505
Kyle DiDonato
Tel: 970-257-6170
Email: kdidonato@spnws.com
8. Tally Drilling, LLC Trade $387,548
5611 Baird Court
Houston TX 77041
Brian McNutt
Tel: 713-443-4669
Email: brian.mcnutt@tallyenergy.com
9. Halliburton Energy Services Inc Trade $383,119
3199 D Rd
Grand Junction CO 81504
Mark Mayo
Tel: 970-523-3716
Email: mark.mayo@halliburton.com
10. Phoenix Services LLC Trade $277,333
1670 Bloomfield Blvd
Farmington NM 87401
Vicki Cox
Tel: 505-325-1125
Email: Vicki@phoenix-servicesllc.com
11. Summit Operating, LLC Trade $275,669
531 East 770 North
Orem UT 84097
Larry R. Williams
Tel: 801-573-2110
Email: larry@thesummitcompanies.com
12. Ware, Incorporated Trade $273,897
3401 Bashford Ave Court
Louisville KY 40218
Tel: 502-968-2211
Email: sarah.hunley@wareinc.com
13. J-W Power Company Trade $269,579
PO Box 674814
Dallas TX 75267-4814
Janet Peeler
Tel: 303-835-3457
Email: jpeeler@jwenergy.com
14. San Miguel County Treasurer Tax $255,846
PO Box 488
Telluride CO 81435-0488
Tel: 970-728-4451
15. Sep-Montezuma Creek, LLC Trade $250,847
531 E 770 N
Oren UT 84097
16. Cutters Wireline Service Inc. Trade $246,132
905 S Hutton Rd
Farmington NM 87401
Chris Caliendo
Tel: 505-327-7141
Email: ccaliendo@thewirelinegroup.com
17. Tucker Transportation Inc Trade $244,873
23156 County Road N
Cortez CO 81321
Morgan Tucker
Tel: 970-565-0449
Email: office@tuckertransportationinc.com
18. Western Chemical, LLC Trade $214,742
PO Box 1327
Roosevelt UT 84066-1327
Joe Arnold
Tel: 435-823-0797
Email: joe@western-chemical.com
19. Tops Well Services, LLC Trade $204,453
3077 Outlet Center Dr.
Sealy TX 77474
Sophie Xu
Tel: 979-627-7434*103
Email: sxu@topswellservices.com
20. Ideal Electric Power Company Trade $196,305
330 East First Street
Mansfield OH 44902-7700
Calvin Bosma
Tel: 419-522-3611
Email: accts.receivable@theidealelectric.com
21. Quality Compression Serv Inc Trade $186,102
PO Box 364
Dove Creek CO 81324
Rob Howell
Tel: 970-739-5785
Email: howell.quality@gmail.com
22. United States Treasury Tax $181,660
Internal Revenue Service
Ogden UT 84201-0038
23. Millennium Contracting, Inc. Trade $179,551
PO Box 1499
Cortez CO 81321
Tel: 970-564-1808
Email: millennium.contracting@yahoo.com
24. CJ Construction, Incorporated Trade $176,802
PO Box 510
Montezuma Creek UT 84534
Corey Johnson
Tel: 505-609-5608
Email: corey@cjconstructioncorp.com
25. Extreme Wireline, Incorporated Trade $168,026
PO Box 150
Vernal UT 84708-0150
Heather Lamoreaux
Tel: 801-633-1569
Email: extreme0835@gmail.com
26. Capitol Operating Group, LLC Trade $162,014
5750 Johnston Street, #103
Lafayette LA 70503
Kayla Menard
Tel: 337-534-8686
Email: kmenard@cogllc.com
27. Amplify Energy Operating, LLC Trade $149,837
500 Dallas Street, Suite 1700
Houston TX 77002
Tel: 713-490-8900
Email: donna.tijerina@amplifyenergy.com
28. Zeco Equipment, LLC Trade $148,609
PO Box 1459
Vernal UT 84078
Dwayne Murray
Tel: 435-781-0454
Email: saiged@zeco.biz
29. Quail Tools, LLC Trade $140,495
PO Box 10739
New Iberia LA 70562-0739
Mark LeMaire
Tel: 970-986-9568
Email: marklemaire@quailtools.com
30. Insight Environmental, Inc. Trade $140,438
1330 Rayford Park Road
Suite C
Spring TX 77386
PDC ENERGY: Moody's Puts 'Ba2' CFR on Review for Upgrade
--------------------------------------------------------
Moody's Investors Service placed PDC Energy, Inc.'s ratings on
review for upgrade, including its Ba2 corporate family rating and
its Ba3 senior unsecured rating. PDC's outlook is changed to
ratings under review from stable.
These rating actions follow the agreement reached by Chevron
Corporation (Chevron, Aa2 stable) to acquire PDC in a $7.6 billion
all-stock transaction, including PDC's outstanding debt. The
transaction is expected to close by year-end 2023, subject to PDC
shareholder and regulatory approvals and other customary closing
conditions.
The potential ownership by Chevron is a positive for PDC given
Chevron's much stronger credit profile. In addition, PDC's assets
are highly complementary to Chevron's and the acquisition will
allow for PDC's highly productive and regulatorily burdened DJ
Basin assets in Colorado to be absorbed into Chevron's much larger
and geographically diverse upstream operations. Within Chevron's
portfolio, the effect of Colorado's greater permitting burden
(relative to most other US states) will be more diluted than it was
for PDC on a stand-alone basis.
On Review for Upgrade:
Issuer: PDC Energy, Inc.
Corporate Family Rating, Placed on Review for Upgrade, currently
Ba2
Probability of Default Rating, Placed on Review for Upgrade,
currently Ba2-PD
Senior Unsecured Regular Bond/Debenture, Placed on Review for
Upgrade, currently Ba3
Outlook Actions:
Issuer: PDC Energy, Inc.
Outlook, Changed To Rating Under Review From Stable
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
PDC's ratings were placed on review for upgrade based on their
potential ownership by Chevron Corporation (Aa2 stable) which has a
much stronger credit profile and financial resources. If PDC's
notes remain outstanding and are guaranteed by Chevron then the
ratings on the notes would be upgraded to Chevron's rating level.
If PDC were to be an unguaranteed subsidiary of Chevron post
acquisition and continue to provide separate audited financial
statements going forward, then its ratings would likely be upgraded
based on anticipated parental support. However, the ratings upgrade
would likely be limited to the Baa category unless there are
significant changes to PDC's stand-alone credit profile.
Denver, CO-based PDC Energy (PDC) is an independent North American
exploration and production (E&P) company with operations in the
Wattenberg Field in Colorado and the Delaware play of the Permian
Basin in Texas. Chevron Corporation is headquartered in San Ramon,
California and is among the world's largest integrated oil and gas
companies.
The principal methodology used in these ratings was Independent
Exploration and Production published in December 2022.
PDC ENERGY: S&P Places 'BB' Issuer Credit Rating on Watch Positive
------------------------------------------------------------------
S&P Global Ratings placed all of its ratings on PDC Energy Inc.,
including its 'BB' issuer credit rating and 'BB' issue-level rating
on its debt, on CreditWatch with positive implications.
The CreditWatch placement reflects that S&P will likely raise its
issuer credit rating on PDC following the close of the acquisition,
which S&P expects will occur by year-end 2023.
On May 22, 2023, San Ramon-based integrated oil and gas company
Chevron Corp. announced it had entered into a definitive purchase
agreement to acquire PDC Energy Inc. in a transaction valued at
about $7.6 billion, including the assumption of PDC's debt.
S&P said, "The CreditWatch placement reflects that we will likely
upgrade PDC Energy following the close of its acquisition by
higher-rated Chevron Corp (AA-/Stable/A-1+). We will likely view
PDC Energy as a core subsidiary of Chevron given the strategic fit
of the assets--which are located in Colorado--and the likelihood
that Chevron will either repay or assume PDC's outstanding debt."
The transaction has been approved by the boards of directors of
both companies and is subject to customary closing conditions and
regulatory approvals.
S&P expects to resolve the CreditWatch placement when the
acquisition closes, which it expects will occur by the end of
2023.
The CreditWatch positive placement reflects that S&P will likely
raise its issuer credit rating on PDC Energy to the same level as
our long-term issuer credit rating on Chevron when the deal closes,
assuming the transaction is completed as proposed and there are no
material changes to our operating assumptions.
PHARMASTRATEGIES LLC: Taps Hutchinson as Counsel in RXDC Suit
-------------------------------------------------------------
Pharmastrategies LLC seeks approval from the U.S. Bankruptcy Court
for the District of Colorado to employ Hutchinson Black and Cook,
LLC as special counsel.
The Debtor needs the firm's legal assistance in connection with an
adversary proceeding (Adv. Proc. No. 23-01095) filed against its
creditor, RXDC, LP.
Hutchinson will be paid at these rates:
Kimberly Hult, Esq. $450 per hour
Jonathan Boonin, Esq. $450 per hour
Associate Attorneys $225 to 600 per hour
Paralegals $125 per hour
Kimberly Hult, Esq., a partner at Hutchinson, disclosed in a court
filing that her firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Kimberly Hult, Esq.
Hutchinson Black and Cook, LLC
921 Walnut Street, Suite 200
Boulder, CO 8030
Tel: (303) 442-6514
Email: kimberly.hult@hbcboulder.com
About Pharmastrategies LLC
PharmaStrategies, LLC, a company in Black Hawk, Colo., sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Colo. Case No. 22-14405) on Nov. 10, 2022. In the petition signed
by its manager, Larry Krug, the Debtor disclosed up to $50,000 in
assets and up to $10 million in liabilities.
Judge Michael E. Romero oversees the case.
The Debtor tapped David V. Wadsworth, Esq., at Wadsworth Garber
Warner Conrardy, PC as bankruptcy counsel. Benezra & Culver, PC and
Hutchinson Black and Cook, LLC serve as the Debtor's special
counsels.
PHILADELPHIA SCHOOL: Fitch Affirms IDR at 'BB+', Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed the following School District of
Philadelphia (SDP) ratings:
- Issuer Default Rating (IDR) at 'BB+';
- $2.32 billion GO and GO refunding bonds at 'BB+';
- Approximately $900.6 million Pennsylvania State Public School
Building Authority (PSPSBA) school lease revenue and revenue
refunding bonds issued on behalf of SPDSPD at 'BB'+';
The GO and PSPSBA bonds have an enhanced rating of 'A+' with a
Positive Rating Outlook, reflecting protections under Pennsylvania
statutes outlining intercept of Commonwealth aid for school
districts (Pennsylvania School Credit Intercept Provision) and the
Positive Outlook on the commonwealth's IDR.
The Outlook for the IDR and underlying ratings is Revised to
Positive from Stable.
Entity/Debt Rating Prior
----------- ------ -----
Philadelphia
School District
(PA) LT IDR BB+ Affirmed BB+
SECURITY
The district pledges its full faith, credit and taxing power to
repayment of the GO bonds. The bonds are also subject to
protections under Pennsylvania statutes outlining intercept of
commonwealth aid for school districts under the Pennsylvania School
Credit Intercept Provision. The commonwealth's pre-default
intercept mechanism provides for full and timely payment of debt
service through the ability to intercept all state revenues
appropriated to the district.
ANALYTICAL CONCLUSION
The Outlook revision to Positive from Stable reflects the
district's ability to maintain positive reserve balances since
fiscal 2016(reversing the prior trend of negative general fund
balances prior to fiscal 2015). It also reflects the recent
commonwealth court ruling on Feb. 7, 2023, that found the current
state funding system inadequately and inequitably. The judge in the
case called on the state legislature to appropriately address the
issue, which may result in comprehensive funding reforms that Fitch
believes will be beneficial to the district's ability to achieve
structurally balanced operations.
The 'BB+' underlying GO, lease revenue bond ratings and IDR reflect
SPD's constrained budgetary environment, with limited independent
ability to materially alter its fiscal profile. The district has
seen improvements in its financial operations due to meaningful
recurring revenue commitments enacted by the commonwealth (IDR
AA-/Positive) and the city of Philadelphia (IDR A+/Stable) through
tight spending controls in recent years. Federal stimulus aid
provides a meaningful near-term budgetary cushion and funds other
needs, including $210 million in new school construction and $75
million to update the district's teaching materials.
The 'A+' long-term rating on the bonds reflects the credit
enhancement provided by the Pennsylvania School Credit Intercept
Provision.
Economic Resource Base
The district is coterminous with the city of Philadelphia, which
serves as a regional economic center in the Northeast with a stable
employment base weighted toward the higher education and healthcare
sectors. Jobs expansion had been steady and strong prior to the
outbreak of the coronavirus, but comparatively low wealth levels
and modest population increases persist, limiting growth prospects.
The city's 2020 Census population is 1.6 million, up 3.3% from the
2010 Census. School enrollment has been declining, pressured by
growth in charter schools.
KEY RATING DRIVERS
Revenue Framework: 'a'
Fitch expects SPDSPD's revenue growth will approximate the
long-term rate of inflation. The district's key revenue components
are property taxes and commonwealth appropriations. Under state
law, SPD has the ability to levy up to 16.75 mills on taxable real
estate without city council approval. The district does not intend
to levy property taxes other than those authorized by the city
council on the district's behalf. Fitch's revenue framework
assessment focuses more on the revenue growth prospects than the
ability to control revenue increases given the practical and
political constraints of independently raising the millage rate.
Expenditure Framework: 'bbb'
Fixed carrying costs for debt and post-employment benefits are
moderate, but Fitch views charter school spending as SPD's most
critical expenditure challenge. Fitch anticipates the natural pace
of spending growth to be above expected revenue growth due to cost
pressures associated with employee compensation and contributions
to charter schools. The labor environment poses limitations on
expenditure flexibility and pressures spending growth.
Statutorily-defined commonwealth reimbursements offset a
significant share of pension spending.
Long-Term Liability Burden: 'aa'
Long-term liabilities present a moderate burden on the district's
economic resource base. Other post-employment benefit (OPEB)
liabilities are modest, with the district providing a capped
healthcare subsidy for retirees through the statewide teachers'
pension plan system.
Operating Performance: 'bb'
The district's financial position has improved in recent years,
with increased reserve balances bolstered by federal relief aid and
increased commitments from the city for new and recurring revenues.
However, financial flexibility remains limited and the district
continues to address longer-term structural issues. Both
Philadelphia and Pennsylvania have previously stepped in to support
the district and Fitch anticipates similar assistance will occur as
needed in the future.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Significant changes in the school funding framework, as
recommended by a recent commonwealth court ruling, that materially
improves SPD's revenue growth prospects and mitigates ongoing
spending pressures;
- Continued improvement of the district's operating performance
that supports progress towards budgetary structural balance and a
sustained improvement in the district's overall financial
resilience.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Significant and sustained budgetary pressure on the commonwealth
and city of Philadelphia that result in reductions in educational
aid and other subsidies that impede the district's financial
sustainability;
- An inability to retain budget balance after the federal relief
funds expire that results in weakened budget flexibility;
- Material or sustained increases in the mandatory per-pupil
payments SPD makes to charter schools or increasing charter school
enrollment that results in more spending pressures.
CURRENT DEVELOPMENTS
The general fund ended Fiscal 2022 with a $201.9 million general
fund surplus primarily driven by operating revenues that was
slightly above budgeted expectations and spending were below due to
salary savings from staffing challenges, and reductions in
facilities spending and other savings. Federal relief funds
provided a substantial $736.8 million, or 18% of operating revenues
and other financing sources, based on year to date results; roughly
13% less than estimates in the adopted budget.
The SPD 2023 adopted budget assumed a large operating fund surplus
driven by a 31.8% increase in state aid and $459 million of federal
relief funds, 12% of revenue and other financing sources. The
infusion of federal funding supports the expectation for a sizable
surplus for fiscal 2023. The budgeted state aid reflects the
governor's budget proposal, which reflects an increase in the basic
educational aid and savings in charter costs associated with the
governor's revised charter school funding proposal. The budgeted
expenditures assume a $226 reduction in tuition payments and
transportation costs for charter school students, including roughly
$145 million in reduced cyber charter school tuition and special
education costs.
The governor's proposed 2024 budget includes a 7.8% increase in
basic aid and the SPD is projecting a $71.8 million increase in the
state basic education (5.3%) subsidy and $3.2 million (1.9%) in
special education subsidy. Federal revenues including relief funds
in FY24 are projected to total $528.4 million. Charter school costs
are projected to account for one third of the district's budgeted
expenditures and is projected to increase $235 million over fiscal
2023 due to higher charter school spending per pupil. Charter
school funding is based on a per pupil formula and the district
continues to see increased charter and cyber charter school
enrollment.
The proposed five-year financial plan assumes the federal relief
aid will be exhausted in fiscal 2025, resulting in operating
deficits from fiscal 2025 through fiscal 2028. The drop-off in
stimulus funds and the projected emergence of a gap between
spending and revenue in fiscal 2025 will have to be addressed. If
the gaps persist, the district would likely drawn down reserves
although the unrestricted general fund balance would remain
positive through fiscal 2026. The city of Philadelphia's Five-Year
Plan assumes $1.4 billion in local grants over the five-year
period, including $282 million for fiscal 2024, reflecting a 4.5%
increase over the 2023 adopted budget.
CREDIT PROFILE
The district is the nation's 8th-largest school district and the
largest in the commonwealth.
The 2021 enrollment totaled 197,288 students, of whom 82,221 or 41%
were enrolled in charter schools or alternative education programs.
Charter school enrollment including cyber-charter enrollment
increased during the pandemic but the district expects enrollment
to stabilize and remain relatively flat in 2024 and beyond.
Revenue Framework
Commonwealth allocations and local revenues each typically comprise
about one-half of SPD's revenues. Pennsylvania's funding comes
primarily in the form of direct aid for education and reimbursement
for a substantial share of annual pension costs. The commonwealth
has made permanent a dedication of cigarette tax revenues of at
least $58 million annually, and recently provided increased basic
education funding (BEF) under a more favorable funding formula.
Local revenues consist mainly of a property tax and certain other
taxes collected by the city as school tax collector, an annual
statutorily mandated payment of $120 million of the sales tax
levied by the city and collected by the commonwealth, and direct
grants made by the city.
Fitch anticipates revenue growth will be slow, in line with the
long-term expectation for inflation. The commonwealth has only
decreased annual funding to SPD once in the past three decades.
There were multiple decreases to basic BEF, the largest component,
including just after the Great Recession, but the commonwealth
continued to fund a share of pension expense and overall state
funding generally increased. Unlike in many other states, the vast
majority of local school aid in Pennsylvania is not distributed on
a per-pupil basis and is not directly tied to enrollment.
The city worked with the commonwealth to increase school funding
including a state mandated $120 million annual allocation of a
local sales tax increase to SPD, the city authorized multiple
increases in the district's property tax levy, and committed to
more additional funding phased in over multiple years beginning in
fiscal 2019. Property taxes are more than one-half of local
revenue, and Fitch views prospects for growth in the city's tax
base positively.
The commonwealth has granted the district authority to levy
property taxes of up to 16.75 mills, although this authority was
limited while the district was in distressed status between
December 2001 and December 2017. This rate is more than double the
7.681 mills the city authorizes on behalf of the school district,
providing high independent revenue-raising ability. SPD has
indicated no intention to utilize this authority, and the city does
not believe it practically available. As such, Fitch puts minimal
weight on this theoretical revenue-raising ability.
Expenditure Framework
Charter school payments (including transportation) represent
approximately one-third of governmental funds expenditures
(excluding non-recurring programs funded with federal relief aid),
and are a significant constraint on expenditure flexibility.
Nevertheless, management has demonstrated its ability to implement
aggressive cost-cutting measures during periods of economic
downturns. Federal aid relieved the district of the need to make
meaningful spending cuts during the pandemic.
Fitch anticipates expenditure growth will continue to exceed
expected revenue growth in the absence of policy actions. Charter
school and salary and wage pressures have been the primary growth
drivers in recent years, and continue to add modest pressure.
SPD's carrying costs (debt service, actuarially determined pension
contributions and actual OPEB contributions) are moderate at under
16% of spending. The carrying costs are lower when adjusted for the
commonwealth's reimbursement of two-thirds of the annual pension
expenses, which is based on a statutory formula tied to each school
district's property values and personal income.
Fitch assesses the district's expenditure flexibility as
constrained given high levels of charter school expenditures and
the inflexible workforce environment. Adding charter school
expenditures to carrying costs, Fitch estimates total fixed costs
at over 40% of total governmental funds expenditures.
The school administrators and school safety staff (accounting for
10% of total district staff) laabor contract negotiations are
governed by a state law that allows for labor or management to
trigger binding arbitration in the event of an impasse. The
district's fiscal and economic conditions are not a required
evaluation factor. Teachers and facilities employees (93% of the
workforce) are not covered by binding arbitration but can authorize
a strike. The current teachers' contract agreement expires on Aug.
31, 2024.
Long-Term Liability Burden
SPD's long-term liability burden is moderate at approximately 12%
of personal income. Most debt is for capital needs, but the
district has occasionally benefited from financing issued by the
city to provide operating revenues for the district to manage
budgetary stress.
The district's six-year capital improvement program (CIP) totals $2
billion and assumes the district will issue approximately $350
million in debt every two years. The additional debt will have a
modest impact on outstanding direct debt, which totals
approximately $3.2 billion. The district is in the process of
beginning a three-phase facilities master plan that includes data
analytics and public engagement to establish facilities and capital
needs. Substantial additional debt issuance by the city (thereby
increasing overlapping debt) or the district without commensurate
economic growth could pressure the assessment of SPD's long-term
liability burden.
The net pension liability was 37% of the total liability burden in
fiscal 2022. The district's pension funding for the PSERS is
determined by commonwealth statutes that dictated a ramp up to full
actuarially determined levels by fiscal 2017. The pension liability
has been relatively stable since then.
Terms of the pension system, including annual budgetary
requirements, are wholly outside of the district's control, as the
plan is statewide. The ratio of net pension assets to liabilities
was 57.2% using the Fitch adjusted 6% rate of return on pension
assets.
The district's solid market access reflects the credit enhancement
offered by Pennsylvania's intercept provisions for school aid.
Legislation provides for commonwealth general fund money to make
intercept-eligible debt service payments, including for the
district's Tax and revenue notes (TRANs), in the event of a
prolonged commonwealth budget impasse.
Operating Performance
Despite recent improvements in operating performance, aided by
successful negotiation with state and local partners, the district
maintains only adequate gap-closing capacity to address economic
downturns. The district anticipates that healthy surpluses in
fiscal 2023 and 2024 will bolster reserves, but management will
need to manage projected budget gaps in fiscal 2025 and beyond
through efficiencies and other spending controls.
SPD's budgetary management practices are sound but are limited by
fiscal constraints. Fitch believes that management will continue to
actively address and minimize the projected budget gaps, and will
continue to work with the city and commonwealth to support
sufficient education funding.
SPD's narrow liquidity profile, partially resulting from the timing
of the receipt of city property tax revenues nine months into the
district's fiscal year, is bolstered by consistent marketplace
access for cash flow borrowing, supported by the state aid
intercept program.
Fiscal year-end government wide days cash on hand is typically
narrow, approximating 57 days in fiscal 2022. TRAN issuance provide
the district liquidity in anticipation of the bulk of property tax
collections. Consistent with recent practice, the district issued
$500 million in TRANs in July 2022.
In addition to the sources of information identified in Fitch's
applicable criteria specified below, this action was informed by
information from Lumesis.
ESG CONSIDERATIONS
Fitch has revised the ESG Relevance Score for Labor Relations &
Practices to '4' from '3' due to due to the impact of labor
negotiations on the district's expenditure flexibility. This has a
negative impact on the credit profile, and is relevant to the
ratings in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
PHINIA INC: S&P Assigns 'BB+' Issuer Credit Rating, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issuer credit rating to
PHINIA Inc. S&P also assigned a 'BB+' issue level rating and '3'
recovery rating to the company's proposed $500 million term loan B,
indicating its expectations of meaningful recovery (50%-70%;
rounded estimate: 60%) in the event of a payment default.
S&P's stable outlook reflects its expectation that the company will
continue maintaining debt to EBITDA of under 1.5x and free
operating cash flow (FOCF) to debt of over 25% over the next 12
months.
The company is a leading supplier of fuel systems, with good
geographic and market diversification, and low customer
concentration.
The company has leading market positions as a supplier of fuel
systems to original equipment manufacturers (OEMs) as well as a
strong aftermarket business. Its largest customer, General Motors
Co., only made up 12% of total 2022 revenue, and its top five
customers only represented 32% in 2022. S&P believes this reduces
reliance on any single customer, mitigating risk of potential
customer losses. The company also has good geographic revenue
diversification across the Americas (41% of 2022 revenue), Europe
(39% of 2022 revenue), and Asia (20% of 2022 revenue), which helps
mitigate regional demand cyclicality. The company's end markets are
also diversified, having generated 27% of 2022 sales to commercial
vehicle and industrial OEM customers, 46% to light vehicle OEM
customers, and 27% to aftermarket customers. However, the company's
strengths are offset by the smaller scale of its revenue and
earnings base relative to other supplier peers. Within fuel
systems, the company competes against much larger peers who are
better capitalized such as Bosch, Denso, and Hitachi, who all
generate total revenues in excess of $40 billion annually.
S&P views the aftermarket business as a positive factor given its
lower demand cyclicality and lower immediate sensitivity to the
electric vehicle (EV) transition. The installed car parc globally
is primarily powered by internal combustion engines (ICE) and the
average vehicle age is over 12 years (and growing). These factors
should support continued demand for PHINIA's aftermarket parts and
services. S&P views starters and alternators as a nondiscretionary
business tied to vehicle miles drive, supporting both profit
stability and strong free cash flow generation. Still, the
aftermarket is extremely fragmented and competitive, and it
includes companies like Burgess Point and First Brands, both of
which have increased market share substantially in recent years.
The company lacks a clear strategy to offset declining ICE vehicle
production, which over time may reduce revenues and profitability.
The company is susceptible to EV transition risk as the majority of
its products and services are catered to traditional ICE vehicles.
While the company does benefit from diversification in the
aftermarket and commercial vehicle segment, which will take longer
to electrify, fuel systems sales to light vehicle customers faces
the greatest risk of EV displacement as it is electrifying the
fastest. S&P said, "We forecast that by 2025 over 30% of new light
vehicle sales will be battery/plug-in hybrid electric vehicles
(BEVs/PHEVs) in Europe, 35%-40% in China, and 18%-23% in the U.S.
If the trend toward electric vehicles were to accelerate further,
this would be quite negative for PHINIA. However, we think there
will be opportunities for PHINIA to gain more share of the
shrinking ICE market as smaller players are forced out and OEMs
look to further outsource ICE manufacturing. Although the company
has made some investments into hydrogen technology, we view this as
a nascent industry and its longer-term commercial viability is
still unclear."
The company's credit metrics are strong but there are risks in
operating as a stand-alone entity.
In the near-term we believe that as OEMs deemphasize their ICE
manufacturing and reallocate resources to EV manufacturing, they
could outsource more production. This, along with recovery in auto
production volumes globally, should drive top line growth for
PHINIA of about 1%-2% in 2023 and 2%-3% in 2024. S&P said, "We
forecast S&P adjusted EBITDA margins of 14%-15% in 2023 and 2024,
which is above most automotive supplier peers of its own size. Our
forecast incorporates some margin decline from historical levels as
the company starts to bear stand-alone operating costs.
Furthermore, as a smaller spin-off of a larger parent, the company
could find its bargaining power and ability to increase prices
diminished, though this risk is somewhat offset by its strong
customer and product diversification. We expect the company to
continue restructuring its operations and optimize its cost
footprint. The company will have funded debt of a proposed $300
million term loan A, proposed $500 million term loan B, and an
existing $26 million senior unsecured note. Given the earnings
profile, we expect S&P Global Ratings-adjusted leverage of
1.0x-1.5x in 2023 and 2024. We view the lower leverage as a benefit
to the credit profile, particularly given the cyclicality of its
fuel systems business and smaller earnings base relative to
peers."
A deviation from its legacy financial policy to increase leverage
for acquisitions or shareholder returns is also a risk.
S&P said, "Over the longer term, we believe the company will
maintain leverage of below 1.5x and generate free cash flow to debt
in excess of 25%. This reflects our expectation that the company
will continue to conservatively manage its leverage profile, which
is critical to its ratings given the cyclicality of auto demand and
longer-term secular decline of its revenue and earnings base. Our
base-case expectation is that the company makes tuck-in
acquisitions to consolidate smaller peers in the fuel supply
segment or to bolster its hydrogen portfolio funded by free cash
flow. We also believe the company could return cash to shareholders
through share repurchases if it doesn't find accretive acquisition
opportunities. If the company does issue debt to fund acquisitions
or shareholder returns, we would continue to expect it to maintain
leverage below 1.5x in the longer term. However, if the company
were to depart from this more conservative strategy and do a larger
acquisition that increased leverage materially, we could lower our
rating.
"The stable outlook on PHINIA reflects our expectation that the
company will continue maintaining debt to EBITDA of below 1.5x and
FOCF to debt of above 25% over the next 12 months as recovering
automotive volumes support profitability."
S&P could lower its rating on PHINIA if it expects the company will
sustain debt to EBITDA above 2x or FOCF to debt below 25%, which
could happen if:
-- Operating performance deteriorates due to lower ICE industry
volumes resulting from lower automotive demand, heightened pace of
EV transition without new offsetting business wins, or
greater-than-expected inflationary pressures coupled with
heightened competitive pressures; or
-- The company adopts a more aggressive financial policy and
pursues debt-funded acquisitions, share repurchases, or dividends.
While unlikely, S&P could raise its rating on PHINIA if the
company:
-- Significantly expands its scale and product offerings, largely
mitigating the risk of declining new ICE vehicle production
volumes;
-- Maintains adjusted EBITDA margins at least in the mid-teens
percent area; and
-- Sustains credit metrics in line with its current financial risk
profile and liquidity position.
ESG credit indicators: E-4, S-2, G-2
Environmental factors are a negative consideration in S&P's credit
rating analysis of PHINIA. It derives a large portion of its
revenues from its fuel systems business segment, which sells
traditional fuel injection systems for cars and trucks. PHINIA also
has an aftermarket business segment that caters to fuel injections,
electronics, engine management, starters, and other traditional ICE
vehicle components. These factors introduce volume displacement
risks for the company in the long run compared to other auto
suppliers as the production of electric vehicles accelerates.
Social and governance factors have no material influence on our
rating analysis.
PRECISION FORGING: Seeks to Hire Master Plan as Accountant
----------------------------------------------------------
Precision Forging Dies, Inc. seeks approval from the U.S.
Bankruptcy Court for the Central District of California to employ
Master Plan, LLC as its accountant.
The Debtor requires an accountant to:
a. oversee the internal accounting systems employed by the
Debtor;
b. assist in gathering information for the preparation of
federal and state tax returns;
c. assist in preparing and reviewing financial projections;
d. assist the Debtor in complying with the guidelines and
reporting requirements promulgated by the Office of the United
States Trustee; and
e. provide additional financial analysis, projections, and other
accounting services as may be required.
The firm will be paid $175 per hour for accounting and bookkeeping
services.
Daniel Geiger, a partner at Master Plan, disclosed in a court
filing that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Daniel Geiger
Master Plan LLC
6767 W. Tropicana Ave., Ste 215
Las Vegas, NV 89103
Tel: (702) 734-8881
About Precision Forging Dies
Precision Forging Dies, Inc. -- https://precisionforgingdies.com --
specializes in precision manufacturing and servicing of structural
components, tooling, and turbines for military, commercial and
space industries. The company is based in South Gate, Calif.
Precision Forging Dies filed a petition for relief under Subchapter
V of Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No.
23-12015) on April 3, 2023. In the petition filed by its chief
executive officer, Dan Kloss, the Debtor reported $10 million to
$50 million in assets and $1 million to $10 million in
liabilities.
Judge Julia W. Brand oversees the case.
The Debtor tapped Robert P. Goe, Esq., at Goe Forsythe & Hodges,
LLP as legal counsel and Master Plan, LLC as accountant.
QUORUM: Moody's Lowers CFR to Caa2 & Alters Outlook to Negative
---------------------------------------------------------------
Moody's Investors Service downgraded QBS Parent, Inc.'s (dba
"Quorum") corporate family rating to Caa2 from B3 and its
probability of default rating to Caa2-PD from B3-PD. Concurrently,
the company's first lien senior secured term loan was downgraded to
Caa1 from B2. Moody's also assigned a Caa1 rating to the company's
$35 million revolving credit facility due 2024 and withdrew the
rating under the existing revolving credit facility due 2023. The
outlook was changed to negative from stable.
The downgrade of the CFR to Caa2 reflects Moody's view that
Quorum's credit profile will remain weak because of the high
interest burden, ongoing restructuring and integration expenses and
only modest EBITDA growth supporting expectation for continuing
cash burn through the end of 2024. Moody's views the default risk
to be heightened, including a potential for a distressed exchange
or debt restructuring as the current structure may be
unsustainable.
The downgrade also reflects governance considerations, particularly
that financial strategies have grown more aggressive given the
company's diminished liquidity and very high debt-to-EBITDA
leverage of around 20.0 times as of December 31, 2022. Quorum's
quality of earnings remains poor given extensive EBITDA add-backs,
such as restructuring and integration expenses and pro forma cost
savings, currently allowed under the company's bank credit
agreement. Moody's has revised Quorum's Governance Issuer Profile
Score (IPS) to G-5 (very highly negative) from G4 (highly
negative). Concurrently, Moody's has revised the company's Credit
Impact Score (CIS) to CIS-5 (very highly negative) from CIS-4
(highly negative).
RATINGS RATIONALE
The Caa2 CFR reflects Quorum's very high debt-to-EBITDA leverage
(Moody's adjusted) estimated to be 20.0 times at 31 December 2022
(15.0 times including pro forma cost savings), weak liquidity due
to sizable interest rate burden and Moody's concern that the
company's debt capital structure may be unsustainable without a
large and unanticipated increase in earnings, or a balance sheet
restructuring. Moody's anticipates that the company's quality of
earnings and financial leverage will improve over the next 12-18
months, such that debt-to-EBITDA (Moody's adjusted) will trend
towards 9.5 times. However, the company's liquidity will continue
to be pressured if interest rates remain elevated. The rating also
considers the refinancing risk with respect to the company's
outstanding revolver loans that come due in December 2024, where
Moody's assumes no market access. Quorum's very modest revenue
scale and exposure to cyclical energy industry also constrain the
company's credit profile.
Positive credit consideration is given to the mission-critical
nature of the company's solutions and its strong niche position as
a provider of vertically-focused back-office business software
solutions to companies in the energy industry. Recent acquisitions
have diversified Quorum's revenue sources beyond largely upstream
enterprise resource processing ("ERP") services, and into midstream
operations that are less exposed to energy commodity prices that
the upstream segment. Quorum's high gross customer retention rates
in the mid-90s% range and a transition to a more recurring-revenue
model, in which subscriptions now make up roughly 70% of revenues,
provide an ancillary cushion against energy sector volatility. The
strong energy market, including high oil prices and growth in rig
counts, as well as ongoing trend towards digitization, provide
credit support.
Moody's expects Quorum to have weak liquidity over the next 12-15
months. Moody's anticipates cash flow deficits in 2023 and 2024
given the current interest rate environment. Quorum generates most
of its annual cash flow in the first quarter given the large
renewal cycle for its subscription contracts, with the balance
depleting during the seasonally weaker latter quarters of the year.
Moody's projects the company's $35 million revolving credit
facility expiring December 2024 to remain largely drawn over the
next 12-15 months. Moody's assumes no market access and considers
the outstanding revolving loans due and payable in December 2024.
The company's term loans include no financial maintenance
covenants, while the revolver includes a static, maximum senior
secured first lien net leverage covenant set at 7.25x and that is
triggered at 35% utilization. The company's reported first lien net
leverage ratio was around 6.24x as of December 31, 2022 (14%
covenant cushion). Moody's projects modest EBITDA growth over the
next 12-18 months and anticipates adequate covenant cushion will be
maintained.
The downgrade of the first lien senior secured credit facility
rating to Caa1 from B2, one notch higher than the company's Caa2
CFR, reflects the expected benefit of the loss absorption support
provided to the credit facility by the $125 million senior secured
second lien term loan (unrated).
The negative outlook reflects Moody's expectation for weak credit
metrics and liquidity, compounded by the refinancing risk. Moody's
is concerned that Quorum's probability of default could further
increase if cash flow deficits are substantially higher or if debt
restructuring is likely.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the negative outlook, a ratings upgrade is unlikely in the
near term. An upgrade would require the company to demonstrate
strong earnings recovery while substantially improving its
liquidity profile, including reducing reliance on its credit
facility. Additionally, Moody's adjusted debt-to-EBITDA below 8.5
times and annual free cash flow is maintained at least breakeven
could warrant consideration for a ratings upgrade.
Moody's could downgrade the ratings if Quorum's operating
performance deteriorates, the revolver expiration is not
proactively addressed or if liquidity is materially weaker than
expected. The ratings could also be downgraded if the likelihood of
a distressed exchange or other form of default increases.
Assignments:
Issuer: QBS Parent, Inc.
Backed Senior Secured 1st Lien Revolving Credit Facility, Assigned
Caa1
Withdrawals:
Issuer: QBS Parent, Inc.
Backed Senior Secured 1st Lien Revolving Credit Facility,
Withdrawn, previously rated B2
Downgrades:
Issuer: QBS Parent, Inc.
Corporate Family Rating, Downgraded to Caa2 from B3
Probability of Default Rating, Downgraded to Caa2-PD from B3-PD
Backed Senior Secured 1st Lien Term Loan, Downgraded to Caa1 from
B2
Outlook Actions:
Issuer: QBS Parent, Inc.
Outlook, Changed To Negative From Stable
The principal methodology used in these ratings was Software
published in June 2022.
Headquartered in Houston, TX, Quorum is a software development and
consulting company that designs, develops, implements, and supports
ERP software solutions to companies in the North American energy
industry. The company is owned by affiliates of Thoma Bravo
Partners as the result of a late-2018 LBO.
RBJ PROPERTIES: Case Summary & One Unsecured Creditor
-----------------------------------------------------
Debtor: RBJ Properties, LLC
5457 Twin Knolls Ct.
Columbia, MD 21046
Business Description: RBJ is a full service real estate remodeling
and real estate development company
servicing Maryland.
Chapter 11 Petition Date: May 15, 2023
Court: United States Bankruptcy Court
District of Maryland
Case No.: 23-13383
Judge: Hon. Nancy V. Alquist
Debtor's Counsel: Robert N. Grossbart, Esq.
GROSSBART, PORTNEY & ROSENBERG, P.A.
100 North Charles Street
1 Charles Center, 20th floor
Baltimore, MD 21201
Tel: (410) 837-0590
Fax: (410) 837-0085
Email: Robert@Grossbartlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Lafonte Johnson as sole member.
The Debtor listed Danett, LLC as its single unsecured creditor
holding a claim of $1,000.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/RJAOZLY/RBJ_Properties_LLC__mdbke-23-13383__0001.0.pdf?mcid=tGE4TAMA
REMOTEMD LLC: Unsecured Claims Under $2,500 to Recover 41%
----------------------------------------------------------
RemoteMD, LLC, filed with the U.S. Bankruptcy Court for the Eastern
District of Louisiana a Plan of Reorganization for Small Business
dated May 16, 2023.
Debtor provides Consulting Services to assist Corporate Clients
with the development, implementation, and management of their
Medical Policies and Procedures.
This Plan provides for the creation of a Litigation Trust. On the
Effective Date, the Reorganized Debtor on their own behalf and on
behalf of the holders of Allowed Claims, shall execute the
Litigation Trust Agreement. The entry of the confirmation order
shall include and constitute approval of the Litigation Trust
Agreement and authorization of the Debtor to execute the Litigation
Trust Agreement. In connection with the formation of the Litigation
Trust, the Reorganized Debtors shall transfer the Initial
Litigation Trust Funds to the Litigation Trust.
The Debtor states that Plan payments will commence pursuant to the
terms of the Plan for unclassified priority claims on the Effective
Date. The anticipated Effective Date is October 2023. Payments for
Class 1 will commence pursuant to the terms of this Plan on the
Effective Date. Payments for Class 2 will commence pursuant to the
terms of this Plan on the sixth full month following the Effective
Date. No payments are anticipated for Class 3.
The final Plan payment is expected to be paid on or before the
second quarter of 2027.
The Plan proposes to pay holders of Allowed Claims the Debtor's
Projected Disposable Income which includes sums from future
services, future contracts, payments of the Remote Texas Note and
factoring its receivables. Further, the Plan anticipates additional
potential distributions to holders of Allowed Claims from the
collection, if any, by the Litigation Trustee of funds from the
Retained Causes of Action.
Class 1 consists of Allowed General Unsecured Claims allowed under
Section 502 of the Bankruptcy Code in an amount less than $2,500.00
or those that reduce their claims to $2,500.00. Pro rata payments
out of a fund of $10,000.00 to be paid quarterly in 8 equal
payments commencing commence on the first full quarter following
the Effective Date or until the claims are paid in full.
Estimated pro rata distribution is 41% for Class 1 exclusive of
claims that elect treatment under Class 1. The rate of distribution
may be altered based on holders of claims that elect Class 1
treatment. The holder of a Class 1 Claim is impaired and is
entitled to vote to accept or reject the Plan. Estimated amount is
$24,212.62 exclusive of creditors who elect Class 1 treatment.
Class 2 consists of General Unsecured Claims over $2,500.00. Twelve
Quarterly payments commencing on the at the end of the first full
quarter that is six full months following the Effective Date for a
total of 3 years of payments. Estimate distribution is 14.5% to
16.4% for Class 2. The rate of distribution may be altered based on
the results of any objections filed by the Litigation Trustee that
are sustained. Estimated Amount range is $7,330,079.75 to
$6,499,279.00. The holders of Class 2 Allowed General Unsecured
Claims are Impaired.
Class 3 equity security holder, which consists solely of Dr.
Michael Kotler, will not be impaired by this Plan. The Class 3
equity security holder will continue to own 100% of the reorganized
Debtor.
A full-text copy of the Plan of Reorganization dated May 16, 2023
is available at https://bit.ly/3BP2Kc2 from PacerMonitor.com at no
charge.
Counsel for the Debtor:
Douglas S. Draper, Esq.
Leslie A. Collins, Esq.
Greta M. Brouphy, Esq.
Michael E. Landis, Esq.
Heller, Draper, Patrick, Horn & Manthey, LLC
650 Poydras Street, Suite 2500
New Orleans, LA 70130
Phone: (504) 299-3300
Email: ddraper@hellerdraper.com
lcollins@hellerdraper.com
gbrouphy@hellerdraper.com
mlandis@hellerdraper.com
About RemoteMD LLC
On Oct. 18, 2022, Robert Dudley, Premier Laboratory Services, Inc.,
Steele Strategies, Inc., Securitas Security Services USA, Inc. and
KJG Strategies, filed an involuntary petition against RemoteMD,
LLC. On Nov 4, 2022, the court entered the order converting the
involuntary bankruptcy case to a case under Chapter 11 of the
Bankruptcy Code.
RemoteMD filed an amended voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. Case No.
22-11254) on Nov. 7, 2022. Judge John W. Kolwe oversees the case.
The Debtor tapped Douglas S. Draper, Esq. at the law firm of
Heller, Draper & Horn, LLC as legal counsel and Cooper CPA Group as
accountant.
ROCKET MORTGAGE: Moody's Affirms Ba1 CFR & Alters Outlook to Stable
-------------------------------------------------------------------
Moody's Investors Service has affirmed Rocket Mortgage, LLC's Ba1
corporate family and long-term senior unsecured ratings. Rocket
Mortgage's outlook was changed to stable from positive.
RATINGS RATIONALE
The affirmation of the ratings reflects Rocket Mortgage's strong
franchise in the US mortgage market, supporting its strong
capitalization levels and funding profile, and its historically
strong earnings capacity. The affirmation also reflects the
potentially complementary businesses that its parent, Rocket
Companies Inc., owns.
Moody's changed Rocket Mortgage's outlook to stable from positive
given the challenges that the company continues to face due to
difficult industry operating conditions as well as in strengthening
its purchase origination franchise. As a result, Moody's expects
that over the next 12-18 months, profitability will remain well
below the company's historical levels and that Rocket Mortgage will
be unable to consistently generate net income to assets (excluding
mortgage servicing rights (MSR) fair value marks) of more than
5.0%. The stable outlook also reflects Moody's expectation that
until the company returns to strong profitability, its financial
policy will remain conservative and that Rocket Mortgage's tangible
common equity (TCE) to tangible managed assets (TMA) will remain
above 25%.
Over the last year, as origination volumes have declined, mortgage
originators have materially reduced and continue to reduce
overhead, but the industry still has modest excess capacity that
continues to negatively affect gain-on-sale margins. Due to
depressed gain-on-sale margins, purchase origination challenges,
still-elevated overhead expenses and a negative MSR fair-value
mark, Rocket Mortgage and Rocket Companies were unprofitable in the
first quarter of 2023.
Rocket Companies reported a net loss of $411 million, or an
annualized -8% return on average assets (ROAA) in the first
quarter. Excluding a $216 million write down in MSRs, the company
had a core after-tax loss of $200 million. With Rocket Mortgage
having a higher refinance origination market share than for
purchase originations, it has seen origination volumes decline more
than aggregate originations. During the first quarter of 2023,
Rocket Mortgage originated $17 billion of loans, compared with $54
billion in the first quarter of 2022. Moody's expects that
longer-term profitability will improve as Rocket Mortgage
strengthens its purchase origination franchise as well as continues
to right-size its overhead costs to reflect current origination
volumes. However, over the next 12-18 months, Moody's expects
profitability to remain well below the company's historical levels
and that Rocket Mortgage will be able to consistently generate net
income to assets (excluding MSR fair value marks) of more than
5.0%.
Rocket Mortgage's current capitalization is currently very strong.
As loans held for sale have declined materially with the decline in
origination volumes and shareholder distributions have been
limited, Rocket Mortgage's as well as Rocket Companies' TCE to TMA
has risen materially over the last year with Rocket Companies' TCE
to TMA ratio equal to 34% as of March 31, 2023, up from 31% as
March 31, 2022. As profitability strengthens, Moody's expects the
company's capitalization will decline. However, until Rocket
Mortgage returns to strong profitability, Moody's expects that
Rocket Mortgage's as well as Rocket Companies' financial policy
will remain conservative and TCE to TMA for Rocket Mortgage will
remain above 25%.
The Ba1 senior unsecured bond rating is at the same level as Rocket
Mortgage's Ba1 corporate family rating and incorporates the
priority of claim and strength of asset coverage.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Rocket Mortgage's ratings could be upgraded if it is able to
demonstrate improved profitability from its purchase mortgage
originations while achieving and maintaining: 1) expected long-term
strong profitability such as net income to assets (excluding MSR
fair value marks) in excess of 5.0%, 2) a strong capital position
with its ratio of TCE to TMA remaining above 20%, 3) solid
financial flexibility, such as keeping its secured debt to gross
tangible assets ratio at less than 50%, 4) low refinance risk on
its warehouse facilities with an average warehouse line maturity
runway of more than 12 months, and 5) disciplined growth coupled
with continuing to avoid significant operational or regulatory
issues.
Rocket Mortgage's ratings could be downgraded if its financial
profile or franchise position weaken. In particular, the ratings
could be downgraded if the company's TCE to TMA ratio declines to
less than 17.5% or if profitability remains weak such that Moody's
expects its net income to average assets to remain below 4.0%.
Until net income to average assets is again consistently above
3.0%, the company's ratings could be downgraded if TCE to TMA
decreased and was expected to remain below 25%.
In addition, negative ratings pressure may develop if 1) the
percentage of non-government sponsored entity and non-government
loan origination volumes grow to more than 7.5% of its total
originations without a commensurate increase in alternative
liquidity sources and capital to address the riskier liquidity and
asset quality profile that such an increase would entail or 2)
refinance risk increased such that the average remaining time to
maturity of its warehouse lines decreased to less than 12 months.
An increase in the company's reliance on secured debt, whereby
secured MSR and secured corporate debt to total corporate debt
increases to above 20% and is expected to remain above such level,
could result in a downgrade of the long-term senior unsecured
rating, as it would further subordinate its priority ranking.
The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.
SAHENE CONSTRUCTION: Creditors to Get Proceeds From Liquidation
---------------------------------------------------------------
Sahene Construction LLC filed with the U.S. Bankruptcy Court for
the Middle District of Louisiana a Plan of Liquidation under
Subchapter V dated May 16, 2023.
The Debtor was founded in 2004 and was an active residential and
commercial construction company in Louisiana communities ever
since.
Problems with the Debtor's business began to manifest in 2022 when
the Debtor discovered that Morrow had engaged in a series of
questionable transactions. Morrow's self-dealing and breaches of
his fiduciary duties negatively impacted the Debtor's cash flow.
Without sufficient operating capital, the Debtor began to fall
behind on its projects. Accordingly, the Debtor made the difficult
decision to seek relief under Subchapter V.
The Debtor projects to have cash on hand of $140,000 on the
Effective Date. The Debtor's other assets are primarily intangible.
The Debtor has Causes of Action that, if prosecuted or settled by
the Debtor could result in a recovery for the Estate. The Debtor
has breach of contract and open account Causes of Action against
several of its former clients. The Debtor also has, inter alia,
breach of fiduciary duty Causes of Action against its former
manager, Morrow.
The Debtor is not aware of any Secured Claims. Aside from about
$7,000 in Priority Tax Claims and $22,500 in Administrative Claims,
the Debtor's debts are entirely General Unsecured Claims. The
Debtor estimates that the aggregate amount of General Unsecured
Claims is $988,805.62.
The Debtor intends to liquidate its interests in property, and
thus, has formulated this plan of liquidation. The Debtor proposes
to liquidate its assets through the Liquidation Trust and
thereafter have the Liquidation Trustee make distributions to
Holders of Allowed Claims.
Class 1 consists of Allowed General Unsecured Claims. Except to the
extent that any Holder of an Allowed General Unsecured Claim agrees
to less favorable treatment of its Allowed Claim, in full and final
satisfaction, settlement, release, and discharge of and in exchange
for its Allowed Claim, each Holder shall receive its Pro Rata share
of the Liquidation Trust Interests. Class 1 is Impaired under the
Plan.
Class 2 consists of Interests in the Debtor. The Debtor will not
receive or retain any property under the Plan. Class 2 is
Unimpaired under the Plan.
The Debtor believes that it will have enough Cash on hand on the
Effective Date of the Plan to: (a) pay all the Claims and expenses
that are entitled to be paid on that date; and (b) fund the
Liquidation Trust.
On the Effective Date, the Liquidation Debtor (solely in its
capacity as successor to Debtor) and the Liquidation Trustee shall
execute the Liquidation Trust Agreement and shall take all steps
necessary to establish the Liquidation Trust in accordance with the
Plan, which shall be for the benefit of the Liquidation Trust
Beneficiaries. The Liquidation Trust shall be governed by the
Liquidation Trust Agreement and administered by the Liquidation
Trustee.
The Liquidation Trust Funding Amount shall be used solely to fund
the administration of the Liquidation Trust and to fund
distributions to the Liquidation Trust Beneficiaries on account of
their Liquidation Trust Interests consistent with the Liquidation
Trust Proceeds Waterfall. Other than with respect to the
Liquidation Trust Funding Amount, no party, including, without
limitation, the Debtor, and the Liquidation Debtor shall have any
responsibility to fund the Liquidation Trust unless otherwise
agreed to.
Any proceeds of the Liquidation Trust Assets, including proceeds
recovered from the successful prosecution or settlement of any
Liquidation Trust Causes of Action shall be distributed as follows
(the "Liquidation Trust Proceeds Waterfall"): (a) first, to the
extent the Liquidation Trust Funding Amount is insufficient to pay
in full all accrued and unpaid Liquidation Trust Expenses, to pay
such Liquidation Trust Expenses; and (b) second, after the amounts
in clause (a) are fully satisfied, to fund Pro Rata distributions
to the Liquidation Trust Beneficiaries in accordance with their
Liquidation Trust Interests.
A full-text copy of the Liquidating Plan dated May 16, 2023 is
available at https://bit.ly/3MlVvNs from PacerMonitor.com at no
charge.
Attorneys for Sahene Construction:
Ryan J. Richmond, Esq.
Ashley M. Caruso, Esq.
Sternberg, Naccari & White, LLC
251 Florida Street, Suite 203
Baton Rouge, LA 70801-1703
Tel: (225) 412-3667
Fax: (225) 286-3046
Email: ryan@snw.law
ashley@snw.law
About Sahene Construction
Sahene Construction LLC, was founded in 2004 and was an active
residential and commercial construction company in Louisiana
communities ever since. The Debtor filed a Chapter 11 bankruptcy
petition (Bankr. M.D. La. Case No. 23-10096) on Feb. 15, 2023. The
Debtor tapped Sternberg, Nacarri & White, LLC as its counsel.
SAMSONITE INT'L: Fitch Hikes LongTerm IDR to 'BB', Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has upgraded the Long-Term Issuer Default Ratings
(IDRs) of Samsonite International S.A. and Samsonite IP Holdings
S.a r.l. to 'BB'. The Rating Outlook is Stable.
The upgrade reflects increased confidence around Samsonite's
topline rebound, led by a continued strong recovery in global
travel. This, alongside effective cost reductions and the company's
progress on paying down pandemic era debt, have increased Fitch's
confidence that Samsonite will be able to sustain EBITDA in the
low-USD600 million range and EBITDAR leverage (capitalizing leases
at 8x) in the low-4.0x range beginning in 2023, as appropriate for
the 'BB' rating. Samsonite's ratings continue to reflect the
company's position as the world's largest travel luggage company,
with strong brands and historically good organic growth.
KEY RATING DRIVERS
Operating Recovery on Track: The pandemic underscored Samsonite's
exposure to the travel segment. Severe disruption to the global
travel segment yielded weak results for the business, with 2020
revenue down nearly 60% from 2019 to USD1.5 billion and EBITDA
migrating to negative USD219 million in 2020 from positive USD492
million in 2019. The post-pandemic global travel rebound has been a
multiyear recovery story, driven in-part by staggered re-opening
timelines across geographic regions.
Fitch expects that Samsonite's 2023 topline performance could
exceed pre-pandemic levels, aided by elevated global pent-up demand
for travel and the relaxing of restrictions around domestic and
international travel, including the relaxing of China's zero-COVID
policy.
In 1Q23, Samsonite reported constant currency sales growth
(excluding the divested Speck segment and discontinued Russian
operations) of approximately 18.0% versus 2019 levels. Fitch notes
that although 1Q23 revenue was above 2019 levels, unit volumes
still remain around 15% below 2019 levels as of 1Q23, which could
provide further support to Samsonite's topline rebound.
Recent results have increased Fitch's confidence that Samsonite's
revenue could settle around USD3.7 billion in 2023, relative to
USD3.6 billion in 2019; EBITDA in 2023 could be in the low-USD600
million range, relative to 2019 levels of USD492 million as the
company benefits from a strong topline rebound and an improved
margin profile, driven by cost cutting efforts during the
pandemic.
Good Liquidity; Debt Repayment: Samsonite ended 1Q23 with
approximately USD1.4 billion in liquidity, comprised of USD571
million of cash and USD845 million available under its USD850
revolver maturing in March 2025. At the beginning of the pandemic,
Samsonite took on additional debt of USD1.4 billion (comprised of
USD810.3 million in revolver borrowings and a USD600 million
incremental term loan B). Subsequently through March 31, 2023,
Samsonite has paid down approximately USD1.2 billion in COVID debt
utilizing its high cash balance and strong cash flow. Across
2021-2022, the company generated approximately USD560 million in
cumulative FCF.
EBITDAR leverage was 5.2x in 2022, and could sustain in the
low-4.0x range beginning in 2023, assuming the company returns
borrowings to pre-pandemic levels of USD1.8 billion and EBITDA
trends in the low-USD600 million range. In line with the company's
public guidance, Fitch expects management to continue to suspend
cash distributions to shareholders in 2023 but recognizes these
could resume in 2024.
Strong Brands and Leading Market Position: Samsonite's multi-brand,
multi-category approach enabled it to grow into the largest travel
luggage company in the world, with USD3.6 billion in revenues and
USD492 million in EBITDA in 2019. Its focus on innovation,
geographic diversity, and ability to operate across the value,
mid-market and premium market segments has enabled Samsonite to
grow market share. As sales continue to shift online, Samsonite's
direct-to-consumer sales penetration of around 27% company-operated
retail at 1Q23, plus around 10% DTC e-commerce allows the company
to continue to grow its brands, with a healthy mix of retail and
wholesale presence.
History of Stable Cash Flows: Prior to the pandemic, the luggage
industry saw good growth due to increasing disposable income in
developing countries, increased business travel and a shift of
consumer spending toward experiences such as travel and
entertainment. Samsonite's organic growth, excluding acquisitions,
averaged 9% for the six years ending 2018; 2019 was an exception,
where total net sales were down 1.8% on a constant currency basis
due to headwinds from market challenges in the U.S., Hong Kong,
South Korea and Chile, as well as a planned reduction in China B2B
sales.
Pre-2019, the business generated relatively strong EBITDA margins
of 16%-17% (pre IFRS 16 implementation), with stable cash flows.
Post-pandemic recovery, Fitch expects Samsonite to enjoy topline
growth in the low-single digit range annually, given long-term
fundamentals of the travel industry.
EBITDA margins could stabilize in the low-16% range beginning in
2024, slightly lower than the expected high-16% range in 2023 and
higher than the 13.5% seen in 2019. Since 2020, the company has
executed cost savings efforts including closing unproductive stores
(989 as of 1Q23 versus 1,294 stores as of 4Q19). These savings
could be somewhat offset in the medium-term by an on-going ramp up
in SG&A as sales continue to recover.
Parent Subsidiary Linkage: Fitch's analysis includes a strong
subsidiary/weak parent approach between the parent, Samsonite
International, S.A. and its subsidiaries Samsonite Finco S.a r.l.
and Samsonite IP Holdings S.a r.l. Fitch assesses the quality of
the overall linkage as high that results in an equalization of the
ratings.
DERIVATION SUMMARY
Samsonite's ratings reflect the company's position as the world's
largest travel luggage company, with strong brands and historically
good organic growth. The rating recognizes Samsonite's strong
topline rebound, following weak pandemic-era performance in 2020,
led by a continued strong recovery in global travel. This,
alongside effective cost reductions and the company's progress on
paying down pandemic-era debt, have increased Fitch's confidence
that Samsonite will be able to sustain EBITDA in the low-USD600
million range and EBITDAR leverage (adjusted debt/EBITDAR,
capitalizing leases at 8x) in the low-4.0x range beginning in 2023,
as appropriate for the 'BB' rating.
'BB'-rated peers include the following: Capri Holdings Limited
(BBB-/Stable), Levi Strauss & Co. (BB+/Stable), and Signet Jewelers
Limited (BB/Stable).
Signet's 'BB'/Stable rating reflect its leading market position as
a U.S. specialty jeweler with approximately 9% share of a highly
fragmented industry. The rating considers its recently strong
operating trajectory, which demonstrates success in the
implementation of its topline and other initiatives. Although Fitch
expects some near-term contraction from strong results seen in 2021
and 2022, the rating reflects expectations that Signet will be able
to maintain EBITDAR leverage in the low-4x range, in line with
their publicly articulated financial policy.
Levi's rating considers the company's good execution from a
top-line and a margin standpoint, which support Fitch's longer-term
expectations of low-single-digit revenue and EBITDA growth.
Although operating results could experience some near-term pressure
given ongoing shifts in consumer behavior, difficult comparisons
and global macroeconomic uncertainty, Fitch expects that Levi will
maintain EBITDAR leverage below 3.5x over time. Levi's ratings
reflect its position as one of the world's largest branded apparel
manufacturers, with broad channel and geographic exposure, while
also considering the company's narrow focus on the Levi brand and
in bottoms.
Capri's rating reflects its strong positioning in the U.S. handbag
market and good growth at its various brands along with its
demonstrated commitment to debt reduction. The rating also
considers the fashion risk inherent in the accessories and apparel
space. The ratings consider Capri's good execution both from a
topline and a margin standpoint, which support Fitch's longer-term
expectations of low-single digit revenue and EBITDA growth.
Although there could be some near-term pressure to operating
results given ongoing shifts in consumer behavior, difficult
comparisons, and global macroeconomic uncertainty, Fitch expects
that Capri will be able to sustain adjusted leverage in the low-3x
range, as appropriate for the 'BBB-' rating.
KEY ASSUMPTIONS
- Revenue, which grew approximately 43% in 2022, could grow an
additional 29% in 2023 to around USD3.7 billion, above the USD3.6
billion recorded in 2019. Revenue growth in 2023 is supported by
the continued rebound of the travel segment, including the
re-opening of China, which accounted for approximately 8% of the
company's consolidated 2019 sales. Growth in 2024 could be flat, as
the company comps strong demand trends seen over the last few
years; thereafter, revenue could grow in the low-single digits.
- EBITDA is expected to grow from USD472 million in 2022, to
approximately USD620 million in 2023, relative to USD492 million in
2019 driven by continued topline expansion. Margins in 2023 could
expand to the high-16% range, relative to the mid-16% range in 2022
and 13.5% in 2019, as SG&A ramp is somewhat offset by the benefit
of a business mix shift to the higher-margin Asia segment.
Beginning in 2024, EBITDA margins could moderate slightly to the
low-16% range, relative to 13.5% in 2019 as the company's cost cuts
taken during the pandemic offset some of the increase in SG&A as
sales continue to recover. In addition, gross margins and EBITDA
margins should be supported by higher growth at the company's
higher-end Tumi brand, which is a higher margin business.
- FCF moderated slightly to approximately USD204 million in 2022
from USD356 million in 2021, as Samsonite's EBITDA rebound was
partially offset by a working capital reversal. FCF, pre-cash
distributions, could be sustained around USD270 million-USD290
million annually beginning 2023. Fitch projects that the company
will continue to use its elevated cash balance, which was USD571
million as of March 31, 2023, to repay debt until the company
returns to its pre-pandemic debt balance of around USD1.8 billion.
- The company's outstanding debt of approximately USD2.0 billion,
as of March 31, 2023, consists of EUR350 million in fixed rate
notes (3.5%) and approximately USD1.6 billion in floating rate term
loan facilities and a revolving credit facility, currently undrawn.
These floating rate instruments are priced at LIBOR + margins
ranging from 1.125%-3.00%. Variable base rates are in the 3.5%-5%
range over the forecast horizon, given the higher interest rate
environment.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- An upgrade could result from higher than expected organic growth
yielding EBITDA sustained above USD700 million alongside
anticipated debt reduction, such that EBITDAR leverage
(capitalizing leases at 8.0x) is sustained below the high-3x
range.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A downgrade could result from EBITDAR leverage (capitalizing
leases at 8.0x) sustaining above the low-4x range, due to a
combination of weaker than expected rebound in sales and EBITDA,
such that EBITDA declines below USD550 million, and/or lower than
anticipated debt reduction.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Samsonite had USD1.4 billion of total liquidity
at March 31, 2023, consisting of USD571 million in cash plus USD845
million of availability on its USD850 million revolver due 2025.
The company's capital structure as of March 31, 2023, consists of
the USD850 million revolver due March 2025, USD570 million of term
loan A due March 2025, approximately USD1.0 billion of term loan B
due April 2025, and EUR350 million of senior notes due May 2026.
During 2020, the company undertook a number of actions to support
liquidity and extend maturities given the pandemic's impact on its
business. To support liquidity, in April 2020 the company issued a
USD600 million term loan B due April 2025 (as incremental to its
existing term loan B due April 2025). The company also amended its
credit facility to increase its revolver size to USD850 million
from USD650 million and drew USD810 million on the facility,
increasing the debt load by around USD1.4 billion in 2020. As of
March 31, 2023, Samsonite had repaid approximately USD1.2 billion
of its COVID-era borrowings, including all borrowings on its
revolving credit facility.
Recovery and Notching: Fitch does not employ a waterfall recovery
analysis for issuers' assigned ratings in the 'BB' category. The
further up the speculative-grade continuum a rating moves, the more
compressed the notching between the specific classes of issuances
becomes. Samsonite's first-lien secured debt is rated 'BBB-'/'RR1',
notched up two from the IDR and indicating outstanding recovery
prospects given default. The revolver and term loans are
unconditionally guaranteed by the company and certain subsidiaries.
They are secured by substantially all assets of the borrowers and
guarantors on a first-lien basis.
The senior notes are rated 'BB-'/'RR5', one notch below the IDR,
indicating below-average recovery prospects given the amount of
first-lien secured debt in Samsonite's capital structure. The
senior notes are guaranteed on a senior subordinated basis.
ISSUER PROFILE
Samsonite is the world's largest luggage company, selling luggage,
business and computer bags, outdoor and casual bags and travel
accessories with 2022 revenue and EBITDA of USD2.9 billion and
USD472 million, respectively. Its key brands include Samsonite,
Tumi and American Tourister.
SUMMARY OF FINANCIAL ADJUSTMENTS
Historical and projected EBITDA is adjusted to add back non-cash
stock-based compensation and exclude non-recurring charges. Fitch
has adjusted the historical and projected debt by adding 8.0x
annual gross rent expense.
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
----------- ------ -------- -----
Samsonite
Finco S.ar.l.
Senior Secured
2nd Lien LT BB- Upgrade RR5 B+
Samsonite
International
S.A. LT IDR BB Upgrade BB-
senior secured LT BBB- Upgrade RR1 BB+
Samsonite IP
Holdings S.a r.l. LT IDR BB Upgrade BB-
senior secured LT BBB- Upgrade RR1 BB+
SILVER CREEK INDUSTRIES: Case Summary & 6 Unsecured Creditors
-------------------------------------------------------------
Debtor: Silver Creek Industries RS, LLC
2830 Barrett Avenue
Perris, CA 92571
Chapter 11 Petition Date: May 22, 2023
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-12167
Debtor's Counsel: Todd C. Ringstad, Esq.
RINGSTAD & SANDERS LLP
4910 Birch Street
Suite 120
Newport Beach, CA 92660
Tel: 949-851-7450
Fax: 949-851-6926
Email: todd@ringstadlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by James McGeever as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's six unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/YOLQXMA/Silver_Creek_Industries_RS_LLC__cacbke-23-12167__0001.0.pdf?mcid=tGE4TAMA
SILVER CREEK: Case Summary & One Unsecured Creditor
---------------------------------------------------
Debtor: Silver Creek Leasing, LLC
2830 Barrett Avenue
Perris, CA 92571
Chapter 11 Petition Date: May 22, 2023
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-12165
Judge: Hon. Scott H. Yun
Debtor's Counsel: Todd C. Ringstad, Esq.
RINGSTAD & SANDERS LLP
4910 Birch Street
Suite 120
Newport Beach, CA 92660
Tel: 949-851-7450
Fax: 949-851-6926
Email: todd@ringstadlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by James McGeever as managing member.
The Debtor lists Silver Creek Modular, LLC or Webb Investments
Co., LLC as its sole unsecured creditor holding a claim of
$25,000.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/YXQN2NA/Silver_Creek_Leasing_LLC__cacbke-23-12165__0001.0.pdf?mcid=tGE4TAMA
SKYLIGHT PARTNERS: June 7 Auction for NY Property Set
-----------------------------------------------------
In accordance with applicable provisions of the Uniform Commercial
Code as enacted in New York, by virtue of certain events of default
under that certain ownership interest pledge and security agreement
dated as of Sept., 28, 2017 ("pledge agreement"), executed and
delivered by Hyperion Partners LLC ("pledgor"), and in accordance
with its rights as holder of the security, MPLC Lender LLC
("secured party"), by virtue of possession of that certain share
certificate held in accordance with Article 8 of the Uniform
Commercial Code of the State of New York, and by virtue of those
certain UCC-1 Filing Statement made favor of secured party, all in
accordance with Article 9 of the Code, Secured Party will offer for
sale at public auction, (i) all of pledgor's right, title and
interest in and to the following: Skylight Partners LLC ("pledged
entity"), and (ii) certain related rights and property relating
thereto.
Secured Party's understanding is that the principal asset of the
pledged entity is that certain fee interest in the premise located
at 1587 Third Avenue, New York, New York 10128 ("property").
Mannion Auctions LLC, under the direction of Matthew D. Mannion,
will conduct a public sale consisting of the collateral via online
bidding on June 7, 2023, at 2:30 p.m. in satisfaction of an
indebtedness in the approximate amount of $1,446.622.59 including
principal, interest on principal, and reasonable fees and costs,
plus default interest through June 7, 2023, subject to open charges
and all additional costs, fees, and disbursements permitted by law.
The secured party reserves the right to credit bid.
Online bidding will be made available via zoom meeting:
Meeting link: https://bit.ly/HyperionUCC
Meeting ID: 854 7384 2667
Passcode: 458935
One Tap Mobile: +16465588656,,85473842676#,,,,*458935#
US (New York) One Tap Mobile:
+16469313860,,85473842676#,,,,*458935#
US Dial by your location: +1 646 558 8656
US (New York): +1 646 931 3860 US
Interested parties who intend to bid on the collateral must contact
Greg Corbin at Rosewood Realty Group, 152 West 57th Street, 5th
Floor, New York, New York 10019, (212) 359-9904,
greg@rosewoodrg.com, to receive the terms and conditions of sale
and bidding instructions by June 5, 2023, by 4:00 p.m.
Attorney for the secured party:
Jerold C. Feuerstein, Esq.
Kriss & Feuerstein LLP
360 Lexington Avenue, Suite 1200
New York New York 10017
Tel: (212) 661-2900
SL GREEN: Moody's Puts 'Ba1' CFR on Review for Downgrade
--------------------------------------------------------
Moody's Investors Service placed the ratings of SL Green Realty
Corp. on review for downgrade, including the REIT's (P)Ba1 senior
unsecured shelf rating, (P)Ba2 subordinate shelf rating, (P)Ba2
junior subordinate shelf rating, Ba3 preferred stock rating, (P)Ba3
preferred shelf rating and (P)Ba3 preferred shelf non-cumulative
rating. Moody's also placed SL Green Operating Partnership, L.P.'s
Ba1 corporate family rating on review for downgrade, as well as its
(P)Ba1 senior unsecured shelf rating, (P)Ba2 subordinate shelf
rating, and (P)Ba2 junior subordinate shelf rating. In the same
rating action, Moody's downgraded SL Green Operating Partnership's
Speculative Grade Liquidity rating to SGL-3 from SGL-2. The outlook
changed to rating under review from stable.
Downgrades:
Issuer: SL Green Operating Partnership, L.P.
Speculative Grade Liquidity Rating, Downgraded to SGL-3 from
SGL-2
On Review for Downgrade:
Issuer: SL Green Operating Partnership, L.P.
Corporate Family Rating, Placed on Review for Downgrade, currently
Ba1
Backed Senior Unsecured Shelf, Placed on Review for Downgrade,
currently (P)Ba1
Backed Subordinate Shelf, Placed on Review for Downgrade,
currently (P)Ba2
Backed Junior Subordinate Shelf, Placed on Review for Downgrade,
currently (P)Ba2
Issuer: SL Green Realty Corp.
Backed Senior Unsecured Shelf, Placed on Review for Downgrade,
currently (P)Ba1
Backed Subordinate Shelf, Placed on Review for Downgrade,
currently (P)Ba2
Backed Junior Subordinate Shelf, Placed on Review for Downgrade,
currently (P)Ba2
Backed Pref. Shelf, Placed on Review for Downgrade, currently
(P)Ba3
Pref. Stock, Placed on Review for Downgrade, currently Ba3
Backed Pref. Shelf Non-cumulative, Placed on Review for Downgrade,
currently (P)Ba3
Outlook Actions:
Issuer: SL Green Operating Partnership, L.P.
Outlook, Changed To Rating Under Review From Stable
Issuer: SL Green Realty Corp.
Outlook, Changed To Rating Under Review From Stable
RATINGS RATIONALE
Moody's review will focus on SL Green's ability to deleverage
through planned asset sales. Management has guided to $2.4 billion
in dispositions in 2023, most of which management expects to occur
in the second half of the year. These planned sales include
reducing its ownership interest in 245 Park Avenue.
SL Green's Ba1 corporate family rating reflects its high quality
office portfolio in Manhattan, positive same-store NOI growth and
mark-to-market rents in the face of challenging operating
conditions. The REIT also has a manageable lease expiration
schedule and diversified tenant base. Offsetting these credit
strengths are the company's development-focused growth strategy,
very high financial leverage, weakening fixed charge coverage, and
significant asset and geographic concentration. Its financial
policy, which has had at times entailed large share repurchases, is
also a credit challenge.
SL Green's leverage is very high for the rating at 15.2x for the
TTM ending March 31, 2023, largely due to its $2.0 billion
acquisition of 245 Park Avenue. This is inclusive of $1.7 billion
in secured debt. The REIT's fixed charge coverage has also weakened
(floating rate exposure is 9.7% of total debt including pro-rata
share of unconsolidated JVs). Fixed charge coverage has
deteriorated to 1.7x for the trailing twelve months ended March 31,
2023, down from historical levels when its coverage ratio had been
steadily above 2.0x.
SL Green's SGL-3 Speculative Grade Liquidity rating reflects the
REIT's reduced, but still adequate, liquidity. The REIT's
liquidity is supported by $159 million of consolidated cash, $151
million of pro rata cash from unconsolidated joint ventures, and
$760 million of availability on its $1.25 billion unsecured
revolving credit facility as of first-quarter 2023. The company
also expects to receive $577 million of equity contribution
proceeds from One Madison Avenue later this year. SL Green also
maintains a high-quality unencumbered asset pool that enhances
financial flexibility. Upcoming debt maturities include $260
million of non-recourse secured debt coming due in 2023 and $625
million of unsecured term loans coming due in 2024. The REIT will
also need to address non-recourse mortgages maturing in its
unconsolidated joint ventures.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade or downgrade of the ratings
will be updated once the review is completed.
SL Green Realty Corp. (NYSE: SLG) is a real estate investment trust
that owns, operates and acquires primarily commercial office
properties in the Manhattan submarket of the New York metropolitan
area. As of March 31, 2023, SL Green held interests in 60 buildings
totaling 33.1 million square feet.
The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in September 2022.
SONAVATION INC: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Sonavation, Inc.
801 US Highway One
North Palm Beach, FL 33408
Business Description: The Debtor manufactures computer and
peripheral equipment.
Chapter 11 Petition Date: May 22, 2023
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 23-13960
Judge: Hon. Erik P. Kimball
Debtor's Counsel: Paul N. Mascia, Esq.
NARDELLA & NARDELLA, PLLC
135 W. Central Blvd
Suite 300
Orlando, FL 32801
Tel: 407-966-2680
Email: pmascia@nardellalaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Lisa Rhoads as chief executive officer.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/XACTJVI/Sonavation_Inc__flsbke-23-13960__0001.0.pdf?mcid=tGE4TAMA
SOUTH TOWN: Rental Income to Fund Plan Payments
-----------------------------------------------
South Town Holdings, LLC, filed with the Western District of
Arkansas a Disclosure Statement describing Chapter 11 Plan dated
May 18, 2023.
Since 2008, the Debtor has been in the business of rental property,
owning and renting four properties. The identity and fair market
value of the estate's assets are listed in the petition. Estimated
fair market value of $185,000.
The Plan Proponent's financial projections show that the Debtor
will have an aggregate annual cash flow, after paying operating
expenses and post-confirmation taxes, of $4,612 for year 1, $9,802
for Year 2, $13,657 for Year 3, $14,023 for Year 4, and $14,402 for
Year 5. The final Plan is expected to be paid not more than 6
months following confirmation of the Plan.
Cash flow is based on 60% rental of the units which is higher than
historical for the property. Over the past several months, the
owner has made improvements to the real estate to attract new
tenants.
This Plan of Reorganization proposes to pay creditor of the Debtor
from rents collected from rental property owned by the Debtor.
This Plan provides for 1 class of secured claims; 0 class of
unsecured claims and 0 class of equity security holders. Unsecured
creditors holding allowed claims will receive distributions, which
the proponent of this Plan has valued at approximately 100 cents on
the dollar. This Plan also provides for the payment of
administrative and priority claims.
Class 1 consists of the Secured Claim of Armstrong Bank. This Class
shall receive a monthly payment of $751.03 from September 1, 2023
to August 1, 2038 with 6% interest rate. This Class is unimpaired.
A full-text copy of the Disclosure Statement dated May 18, 2023 is
available at bit.ly/3WwBdW0 from PacerMonitor.com at no charge.
The Debtor is represented by:
Michael D. Collins, Esq.
Attorney at Law
Michael D Collins PA
4300 Rogers Ave, Suite 45
Fort Smith, AR 72903
Tel: (479) 783-8291
Fax: (479) 595-0151
Email: michael@collinspa.com
About South Town Holdings
South Town Holdings, LLC has been in the business of Rental
property. The Debtor filed a Chapter 11 bankruptcy petition
(Bankr. W.D. Ark. Case No. 23-70208) on Feb. 17, 2023. The Debtor
is represented by Michael D. Collins, Esq. of Michael D Collins PA.
STAGE LIGHTING: Court OKs Interim Cash Collateral Access
--------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Jacksonville Division, authorized Stage Lighting Store, LLC to use
cash collateral on an interim basis in accordance with the budget.
The Debtor is permitted to use cash collateral to pay:
(a) amounts expressly authorized by the Court, including
payments to the SubChapter V Trustee;
(b) the "bare necessities" for day-to-day operations;
(c) prepetition wages to employees who are retained by the
Debtor moving forward; and
(d) additional amounts as may be expressly approved in writing
by Fox Capital Group Inc. and Small Business Administration.
As previously reported by the Troubled Company Reporter, the Debtor
operates five Vystar business accounts (3 checking and 2 savings)
and one Chase business account. The Debtor generates cash on a
point-of-sale basis. Revenues and receivables are constantly being
deposited in the Debtor's operating accounts.
To ensure monies would not be offset by Vystar upon filing, the
Debtor has on hand $24,000 in cash. The Debtor has $2,261 in its
Chase account and $571 spread across its Vystar accounts.
The Debtor believes Fox Capital Group Inc. may allege an interest
in cash collateral as it has levied on the Debtor's bank account.
The collateral securing payment to Fox has a value of around
$26,832.
The Court said each creditor with a security interest in cash
collateral will have a perfected post-petition lien against cash
collateral to the same extent and with the same validity and
priority as the prepetition lien, without the need to file or
execute any document as may otherwise be required under applicable
non bankruptcy law.
The Debtor will maintain insurance coverage for its property in
accordance with the obligations under the loan and security
documents with the Secured Creditors.
As adequate protection, the Debtor will pay Fox Capital Group Inc
8% of monthly gross revenues of the Debtor during the pendency of
the case until Fox is paid in full.
Furthermore, the Debtor is agreeable to Fox receiving 50% of the
monies currently being held by Worldpay because of an assignment of
receipts previously forwarded to Worldpay.
The Debtor will pay the Small Business Administration adequate
protection payments of $400 per month starting June 15, 2023.
A continued hearing on the matter is set for May 23 at 9 a.m.
A copy of the order is available at https://rb.gy/h9ubv from
PacerMonitor.com.
About Stage Lighting Store, LLC
Stage Lighting Store, LLC is a stage lighting equipment supplier
for school play, professional production, event venue, and church
service needs.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-01061) on May 11,
2023. In the petition signed by Russell Behrens, owner, the Debtor
disclosed $226,028 in assets and $1,395,986 in liabilities.
Judge Jason A. Burgess oversees the case.
Donald M. DuFresne, Esq., at Parker & Dufresne, P.A., represents
the Debtor as legal counsel.
STORCENTRIC INC: Shifts from Chapter 11 to Chapter 7 Liquidation
----------------------------------------------------------------
Wesley Hilliard of Apple Insider reports that StorCentric has
shifted to Chapter 7 bankruptcy after failing to find a buyer or
reorganize its company after COVID-19, leaving Drobo and Retrospect
customers without any information.
Drobo and Retrospect are backup solution vendors with combined
decades in the industry. Their parent company, StorCentric, has
filed for Chapter 7 bankruptcy after COVID-19 disrupted its
business.
In July 2023, StorCentric filed for Chapter 11 bankruptcy, which
would enable the company to restructure and save its assets,
perhaps selling off to a bigger entity. Since then, the company
hasn't been able to find a buyer or recover, so a full liquidation
and selloff is all that's left for the company.
There isn't any publicly available information about this move yet,
but AppleInsider was tipped off about the event. The tipster says
they've received an email from StorCentric stating the Chapter 11
bankruptcy was shifting to Chapter 7 on April 28, 2023.
StorCentric, Drobo, and Retrospect don't show any information about
this on their websites. There isn't any information provided about
what existing customers should do, but we expect they should look
for other solutions.
A message on the Drobo website says that as of January 27, 2023,
Drobo support and products are no longer available. There is no
indication of what will happen to Drobo or its assets in the
liquidation.
Generally, when businesses file for Chapter 7, their assets are
sold off piece by piece to pay debts. Drobo and Retrospect could
survive intact sold to a new company, or be divided up into smaller
pieces and shifted around.
This is an evolving situation, and AppleInsider will provide more
details as we learn more.
About StorCentric, Inc.
StorCentric, Inc., develops software and security systems to
mitigate cybersecurity threats to ensure data is not compromised.
StorCentric sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Cal. Case No. 22-50515) on June 20,
2022. In the petition filed by John Coughlan, CFO, the Debtor
disclosed up to $50 million in both assets and liabilities.
Judge Elaine Hammond oversees the case.
John W. Mills, III, Esq., at Jones Walker LLP is the Debtor's
counsel. Force Ten Partners, LLC is the financial advisor. Donlin,
Recano & Company, Inc., is the claims agent.
The Official Committee of Unsecured Creditors retained Sheppard,
Mullin, Richter & Hampton LLP as bankruptcy counsel; Trodella &
Lapping LLP as
conflicts counsel; and Oxford Restructuring Advisors LLC as
financial advisors.
* * *
The Debtor on April 28, 2023, filed a motion to convert its Chapter
11 case to a case under Chapter 7 of the Bankruptcy Code.
SVN FINANCIAL: Gets Court' Approval to Sell SVB Securities
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the bid procedures and the form and manner of notices for
the sale of SVB Securities, and scheduling auction and sale
Hearing, and approved the sale free and clear of liens, claims,
interests and encumbrances.
According to the Troubled Company Reporter, May 8, 2023, SVB
Financial Group, the bankrupt parent of Silicon Valley Bank, is
seeking to sell its non-bankrupt investment banking subsidiary in
an auction, hoping to boost its value as it faces creditors' payout
demands.
The TCR noted SVB Financial's request to a New York bankruptcy
court on to sell off SVB Securities Holdings LLC comes as the
bankrupt company spars with the Federal Deposit Insurance Corp.
over access to records and $2 billion the agency seized after
Silicon Valley Bank failed in March.
The Court entered an order approving certain bid procedures which
establish key dates and times:
* Bid Deadline: May 22, 2023, at 5:00 p.m. (ET)
* Sale Objection Deadline: May 30, 2023, at 4:00 a.m. (ET)
* Auction (if necessary): May 25, 2023, at times to be
determined
* Sale Hearing: June 5, 2023, at 10:00 a.m. (ET)
Any interested bidder should contact, as soon as practical:
Centerview Partners LLC
31 West 52nd Street
New York, NY 10019
Sean Carmody
Tel: +1 (212) 429-2377
Email: scarmody@centerview.com
Marc Puntus
Tel: +1 (212) 429-2330
Email: mpuntus@centerview.com
Seth Lloyd
Tel: +1 (212) 429-2449
Email: slloyd@centerview.com
Ryan Kielty
Tel: +1 (212) 429-2322
Email: rkielty@centerview.com
Copies of the motion, the bid procedures and the bid procedures
order, as well as all related exhibits, including all other
documents filed with the court, are available (i) free of charge
from the website of the debtor’s claims and noticing agent, Kroll
Restructuring Administration, at
https://restructuring.ra.kroll.com/SVBFG.
About Silicon Valley Bank
Silicon Valley Bank was the nation's 16th largest bank and the
biggest to fail since the 2008 financial meltdown.
During the week of March 6, 2023, Silicon Valley Bank, Santa Clara,
CA, experienced a severe "run-on-the-bank." On the morning of
March 10, 2023, the California Department of Financial Protection
and Innovation seized SVB and placed it under the receivership of
the Federal Deposit Insurance Corporation (FDIC).
The FDIC on March 13, 2023, disclosed that it transferred all
deposits -- both insured and uninsured -- and substantially all
assets of the former Silicon Valley Bank of Santa Clara,
California, to a newly created, full-service FDIC-operated "bridge
bank" in an action designed to protect all depositors of Silicon
Valley Bank.
SVB Financial Group is a financial services company focusing on the
innovation economy, offering financial products and services to
clients across the United States and in key international markets.
Prior to March 10, 2023, SVB Financial Group owned and operated
Silicon Valley Bank, a state-chartered bank.
On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy
protection (Bankr. S.D.N.Y. Case No. 23-10367). The Hon. Martin
Glenn is the bankruptcy judge. The Debtor had assets of
$19,679,000,000 and liabilities of $3,675,000,000 as of Dec. 31,
2022.
Centerview Partners LLC is the proposed financial advisor, Sullivan
& Cromwell LLP proposed legal counsel and Alvarez & Marsal proposed
restructuring advisor to SVB Financial Group as
debtor-in-possession. Kroll is the claims agent.
SYSTEM ENERGY: Moody's Assigns Ba1 Issuer Rating, Outlook Negative
------------------------------------------------------------------
Moody's Investors Service downgraded the ratings of System Energy
Resources, Inc. (SERI), including its First Mortgage Bonds to Baa2
from Baa1, due to ongoing disputes with several state regulatory
commissions regarding SERI's rates and potential refunds related to
these rates, which will reduce the company's cash flow going
forward. As a result of these disputes, Entergy Corporation
(Entergy, Baa2 negative) has disclosed [1], in a May 15, 2023 Form
8-K, that SERI's financial viability is being evaluated by
management. This follows earlier disclosure by Entergy that if
additional refunds from SERI are required at the levels claimed by
the state regulatory commissions, SERI's continued financial
viability would be jeopardized.
Other affected ratings include SERI's Backed Senior Secured rating,
which was downgraded to Baa2 from Baa1 and its Senior Secured Shelf
(Domestic) rating that was downgraded to (P)Baa2 from (P)Baa1.
At the same time, Moody's assigned a Ba1 long-term Issuer rating to
the company.
The rating outlook for SERI remains negative due to the continued
uncertainty over the amount and timing of additional refunds to be
required, their impact on SERI's cash flow and coverage ratios and
management's evaluation of, and conclusions related to, SERI's
financial viability.
Assignments:
Issuer: System Energy Resources, Inc.
Issuer Rating, Assigned Ba1
Downgrades:
Issuer: System Energy Resources, Inc.
Senior Secured First Mortgage Bonds, Downgraded to Baa2 from Baa1
Senior Secured Shelf, Downgraded to (P)Baa2 from (P)Baa1
Issuer: Mississippi Business Finance Corporation
Backed Senior Secured Revenue Bonds, Downgraded to Baa2 from Baa1
Outlook Actions:
Issuer: System Energy Resources, Inc.
Outlook, Remains Negative
RATINGS RATIONALE
"The downgrade of System Energy Resources reflects declining cash
flow of its only asset, the Grand Gulf nuclear plant, as rate
adjustments and potential cash refunds continue to surface from
ongoing state commission legal challenges" said Ryan Wobbrock -
Vice President and Senior Credit Officer. "Furthermore, the
overhang of sizeable financial claims against System Energy and
management disclosure that the company's financial viability could
be jeopardized as a result of these refunds, will continue to weigh
on the company's credit profile" added Wobbrock.
As a result of these developments, SERI's ESG credit impact score
(CIS) was changed to CIS-4 from CIS-3, reflecting the highly
negative effect that more pronounced governance risks have on the
rating. SERI's governance score was changed to highly negative (G-4
Issuer Profile Score, or IPS) from Neutral-to-Low (G-2 IPS), driven
by the disclosure around SERI's financial risk and liquidity
strategy, in the face of the potential for materially adverse
regulatory and legal decisions. The company's social risk is also
elevated and highly negative (S-4 IPS), reflecting heightened
customer relations risks as well as demographic and societal trends
since the company's financial decline is directly related to
adverse regulatory decisions and litigation settlements.
These events are stemming from several legal complaints filed with
the Federal Energy Regulatory Commission (FERC, the primary
regulator of SERI), by utility regulatory commissions in Louisiana,
Mississippi, Arkansas and New Orleans, which oversee the rates of
SERI's affiliate utilities and charges to their end-use customers.
The affiliate utilities purchase power from the Grand Gulf Nuclear
Station and recover the costs from their respective customers.
While several aspects of the FERC litigation remain outstanding and
their resolution uncertain, SERI is exposed to the potential for
material one-time cash refunds, which would worsen an already
weakened financial profile going forward.
Currently, the company is awaiting clarification on a December 23,
2022 FERC Initial Order that declared aspects of SERI's rates to be
unjust and unreasonable. SERI's position is that just over $100
million of refunds are required by the order, which the company
paid in January 2023; however, the plaintiffs have expressed their
position that an additional $600 million of refunds are required.
Moreover, on May 15, 2023, the Administrative Law Judge (ALJ)
issued an initial decision [2] on a separate complaint, which
Entergy estimates will cost roughly $250 million if upheld by the
FERC. These events highlight the ongoing uncertainty associated
with legal outcomes and their impact on SERI's financial position.
SERI's own internal liquidity sources (e.g., over $300 million of
cash flow less roughly $200 million of maintenance capex and
nuclear fuel purchase) are insufficient to finance a significant
amount of customer refunds. SERI's external liquidity sources
include access to Entergy's money pool and a $120 million credit
facility for nuclear fuel purchases. SERI also receives capital
contributions from Entergy from time-to-time (e.g., $135 million in
2022 to fund the Mississippi Public Service Commission (MPSC)
settlement payment) which can be funded through the parent's $3.5
billion master credit facility (over $3.3 billion available at
March 31, 2023) or its strong access to the capital markets.
However, Entergy is not obligated to do so, as it reiterated in its
2022 10-K filing, while also disclosing the potential for SERI to
explore other protections to restructure its obligations. Entergy
is also no longer obligated to maintain a minimum equity level at
SERI following the termination of the Capital Funds Agreement
between the two entities in 2019.
Under normal operating and financial conditions, Moody's had
already expected SERI to undergo a sustained financial decline
following a 2022 litigation settlement with the MPSC. Among other
things, the MPSC settlement reduced SERI's allowed ROE to 9.65%
from 10.94% and equity capitalization to 52% from 68%. If the MPSC
settlement terms were to be agreed upon by utility commissions in
Louisiana, Arkansas and New Orleans, Moody's estimates that SERI's
run-rate ratio of cash flow from operations, before changes in
working capital (CFO pre-WC) to debt would be around 30%, down from
well over 40%, historically.
Outlook
SERI's negative outlook reflects the risk that additional FERC
orders could result in substantial customer refunds and that SERI
will have to seek significant incremental funding outside of its
parent company to finance them. It is also prompted by the
uncertainty over the amount and timing of these refunds, their
impact on SERI's cash flow and coverage ratios and management's
evaluation of and conclusions related to SERI's financial
viability.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to a downgrade
SERI could be downgraded further if materially negative orders are
issued by the FERC, if it becomes evident that Entergy will no
longer provide adequate support for the company or if regulatory
and legal challenges persist and result in additional financial
deterioration.
Under normal operating and financial conditions, assuming these
issues are resolved, SERI could also be downgraded if its CFO
pre-WC to debt ratio falls to 20% or below on a sustainable basis.
Factors that could lead to an upgrade
Given the downgrade and negative outlook related to the continued
regulatory, legal and financial challenges, it is unlikely that
SERI will be upgraded in the foreseeable future.
System Energy Resources, Inc., a wholly-owned subsidiary of Entergy
Corporation, has a 90% ownership interest in the Grand Gulf Nuclear
Station, which is located in Port Gibson, Mississippi. At a roughly
1,400 megawatt capacity, Grand Gulf is one of the largest nuclear
units in the United States and its operating license expires in
2044.
The principal methodology used in these ratings was Regulated
Electric and Gas Utilities published in June 2017.
TRUCK DYNASTY: Taps Law Firm of Toni Campbell Parker as Counsel
---------------------------------------------------------------
Truck Dynasty Transportation, Inc. seeks approval from the U.S.
Bankruptcy Court for the Northern District of Mississippi to employ
the Law Firm of Toni Campbell Parker to handle its Chapter 11
case.
The hourly rates charged by the firm's attorney and paralegals are
as follows:
Toni Campbell Parker $350 per hour
Paralegals $100 per hour
In addition, the firm will seek reimbursement for out-of-pocket
expenses incurred.
The firm received a retainer of $7,500.
Toni Campbell Parker, Esq., disclosed in a court filing that her
firm is a "disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached at:
Toni Campbell Parker, Esq.
Law Firm of Toni Campbell Parker
45 North Third Ave, Ste. 201
Memphis, TN 38103
Tel: (901) 683-0099
Email: Tparker002@att.net
About Truck Dynasty Transportation
Truck Dynasty Transportation, Inc. operates a trucking and
transportation company in Olive Branch, Miss.
Truck Dynasty Transportation sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Miss. Case No. 23-11142) on
April 14, 2023, with up to $50,000 in assets and up to $10 million
in liabilities. Bradley Little, president of Truck Dynasty
Transportation, signed the petition.
Judge Jason D. Woodard oversees the case.
Toni Campbell Parker, Esq., at the Law Firm of Toni Campbell
Parker, represents the Debtor as bankruptcy counsel.
VENATOR MATERIALS: Gets Court OK to Seek Quick Bankruptcy Exit
--------------------------------------------------------------
Steven Church of Bloomberg News reports that Venator Materials Plc
won court permission to seek a quicker-than-normal vote of
creditors on its plan to exit bankruptcy by turning the company
over to lenders in exchange for canceling nearly all of the
specialty chemical maker's debt.
US Bankruptcy Judge David Jones agreed to schedule a hearing in
June 2023 in Houston to consider approving Venator's restructuring
proposal, which the company says has support from more than 90% of
major debt holders.
Jones also gave the company interim approval to borrow as much as
$275 million to help it continue operating and pay its bills while
reorganizing.
On May 13, 2023, the Debtors, the Term Lender Group, and the
Cross-Holder Group executed the Restructuring Support Agreement,
pursuant to which the Debtors will
effectuate the recapitalization transactions through prepackaged
chapter 11 cases.
The key terms of the Restructuring Support Agreement, which are
reflected in the Plan, include:
* debtor-in-possession financing, with approximately $275
million in new liquidity, as well as a backstop commitment to fund
any additional liquidity needed at emergence (either through a
rights offering or an exit term loan facility);
* a roll-up of the Prepetition ABL Facility, which will be
refinanced at emergence;
* equitization all of the Company's other funded debt,
including the Term Loan Facility, the Senior Secured Notes, and the
Senior Unsecured Notes;
* repayment in full or reinstatement of all general unsecured
claims; and
* the cancellation of existing equity interests.
About Venator
Venator (NYSE: VNTR) is a global manufacturer and marketer of
chemical products that comprise a broad range of pigments and
additives that bring color and vibrancy to buildings, protect and
extend product life, and reduce energy consumption. It markets its
products globally to a diversified group of industrial customers
through two segments: Titanium Dioxide, which consists of our TiO2
business, and Performance Additives, which consists of its
functional additives, color pigments and timber treatment
businesses. Based in Wynyard, U.K., Venator employs approximately
2,800 associates and sells its products in more than 106
countries.
After reaching terms of a Prepackaged Plan, Venator Materials PLC,
and 23 affiliated companies on May 14, 2023, filed petitions
seeking relief under chapter 11 of the United States Bankruptcy
Code (Bankr. S.D. Tex. Lead Case No. Case No. 23-90301).
The Debtors' cases have been assigned to Judge David R Jones.
In connection with the prepackaged Chapter 11 and recapitalization
process, Venator is assisted by Moelis & Company and Kirkland &
Ellis as respective financial and legal advisors, in addition to
Alvarez & Marsal as operational advisor. Epiq Corporate
Restructuring, LLC, is the claims, noticing, and solicitation agent
and maintains the page https://dm.epiq11.com/venator
VENATOR MATERIALS: June 26 Plan & Disclosure Hearing Set
--------------------------------------------------------
Venator Materials PLC and Its Debtor Affiliates filed with the U.S.
Bankruptcy Court for the Southern District of Texas a motion for
entry of a final order scheduling the Combined Hearing on the
Disclosure Statement relating to the Joint Prepackaged Plan of
Reorganization.
On May 16, 2023, Judge David R. Jones ordered that:
* June 26, 2023 is the Combined Hearing, at which time this
Court will consider, among other things, final approval of the
adequacy of the Disclosure Statement and confirmation of the Plan.
* June 20, 2023 is fixed as the last day to file any
objections to adequacy of the Disclosure Statement and confirmation
of the Plan.
* June 15, 2023 is fixed as the last day to submit ballots to
be counted as votes.
A copy of the order dated May 16, 2023 is available at
https://bit.ly/3Ox4uhF from PacerMonitor.com at no charge.
About Venator
Venator (NYSE: VNTR) is a global manufacturer and marketer of
chemical products that comprise a broad range of pigments and
additives that bring color and vibrancy to buildings, protect and
extend product life, and reduce energy consumption. We market our
products globally to a diversified group of industrial customers
through two segments: Titanium Dioxide, which consists of our TiO2
business, and Performance Additives, which consists of our
functional additives, color pigments and timber treatment
businesses. Based in Wynyard, U.K., Venator employs approximately
2,800 associates and sells its products in more than 106
countries.
On May 14, 2023, Venator Materials PLC, and 23 affiliated companies
filed petitions seeking relief under chapter 11 of the United
States Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90301).
The Debtors' cases have been assigned to Judge David R Jones.
In connection with the prepackaged Chapter 11 and recapitalization
process, Venator is assisted by Moelis & Company and Kirkland &
Ellis as respective financial and legal advisors, in addition to
Alvarez & Marsal as operational advisor. Epiq Corporate
Restructuring, LLC, is the claims, noticing, and solicitation agent
and maintains the page https://dm.epiq11.com/venator.
VIAVI SOLUTIONS: S&P Alters Outlook to Negative, Affirms 'BB+' ICR
------------------------------------------------------------------
S&P Global Ratings revised the outlook on Viavi Solutions Inc. to
negative from stable, and affirmed all ratings on the company,
including its 'BB+' issuer credit rating.
S&P said, "Our negative outlook on Viavi reflects our expectation
that macroeconomic uncertainty and reduced spending by service
providers and networking equipment manufacturers will pressure
revenue and profitability in fiscal 2023 ending July. We expect
weakened credit metrics, with adjusted leverage elevated at about
3.7x and weaker FOCF/Debt of 9% in fiscal 2023. The outlook also
reflects the challenging environment and higher business volatility
may make it difficult for credit metrics to improve and stabilize
by fiscal 2024."
Concentration in volatile end markets and uncertain macro may slow
the company's recovery. As service providers manage lower growth
and decreasing margins due to reduced discretionary spending and
increasing costs associate with supplies, energy, and labor, they
have focused on cutting operating expenses and capital expenditures
(capex) to preserve cash, both of which have constrained revenue
from Viavi's testing solutions. Viavi's customer base is heavily
concentrated in the telecommunications space with core network and
service enablement segment accounting for roughly 72% of revenues
as of April 2023. This high reliance on communications service
providers can lead to periods of revenue volatility, which tends to
mostly affect the company's field solutions (accounts for
approximately 38% of total revenue). The sharp pullback in spending
has even spread to Viavi's lab production segment (accounts for
approximately 25% of total revenue), which has historically been
more resilient to spending cycles given that lab spending holds up
well as network equipment manufacturers need to maintain
competitive advantages by investing in next generation technology.
Further pressuring topline growth is weakness in its optical
security and performance products (OSP) segment, which S&P expects
to be down this year driven by lower demand for anticounterfeiting
products due to post-COVID fiscal tightening and lower 3D sensing
revenue due to decreased demand for smartphones. All in all, S&P
expects Viavi's revenue to decline by 15% in fiscal 2023 and lower
volume sales directly hurting profitability by reducing EBITDA
margins to 21% by fiscal 2023, down from 25% in fiscal 2022.
S&P said, "We expect prevailing industry trends to support
long-term growth prospects and lead to a modest recovery, although
macroeconomic uncertainty could exacerbate interim volatility and
keep leverage elevated longer than expected. VIAVI provides testing
products for both lab and field applications used during network
buildouts and maintenance tasks but cyclical communications service
provider spending can cause greater business volatility that may
suppress the company's key testing and monitoring areas. While we
expect 2023 will include significant reductions in capex for
Verizon and T-Mobile, fiber builds for the wireline companies and
AT&T Inc. combined with cable network upgrades will likely keep
capex elevated for the sector as a whole. Service providers can
suppress investments and capex for short periods, but not building
fiber or keeping investments down for a prolonged period is a lost
opportunity that increases the risk of falling behind competitors
on the technology curve. Additionally, the very long design life
cycle of wireless and fiber networks also increases client
stickiness given the need for testing at each step of the network
buildout.
"Although we expect some continued weakness in topline trends for
some of Viavi's key customers, we believe broadband and mobile
services are essential to businesses and consumers and we expect
government-subsidized rural broadband expansion to spur significant
spending by cable and telcos over the next several years.
"We forecast revenue growth of about 4.5% growth in fiscal 2024
driven by increasing 5G deployment, expansion of fiber networks,
increasing spending on network upgrades and rising 3D sensing
demand. We expect EBITDA margins to expand to 23.8% in fiscal 2024
from about 20.3% in 2023, as Viavi realizes the benefits of
increasing operating leverage from increasing sales coupled with
cost savings from its recently actioned restructuring plans.
"Our current rating on Viavi takes into account its strong
liquidity and prudent financial policy. Viavi's management team has
experience managing the business through industry cycles and has a
good track record of operating its business below 3x gross
leverage. Viavi has consistently expanded its revenue and EBITDA
base since its spin-off in 2015. This established track record
along with its history of maintaining a large cash balance as a
risk mitigant should provide a buffer in the wake of further
deterioration. We expect Viavi will decrease its leverage to around
2.7X by fiscal 2024 and we expect deleveraging to stem from good
revenue growth along with the paydown of its $68.1 million of
outstanding 2023 convertible notes and $96.4 million 2024
convertible notes with cash on hand. Although the debt paydown will
facilitate the de-risking of its balance sheet, further spending
volatility or weakening macros could cause leverage to remain
higher for longer than expected. We expect the company to generate
FOCF to debt in the mid-teen percentages for the next few years."
Viavi's cash balance was roughly $580 million as of April 2023 and
although the upcoming debt paydown will suppress its cash balance
for a couple of quarters, the company's good FOCF generation should
replenish its cash base to historical levels very quickly. S&P
expects Viavi to take a balanced approach to capital allocation and
expect it will continue to use tuck-ins to acquire businesses that
diversify its business and provide less concentration on
service-provider spending. If Viavi were to deplete its cash
balance towards acquisitions or shareholder returns, S&P could
alter its view on its liquidity profile.
S&P's negative outlook on Viavi reflects its expectation that
macroeconomic uncertainty and reduced spending by service providers
and networking equipment manufacturers will pressure revenue and
profitability in fiscal 2023 ending July. S&P expects weakened
credit metrics, with adjusted leverage elevated at about 3.7x and
weaker FOCF/Debt of 9% in fiscal 2023. The outlook also reflects
the challenging environment and higher business volatility may make
it difficult for credit metrics to improve and stabilize by fiscal
2024.
S&P could revise the outlook to stable if:
-- Viavi grows organic revenue consistently and the business
recovers as service provider capex resumes, while managing its cost
base such that adjusted leverage declines and remains below 3x;
and
-- FOCF to debt rises to the 15% area.
S&P could lower the rating within the next 12 months if:
-- Delayed customer spending, competitive pressures, or heightened
investments sustain EBITDA and FOCF declines such that leverage
remains above 3x or FOCF to debt decreases to below 15%;
-- S&P views the company will experience greater business
volatility than previously expected such that credit metrics weaken
to the same levels; or
-- It adopts a more aggressive financial policy including
debt-funded acquisitions or increasing shareholder returns without
a credible path to deleveraging.
ESG credit indicators: E-2, S-2, G-2
VICE MEDIA: DIP Financing Has Interim Approval
----------------------------------------------
Rick Archer of Law360 reports that a New York bankruptcy judge told
Vice Media Group on May 16, 2023, that it must try to resolve
objections from the U.S. Trustee's Office to its proposed $60
million debtor-in-possession financing package before it can take
out the money to fund its Chapter 11 case.
Judge John P. Mastando II on May 17, 2023, entered an interim order
authorizing Vice Group Holding Inc., in its capacity as borrower to
obtain postpetition financing, and for each of the other Debtors to
guarantee unconditionally, on a joint and several basis, the DIP
Borrower's obligations in connection with a senior secured
superpriority debtor-in-possession multi-draw term loan facility
(the "DIP Facility") which consists of a multi-draw credit loan
facility in an aggregate principal amount of up to $60 million,
which shall be made available to the Debtors
(a) in a single new money draw in the initial amount of $5
million (the "Initial New Money DIP Loans"), in accordance with the
terms and conditions set forth in the DIP Credit Agreement, and
effective upon entry of this Interim Order, and
(b) in a roll-up (the "Initial Roll-Up DIP Loans") of
approximately $25 million in Prepetition Senior Secured Term Loans
in accordance with the terms and conditions set forth in the DIP
Credit Agreement and effective upon entry of this Interim Order,
and
(c) in new money draws of the remaining principal amount of $5
million in accordance with the terms of the DIP Credit Agreement
and the DIP Budget effective solely upon entry of the Final Order,
and
(d) in a roll-up of approximately $25 million in outstanding
Prepetition Senior Secured Term Loans in accordance with the terms
and conditions set forth in the DIP Credit Agreement and effective
solely upon entry of the Final Order.
The final hearing on the DIP Financing Motion shall be held on June
6, 2023, at 11:00 a.m., prevailing Eastern time. Any objections or
responses to entry of a final order on the Motion shall be filed on
or before 4:00 p.m., prevailing Eastern time, on May 30, 2023, and
shall be served on: (a) the Debtors, Vice Group Holding Inc., 49
South 2nd Street, Brooklyn, NY 11249, Attention: Maria Harris,
Email: maria.harris@vice.com; (b) proposed lead counsel to the
Debtors, Togut, Segal & Segal LLP, One Penn Plaza, Suite 3335, New
York, NY 10119 (Attn: Kyle J. Ortiz and Brian F. Moore); (c)
proposed special counsel to the Debtors, Shearman & Sterling LLP,
599 Lexington Avenue, New York, NY 10022 (Attn.: Fredric Sosnick)
and Shearman & Sterling LLP, 2601 Olive Street, 17th Floor, Dallas,
TX 75201 (Attn.: Ian E. Roberts); (d) counsel to the DIP Lenders,
the DIP Administrative Agent, and the DIP/First Lien Group, Gibson,
Dunn & Crutcher LLP, 200 Park Ave., New York, NY 10166, Attn: David
M. Feldman, Esq., Michael S. Neumeister, Esq., and Matthew C. Rowe,
Esq.; (e) counsel to the DIP Agent, Collateral Agent and the
Prepetition First Lien Collateral Agent, Shipman & Goodwin LLP, One
Constitution Plaza, Hartford, Connecticut 06103, Attn: Marie C.
Pollio, Esq. and Latonia Williams, Esq.; and (f) counsel to William
K. Harrington, the United States Trustee, U.S. Department of
Justice, Office of the United States Trustee, One Bowling Green,
Rm. 534, New York, NY 10004 (Attn.: Andrea B. Schwartz, Esq. and
Annie Wells, Esq.
About Vice Media
Vice Media Group LLC -- https://www.vicemediagroup.com/ -- is an
American-Canadian digital media and broadcasting company. It is
behind popular media websites such as Vice and Motherboard.
Vice Media Group Holding Inc. and 32 affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
23-10737) on May 15, 2023. In the petition filed by Hozefa
Lokhandwala, as chief strategy officer, Vice Media Group reported
assets and liabilities between $500 million and $1 billion.
The Honorable Bankruptcy Judge John P. Mastando III oversees the
cases.
The Debtors tapped TOGUT, SEGAL & SEGAL LLP as general bankruptcy
counsel; PJT PARTNERS INC. and LIONTREE ADVISORS LLC as financial
advisors; AP SERVICES, LLC as restructuring advisor. STRETTO,
INC., is the claims agent.
WATSON/ALTERNATIVE: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Watson/Alternative Wealth Builders, Inc.
8975 Beckington Drive
Elk Grove CA 95624
Business Description: The Debtor is a lessor of residential
buildings and dwellings.
Chapter 11 Petition Date: May 22, 2023
Court: United States Bankruptcy Court
Eastern District of California
Case No.: 23-21640
Judge: Hon. Christopher D. Jaime
Debtor's Counsel: George H. Jones, Esq.
GEORGE JONES
816 H Street, Suite 108
Sacramento, CA 95814
Tel: 888-675-2456
Email: georgej2034@gmail.com
Total Assets: $700,000
Total Liabilities: $1,440,000
The petition was signed by Willie Watson as president.
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/ULKPQZQ/WatsonAlternative_Wealth_Builders__caebke-23-21640__0001.0.pdf?mcid=tGE4TAMA
WB MAINTENANCE: Unsecureds Will Get 100% of Claims in Plan
----------------------------------------------------------
WB Maintenance Inc. d/b/a WB Maintenance & Repair, and its Debtor
Affiliates filed with the U.S. Bankruptcy Court for the Eastern
District of New York a First Amended Disclosure Statement
describing First Amended Plan dated May 16, 2023.
The Debtors are privately held corporations organized under the
laws of the State of New York. W.B. & Son Construction Corp. was
dissolved on June 29, 2016 and WB Maintenance & Design Group was
dissolved on November 2, 2018.
WB Maintenance Inc. has not been formally dissolved but is not
operational. The remaining 2 Debtors perform interior and exterior
construction and remodeling services for residential buildings and
individual residences. Currently, the operational Debtors generate
a profit from their operations.
The business plan for 2023 and beyond relies on the Subchapter V
Debtors continuing operations with their customers, including
providing general construction services to generate revenue and
reducing overhead costs and spending to enable the repayment of the
Debtors' creditors. To accomplish the repayment under the Plan, the
Debtors evaluated historical numbers, considered price increases
for their services, and contemplated debtor-in possession
financing. The Debtors do not anticipate hurdles in accomplishing
the repayment contemplated under the Plan.
The Plan contemplates payment in full to all creditors. The Plan is
premised on the $300,000.00 sum held by the active Debtors in their
debtor in possession accounts and the revenues of Go-Pro
Maintenance Inc. and W.B. Maintenance & Repair Corp. The Debtors
filed a joint Plan, which provides for distribution to each of the
Debtor's creditors from the two Subchapter V Debtors, Go-Pro
Maintenance Inc. and W.B. Maintenance & Repair Corp.
Class 2 consists of Non-Priority Unsecured Claims (Wage and Hour
Claims). The total amount of Plaintiffs' claims is $2,701,643.73.
Pursuant to a settlement agreement reached by Plaintiffs and
Defendants, by their counsel (the "Settlement Agreement"), and the
Debtors, the total of the obligation to be paid to Plaintiffs as of
the date of this Disclosure Statement, is the gross sum of
$530,000.00 (the "Settlement Amount") which is to be paid to
Plaintiffs' attorneys, "LevinEpstein & Associates, P.C., as
Attorney for Plaintiffs" as follows: one (1) lump-sum payment of
$530,000.00 on the Effective Date of the Plan subject to
confirmation of the Debtors' Plan.
Plaintiffs' claims will be allowed as reduced pursuant to the
Settlement Agreement under the lead case, WB Maintenance Inc. (22
41755) and paid in amount equal to approximately 20% of the amount
set forth in the aggregate amount filed in their proofs of claim.
Class 3 consists of General Unsecured Trade Claims. Allowed claims
of all pre-petition unsecured creditors of the Debtors, subject to
an allowance of their claims by the Court, will be paid in cash, an
amount equal to 100% of the allowed amount of such creditors' claim
payable in 1 installment on the Effective Date of the Plan. Payment
of claims in this Class will be in full satisfaction of all claims
that were filed and those that should have been filed. The claims
in this class total approximately $113,607.07. This class is
unimpaired.
Class 4 consists of Administrative Convenience Claims. Allowed
claims of all Pre-Petition unsecured creditors of the Debtors,
subject to an allowance of their claims by the Court, with claims
totaling less than $1,000.00 will be paid in cash, an amount equal
to 100% of the allowed amount of such creditors' claims payable in
1 installment on the Effective Date of the Plan. The claims in this
class total approximately $1,311.99. This class is unimpaired.
Class 5 consists of Equity Security Interests of the Debtors. On
the Effective Date of the Plan, equity in the Debtors will vest in
the Pre-Petition equity security holders in the same proportion as
held by each of them immediately prior to the Filing Date. This
class is unimpaired so its vote will not be solicited.
The funds necessary for the satisfaction of creditors' claims shall
be generated from revenues received in the ordinary course of the
Debtors' collective operation of their construction business,
particularly from the business operations of Debtors Go Pro
Maintenance Inc. and W.B. Maintenance & Repair Corp.
A full-text copy of the First Amended Disclosure Statement dated
May 16, 2023 is available at https://bit.ly/3IwTUTV from
PacerMonitor.com at no charge.
Counsel for Debtors:
Ralph E. Preite, Esq.
Koutsoudakis & Iakovou Law Group, PLLC
40 Wall Street, 49th Floor
New York, NY 10005
Main: (212) 404-8644
Direct: (212) 404-8608
Email: ralph@kilegal.com
About WB Maintenance Inc.
WB Maintenance Inc. sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-41755) on July
22, 2022, listing under $1 million in both assets and liabilities.
Ralph E Preite, Esq. at Koutsoudakis & Iakovou Law Group PLLC, is
the Debtor's counsel.
WHO DAT?: Unsecured Creditors to Get Share of Income for 3 Years
----------------------------------------------------------------
Who Dat?, Inc., filed with the U.S. Bankruptcy Court for the
Eastern District of Louisiana a Second Amended Plan of
Reorganization dated May 16, 2023.
The Debtor was formed in 1983 by Steve and Sal Monistere in order
to develop, protect, foster, and preserve the Debtor's "Who Dat"
trademarks, to develop "Who Dat"-branded goods and services, and to
implement a marketing campaign for these branded products.
On or about July 19, 2019, the Saints commenced an arbitration
proceeding in 2019 ("Arbitration") alleging that the Debtor had
committed multiple breaches of the Agreement and seeking damages
and an injunction. The arbitrator issued an Interim Award on
January 7, 2021 and a Final Award on questions solely related to
questions of liability on February 11, 2021 (the "Award").
On March 5, 2021, the Debtor filed a petition to vacate the Award
in the United States District Court for the Eastern District of
Louisiana which is pending as Civil Action No. 2:21-cv474 which is
remains pending. The burden of the Agreement, the expenses of the
Arbitration and impending costs associated with litigation
regarding the Award, and the effects of the Coronavirus pandemic
each contributed to the filing of this case on the Petition Date.
The Debtor anticipates it will make the final payment due under
this Plan on or before July 31, 2026.
This Plan proposes to pay the Debtor's Creditors from cash flowing
from operations and/or other future income.
Non-priority unsecured Claims holding allowed Claims will receive
pro rata distributions of disposal income of the Debtor after
satisfaction and payment of any Administrative or Priority Claims.
Class 3 consists of NonPriority Unsecured Creditors. Class 3 is
impaired by the Plan, and each holder of an allowed Class 3
Non-Priority Unsecured Claim will receive their pro-rata share of
quarterly distributions of the net revenue of the Debtor's
operations and other income in the preceding quarter for a period
of 3 years after the effective date of this Plan and after payment
and satisfaction of any Administrative or Priority Claims.
Although the Debtor and IPC do not believe that IPC is an insider
of the Debtor, the Plan treats that claim as a Class 4 Claim
without prejudice to the rights of the Debtor or IPC to assert that
it is not, in fact, an insider of the Debtor in the event that this
Plan is not confirmed. The amount of claim in this Class total
$1,548,801.08.
Class 4 consists of Equity Interest Holders and Subordinated
Insider Claims. Class 4 is impaired by this Plan, and each holder
of a Class 4 Equity Interest will retain those interests but will
not receive any distribution on account of such equity interest
until after all distributions to holders of Class 3 Claims have
been made by the Debtor. Insider holders of non-priority unsecured
Claims will not receive any distribution pursuant to the terms of
this Plan. IPC's pre-petition Claim is included for treatment in
this Class notwithstanding the fact that it and the Debtor maintain
that it is not an insider of the Debtor and both parties reserve
all rights with respect to same in the event that this Plan is not
confirmed.
This Plan will be funded by the ongoing operations of the Debtor.
The Debtor anticipates that Steve Monistere and Greg Latham will
continue in their respective positions as President and Secretary
of the Debtor.
A full-text copy of the Second Amended Plan dated May 16, 2023 is
available at https://bit.ly/43iSowB from PacerMonitor.com at no
charge.
Attorneys for the Debtor:
Christopher T. Caplinger, Esq.
Benjamin W. Kadden, Esq.
James W. Thurman, Esq.
Coleman L. Torrans, Esq.
Lugenbuhl Wheaton Peck Rankin & Hubbard
601 Poydras St., Suite 2775
New Orleans, LA 70130
Tel: (504) 568-1990
Fax: (504) 310-9195
Email: ccaplinger@lawla.com
bkadden@lawla.com
jthurman@lawla.com
ctorrans@lawla.com
About Who Dat? Inc.
Who Dat?, Inc. was formed in 1983 by Steve and Sal Monistere in
order to develop, protect, foster, and preserve the "Who Dat"
trademarks. The Debtor filed a Chapter 11 bankruptcy petition
(Bankr. E.D. La. Case No. 21-10292) on March 8, 2021, with as much
as $1 million in both assets and liabilities.
The Debtor tapped Lugenbuhl Wheaton Peck Rankin & Hubbard as
bankruptcy counsel, Intellectual Property Consulting as special
counsel, and Chaffe & Associates, Inc. as financial advisor.
WILSON COLLEGE: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed Wilson College, PA's (Wilson) Long-Term
Issuer Default Rating (IDR) at 'BB'. Fitch has also affirmed at
'BB' $34.8 million outstanding par (FYE 2022) Chambersburg Area
Municipal Authority's education facility revenue and refunding
bonds series 2018, issued on behalf of Wilson College.
The Rating Outlook is Stable.
Entity/Debt Rating Prior
----------- ------ -----
Wilson College (PA) LT IDR BB Affirmed BB
Wilson College
(PA) /General
Revenues/1 LT LT BB Affirmed BB
SECURITY
The bonds are a general obligation of Wilson and are secured by a
pledge of the college's gross revenues, a mortgage on its core
campus property and a cash-funded debt service reserve fund.
ANALYTICAL CONCLUSION
Wilson's 'BB' ratings reflect the college's adequate balance sheet
cushion relative to limited revenue defensibility and strong
operating risk assessments. Despite maintenance of comfortable
balance sheet ratios relative to adjusted debt, Wilson's ratings
are constrained by execution risk related to its targeted
enrollment growth plans in a demographically weak and competitive
market and by reliance on somewhat elevated endowment draws.
The Stable Outlook reflects Fitch's view that expense management
will largely mitigate potential revenue volatility in the near
term, supporting the college's prospects for ongoing financial
performance at the current rating level. The Stable Outlook also
considers the impacts of a Fitch-modeled, forward-looking stress
scenario on Wilson's operating and leverage metrics. Fitch's stress
scenario indicates that Wilson has ability to withstand modeled
assumptions and maintain sufficient financial metrics over time
that are consistent with its rating.
KEY RATING DRIVERS
Revenue Defensibility: 'bb'
Sensitive Demand in Unfavorable Market; Some Revenue Diversity
Wilson's Fall 2022 headcount enrollment of 1,360 (908 FTEs), was
comprised of 525 traditional undergraduates and 244 graduate
students, with the remaining 591 students enrolled in online,
adult, teacher education and dual-enrollment programs.
Traditional undergraduate headcount in fall 2022 was down 20% from
the recent 662 peak in fall 2019, with most of the decline
resulting from sharply lower first-time freshmen during the
pandemic years. Fall 2022 headcount stabilized to roughly the fall
2021 level, and YOY fall 2023 admissions and deposits indicate
positive trends from fall 2022. The majority of undergraduates
major in nursing or veterinary studies; both programs have little
local competition. However, Wilson's largely regional draw in a
demographically unfavorable and competitive Pennsylvania region
with nearby public options subjects Wilson to significant demand
pressures in the traditional undergraduate student market.
Partially offsetting Wilson's limited student demand position in
the undergraduate market, Wilson launched its online college in
fall 2022 and maintains established graduate, adult and teacher
education programs. Wilson is adding new programming including
mostly online programs in allied health professions.
Wilson benefits from steady gift income averaging over 8% of
operating revenues over the past five years and from endowment
distributions averaging about 13% of operations over the same
period. These revenue sources, together with grants and investment
income, favorably reduced Wilson's reliance on potentially
vulnerable student-generated revenues to around 65% of operations
over the past several years.
Operating Risk: 'a'
Solid Cash Flow; Manageable Capital Needs
Operating cost flexibility is solid as reflected in historically
strong cash flow. Wilson's Fitch-calculated cash flow margins have
remained between 15%-20% in recent years, driven in part by
slightly elevated endowment draws that are expected to continue in
the near term at 7% budgeted in fiscal years 2023 and 2024. The
college manages cash expenses in line with revenues and has a
rather flexible expense base, with a high proportion of adjunct
faculty.
Fitch considers capital spending needs moderate in the context of
consistent donor support and the manageable level of capital
investment needed to sustain Wilson's unique program offerings
following recent capital investments.
Financial Profile: 'bbb'
Thin Balance Sheet Resources
Wilson's 'bb' financial profile assessment reflects adequate
Available Funds (AF, cash and investments less permanently
restricted net assets) relative to adjusted debt of 86% at FYE
2022. Despite maintenance of comfortable balance sheet ratios
relative to adjusted debt, Wilson's ratings are constrained by
execution risk related to Wilson's targeted enrollment growth plans
in a demographically weak and competitive market and by reliance on
somewhat elevated endowment draws.
Wilson's balance sheet cushion is sensitive to economic and demand
stress. Forward-looking balance sheet and demand volatility is
reflected in Fitch's rating case scenario analysis, which stresses
Wilson's AF and financial operations at levels consistent with
Fitch's economic market expectations over the intermediate term.
Asymmetric Additional Risk Considerations
No asymmetric additional risk considerations apply to Wilson's
rating.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Weakening student demand, as evidenced by material declines in
enrollment or net tuition and fee revenue;
- An increase in the college's endowment draw;
- Diminished operating cost management with cash flow margins
declining below 10%.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Continued growth of student-generated revenues allowing
diminished reliance on endowment draws;
- Improved financial profile as demonstrated by sustained
maintenance of AF-to-adjusted debt above 120%;
- Consistent track record of sustainable endowment draws at or
below 6%.
CREDIT PROFILE
Wilson College is situated on 275 acres in Chambersburg, PA, in the
south-central area of the state close to the Maryland border and
about 50 miles southwest of Harrisburg, the PA state capitol.
Initially founded as a women's college in 1869 by two Presbyterian
ministers, the college became coeducational in fall 2013 and
currently offers undergraduate, graduate, adult and high school
(dual-enrollment and exchange) programs. Approximately 50% of
undergraduates live on campus, and approximately 45% are
student-athletes on one of Wilson's NCAA Division 3 teams.
Wilson is accredited by the Middle States Commission on Higher
Education with additional recognition from the accrediting bodies
related to the college's various undergraduate and graduate
offerings.
In addition to the sources of information identified in Fitch's
applicable criteria specified below, this action was informed by
information from Lumesis.
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.
[*] Christine K. Lane Joins Crowell & Moring Tax Group Co-Chair
---------------------------------------------------------------
Christine K. Lane has joined Crowell & Moring as co-chair of the
Tax Group, expanding the firm's ability to handle the U.S. federal
tax aspects of complex business transactions, including domestic
and cross-border mergers, acquisitions, joint ventures, and
recapitalizations.
Ms. Lane brings in-depth experience guiding clients on all aspects
of tax planning for corporate transactions, including mergers and
acquisitions, joint ventures, and reorganizations, as well as
advising on structuring, both in the context of IPOs and private
equity/private placements, for established and early-stage growth
companies. In particular, Lane has advised on the structuring of
emerging companies with a focus on AI development. She frequently
counsels U.S. and foreign insurers and reinsurers with respect to
such transactions. Her work has spanned sectors, including health
care and life sciences, technology, insurance, and manufacturing.
Lane has experience handling matters before the IRS and the
Treasury Department.
"Christine's deep transactional background allows her to slot right
into our corporate work, especially on M&A matters," said Jennifer
K. Grady, co-chair of Crowell's Transactional Department. "Her
ability to guide clients through the entire lifecycle of a deal,
understanding the tax implications and structures required before
corporate teams are even brought in, is an incredible asset."
Ms. Lane joins Crowell after spending a decade at Hogan Lovells
where she represented a wide range of clients across industries,
including Fortune 50 and 100 clients. Her experience includes
representing GE Healthcare in its acquisition of Thermo Fisher's
cell culture, gene modulation, and magnetic beads businesses for
approximately $1.06 billion and the 3M Company in its $1.037
billion acquisition of the Polypore separations media business.
Lane also represented a publicly traded, major player in the health
care industry on multiple transactions over the past decade.
Ms. Lane formerly worked as an attorney in the Office of Chief
Counsel of the IRS where she focused on the taxation of insurance
companies, products, and transactions involving both life and
property and casualty insurance companies. During her government
service, Lane also handled a variety of tax matters before the
United States Tax Court and United States Bankruptcy Court, holding
the position of Special Assistant United States Attorney.
"We are proud to have such a diverse and talented tax group, and
Christine will play an important role as we continue to expand our
team and deepen our capabilities," said S. Starling Marshall,
co-chair of the firm's Tax Group.
Ms. Lane earned her law degree at Florida State University College
of Law, LL.M in Tax from Georgetown University Law Center, and
undergraduate degree from the University of Miami.
"Crowell's entrepreneurial spirit and growth mindset really drew me
in, as well as the way Crowell lawyers collaborate across practice
groups to achieve the best results for their clients," Ms. Lane
said. "Having known and worked alongside Crowell attorneys, I also
implicitly understand the high caliber of work and client service
happening here every day."
About Crowell & Moring LLP
Crowell & Moring LLP is an international law firm with offices in
the United States, Europe, MENA, and Asia. Drawing on significant
government, business, industry and legal experience, the firm helps
clients capitalize on opportunities and provides creative solutions
to complex litigation and arbitration, regulatory and policy, and
corporate and transactional issues. The firm is consistently
recognized for its commitment to pro bono service as well as its
programs and initiatives to advance diversity, equity and
inclusion.
[*] Peter Walsh Elected Potter Anderson Executive Committee Chair
-----------------------------------------------------------------
Potter Anderson & Corroon LLP on May 22 announced the election of
Peter J. Walsh, Jr., as chair of the firm's Executive Committee.
Mr. Walsh will serve as chair-elect until his three-year term
begins on January 1, 2024. Kathleen Furey McDonough, the firm's
current chair, will complete her second term at the end of 2023 and
will step down after six years as chair of the committee.
"Pete will be an exceptional leader at a transitional time," said
Ms. McDonough. "His service as Practice Group Leader of the firm's
Corporate Litigation Group and as member of the Executive
Committee, provides the experience essential to building on the
firm's historical success."
Mr. Walsh, a seasoned litigator, has extensive experience in
Delaware's trial courts, the Supreme Court of Delaware, and
routinely handles high profile matters in the Court of Chancery.
Outside of the firm, Mr. Walsh is a recognized senior leader in the
Delaware legal community and has been active nationally in the
Business Law Section of the ABA, having served on the Council of
the Section, as chair of the Business and Corporate Litigation
Committee, and as chair of the Publications Board. He is also a
Fellow in both the American College of Trial Lawyers and the
Litigation Counsel of America.
Potter Anderson's most recent successes include bolstering its
bankruptcy and corporate litigation practices with key lateral
additions, as well as several high-profile litigation and corporate
victories. Walsh's initial focus as chair will be to build upon
these recent achievements in acquiring and developing talent, as
well as its strong financial performance. He will continue to hone
the firm's approach to client service and reputation with clients
and co-counsel and is committed to proactively seeking ways to best
position the firm to meet the rapidly evolving challenges and
changes in the legal industry.
"I am honored to succeed Kathleen, who made history as the first
woman to chair a major Delaware law firm," said Walsh. "I am
particularly looking forward to guiding the firm as it commemorates
its bicentennial in 2026, as it is an ideal time to celebrate the
firm's past and present successes while keeping focused on the
evolving needs of our clients."
About Potter Anderson & Corroon LLP
Potter Anderson & Corroon LLP is one of the largest and most highly
regarded Delaware law firms, providing legal services to regional,
national, and international clients. With more than 90 attorneys,
the firm's practice is centered on corporate law, corporate
litigation, intellectual property, commercial litigation,
bankruptcy, labor and employment, and real estate.
[*] Ravich Meyer Law Firm Partners Join Felhaber Larson
-------------------------------------------------------
Following the retirement of longtime partners of the Ravich Meyer
Law Firm Paul Ravich and Joe Nauman, the remaining attorneys of the
firm joined Felhaber Larson as of May 1, 2023.
Both firms cited a similarity in firm culture, commitment to legal
excellence and a professional yet practical approach to the
practice of law and client service as reasons for the partnership.
Four attorneys and two legal assistants will join the 37 attorneys,
three paralegals, and 25 staff at Felhaber Larson.
"We are excited to grow Felhaber Larson by adding the excellent
team at the Ravich Meyer Law Firm to our firm," said Sara McGrane,
Chair of Felhaber Larson's Board of Directors. "While we share
similar values, we also share a commitment of excellent service to
our clients. We look forward to expanding our ability to serve our
clients, especially in the real estate, corporate and transactional
practice areas."
Felhaber Larson is a full-service law firm with a 75-year history
of serving clients in business and commercial transactions, banking
and financial services, taxation, real estate, commercial
litigation, labor and employment law, immigration, intellectual
property, health law, and energy, among others.
Ravich Meyer specialized in business organization and planning,
financial transactions, commercial bankruptcy and workout matters,
mergers and acquisitions, real estate, and employment and
management matters.
Ravich Meyer partner Will Tansey, who will be a partner at Felhaber
Larson, going forward, said joining the Felhaber Larson team made
the most sense for his team.
"Felhaber Larson is a long-standing, well respected law firm and
they have the personnel and depth of experience which will allow us
to continue to represent our clients in the best manner," Tansey
said. "While our firm name and location will change, what won't
change is the qualities upon which we have built our professional
reputation and we know we can continue that in partnership with
Felhaber Larson."
The four attorneys joining Felhaber include:
Will Tansey
Mr. Tansey, who has 21 years of experience, practices in the areas
of commercial law and real estate. He represents private landowners
and developers in connection with real estate acquisition,
development, sale, lease, finance and related operational and
corporate matters. He has also represented debtors, creditors and
other interested parties in connection with out-of-court workouts
and Chapter 11 bankruptcies.
Education:
University of Minnesota, J.D. - 2002 Cum Laude
University of Wisconsin-Madison, B.S. - 1995 Cum Laude
Dave Kirkman
For more than 40 years, Mr. Kirkman has practiced transactional
business and commercial law, with an emphasis on commercial real
estate, including development, financing, leasing, acquisition and
disposition. Kirkman's practice requires a depth of expertise in
ownership entity structuring, enforcement issues, creative
financing, subdivision, environmental, tax and governance planning,
partner/shareholder issues, and municipal controls.
Education:
William Mitchell College of Law, J.D. - 1979 Magna Cum Laude
St. Cloud State University, B.S. - 1975 Magna Cum Laude
Peter Snyder
Mr. Snyder, who has practiced law for nine years, practices
principally in the area of commercial transactional law, including
financial transactions, corporate governance, commercial real
estate, contract negotiations, shareholder/partner relations, and
employment issues.
Education:
William Mitchell College of Law, J.D., magna cum laude, 2013
University of Wisconsin–Madison, 2009
Ted Wagor
Mr. Wagor, who has practiced law for eight years, practices in the
area of general business and corporate law, including corporate
governance, contract negotiations, shareholder/partner relations,
and employment issues. Wagor also practices in real estate
transactional law and general litigation.
Education:
University of Minnesota Law School, J.D., 2013
Winona State University, B.A., 2008, Magna Cum Laude
About Felhaber Larson
Felhaber Larson -- http://www.felhaber.com-- is a full-service law
firm with a 75-year history of serving clients in business and
commercial transactions, banking and financial services, taxation,
real estate, commercial litigation, labor and employment law,
intellectual property, and energy, among others.
*********
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.
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then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
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