/raid1/www/Hosts/bankrupt/TCR_Public/230614.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, June 14, 2023, Vol. 27, No. 164
Headlines
125 MIDWOOD STREET: Voluntary Chapter 11 Case Summary
1551 BROADWAY: July 31 Public Sale Auction Set
246-18 REALTY: Seeks Cash Collateral Access on Final Basis
403 LLC: Taps Goldberg Weprin Finkel Goldstein as Legal Counsel
4137 CLINTON: Taps Extreme Realty to Sell Stickney Property
575 BOULEVARD: Property Sale Proceeds to Fund Plan
77 HERON LAKES: Hires Pendergraft & Simon LLP as Counsel
AAD CAPITAL: Exclusivity Period Extended to June 30
ACHIEVEMENT FIRST: S&P Affirms 'BB+' ICR, Alters Outlook to Neg.
AEROCARE MEDICAL: Taps Keegan Linscott & Associates as Accountant
AFFORDABLE HOUSING: Case Summary & Nine Unsecured Creditors
AMERICAN HVAC: Gets OK to Hire James Hannigan as Accountant
AMERIMARK INTERACTIVE: Committee Taps Kelley Drye as Legal Counsel
AMERIMARK INTERACTIVE: Committee Taps Porzio as Co-Counsel
AMERIMARK INTERACTIVE: Taps Dundon Advisers as Financial Advisor
ATHEN'S INC: Court OKs Deal on Cash Collateral Access
BANQ INC: Case Summary & Nine Unsecured Creditors
BDC GROUP: Voluntary Chapter 11 Case Summary
BRAND MARINADE: Seeks to Hire Emellishr LLC as Broker
BRIGHT MOUNTAIN: Gretchen Tibbits Quits as Director
CALUMET SPECIALTY: S&P Affirms 'B-' ICR, Outlook Positive
CARING HANDS: Court OKs Cash Collateral Access Thru June 30
CHALICE BRANDS: Gets Ontario Court's CCAA Initial Stay Order
CHARLES DEWEESE: Exclusivity Period Extended to August 28
CHRISTMAS TREE: Deadline to File Claims Set for July 5
CHRISTMAS TREE: Gets OK to Hire Murphy & King as Lead Counsel
CHRISTMAS TREE: Gets OK to Hire Troutman as Co-Counsel
CHRISTMAS TREE: Taps FAAN Advisors Group as Financial Advisor
CLOVIS ONCOLOGY: Equity Committee Taps Chipman as Delaware Counsel
COINBASE GLOBAL: Moody's Alters Outlook on 'B2' CFR to Negative
CREATIVE INVESTORS: Exclusivity Period Extended to August 10
CROWN FINANCE: $3.33B Bank Debt Trades at 74% Discount
CSR WORLDWIDE: Seeks Cash Collateral Access
DELCATH SYSTEMS: Names Sandra Pennell as SVP of Finance
DIAMOND SCAFFOLD: Committee Seeks Plan Exclusivity Termination
DIEBOLD HOLDING: Court Approves Equity Transfer Protocols
DIEBOLD NIXDORF: July 12 Disclosure Statement & Plan Hearing Set
DIOCESE OF SANTA ROSA: Committee Taps Berkeley as Financial Advisor
DIVISION SEVEN: Files Emergency Bid to Use Cash Collateral
FIRST BANCORP: Fitch Alters Outlook on 'BB' IDR to Positive
FORTREA HOLDINGS: Fitch Assigns 'BB+(EXP)' Rating on Secured Notes
FORTREA HOLDINGS: Moody's Rates New $570MM Secured Notes 'Ba3'
GAI REMODELING: Seeks Cash Collateral Access
GAMESTOP CORP: Incurs $50.5 Million Net Loss in First Quarter
GARCIA GRAIN: Taps Sanchez Devanny as Counsel for Rio Bravo
GARDNER AGENCY: Files Emergency Bid to Use Cash Collateral
GAUCHO GROUP: Falls Short of Nasdaq Bid Price Requirement
GESCO INDUSTRIES: Gets CCAA Initial Stay Order; PwC as Monitor
GOGO INC: S&P Alters Outlook to Positive, Affirms 'B+' ICR
GRAYSON UNLIMITED: Taps Law Office of Matthew A. Lazroe as Counsel
HIGHLAND CARGO: Court OKs Deal on Cash Collateral Access
HTG MOLECULAR: Court OKs Cash Collateral Access Thru June 15
HUNYGIRLS VENTURES: Unsecureds Will Get 12.4% of Claims in 3 Years
IDAHO ALLERGY: Seeks Cash Collateral Access
INITALY LLC: Wins Interim Cash Collateral Access
INNOVATIVE DESIGNS: Delays 10-Q Filing for Period Ended April 30
J.A.R. CONCRETE: Seeks Interim Cash Collateral Access
JOYCARE THERAPY: Amends Other Secured Claims Pay Details
LANNETT CO: Reaches Deal With Creditors Committee in Chapter 11
LANNETT COMPANY: Has Cash Collateral Access on Final Basis
LANNETT COMPANY: Prepackaged Plan Confirmed by Judge
LANTERN 18 LLC: Taps Aframe & Barnhill as Legal Counsel
LEAR CAPITAL: Amended Small Business Plan Confirmed by Judge
LEGACY CARES: Committee Taps AlixPartners as Financial Advisor
LG TRUCKING: Seeks Cash Collateral Access
LSF9 ATLANTIS: Fitch Affirms LongTerm IDR at 'B', Outlook Positive
LUMEN TECHNOLOGIES: $5B Bank Debt Trades at 28% Discount
MADERA COMMUNITY: Committee Hires FTI as Financial Advisor
MERIDIEN ENERGY: $1.6MM DIP Loan from ICT-DIP Wins Final OK
MOBIQUITY TECHNOLOGIES: Taps Assurance Dimensions as New Auditor
MOVIA ROBOTICS: Seeks to Extend Plan Exclusivity by 90 Days
MOXI ENTERPRISES: Case Summary & Seven Unsecured Creditors
NA LAND INVESTMENTS: Case Summary & Five Unsecured Creditors
NORTHERN CONTRACTORS: Seeks Cash Collateral Access
NOTTINGHAM ACADEMY: Court OKs Cash Collateral Access Thru June 30
P&L DEVELOPMENT: S&P Affirms 'CCC+' ICR, Outlook Negative
PANEVAS LLC: Court OKs Interim Cash Collateral Access
PERFECTLY PRISCILLA: Seeks Cash Collateral Access
PGX HOLDINGS: Court OKs $12MM DIP Loan from Blue Torch
PHASEBIO PHARMACEUTICALS: Committee Wants Plan Exclusivity Denied
POWER ON INC: Seeks Cash Collateral Access
PRESTIGE CONSTRUCTION: Anderson's Contribution to Fund Plan
PRIMAL MATERIALS: Case Summary & Nine Unsecured Creditors
PRIME PLUMBING: Case Summary & Eight Unsecured Creditors
PROJECT BOOST: Fitch Affirms LongTerm IDR at 'B', Outlook Stable
PROPPANT TECH: Case Summary & 20 Largest Unsecured Creditors
QUANTUM CORP: Incurs $37.9 Million Net Loss in FY Ended March 31
REMODEL 615: Amends SBA Secured Claims Pay Details
RLI SOLUTIONS: Mediation Delays Filing of Chapter 11 Plan
SAN JORGE CHILDREN'S: Has Deal on Cash Collateral Access
SANDY ROAD: Gets OK to Hire Seigfreid Bingham as Substitute Counsel
SCUNGIO BORST: Exclusivity Period Extended to September 20
SOLER & SOLER: Unsecureds Will Get 1.26% of Claims in Plan
SRPC PROPERTIES: Seeks Cash Collateral Access
STRUCTURLAM MASS: Committee Taps Buchalter as Lead Counsel
STRUCTURLAM MASS: Committee Taps Dundon as Financial Advisor
STRUCTURLAM MASS: Committee Taps Goodmans as Canadian Counsel
STRUCTURLAM MASS: Committee Taps Morris Nichols Arsht as Co-Counsel
STRUCTURLAM MASS: Taps Paul Hastings as Special Counsel
SUSTAINABLE SAN DIEGO: Product Sales & Rental Income to Fund Plan
TRICIDA INC: Plan Exclusivity Period Extended to August 9
US FOODS: Moody's Upgrades CFR & Senior Secured Notes to Ba3
VERO PARENT: $180M Bank Debt Trades at 16% Discount
VISIONARY LABELS: Has Deal on Cash Collateral Access
XPLORNET COMMS: $995M Bank Debt Trades at 19% Discount
ZAYO GROUP: $4.96B Bank Debt Trades at 20% Discount
ZIP MAILING: Wins Continued Cash Collateral Access Thru June 24
[*] Prime Commercial Space Up for Sale on June 30
*********
125 MIDWOOD STREET: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: 125 Midwood Street Partners, LLC
125 Midwood Street
Brooklyn, NY 11225
Business Description: The Debtor is a Single Asset Real Estate (as
defined in 11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: June 12, 2023
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 23-42074
Debtor's Counsel: Nnenna Onua, Esq.
MCKINLEY ONUA & ASSOCIATES
26 Court Street
Suite 300
Brooklyn, NY 11242
Tel: 718-522-0236
Email: nonua@mckinleyonua.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Yolanda Shivers as managing member.
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/BQ4AEMA/125_Midwood_Street_Partners_LLC__nyebke-23-42074__0001.0.pdf?mcid=tGE4TAMA
1551 BROADWAY: July 31 Public Sale Auction Set
----------------------------------------------
A public auction for the sale of (a) 99.5% of the limited liability
company interest in the and to (i) 1551 Broadway Owner LLC, and
(ii) 1555 Broadway Owner LLC, and (b) 100% of the common stock in
and to (i) 1551 Broadway Manager Corp., and (ii) 1555 Broadway
Manager Corp., on July 31, 2023, at 11:00 a.m. (New York Time).
The sale will be held virtually via https://bit.ly/1551BWay and be
attend by dialing in to +16469313860,,84232419591#,,,,*027723#.
The principal assets of the Companies are direct and indirect in
the properties located a 1551-1553 Broadway and 1555 Broadway New
York, New York.
The sale is held to enforce the rights of IGIS Global Private
Placement Real Estate Investment Trust No. 141, as secured party
under (a) that certain loan agreement dated Nov. 2, 2017 by and
among the Times Square $ 34th Newco LLC ("Borrower") and secured
party, and (b) that certain pledge and security agreement dated as
of Nov. 2, 2017, executed by borrower in favor of secured party.
Secured party reserves the right to reject all bids and terminate
or adjourn the sale to another time, without further publication.
Interested parties who would like additional information regarding
the company, the collateral, property visits, and the terms of the
public sale should contact Eastdil Secured at
1551Broadway@eastdilsecured.com or visit
https://www.1551BroadwayUCCForeclosure.com to obtain a
non-disclosure agreement which must be executed before obtaining
access to the virtual data site at
https://www.1551BroadwayUCCForeclosure.com.
246-18 REALTY: Seeks Cash Collateral Access on Final Basis
----------------------------------------------------------
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 on a final basis.
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 on monthly basis
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; and
(ii) Entry of an order authorizing the appointment of a Chapter
11 trustee, or examiner with expanded powers.
A copy of the motion is available at https://urlcurt.com/u?l=9j4tjd
from PacerMonitor.com.
A copy of the budget is available at https://urlcurt.com/u?l=svIBmK
from PacerMonitor.com.
The Debtor projects $19,430 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.
403 LLC: Taps Goldberg Weprin Finkel Goldstein as Legal Counsel
---------------------------------------------------------------
403 LLC seeks approval from the U.S. Bankruptcy Court for the
Eastern District of New York to employ Goldberg Weprin Finkel
Goldstein, LLP as its legal counsel.
The Debtor requires legal counsel to:
a. give legal advice in connection with the Chapter 11 case
and the Debtor's responsibilities and duties;
b. represent the Debtor in all proceedings before the
bankruptcy court and the United States Trustee;
c. review and prepare legal papers;
d. take all actions necessary to enable the Debtor to file a
plan of reorganization; and
e. perform all other necessary legal services for the Debtor
to obtain a successful conclusion of its Chapter 11 case.
The firm will be paid at these rates:
Partners $685 per hour
Associates $275 to $500 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received a retainer of $15,000.
Kevin Nash, Esq., a partner at Goldberg, 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:
Kevin J. Nash, Esq.
Goldberg Weprin Finkel Goldstein, LLP
1501 Broadway, 22nd Floor
New York, NY 10036
Telephone: (212) 221-5700
Email: knash@gwfglaw.com
About 403 LLC
403, LLC filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.Y.
Case No. 23-41131) on March 31, 2023, with as much as $1 million in
both assets and liabilities. Judge Jil Mazer-Marino oversees the
case.
The Debtor is represented by Kevin J. Nash, Esq., at Goldberg
Weprin Finkel Goldstein, LLP.
4137 CLINTON: Taps Extreme Realty to Sell Stickney Property
-----------------------------------------------------------
4137 Clinton Ave, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Illinois to employ Extreme Realty,
LLC.
The Debtor requires a broker to market and sell its real property
located at 4137 Clinton Ave., Stickney, Ill., for a listing price
of $399,900 for the period June 1 to Dec. 1, 2023.
The firm will get a commission of 5 percent of the purchase price
of the property.
As disclosed in court filings, Extreme Realty is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Monica Morales
Extreme Realty, LLC
1921 N Harlem Ave
Chicago, IL 60707
Tel: (773) 406-1900
- and -
Emmanuel Nevarez
Extreme Realty, LLC
Tel: (709) 979-5303
Facsimile: (708) 712-1632
Email: propertyhelproject@gmail.com
About 4137 Clinton Ave
4137 Clinton Ave, LLC filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-13700) on
Nov. 28, 2022, with as much as $1 million in both assets and
liabilities. Matthew Brash has been appointed as Subchapter V
trustee.
Judge A. Benjamin Goldgar oversees the case.
The Debtor is represented by Karen Porter, Esq., at Porter Law
Network.
575 BOULEVARD: Property Sale Proceeds to Fund Plan
--------------------------------------------------
575 Boulevard LLC filed with the U.S. Bankruptcy Court for the
Middle District of Georgia a Disclosure Statement for Plan of
Reorganization dated June 5, 2023.
The Debtor is a Georgia Domestic limited liability company and is
in good standing with the Georgia Secretary of State’s office.
Its manager and majority owner is Jeffrey Wilson.
Its principal office address is 103 North Bartow Street, Nashville,
Georgia 31639. It was organized for the purposes of developing,
owning, and operating a commercial office and event space located
at 575 Boulevard, Atlanta, Georgia 30308. Historically, its primary
business has been operating a commercial office and event space.
As of the Petition Date, the Debtor's primary asset was a 12,000
square foot commercial building located in the Grant Park
neighborhood of Atlanta, Georgia (the "Property"). The building was
formerly a Methodist Church that Debtor converted into office and
event space. On May 2, 2023, the Property was sold. The proceeds
will be distributed per the Plan.
On January 20, 2023, the Debtor filed a motion to sell the
Property, along with two neighboring residential properties owned
by Debtor's controlling member, Jeffrey Wilson. As pertinent to the
Debtor, the sale called for a $2,000,000 purchase price for the
Property. The purchase price was to be payable as follows: (i)
$900,000.00 cash at closing; and (ii) a $1,100,000.00 promissory
note amortized over twenty years at 5.75% interest per year with a
5-year balloon. Despite significant opposition from a non-party
potential purchaser and an alleged creditor of Debtor that
culminated in a contested evidentiary hearing, the Bankruptcy Court
authorized the sale.
Prior to the closing of the sale, the terms of the original
contract were amended in favor of the Debtor. As a result, the
Property ultimately sold for the original $2,000,000.00 purchase
price, with $1,075,000 cash at closing and $925,000 financed over
20 years at 5.75% interest, with a 5-year balloon payment. After
paying all secured creditors and closing costs, the Debtor
ultimately received $524,199.26 in net proceeds at closing. The
Debtor will receive the remaining $925,000.00 in net proceeds over
the next five years.
The Debtor's Bankruptcy Case is a reorganization case under Chapter
11 of the Bankruptcy Code. Although the Debtor has sold its primary
asset—the Property—the Debtor has replaced that asset with a
seller financed promissory note, collection of which will result in
a substantial profit to Debtor. The Debtor has continued to conduct
its affairs and operate its businesses as a debtor and
debtor-in-possession, as authorized under Sections 1107(a) and 1108
of the Bankruptcy Code.
Generally, the Plan provides for payments to Allowed Claims from
the net proceeds received from the sale of the Property. The
Reorganized Debtor will retain no property, other than (i) the cash
remaining on hand following the distributions described in the
Plan; and (ii) the Note.
Class 2 consists of the Allowed Unsecured Claims. The Allowed
Unsecured Claims of General Unsecured Creditors (other than Allowed
Unsecured Claims included in Class 1) (the "Class 2 Unsecured
Claims") are estimated to total $116,347.13 as of the Confirmation
Date. The Debtor shall satisfy such Allowed Class 2 Unsecured
Claims by paying such Claims in full on or before the Effective
Date. This Class is unimpaired.
Members of the Debtor shall retain their interest in the Debtor.
The Plan is a reorganizing Chapter 11 plan. The funds required for
implementation of the Plan and the distributions hereunder shall be
provided from the net proceeds received from the sale of the
Property, along with the collection of Note payments received by
the Debtor.
A full-text copy of the Disclosure Statement dated June 5, 2023 is
available at https://urlcurt.com/u?l=1S28OM from PacerMonitor.com
at no charge.
Attorneys for Debtor:
David L. Bury, Esq.
G. Daniel Taylor, Esq.
STONE & BAXTER, LLP
577 Third Street
Macon, Georgia 31201
About 575 Boulevard LLC
575 Boulevard LLC is a Single Asset Real Estate (as defined in 11
U.S.C. Sec. 101(51B)).
575 Boulevard LLC filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. M.D. Ga. Case No. 22-71057) on Dec. 5,
2022. In the petition filed by Jeffrey L. Wilson, as manager, the
Debtor reported assets between $500,000 and $1 million and
liabilities between $1 million and $10 million.
The Debtor is represented by:
Gregory D. Taylor, Esq
Stone & Baxter, LLP
103 N Bartow St
Nashville, GA 31639
77 HERON LAKES: Hires Pendergraft & Simon LLP as Counsel
--------------------------------------------------------
77 Heron Lakes, Ltd., seeks approval from the U.S. Bankruptcy Court
for the Southern District of Texas to employ Pendergraft & Simon,
LLP as counsel.
The firm will provide these services:
a. analysis of the financial situation, and rendering advice
and assistance to the Debtors in determining whether to file
petitions under Title 11, United States Code;
b. advising Debtors with respect to their powers and duties as
a Debtors-in-Possession;
c. conducting appropriate examinations of witnesses, claimants
and other persons;
d. preparation and filing of all appropriate petitions,
schedules of assets and liabilities, statements of affairs,
answers, motions and other legal papers; and to consult with and
advise the Debtors-in-Possession in connection with the operation
of or the termination of the operation of the business of the
Debtors;
e. representation of the Debtors at the meeting of creditors
and such other services as may be required during the course of the
bankruptcy proceedings;
f. representing Debtors-in-Possession in all proceedings before
the Court and in any other judicial or administrative proceeding
where the rights of the Debtors may be litigated or otherwise
affected;
g. preparation, filing, negotiation and prosecution of a
Disclosure Statement and Plan of Reorganization;
h. advising and consulting with the Debtors-in-Possession
concerning questions arising in the conduct of the administration
of the estate and concerning Debtors' rights and remedies with
regard to the Estates' assets and the claims of se- cured, priority
and unsecured creditors;
i. investigating pre-petition transactions and prosecution, if
appropriate, preference and other avoidance actions arising under
the Debtors-in-Possessions' avoidance powers or any other causes of
action held by the Estates;
j. defending, if necessary, any motions to lift the automatic
stay, contested matters and/or adversary proceedings, and, analyze
and prosecute any objections to claims;
k. appearing on behalf of the Debtors-in-Possession before
this Court;
l. advising and assisting the Debtors-in-Possession with real
estate and business organizations issues related to this case; and
m. assistance to Debtors in any matters relating to or arising
out of the captioned case.
The firm will be paid at these rates:
Leonard Simon $600 per hour
William P. Haddock $500 per hour
Senior paralegal/Senior law clerk $250 per hour
Junior paralegal/Junior law clerk $125 per hour
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
The firm received from the Debtor a retainer of $14,000.
Leonard H. Simon, Esq. a partner at Pendergraft & Simon, LLP,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Leonard H. Simon, Esq.
Pendergraft & Simon, LLP
2777 Allen Parkway, Suite 800,
Houston, TX 77019
Tel: (713) 528-8555
Fax: (713) 868-1267
About 77 Heron Lakes, LTD.,
77 Heron Lakes, Ltd. in Houston, TX, filed its voluntary petition
for Chapter 11 protection (Bankr. S.D. Tex. Case No. 23-31641) on
May 1, 2023, listing as much as $1 million to $10 million in both
assets and liabilities. Joe Fogarty as president and general
partner.
PENDERGRAFT & SIMON LLP serve as the Debtor's legal counsel.
AAD CAPITAL: Exclusivity Period Extended to June 30
---------------------------------------------------
The Hon. James R. Sacca of the U.S. Bankruptcy Court for the
Northern District of Georgia extended AAD Capital Partners LLC and
Market Street Shreveport LLC's exclusive period to file a plan and
to obtain acceptances thereof through June 30, 2023.
The Debtors explained that the proposed extension will provide time
for them to focus on upcoming mediation in an attempt to resolve
disputes with Arena Limited SPV, LLC, Market Street's primary
secured creditor.
The Court has considered the motion and the record in the case.
Arena raised a possible objection to the motion, but the Debtors
and Arena have agreed to extend the Debtors; exclusivity period to
and through June 30 in order to avoid the need for an objection.
About AAD Capital Partners
AAD Capital Partners LLC, doing business as Peachtree Battle
Business Services, is a domestic limited liability company.
AAD Capital Partners LLC filed a petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-58223) on
Oct. 12, 2022. In the petition filed by Edward Chen, as managing
member and owner, the Debtor reported assets and liabilities
between $10 million and $50 million.
The Debtor is represented by Ashley Reynolds Ray of Scroggins &
Williamson, P.C.
Arena Limited SPV, LLC, as secured creditor, is represented by Eric
W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP and R.
Joseph Naus, Esq. at Wiener, Weiss & Madison, a Professional
Corporation.
ACHIEVEMENT FIRST: S&P Affirms 'BB+' ICR, Alters Outlook to Neg.
----------------------------------------------------------------
S&P Global Ratings revised the outlook to negative from stable and
affirmed its 'BB+' issuer credit rating to Achievement First Rhode
Island Inc. (AFRI).
"The outlook revision reflects our opinion of AFRI's weakened
liquidity ratios, specifically days' cash on hand, and its lean
lease-adjusted maximum annual debt service coverage, which is
budgeted through at least the near term," said S&P Global Ratings
credit analyst David Holmes.
AEROCARE MEDICAL: Taps Keegan Linscott & Associates as Accountant
-----------------------------------------------------------------
Aerocare Medical Transport System, Inc. received approval from the
U.S. Bankruptcy Court for the District of Arizona to employ Keegan
Linscott & Associates, PC as its accountant.
The firm's services include:
a. preparation and filing of tax returns for the years 2021 and
2022;
b. review of pending claims by taxing authorities for accuracy
and amounts; and
c. any other task that may be required and related to the
Debtor's Chapter 11 bankruptcy proceedings involving tax
liabilities.
The firm will be paid at hourly rates ranging from $125 to $375.
Christopher Linscott, a partner at Keegan, 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:
Christopher Linscott
Keegan Linscott & Associates, PC
3443 N Campbell Avenue, Suite 115
Tucson, AZ 85719
Tel: (520) 884-0176
Fax: (520) 884-8767
Email: clinscott@keeganlinscott.com
About Aerocare Medical Transport System
Aerocare Medical Transport System Inc. is a nationally recognized
and accredited provider of worldwide air ambulance and medevac
services. It is based in Phoenix, Ariz.
Aerocare filed a petition for relief under Subchapter V of Chapter
11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 23-02376) on
April 13, 2023, with total assets of $1,485,981 and total
liabilities of $3,108,797. Michael W. Carmel, Esq., at the Law
Offices of Michael W. Carmel, Ltd. has been appointed as Subchapter
V trustee.
Judge Eddward P. Ballinger, Jr. oversees the case.
The Debtor tapped James E. Cross, Esq., at Cross Law Firm, PLC as
legal counsel and Keegan Linscott & Associates, PC as accountant.
AFFORDABLE HOUSING: Case Summary & Nine Unsecured Creditors
-----------------------------------------------------------
Debtor: Affordable Housing Changemakers LLC
P.O. Box 26509
Los Angeles, CA 90026
Business Description: The Debtor owns properties (vacant office
building, vacant homes, and vacant
warehouse) located at 3643 & 3647 Whittier
Blvd., Los Angeles, CA valued at $5.27
million.
Chapter 11 Petition Date: June 13, 2023
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-13668
Judge: Hon. Vincent P. Zurzolo
Debtor's Counsel: David A. Wood, Esq.
MARSHACK HAYS LLP
870 Roosevelt
Irvine, CA 92620-3663
Tel: (949) 333-7777
Fax: (949) 333-7778
Email: dwood@marshackhays.com
Total Assets: $5,275,000
Total Liabilities: $2,898,291
The petition was signed by Ana Morgan as sole member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's nine unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/7T53VBY/Affordable_Housing_Changemakers__cacbke-23-13668__0001.0.pdf?mcid=tGE4TAMA
AMERICAN HVAC: Gets OK to Hire James Hannigan as Accountant
-----------------------------------------------------------
American HVAC & Plumbing, Inc. received approval from the U.S.
Bankruptcy Court for the Northern District of California to employ
James Hannigan, CPA as its accountant.
The Debtor requires an accountant to review its internal
bookkeeping and prepare federal and state income tax returns and
monthly operating reports.
The accountant will be paid at the rate of $95 per hour.
As disclosed in court filings, Mr. Hannigan is a "disinterested
person" purusant to Section 101(14) of the Bankruptcy Code.
Mr. Hannigan holds office at:
James H. Hannigan, CPA
6455 Almaden Expressway, Suite 213
San Jose, CA 95120
Tel: (408) 921-6145
About American HVAC & Plumbing
American HVAC and Plumbing, Inc. is an HVAC contractor in Campbell,
Calif.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Calif. Case No. 23-50461) on April
28.
2023, with $115,224 in assets and $2,221,984 in liabilities. Cuinn
F. Hamm, president of American HVAC and Plumbing, signed the
petition.
Judge Stephen L. Johnson oversees the case.
The Debtor tapped Lars Fuller, Esq., at the Fuller Law Firm, PC as
legal counsel and James Hannigan, CPA as accountant.
AMERIMARK INTERACTIVE: Committee Taps Kelley Drye as Legal Counsel
------------------------------------------------------------------
The official committee of unsecured creditors of Amerimark
Interactive, LLC and its affiliates received approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Kelley Drye
& Warren, LLP as counsel.
The committee requires legal counsel to:
a. give advice with respect to the rights, duties and powers
of the committee in the Debtors' Chapter 11 cases;
b. assist the committee in its consultations with the Debtors
and in connection with the administration of the cases, the sale of
the Debtors' assets, the investigation into historic conduct and
transactions that may provide value for creditors, and the ultimate
wind-down of the Debtors' estates;
c. assist the committee in its investigation of the acts,
conduct, assets, liabilities, and financial condition of the
Debtors;
d. represent the committee in matters arising in the
bankruptcy cases, including the Debtors' motions to obtain
post-petition financing, use cash collateral and sell substantially
all of their assets;
e. appear before the bankruptcy court and any other federal or
state court;
f. prepare legal papers; and
g. perform other necessary legal services.
The firm will be paid at these rates:
Partners $800 to $1,100 per hour
Special Counsel $480 to $935 per hour
Associates $500 to $86 per hour
Paraprofessionals $270 to $440 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Eric Wilson, Esq., a partner at Kelley Drye & Warren, 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 R. Wilson, Esq.
Kelley Drye & Warren, LLP
101 Park Avenue
New York, NY 10178
Tel: (212) 808-7800
Fax: (212) 808-7897
Email: ewilson@kelleydrye.com
About Amerimark Interactive
AmeriMark Interactive, LLC is a direct marketer of women's apparel,
shoes, name-brand cosmetics, fragrances, jewelry, watches,
accessories, and other related products. It is based in Cleveland,
Ohio.
AmeriMark Interactive and affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10438) on April 11, 2023. In the petition signed by its
chief restructuring officer, Stuart Noyes, AmeriMark Interactive
disclosed up to $50,000 in assets and $100 million to $500 million
in liabilities.
Judge Thomas M. Horan oversees the cases.
The Debtors tapped McDonald Hopkins, LLC and Morris, Nichols, Arsht
and Tunnell, LLP as bankruptcy counsels; Riveron Management
Services, LLC as restructuring advisor; and Consensus Advisory
Services, LLC and Consensus Securities, LLC as investment bankers.
Stretto Inc. is the notice, claims and balloting agent and
administrative advisor.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee hired Kelley Drye & Warren, LLP and Porzio, Bromberg &
Newman, P.C. as bankruptcy counsels; and Dundon Advisers, LLC as
financial advisor.
AMERIMARK INTERACTIVE: Committee Taps Porzio as Co-Counsel
----------------------------------------------------------
The official committee of unsecured creditors of Amerimark
Interactive, LLC and its affiliates received approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Porzio,
Bromberg & Newman, P.C. as co-counsel with Kelley Drye & Warren,
LLP.
The firm's services include:
a. advising the committee with respect to its power and duties
under the Bankruptcy Code Section 1103;
b. assisting the xommittee in its investigation of the acts,
conduct, assets, liabilities, and financial condition of the
Debtors;
c. assisting the committee in connection with the Debtors'
proposed sale of their assets;
d. assisting the committee in connection with any proposed
Chapter 11 plan or other disposition of the Debtors' Chapter 11
cases;
e. assisting the committee in analyzing the claims of
creditors and the Debtors' capital structure and in negotiating
with holders of claims;
f. representing the committee in matters generally arising in
the Debtors' bankruptcy cases, including the Debtors' motion to
incur debtor-in-possession financing;
g. reviewing and analyzing statements of operations, schedules
and legal papers filed by the Debtors or third parties, advising
the committee as to their propriety, and, after consultation with
the committee, taking appropriate action;
h. preparing legal papers; and
i. representing the committee at hearings and communicating
with the committee regarding the issues raised as well as the
decisions of the court; and
j. other necessary legal services.
The firm will be paid at these rates:
Warren J. Martin Jr. Principal $1,095 per hour
John S. Mairo Principal $875 per hour
Brett S. Moore Principal $795 per hour
Robert M. Schechter Principal $795 per hour
Kelly D. Curtin Principal $735 per hour
Cheryl A. Santaniello Principal $735 per hour
Rachel A. Parisi Principal $735 per hour
David E. Sklar Associate $595 per hour
Christopher P. Mazza Associate $550 per hour
Dean M. Oswald Associate $440 per hour
Maria P. Dermatis Paralegal $350 per hour
Jessica M. O'Connor Paralegal $315 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Cheryl Santaniello, Esq., a partner at Porzio, 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:
Cheryl A. Santaniello, Esq.
Porzio, Bromberg & Newman, P.C.
300 Delaware Avenue, Suite 1220
Wilmington, DE 19801
Tel: (302) 526-1235
Fax: (302) 416-6064
Email: casantaniello@pbnlaw.com
About Amerimark Interactive
AmeriMark Interactive, LLC is a direct marketer of women's apparel,
shoes, name-brand cosmetics, fragrances, jewelry, watches,
accessories, and other related products. It is based in Cleveland,
Ohio.
AmeriMark Interactive and affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10438) on April 11, 2023. In the petition signed by its
chief restructuring officer, Stuart Noyes, AmeriMark Interactive
disclosed up to $50,000 in assets and $100 million to $500 million
in liabilities.
Judge Thomas M. Horan oversees the cases.
The Debtors tapped McDonald Hopkins, LLC and Morris, Nichols, Arsht
and Tunnell, LLP as bankruptcy counsels; Riveron Management
Services, LLC as restructuring advisor; and Consensus Advisory
Services, LLC and Consensus Securities, LLC as investment bankers.
Stretto Inc. is the notice, claims and balloting agent and
administrative advisor.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee hired Kelley Drye & Warren, LLP and Porzio, Bromberg &
Newman, P.C. as bankruptcy counsels; and Dundon Advisers, LLC as
financial advisor.
AMERIMARK INTERACTIVE: Taps Dundon Advisers as Financial Advisor
----------------------------------------------------------------
The official committee of unsecured creditors of Amerimark
Interactive, LLC and its affiliates received approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Dundon
Advisers, LLC as its financial advisor.
The committee requires a financial advisor to:
a. assist in the analysis, review and monitoring of the
restructuring or liquidation process, including, but not limited
to, an assessment of the unsecured claims pool and potential
recoveries for unsecured creditors;
b. develop a complete understanding of the Debtors' businesses
and their valuations;
c. determine whether there are viable alternative paths for
the disposition of the Debtors' assets;
d. monitor and, to the extent appropriate, assist the Debtors
in efforts to develop and solicit transactions, which would support
unsecured creditor recovery;
e. assist the committee in identifying, valuing and pursuing
estate causes of action, including, but not limited to, relating to
pre-bankruptcy transactions, control person liability and lender
liability;
f. assist the committee in analyzing, classifying and
addressing claims against the Debtors and participating effectively
in any effort to estimate (in any formal or informal sense)
contingent, unliquidated and disputed claims;
g. assist the committee in identifying, preserving, valuing
and monetizing tax assets of the Debtors, if any;
h. advise the committee in negotiations with the Debtors,
certain of the Debtors' lenders and third parties;
i. assist the committee in reviewing the Debtors' financial
reports, including, but not limited to, statements of financial
affairs, schedules of assets and liabilities, cash budgets and
monthly operating reports;
j. assist the committee in reviewing the Debtors' cost/benefit
analysis with respect to the assumption or rejection of various
executory contracts and leases;
k. review and provide analysis of the present and any
subsequent proposed debtor-in-possession financing or use of cash
collateral;
l. assist the committee in evaluating and analyzing avoidance
actions, including fraudulent conveyances and preferential
transfers;
m. review and provide analysis of any proposed disclosure
statement and Chapter 11 plan and, if appropriate, assist the
committee in developing an alternative Chapter 11 plan;
n. attend meetings and assist in discussions with the
committee, the Debtors, the secured lenders, the U.S. Trustee and
other parties involved in the Debtors' Chapter 11 cases;
o. attending meetings of the committee and other key
stakeholders and parties;
p. provide testimony.
q. perform other financial advisory services for the
committee.
The firm will be paid at these rates:
Principals $850 per hour
Managing Directors and Senior Advisers $760 per hour
Senior Directors $700 per hour
Directors $625 per hour
Associate Directors $550 per hour
Senior Associates $475 per hour
Associates $370 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Richard Wright, managing director at Dundon Advisers, 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:
Richard Wright
Dundon Advisers, LLC
Ten Bank Street, Suite 1100
White Plains, NY 10606
Tel: (914) 341-1188
Fax: (212) 202-4437
Email: rw@dundon.com
About Amerimark Interactive
AmeriMark Interactive, LLC is a direct marketer of women's apparel,
shoes, name-brand cosmetics, fragrances, jewelry, watches,
accessories, and other related products. It is based in Cleveland,
Ohio.
AmeriMark Interactive and affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10438) on April 11, 2023. In the petition signed by its
chief restructuring officer, Stuart Noyes, AmeriMark Interactive
disclosed up to $50,000 in assets and $100 million to $500 million
in liabilities.
Judge Thomas M. Horan oversees the cases.
The Debtors tapped McDonald Hopkins, LLC and Morris, Nichols, Arsht
and Tunnell, LLP as bankruptcy counsels; Riveron Management
Services, LLC as restructuring advisor; and Consensus Advisory
Services, LLC and Consensus Securities, LLC as investment bankers.
Stretto Inc. is the notice, claims and balloting agent and
administrative advisor.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee hired Kelley Drye & Warren, LLP and Porzio, Bromberg &
Newman, P.C. as bankruptcy counsels; and Dundon Advisers, LLC as
financial advisor.
ATHEN'S INC: Court OKs Deal on Cash Collateral Access
-----------------------------------------------------
The U.S. Bankruptcy Court for the District of Nevada authorized
Athen's Inc. to use cash collateral on an interim basis in
accordance with its agreement with the U.S. Small Business
Administration.
As previously reported by the Troubled Company Reporter,
pre-petition, on June 17, 2020, the Debtor executed a Note,
pursuant to which the Debtor obtained an loan in the amount of
$86,900. The terms of the Note require the Debtor to pay principal
and interest payments of $424 every month beginning 12 months from
the date of the Note over the 30-year term of the SBA Loan, with a
maturity date of June 18, 2050. The SBA Loan has an annual rate of
interest of 3.75% and may be prepaid at any time without notice of
penalty.
As evidenced by a Security Agreement executed in connection with
the SBA Loan, and a validly recorded UCC-1 filing on July 1, 2020
as Filing Number 2020110647-3, the SBA Loan is secured by all
tangible and intangible personal property.
Pursuant to the SBA Proof of Claim, $1.4 million is the cumulative
balance owing on the SBA Loan as of the Petition Date.
The SBA consents to the Debtor's use of cash collateral. Other than
the Debtor's use of cash collateral, the Debtor represents to the
SBA it will make no additional or unauthorized use of the cash
collateral retroactive from the earlier of the SBA Loan date until
entry of an Order Confirming the Debtor's Plan of Reorganization
for ordinary and necessary expenses as set forth in the
projections, which will not vary more than 10% on a
total-disbursements cumulative basis and 20% per line-item basis.
As adequate protection, the SBA will receive a replacement lien to
the extent the automatic stay, pursuant to 11 U.S.C. section 362,
as well as the use, sale, lease or grant results in a decrease in
the value of the SBA's interest in the Personal Property Collateral
on a post-petition basis. The replacement lien is valid, perfected
and enforceable and will not be subject to dispute, avoidance, or
subordination, and this replacement lien need not be subject to
additional recording. The SBA is authorized to file a certified
copy of the cash collateral order and any other necessary and
related documents to further perfect its lien.
Any diminution in the value of the Personal Property Collateral
pursuant to the SBA Loan over the life of the proceeding will
entitle the SBA to a super-priority claim pursuant to 11 U.S.C.
sections 503(b), 507(a)(2) and 507(b).
The Debtor will timely commence making regular monthly payments to
the SBA in accordance with the deadlines and amounts set forth in
the applicable SBA Loan documents.
The Debtor agrees to maintain insurance on the Personal Property
Collateral and designate SBA as a loss payee or additional insured
in accordance with the SBA Loan and related loan documents and
agrees to provide proof of insurance within seven days upon the
SBA's written request.
These events constitute an "Event of Default":
(a) The failure to maintain property insurance;
(b) The conversion of the Debtor's Bankruptcy Case to any
other chapter; or
(c) The dismissal of the Debtor's bankruptcy case.
A copy of the order is available at https://urlcurt.com/u?l=571jKI
from PacerMonitor.com.
About Athen's Inc.
Athen's Inc. filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Nev. Case No. 23-11659) on April 27,
2023. In the petition signed by Anthony Dobbs, president, the
Debtor disclosed $793,698 in total assets and $2,890,982 in total
liabilities.
Judge Natalie M. Cox oversees the case.
The Debtor tapped Candace C. Carlyon, Esq., at Carlyon Cica Chtd.
as counsel and Symphony Business Services LLC as accountant.
BANQ INC: Case Summary & Nine Unsecured Creditors
-------------------------------------------------
Debtor: Banq Inc.
7575 W. Washington Ave., Suite 127-118
Las Vegas, NV 89128
Business Description: Banq Inc. is a developer of digital payment,
banking and crypto systems.
Chapter 11 Petition Date: June 13, 2023
Court: United States Bankruptcy Court
District of Nevada
Case No.: 23-12378
Debtor's Counsel: Bart Larsen, Esq.
SHEA LARSEN PC
1731 Village Center Circle, Suite 150
Las Vegas, NV 89149
Tel: 702-471-7432
Email: blarsen@shea.law
Debtor's
Special
Litigation
Counsel: DIAMOND MCCARTHY LLP
Total Assets: $17,725,914
Total Liabilities: $5,451,447
The petition was signed by Joshua Sroge as CEO.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/AP4XYYA/BANQ_INC__nvbke-23-12378__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's Nine Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. N9 Advisors LLC Toth Funes PA $3,603,753
1209 Orange Street
Wilmington, DE 19801
2. LV Stadium Events Company, LLC $788,523
1475 Raiders Way
Henderson, NV 89052
3. Goodwin Procter LLP Services $577,996
100 Northern Ave
Boston, MA 02210
4. STRV Inc. $192,855
548 Market Street
PMB 57558
San Francisco, CA 94104
5. Anonalyx LLC $39,800
206 Vicksburg Street
San Francisco, CA 94114
Alexander Cullen
6. Prolifogy Inc. $12,848
83 Wooster Heights
Suite 125
Danbury, CT 06810
Cory Plock
Tel: 855-776-5436
7. Brownstein Hyatt Services $8,055
Farber Schreck, LP
410 17th Street
Suite 2200
Denver, CO 80202
8. Consilio Services $2,224
1828 L Street NW
Suite 1070
Washington, DC 20036
Tel: 202-822-6222
9. Joshua Sroge Services $391
7575 W. Washington Ave.
Suite 127, #118
Las Vegas, NV 89128
Email: josh@banq.com
BDC GROUP: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: BDC Group, Inc.
1525 Ketelsen Road
Hiawatha, IA 52233
Chapter 11 Petition Date: June 13, 2023
Court: United States Bankruptcy Court
Northern District of Iowa
Case No.: 23-00484
Debtor's Counsel: Austin J. Peiffer, Esq.
AG & BUSINESS LEGAL STRATEGIES
PO Box 11425
Cedar Rapids, IA 52410
Tel: 319-363-1641
Email: austin@ablsonline.com
Debtor's
Accountant: BERGANKDV
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Dennis Bruce 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/4ROK23I/BDC_Group_Inc__ianbke-23-00484__0001.0.pdf?mcid=tGE4TAMA
BRAND MARINADE: Seeks to Hire Emellishr LLC as Broker
-----------------------------------------------------
Brand Marinade, LLC seeks approval from the U.S. Bankruptcy Court
for the Southern District of Florida to employ Emellishr, LLC to
market its surplus equipment for sale under a non-exclusive
agreement.
The firm will be paid a commission of 12 percent of the sale
price.
Nicole Pape, owner of Emellishr, 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:
Nicole Pape
Emellishr, LLC
1344 Disc Drive #381
Sparks, NV 89436
Telephone: (213) 447-1657
Email: nicole@embellishr.com
About Brand Marinade
Brand Marinade, LLC provides printing and related support services.
The company is based in Boca Raton, Fla.
Brand Marinade filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-12729) on April
7, 2023, with $597,096 in assets and $1,591,752 in liabilities.
Soneet Kapila has been appointed as Subchapter V trustee.
Judge Mindy A. Mora presides over the case.
The Debtor tapped Malinda Hayes, Esq., at the Law Offices of
Malinda L. Hayes as counsel and ABT Financial Consultants, LLC as
accountant.
BRIGHT MOUNTAIN: Gretchen Tibbits Quits as Director
---------------------------------------------------
Gretchen Tibbits tendered her resignation as a director of Bright
Mountain Media, Inc., effective June 1, 2023.
Ms. Tibbits did not have any disagreement with the Company when she
tendered her resignation, as disclosed in a Form 8-K filed by the
Company with the Securities and Exchange Commission.
About Bright Mountain
Based in Boca Raton, Fla., Bright Mountain Media, Inc. --
www.brightmountainmedia.com -- is engaged in operating a
proprietary, end-to-end digital media and advertising services
platform designed to connect brand advertisers with
demographically-targeted consumers -- both large audiences and more
granular segments -- across digital, social and connected
television publishing formats. The Company defines "end-to-end" as
its process for taking ad buying from beginning to end, delivering
a complete functional solution, usually without requiring any
involvement from a third party.
Bright Mountain reported a net loss of $8.13 million for the year
ended Dec. 31, 2022, compared to a net loss of $12 million for the
year ended Dec. 31, 2021. For the three months ended Dec. 31,
2022, the Company reported a net loss of $2.32 million. As of Dec.
31, 2022, the Company had $29.20 million in total assets, $43.27
million in total liabilities, and a total stockholders' deficit of
$14.07 million.
East Brunswick, New Jersey-based WithumSmith+Brown, PC, the
Company's auditor since 2021, issued a "going concern"
qualification in its report dated March 28, 2023, citing that the
Company has suffered recurring losses from operations and has a net
capital deficiency that raise substantial doubt about its ability
to continue as a going concern.
CALUMET SPECIALTY: S&P Affirms 'B-' ICR, Outlook Positive
---------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on
Calumet Specialty Products Partners L.P. The outlook was revised to
positive from stable.
At the same time, S&P assigned its 'B-' issue-level rating and '3'
recovery rating to the proposed 2028 unsecured notes. The '3'
recovery rating indicates its expectation for meaningful (50%-70%;
rounded estimate: 60%) recovery in the event of a default.
Existing issue-level ratings on secured debt remains unchanged and
will be withdrawn once this deal is closed and secured debt is
fully repaid.
S&P said, "The positive outlook reflects our expectation of
improved credit metrics over the next 12 months supported by
improved EBITDA margins. However, we still expect S&P Global
Ratings-adjusted credit measures to remain highly leveraged. The
positive outlook also reflects our expectation that the refinancing
transaction will successfully close, thus improving the company's
debt maturity profile."
The refinancing of Calumet's 2024 secured notes eliminates
near-term refinancing risk.
Assuming this transaction closes, the company's capital structure
will have a weighted average maturity beyond 3 years; the nearest
significant maturity will now be in April 2025. S&P said, "We
expect the new 2028 unsecured notes to substantially mirror the
2027 unsecured notes indenture. Our positive outlook is based on
the improved credit metrics combined with the removal of near-term
refinancing risk. If the refinancing transaction is not executed
and the 2024 notes become current, we may revisit the rating on
Calumet."
Calumet's earnings and profitability has benefited from improved
cracks and margins.
Stabilizing raw material costs and favorable crack spreads have
improved the company's S&P adjusted EBITDA margins 280 basis points
(bps) in 2022 compared with 2021. Calumet's stand-alone operating
performance, which excludes Montana Renewables LLC (MRL), has
improved significantly since 2020. Over the past two years, the
company has grown the top line for its specialty products and
performance brands segments by about 116%. The growth in revenues
is supported by improved market dynamics and increased demand for
its key end products. Additionally, Calumet has also signed a
multi-year agreement with Shell to supply its sustainable aviation
fuel (SAF) which is expected to increase revenues over the years.
As a result of the improved operating performance and favorable
margins, the company improved its weighted average S&P Global
Ratings-adjusted debt to EBITDA around 5.0x.
Calumet continues to shift its focus to its higher-margin specialty
products business.
The company has shed refining assets over the years, moving away
from traditional refining and fossil fuels to focus on its
specialty products and solutions. In addition, the company has
converted its Great Falls, Mont., facility into a renewable diesel
facility. Calumet expects it to have steady state production in
2023 and potentially drive future growth and profitability for the
company given the increased focus on sustainability. Calumet's
operations in Montana include two independent businesses:
renewables through MRL and crude refining through Calumet Montana
Refining LLC, where it will continue to refine about 12,000 barrels
per day (bbl/d) of Canadian sour crude for specialty asphalt.
Rising cost of RINs can hurt EBITDA and credit metrics.
The company's expense for renewable identification numbers (RINs)
has increased repeatedly since the start of 2021, hurting margins.
The company has received exemptions from paying RINs in the past,
and S&P's base-case assumptions assume that the company will be
exempted from paying them in the near term. Credit metrics may be
hampered if RINs are not exempted going forward.
S&P said, "The positive rating outlook on Calumet reflects our
expectation that the company's credit metrics will continue to
improve, such as S&P Global Ratings adjusted debt to EBITDA
approaching 5x over the next 12 months. It also reflects our
expectation that the refinancing transaction will close before the
2024 notes become current. We expect the company's financial
position will continue to benefit from stabilizing costs and
incremental cash flows from its now-operating MRL facility.
"We could revise the outlook to stable if liquidity and cash flows
become constrained such that the company is increasingly reliant on
its credit facility for additional liquidity and if free cash flow
turned negative for consecutive quarters."
S&P could take a negative rating action if:
-- The transaction to refinance the 2024 notes does not close over
the next month and it becomes apparent that the notes will become
current;
-- The 2025 notes become current with no prospects for
refinancing; or
-- S&P Global Ratings adjusted debt to EBITDA worsens to 6.0x on a
sustained basis, which could occur if the company's EBITA margin
deteriorates 100 bps from its 2023 level.
S&P could raise the rating on Calumet over the next 12 months if:
-- The company maintains S&P Global Ratings-adjusted debt to
EBITDA ratio below 5.0x;
-- The company generates positive free cash flows for a sustained
period of time;
-- Management maintains financial policies consistent with the
rating; and
-- S&P expects the company to continue to deliver on its stated
operational and financial goals, such as achieving operating rates
of 18,000 bbl/d at MRL.
S&P could also take a positive rating action if there is a sale or
IPO at MRL and proceeds are used to lower leverage at Calumet.
ESG credit indicators: E-3, S-2, G-3
S&P said, "We view Calumet's environmental and social risks as on
par with other companies in the chemicals and refining sectors. Our
governance assessment is moderately negative. Although we
incorporate these assessments into our rating, they do not have a
material impact on credit quality at this time. The company is
publicly listed and meets regulatory requirements for transparency
in its financial statements."
CARING HANDS: Court OKs Cash Collateral Access Thru June 30
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota authorized
Caring Hands Home Care, Inc. to use cash collateral on an interim
basis in accordance with the budget through June 30, 2023.
The Internal Revenue Service is the only secured creditor. The
Debtor believes the current debt owed to the IRS is $178,409.
Notice of the current federal tax liens were filed with the
Minnesota Secretary of State on September 19, 2022, November 18,
2022, January 9, 2022 and March 27, 2023.
For purposes of adequate protection and to the extent of use of
pre-petition cash collateral in which a lienholder has a valid
security interest, the Debtor is authorized to grant each
lienholder a replacement lien in post-petition accounts receivable
pursuant to 11 U.S.C. section 552. The liens will have the same
validity, priority and effect as pre-petition lien of the Debtor's
prepetition property.
The secured creditors are deemed to be adequately protected with
respect to its interest in the Collateral.
A final hearing on the matter is set for June 27 at 11 a.m.
About Caring Hands Home Care, Inc.
Caring Hands Home Care, Inc., has operated a home health care
agency since 1994 and is licensed by the Minnesota Department of
Human Services.
Caring Hands Home Care sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Minn. Case No. 23-60214) on May 30,
2023.
In the petition signed by Gary Johnson, its president, the Debtor
disclosed up to $100,000 in assets and up to $500,000 in
liabilities.
Judge Michael E. Ridgway oversees the case.
Ahlgren Law Office, PLLC, represents the Debtor as legal counsel.
The Debtor previously filed a voluntary Chapter 11 bankruptcy
petition (Bankr. D. Minn. Case No. 17-60044) on Jan. 27, 2017. It
was represented by Erik A Ahlgren, Esq. -- erikahlgren@charter.net
-- at Ahlgren Law Office in the 2017 case.
CHALICE BRANDS: Gets Ontario Court's CCAA Initial Stay Order
------------------------------------------------------------
The Ontario Superior Court of Justice (Commercial List) ("Court")
made an Order ("Initial Order") granting Chalice Brands Ltd.
protection pursuant to the Companies' Creditors Arrangement Act
("CCAA"). Pursuant to the Initial Order, KSV Restructuring Inc.
was appointed as monitor ("Monitor").
The Initial Order also provides for a stay of proceedings until
June 2, 2023, which may be extended by the Court from time-to-time.
A motion is scheduled to be heard on June 1, 2023 to, among other
things, extend the stay of proceedings to July 28, 2023 ("Comeback
Motion"). A copy of this order, if issued, will be available on
the Monitor’s website at
https://www.ksvadvisory.com/experience/case/chalice-brands-ltd.
According to Court Documents, the Company, in close consultation
and with the assistance of the Monitor, has been working diligently
and in good faith to (i) stabilize the business and operations of
the Company; (ii) advise its stakeholders, including the Investment
Industry Regulatory Organization of Canada (IIROC) of the granting
of the Initial Order; (iii) respond to employee and creditor
inquiries regarding the CCAA proceeding; and (iv) work with the
Oregon Receiver and its counsel in connection with the Oregon
Receivership.
The Company said, because the Chalice Group is a farm-to-table
cannabis business that grows its own cannabis flower, there is
uncertainty about whether the Chalice Group can access the tools
under the federal U.S. Bankruptcy Code and the matter is untested.
As a result, concurrent with these CCAA proceedings, the Company
commenced proceedings in the State of Oregon to have the Oregon
Receivership Entities placed into state receivership.
On May 23, 2023, the Oregon Receiver was appointed as state
receiver over the Oregon Receivership Entities.9 Pursuant to the
Oregon Court's Order Appointing Receiver, a stay has been applied
in the State of Oregon protecting the Oregon Receivership Entities
and their property.
Since its appointment, the Oregon Receiver has taken steps to
stabilize the business and operations of the Oregon Receivership
Entities. Among other things, the Oregon Receiver wrote to the
Oregon Liquor and Cannabis Commission to advise it of the
commencement of the Oregon Receivership and to request temporary
cannabis licenses in order to continue operating the retail stores
of the Oregon Receivership Entities. The Oregon Receiver has also
had preliminary discussions with certain creditors of the Chalice
Group, including counsel to the Homegrown Lenders.
Monitor can be reached at:
KSV Restructuring Inc.
150 King Street West,
Suite 2308
Toronto ON M5H 1J9
Noah Goldstein
Tel: 416-932-6207
Email: NGoldstein@ksvadvisory.com
Christian Vit
Tel: 647-848-1350
Email: CVit@ksvadvisory.com
Counsel to the Monitor:
Cassels Brock & Blackwell LLP
Suite 2100, Scotia Plaza
40 King Street West
Toronto ON M5H 3C2
Ryan Jacobs
Tel: 416-860-6465
Email: RJacobs@cassels.com
Jeremy Bornstein
Tel: 416-869-5386
Email: JBornstein@cassels.com
Canadian Counsel to the Company:
Osler, Hoskin & Harcourt LLP
Box 50, 1 First Canadian Place
100 King Street West, Suite 6200
Toronto, Ontario M5X 1B8
Marc Wasserman
Tel: 416-862-4908
Email: MWasserman@osler.com
Shawn Irving
Tel: 416-862-4733
Email: SIrving@osler.com
Kathryn Esaw
Tel: 416-862-4905
Email: KEsaw@osler.com
Fabian Suarez-Amaya
Tel: 416-862-6416
Email: FSuarezAmaya@osler.com
U.S. Counsel to the Company:
Leonard Law Group
4110 SE Hawthorne Blvd. PMB 506
Portland, OR 97214-9246
Timothy Solomon
Tel: 971-634-0194
Email: TSolomon@LLG-LLC.com
Justin Leonard
Tel: 971-634-0192
Email: JLeonard@LLG-LLC.com
Chief Restructuring Officer of the Chalice Group:
Cardinal Advisory Services Inc.
Attn: Scott Secord
120 Adelaide Street West, Suite 2210
Toronto, ON M5T 1H1
Email: ScottLSecord@gmail.com
Chalice Brands Ltd., together with its direct and indirect
subsidiaries forms a vertically integrated cannabis company
operating primarily in the regulated adult-use market of Oregon.
CHARLES DEWEESE: Exclusivity Period Extended to August 28
---------------------------------------------------------
The Hon. Joan A. Lloyd of the United States Bankruptcy Court for
the Western District of Kentucky entered an Order granting the
first motion to extend exclusivity periods filed by Charles Weldon
Deweese, Penny Whitfield Deweese and their affiliates.
The Debtors' exclusive right to file a plan is extended to August
28, 2023; and provided that the Debtors file a plan on or before
August 28, the Debtors shall have the exclusive right to solicit
acceptances of that plan until November 27.
As reported by the Troubled Company Reporter, in the first months
of their cases, the Debtors, among other things, have been
investigating claims that the estates may have against others and
exploring the estates' engagement of conflicts counsel; marketing
and selling the estates' real property and reducing and eliminating
certain secured claims associated therewith; negotiating the payoff
of a real estate purchase contract with a buyer; selling and
facilitating the sale by Charles Deweese Construction, Inc.'s
trustee of certain personal property owned by the Debtors; and
negotiating agreements for relief from the stay with several
creditors with an interest in equipment.
The Debtors anticipate listing several additional properties --
substantially all their remaining unimproved land -- for sale with
a realtor in the immediate future.
Though much progress has been made in the cases to date and the
Debtors will continue this summer to simplify their balance sheets
and reduce the claims against the estate by liquidating assets and
paying the claims secured by them, the Debtors contend their
Chapter 11 Cases present too many unknowns for the Debtors to
propose a plan at this time:
1. The extent of their liability to the Internal Revenue
Service for trust taxes unpaid by CDC is entirely unknown at this
time.
2. The secured claims against the estate continue to be paid
down. Many of them -- particularly with respect to Farmers Bank and
Franklin Bank -- are secured by multiple properties. Both of these
creditors have liens on equipment that will be sold in June. The
outcome of these sales will determine how much debt will remain
owing against the properties that the Debtors hope to keep, and
those balances, in turn, will constrain the Debtors' ability to
fund a plan that enables them to retain them.
3. The deficiency claims against the Debtors' estates by
equipment lenders and lessors are yet unknown.
4. Beyond all the uncertain claims, the assets of the estates
are not entirely clear, or at least the amount that the Debtors
will ultimately realize from them. The Debtors have identified
certain transfers in their schedules which may give rise to
avoidance actions under chapter 5 of the Bankruptcy Code. Rather
than attempt to resolve these issues themselves, they intend to
hire conflicts counsel to do so, in light of insider relationships
with certain transferees.
About the Dewesees
Charles Weldon Deweese and Penny Whitfield Deweese are longtime
residents of Franklin County, Kentucky who have invested in and
developed residential and commercial properties throughout the
county.
Charles Weldon Deweese and Penny Whitfield Deweese sought Chapter
11 bankruptcy protection (Bankr. W.D. Ky. Case No. 23-10072) on
Jan. 27, 2023.
Real estate owning entities of the Deweeses also sought Chapter 11
protection: CoCo LLC (Case No. 23-10073); Drakes Creek Holding
Company, LLC (Case No. 23-10074); Jed Holding Company LLC (Case No.
23-10075); and Weldon Inc. (Case No. 23-10076).
The Debtors' Chapter 11 cases are jointly administered under Case
No. 23-10072.
The Debtors are represented by Neil Charles Bordy, Esq., at Seiller
Waterman LLC.
CHRISTMAS TREE: Deadline to File Claims Set for July 5
------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware set July 5,
2023, as the deadline for all persons and entities of Christmas
Tree Shops and its debtor-affiliates to file proofs of claim
against the Debtors.
The Court also set Nov. 1, 2023, as the deadline for governmental
units to file their claims against the Debtors.
Each Proof of Claim must be filed, including supporting
documentation so as to be actually received by KCC on or before the
applicable Bar Date as follows: electronically through the
interface available at https://www.kccllc.net/christmastreeshops,
or if submitted through non-electronic means, by overnight mail,
courier service, hand delivery, regular mail, or in person to:
Christmas Tree Shops Claims Processing Center
c/o KCC
222 N. Pacific Coast Highway, Suite 300
El Segundo, CA 90245
About Christmas Tree Shops
Christmas Tree Shops, LLC, operates a chain of brick-and-mortar
home at value pricing. CTS stores offer a variety of products
including home decor, bed and bath products, including home decor,
bed and bath products, and seasonal products.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del Lead Case No. 23-10576) on May 5,
2023. In the petition signed by Marc Salkovitz, executive chairman,
the Debtor disclosed up to $100 million in assets and up to $500
million in liabilities.
Judge Thomas M. Horan oversees the case.
The Debtors tapped Troutman Pepper Hamilton Sanders LLP and Murphy
& King, PC as legal counsel; and Kurtzman Carson Consultants, LLC
as claims agent.
CHRISTMAS TREE: Gets OK to Hire Murphy & King as Lead Counsel
-------------------------------------------------------------
Christmas Tree Shops, LLC and its affiliates received approval from
the U.S. Bankruptcy Court for the District of Delaware to employ
Murphy & King, Professional Corporation as lead counsel.
The firm's services include:
(a) advising the Debtors of their rights, powers, and duties
under Chapter 11 of the Bankruptcy Code;
(b) taking action to protect and preserve the Debtors' estates,
including the prosecution of actions on the Debtors' behalf, the
defense of actions commenced against the Debtors in their Chapter
11 cases, the negotiation of disputes in which the Debtors are
involved, and the preparation of objections to claims filed against
the Debtors;
(c) preparing legal papers;
(d) prosecuting a Chapter 11 plan and seeking approval of all
transactions contemplated therein or other structured exit from
bankruptcy; and
(e) other necessary legal services in connection with the
Debtors' Chapter 11 cases.
The firm will be paid at these rates:
Harold B. Murphy, Shareholder $735 per hour
Charles R. Bennett, Shareholder $735 per hour
Christopher M. Condon, Shareholder $585 per hour
Kathleen R. Cruickshank, Shareholder $625 per hour
Leah O'Farrell, Associate $325 per hour
Michael J. Tretter, Paralegal $240 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received from the Debtors a retainer in the amount of
$150,000.
In response to the request for additional information set forth in
Paragraph D.1 of the U.S. Trustee Guidelines, Murphy & King
disclosed the following:
(a) The firm did not agree to a variation of its standard and
customary billing arrangement for this engagement.
(b) None of the professionals included in this engagement have
varied their rate based on the geographic location of these Chapter
11 cases.
(c) The firm represented the Debtors prior to the petition date
in connection with the filing of the cases. The firm is billing the
Debtors post-petition at the same effective rates it billed
pre-petition, subject to an annual adjustment in hourly rates that
is effective on January 1st each year.
(d) In connection with the budget, the firm and its co-counsel,
Troutman Pepper Hamilton Sanders LLP, and the Debtors have
developed an initial budget and staffing plan to cover the period
from the petition date through July 29, 2023.
Harold Murphy, Esq., a partner at Murphy & King, 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:
Harold B. Murphy, Esq.
Christopher M. Condon, Esq.
Murphy & King, Professional Corporation
28 State Street, Suite 3101
Boston, MA 02109
Tel: (617) 423-0400
Email: hmurphy@murphyking.com
ccondon@murphyking.com
About Christmas Tree Shops
Christmas Tree Shops, LLC is a home-decor retailer that was spun
off from Bed Bath & Beyond in 2020. It operates a chain of
brick-and-mortar home goods retail stores that specializes in
year-round seasonal goods at value pricing. Christmas Tree Shops
stores offer a variety of products including home decor, bed and
bath products, kitchen and dining products, furniture, food and
seasonal products.
Christmas Tree Shops and four of its affiliates sought Chapter 11
bankruptcy protection (Bankr. D. Del., Lead Case No. 23-10576)
on May 5, 2023. At the time of the filing, Christmas Tree Shops
listed $50 million to $100 million in assets and $100 million to
$500 million in liabilities.
Judge Thomas M. Horan presides over the Debtors' cases.
The Debtors tapped Murphy & King, P.C. and Troutman Pepper Hamilton
Sanders, LLP as bankruptcy counsels; and FAAN Advisors Group Inc.
as financial advisor. Kurtzman Carson Consultants, LLC is the
Debtors' claims and noticing agent.
CHRISTMAS TREE: Gets OK to Hire Troutman as Co-Counsel
------------------------------------------------------
Christmas Tree Shops, LLC and its affiliates received approval from
the U.S. Bankruptcy Court for the District of Delaware to employ
Troutman Pepper Hamilton Sanders, LLP as co-counsel with Murphy &
King, Professional Corporation.
The firm's services include:
(a) advising the Debtors of their rights, powers, and duties
under Chapter 11 of the Bankruptcy Code;
(b) taking action to protect and preserve the Debtors' estates,
including the prosecution of actions on the Debtors' behalf, the
defense of actions commenced against the Debtors in their Chapter
11 cases, the negotiation of disputes in which the Debtors are
involved, and the preparation of objections to claims filed against
the Debtors;
(c) preparing legal papers;
(d) prosecuting a Chapter 11 plan and seeking approval of all
transactions contemplated therein or other structured exit from
bankruptcy; and
(e) other necessary legal services in connection with the
Debtors' Chapter 11 cases.
The firm will be paid at these rates:
Evelyn Meltzer, Partner $1,000 per hour
Marcy McLaughlin Smith, Associate $840 per hour
Pierce Rigney, Associate $670 per hour
Monica Molitor, Paralegal $390 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received a retainer in the amount of $108,690.
In response to the request for additional information set forth in
Paragraph D.1 of the U.S. Trustee Guidelines, Troutman disclosed
the following:
(a) Troutman did not agree to a variation of its standard or
customary billing arrangement for this engagement.
(b) None of the professionals included in this engagement have
varied their rate based on the geographic location of these Chapter
11 cases.
(c) Troutman represented the Debtors prior to the petition date
in connection with the filing of these Chapter 11 cases. The firm
is billing the Debtors post-petition at the same effective rates it
billed pre-petition, subject to an annual adjustment in hourly
rates that is effective on January 1st each year.
(d) In connection with the budget, Troutman, Murphy & King and
the Debtors have developed an initial budget and staffing plan to
cover the period from the petition date through July 29, 2023.
Evelyn Meltzer, Esq., a partner at Troutman, 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:
Evelyn J. Meltzer, Esq.
Troutman Pepper Hamilton Sanders, LLP
Hercules Plaza, Suite 5100
1313 N. Market Street, Suite 5100
Wilmington, DE 19801
Telephone: (302) 777-6500
Facsimile: (302) 421-8390
Email: evelyn.meltzer@troutman.com
About Christmas Tree Shops
Christmas Tree Shops, LLC is a home-decor retailer that was spun
off from Bed Bath & Beyond in 2020. It operates a chain of
brick-and-mortar home goods retail stores that specializes in
year-round seasonal goods at value pricing. Christmas Tree Shops
stores offer a variety of products including home decor, bed and
bath products, kitchen and dining products, furniture, food and
seasonal products.
Christmas Tree Shops and four of its affiliates sought Chapter 11
bankruptcy protection (Bankr. D. Del., Lead Case No. 23-10576)
on May 5, 2023. At the time of the filing, Christmas Tree Shops
listed $50 million to $100 million in assets and $100 million to
$500 million in liabilities.
Judge Thomas M. Horan presides over the Debtors' cases.
The Debtors tapped Murphy & King, P.C. and Troutman Pepper Hamilton
Sanders, LLP as bankruptcy counsels; and FAAN Advisors Group Inc.
as financial advisor. Kurtzman Carson Consultants, LLC is the
Debtors' claims and noticing agent.
CHRISTMAS TREE: Taps FAAN Advisors Group as Financial Advisor
-------------------------------------------------------------
Christmas Tree Shops, LLC and its affiliates received approval from
the U.S. Bankruptcy Court for the District of Delaware to employ
FAAN Advisors Group, Inc. as financial advisor.
The firm's services include:
a. assistance to the Debtors in the preparation of
financial-related disclosures required by the court, including the
Debtors' schedules of assets and liabilities, statements of
financial affairs and monthly operating reports;
b. assistance with the identification and implementation of
short-term cash management procedures;
c. assistance with the identification of executory contracts and
leases and performance of cost/benefit evaluations with respect to
the affirmation or rejection of each;
d. assistance to the Debtors' management team and counsel
focused on the coordination of resources related to the ongoing
reorganization effort;
e. assistance with the preparation of financial information for
distribution to creditors and others;
f. attendance at meetings and discussions with potential
investors, banks, and other secured lenders, any official committee
appointed in the Debtors' Chapter 11 cases, the United States
Trustee, and other parties involved in the Debtors' Chapter 11
cases;
g. analysis of creditor claims by type, entity, and individual
claim;
h. assistance with the preparation of information and analysis
necessary for the confirmation of a plan of reorganization;
i. preparation of materials related to due diligence sessions,
discovery, depositions, negotiations, mediations, and other
relevant meetings, and discussions with the Debtors, any committee
appointed in the cases, and other parties; and
j. other necessary financial advisory services.
The firm will be paid at these rates:
Managing Director $650 to $795 per hour
Manager/Director $495 to $550 per hour
Analysts/Associates $295 to $395 per hour
The Debtors paid the firm a $50,000 retainer.
Naveed Manzoor, managing director at FAAN Advisors Group, 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:
Naveed Z. Manzoor
FAAN Advisors Group Inc.
20 Adelaide Street East, Suite 920
Toronto, Ontario M5C 2T6
Tel: 416-815-0298
About Christmas Tree Shops
Christmas Tree Shops, LLC is a home-decor retailer that was spun
off from Bed Bath & Beyond in 2020. It operates a chain of
brick-and-mortar home goods retail stores that specializes in
year-round seasonal goods at value pricing. Christmas Tree Shops
stores offer a variety of products including home decor, bed and
bath products, kitchen and dining products, furniture, food and
seasonal products.
Christmas Tree Shops and four of its affiliates sought Chapter 11
bankruptcy protection (Bankr. D. Del., Lead Case No. 23-10576)
on May 5, 2023. At the time of the filing, Christmas Tree Shops
listed $50 million to $100 million in assets and $100 million to
$500 million in liabilities.
Judge Thomas M. Horan presides over the Debtors' cases.
The Debtors tapped Murphy & King, P.C. and Troutman Pepper Hamilton
Sanders, LLP as bankruptcy counsels; and FAAN Advisors Group Inc.
as financial advisor. Kurtzman Carson Consultants, LLC is the
Debtors' claims and noticing agent.
CLOVIS ONCOLOGY: Equity Committee Taps Chipman as Delaware Counsel
------------------------------------------------------------------
The official committee of equity security holders of Clovis
Oncology, Inc. seeks approval from the U.S. Bankruptcy Court for
the District of Delaware to employ Chipman Brown Cicero & Cole, LLP
as Delaware counsel.
The firm's services include:
a. advising the equity committee with respect to its rights,
powers, and duties in the Chapter 11 cases of Clovis Oncology and
its affiliates;
b. participating in in-person and telephonic meetings of the
equity committee and subcommittees formed thereby, if any;.
c. assisting and advising the equity committee in its meetings
and negotiations with the Debtors and other parties involved in the
Debtors' bankruptcy cases;
d. assisting the equity committee in analyzing claims asserted
against, and interests in, the Debtors, and in negotiating with the
holders of such claims and interests, and bringing, or
participating in, objections or estimation proceedings with respect
to such claims and interests;
e. assisting the equity committee in analyzing the Debtors'
assets and liabilities, including in its review of the Debtors'
schedules of assets and liabilities, statement of financial
affairs, and other reports prepared by the Debtors;
f. negotiating and taking all necessary or appropriate actions
in connection with a plan of reorganization and all related
documents thereunder and transactions contemplated therein;
g. attending all meetings and negotiating with representatives
of the Debtors' estates, creditors, the United States Trustee, and
other parties involved in the Debtors' bankruptcy cases;
h. providing legal advice regarding bankruptcy law, corporate
law, corporate governance, transactional, litigation and other
issues; and
i. other necessary legal services.
The firm will be paid at these rates:
William E. Chipman, Jr. $775 per hour
Robert A. Weber $725 per hour
Mark L. Desgrosseilliers $725 per hour
Mark D. Olivere $525 per hour
Edwin Leon $300 per hour
Renae M. Fusco $275 per hour
John B. Lord $275 per hour
Partners $525 to $775 per hour
Associates $300 to $375 per hour
Paralegals for $200 to $275 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Robert Weber, Esq., a partner at Chipman, 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 through:
Robert A. Weber, Esq.
Chipman Brown Cicero & Cole, LLP
1313 N. Market Street, Suite 5400
Wilmington, DE 19801
Tel: 302-414-8906
About Clovis Oncology
Clovis Oncology, Inc. is an American pharmaceutical company, which
mainly markets products for treatment in oncology. The company is
based in Boulder, Colo.
Clovis Oncology and its affiliates sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bank. D. Del. Lead Case No.
22-11292) on Dec. 11, 2022. In the petition signed by Paul E.
Gross, executive vice president and general counsel, Clovis
Oncology disclosed $319,164,834 in assets and $754,564,457 in
liabilities.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped Morris Nichols Arsht and Tunnell, LLLP and
Wilkie Farr & Gallagher, LLP as bankruptcy counsels; Alixpartners,
LLP as financial advisor; Perella Weinberg Partners, LP as
investment banker; and Ernst & Young, LLP as tax services
provider.
Kroll Restructuring Administration, LLC is the claims, noticing and
solicitation agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors in the Debtors' cases. The committee tapped
Morrison & Foerster, LLP as lead bankruptcy counsel; Potter
Anderson & Corroon, LLP as Delaware counsel; Alvarez & Marsal
North America, LLC as financial advisor; and Jefferies, LLC as
investment banker.
The U.S. Trustee also appointed an official committee to represent
the Debtors' equity security holders. Baker & McKenzie, LLP and
Chipman Brown Cicero & Cole, LLP serve as the equity committee's
bankruptcy counsel and Delaware counsel, respectively.
COINBASE GLOBAL: Moody's Alters Outlook on 'B2' CFR to Negative
---------------------------------------------------------------
Moody's Investors Service affirmed Coinbase Global, Inc.'s B2
corporate family rating and B1 guaranteed senior unsecured notes'
ratings. Coinbase's outlook was changed to negative from stable.
The rating action followed the June 6, 2023 US Securities and
Exchange Commission's (SEC) complaint[1] against Coinbase that
alleges Coinbase has been operating as an unregistered securities
broker, national securities exchange, and clearing agency, and for
failing to register the offer and sale of its crypto asset
staking-as-a-service program. Following the SEC's complaint, a
multi-state task force of a number of US State securities
regulators filed a Show Cause Order against Coinbase alleging
similar violations to securities laws as in the SEC's complaint, in
relation to staking services.
RATINGS RATIONALE
Moody's said the affirmation of Coinbase's ratings reflects its
healthy liquidity position, its recent cash flow generation
improvements stemming from prudent expense management, and because
the SEC's charges pertain only to some of Coinbase's products, and
exclude its leading traded products. The change in outlook to
negative from stable reflects the uncertain magnitude of impact the
SEC's charges will have on Coinbase's business model and cash
flows.
Moody's said the possible implications on Coinbase from regulatory
actions include disgorgement of ill-gotten gains, interest and
penalties, and adverse consequences to certain of its product
offering and business activities, including its staking rewards
business. Moody's said the timing and financial consequences
pertaining to the resolution of these matters are uncertain.
For the trailing-twelve months ended March 2023, 20% of Coinbase's
total revenue was driven by Bitcoin trading, 13% from Ethereum
trading and 28% from other crypto asset trading. The balance of
Coinbase's revenue is driven by non-transaction related revenue
activities, including 20% from interest income. In its complaint,
the SEC identified a list of thirteen crypto assets that it
considers to be securities, which didn't include Bitcoin or
Ethereum, Coinbase's leading two products. Further, said Moody's,
Coinbase has been benefiting from the higher interest rate
environment and reported $241 million in interest income in the
first quarter of 2023, representing 31% of its total revenue for
the period; and this interest revenue is earned on customer fiat
balances as well as the fiat balances backing USDC (a fiat-backed
stablecoin), a product that was not referred to in the SEC's
complaint.
As of March 2023, Coinbase maintained its strong liquidity position
with $5 billion in cash and equivalents and $0.3 billion in USDC (a
fiat-backed stablecoin), relative to its $3.4 billion in long-term
debt (including the $2.0 billion rated senior guaranteed notes (due
2028 and 2031). Moody's expects Coinbase to maintain focus on
expense management that has served to mitigate the adverse impact
of the decline in transaction revenue it has suffered following the
spike in activity that occurred after the onset of the coronavirus
pandemic.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's said that Coinbase's ratings could be upgraded should there
be evidence of: (1) resolution of the SEC's charges in a manner
that does not significantly adversely affect Coinbase's revenue
streams, cost base and liquidity; (2) a substantial and sustained
increase in trading revenue; (3) achieving revenue diversification
through the strong and sustained development of non-transactional
revenue streams, without adding significant incremental credit
risk.
Factors that could lead to a downgrade of Coinbase's ratings
include: (1) an accelerated decline in the company's liquidity
position, including through incurring significant regulatory
penalties; (2) a strategic or mandated revamp of its business
model, leading to lower revenue or increased costs and a failure to
return to relatively healthy free cash flow generation; (3) a
further substantial and sustained reduction in trading revenue; 4)
reduction in interest rate levels negatively impacting the
company's free cash flow prospects.
The principal methodology used in these ratings was Securities
Industry Service Providers Methodology published in November 2019.
CREATIVE INVESTORS: Exclusivity Period Extended to August 10
------------------------------------------------------------
The Hon. Laurel M. Isicoff of the U.S. Bankruptcy Court for the
Southern District of Florida extended the periods within which
Creative Investors, Inc. have the exclusive right to file a Chapter
11 plan and to solicit acceptances thereof to August 10 and October
10, 2023, respectively.
Absent an extension, the deadline set by the Court for the Debtor
to file its disclosure statement and Chapter 11 plan was May 10,
2023.
The Debtor explained that more time is needed to resolve issues in
this case. There are four properties and multiple ownership.
Additional time is also needed due to valuation issues being
resolved in this case.
The Debtor is represented by:
Joel M. Aresty, Esq.
JOEL M. ARESTY, P.A.
309 1st Ave S
Tierra Verde, FL 33715
Telephone: (305) 904-1903
Facsimile: (800) 559-1870
E-mail: Aresty@Mac.com
About Creative Investors
Creative Investors, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-10171) on Jan. 10,
2023, with $500,001 to $1 million in assets and $100,001 to
$500,000 in liabilities. Judge Laurel M. Isicoff oversees the
case.
Joel M. Aresty, P.A. and Armando R. Alfonso, Esq., at A.R.A Law
serve as the Debtor's bankruptcy counsel and special counsel,
respectively.
CROWN FINANCE: $3.33B Bank Debt Trades at 74% Discount
------------------------------------------------------
Participations in a syndicated loan under which Crown Finance US
Inc is a borrower were trading in the secondary market around 26
cents-on-the-dollar during the week ended Friday, June 9, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $3.33 billion facility is a Term loan that is scheduled to
mature on February 28, 2025. About $2.63 billion of the loan is
withdrawn and outstanding.
Crown Finance US, Inc. operates as a movie theater.
CSR WORLDWIDE: Seeks Cash Collateral Access
-------------------------------------------
CSR Worldwide, Inc. asks the U.S. Bankruptcy Court for the Eastern
District of Oklahoma for authority to use cash collateral on an
expedited interim basis and on a permanent basis, in accordance
with the budget, with a 10% variance.
The Debtor requires funds to pay post-petition wages, insurance,
utilities, and maintenance expenses to continue present operations
and to maintain and preserve the bankruptcy estate.
The Debtor believes Bank of Hays may claim to hold a secured
interest in the amount of $5.7 million in all the assets of the
Debtor including the accounts receivable of the Debtor.
The Debtor states it holds pre-petition receivables in the
approximate sum of $1,255 and approximately $1,264 in cash and
deposit accounts as of the bankruptcy filing date. These
pre-petition receivables and funds may constitute Bank of Hays'
cash collateral. Additionally, the Debtor has the ability to
liquidate inventory to generate additional operating cash.
The Debtor believes Bank of Hays has a first lien position on all
of the Debtor's cash collateral.
Bank of Hays is entitled to certain protections for the Debtor's
use of cash collateral. The Debtor has agreed to provide Bank of
Hays with a replacement lien in and to the Debtor's future
receivables pursuant to 11 U.S.C. section 361(2) to the extent that
Debtor uses cash collateral.
A copy of the motion is available at https://urlcurt.com/u?l=S8a42A
from PacerMonitor.com.
About CSR Worldwide OK, Inc.
CSR Worldwide OK, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D. Okla. Case No. 23-80391) on June
6, 2023. In the petition signed by CEO Troy Don Burgess, the Debtor
disclosed $7,099,094 in assets and $7,130,915 in liabilities.
Ron Brown, Esq. and R. Gavin Fouts, Esq., at Brown Law Firm PC,
represents the Debtor as legal counsel.
DELCATH SYSTEMS: Names Sandra Pennell as SVP of Finance
-------------------------------------------------------
Delcath Systems, Inc. announced that the Company has appointed
Sandra Pennell as its new senior vice president of Finance. Ms.
Pennell will also serve as an executive officer of the Company and
its principal accounting officer and principal financial officer.
Ms. Pennell joins the Company with over twenty-years of experience
in a variety of financial oversight roles within the biotechnology
industry and she will be responsible for managing all the Company's
financial affairs, including preparing global financial statements
for the guidance of management in accordance with U.S. Generally
Accepted Accounting Principles (GAAP). She will lead the Company's
financial team as the Company prepares to transition into a
commercial organization.
Ms. Pennell previously held the position of vice president, Finance
at Invivyd, Inc. and prior to that she was a vice president,
corporate controller, and principal accounting officer at Vericel
Corporation. Sandra earned a Bachelor and Master of Science in
Accountancy from University of Illinois at Urbana-Champaign.
"We are pleased to welcome Sandra to the Delcath management team,"
said Gerard Michel, chief executive officer. "Given her experience
in rapidly growing commercial companies she is well positioned to
manage Delcath's financial operations and strategy as we approach
the possible commercialization of the Hepzato Kit in the US."
Ms. Pennell is entitled to receive an annual base salary of
$295,000, pro-rated for 2023, a bonus of up to 35% of her pro-rated
annual base salary, subject to certain bonus achievements, for
fiscal year 2023, and a new hire equity grant consisting of an
option to purchase 100,000 shares of common stock of the Company,
at a price per share equal to the closing price of the Company's
common stock on the Nasdaq Stock Market on June 12, 2023, and which
shall vest over three years with one third vesting on June 1, 2024
and the remainder vesting in equal monthly installments over the
twenty-four months following June 1, 2024.
About Delcath Systems
Headquartered in New York, NY, Delcath Systems, Inc. --
http://www.delcath.com-- is an interventional oncology company
focused on the treatment of primary and metastatic liver cancers.
The Company's lead product candidate, the HEPZATO KIT (melphalan
hydrochloride for injection/hepatic delivery system), is a
drug/device combination product. HEPZATO is designed to administer
high-dose chemotherapy to the liver while controlling systemic
exposure and associated side effects.
Delcath reported a net loss of $36.51 million for the year ended
Dec. 31, 2022, compared to a net loss of $25.65 million for the
year ended Dec. 31, 2021. As of March 31, 2023, the Company had
$30.60 million in total assets, $25.31 million in total
liabilities, $18.37 million in mezzanine equity, and a total
stockholders' deficit of $13.07 million.
New York, NY-based Marcum LLP, the Company's auditor since 2018,
issued a "going concern" qualification in its report dated March
27, 2023, citing that the Company has a significant working capital
deficiency, has incurred significant losses and needs to raise
additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
DIAMOND SCAFFOLD: Committee Seeks Plan Exclusivity Termination
--------------------------------------------------------------
The Committee of Creditors Holding Unsecured Claims asks the U.S.
Bankruptcy Court for the Southern District of Alabama for entry of
an order confirming that Diamond Scaffold Services LLC's exclusive
period to file and solicit acceptances of a plan has terminated, or
alternatively, should be terminated for cause.
The Committee seeks entry of an order confirming that exclusivity
has lapsed and that any party may file a competing plan because the
Debtor has not obtained acceptance of its plan within the
prescribed period. Additionally, even if the Court somehow
determines that exclusivity is still intact, exclusivity should be
terminated for cause because the Debtor filed plan containing a new
value contribution and, moreover, the Debtor's plan is patently
unconfirmable.
The Debtor filed its Plan of Reorganization on February 27, 2023,
within its extended exclusivity period. Upon filing its petition,
the Debtor had an exclusive 120-day period within which only the
Debtor could file a plan under Section 1121 of the Bankruptcy Code,
which would have expired on October 19, 2022 absent an extension.
However, because none of the Court's orders extending the exclusive
plan filing period extended the Debtor's exclusive period to obtain
acceptances of the Plan, the Debtor no longer has exclusivity, the
Committee argues.
About Diamond Scaffold Services
Diamond Scaffold Services LLC -- https://www.diamondscaffold.com/
-- is an authorized distributor of Ring-lock, Cup-lock, Shoring,
and Frame Scaffold.
Diamond Scaffold Services sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Ala. Case No. 22-11208) on June
21, 2022, with between $1 million and $10 million in assets and
between $10 million and $50 million in liabilities. Jewell Wayne
Sumrall, president of Diamond Scaffold Services, signed the
petition.
Judge Jerry C. Oldshue oversees the case.
The Debtor tapped Alexandra K. Garrett, Esq., at Silver, Voit &
Garrett as bankruptcy counsel; Jason R. Watkins, Esq., as special
counsel; and SC&H Group, Inc. as investment banker.
On July 21, 2022, the Court appointed the Committee and designated
these entities to serve as Committee members: (i) Arnold McElroy
and (ii) Primary Freight, LLC. The Committee is represented by:
Edward J. Peterson, Esq.
JOHNSON, POPE, BOKOR, RUPPEL & BURNS, LLP
401 E. Jackson Street, Ste. 3100
Tampa, FL 33602
Telephone: (813) 225-2500
Facsimile: (813) 223-7118
E-mail: edwardp@jpfirm.com
- and -
Matthew B. Hale, Esq.
STICHTER RIEDEL BLAIN & POSTLER, P.A.
110 E. Madison Street, Suite 200
Tampa, FL 33602
Telephone: (813) 229-0144
E-mail: mhale@srbp.com
DIEBOLD HOLDING: Court Approves Equity Transfer Protocols
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
approved the procedures with respect to transfers of equity
securities in Diebold Nixdorf Incorporated filed by Diebold Holding
Company LLC and its debtor-affiliates.
Claimholders and potential purchasers of claims against Diebold
Nixdorf are hereby notified that, if the Court ultimately approves
a sell-down order, claimholders that acquire claims after the
record date in an amount that would entitle them to receive more
than 4.5% of the stock of the reorganized Debtors under a plan of
reorganization may be subject to a required sell-down of nay claims
purchased after the record date in accordance with the sell-down
procedures.
Complete copies of the motion and order, with additional
information about the equity transfer procedures, record ate and
possible sell-down order, are available for a fee via PACER at
https://ecf.txsb.gov or through the Debtors' claims and noticing
agent, Kroll Restructuring Administration LLC by accessing their
website at https://cases.ra.kroll.com/DieboldNixdorf, or by calling
(833) 701-9076 (US Toll free or (646) 440-4833 (international) or
by email at DieboldNixdorfinfo@ra.kroll.com
About Diebold Nixdorf
Diebold Nixdorf, Incorporated automates, digitizes and transforms
the way people bank and shop. As a partner to the majority of the
world's top 100 financial institutions and top 25 global retailers,
its integrated solutions connect digital and physical channels
conveniently, securely and efficiently for millions of consumers
each day.
Diebold Nixdorf Inc. and several affiliated entities sought
protection under Chapter 11 of the U.S. Bankruptcy Code on June 1,
2023. The cases are jointly administered under the case of Diebold
Holding Company, Inc., Bankr. S.D. Tex. Lead Case No. 23-90602. In
the petition signed by Jonathan B. Leiken, president, Diebold
disclosed $3.09 billion in assets and $2.57 billion in
liabilities.
Diebold Nixdorf Dutch Holding B.V. commenced voluntary
reorganization proceedings pursuant to the Wet Homologatie
Onderhands Akkoord under Netherlands law in the District Court of
Amsterdam. Diebold Netherlands sought recognition of the Dutch
Proceeding under Chapter 15 of the Bankruptcy Code.
Judge David R. Jones oversees the Chapter 11 cases.
The Chapter 11 Debtors tapped Jones Day and Jackson Walker LLP as
legal counsel, Ducera Partners LLC as financial advisor, FTI
Consulting, Inc., as investment banker, Kroll Restructuring
Administration, LLC as claims and noticing agent.
DIEBOLD NIXDORF: July 12 Disclosure Statement & Plan Hearing Set
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas will
hold a hearing on July 12, 2023, at 2:30 p.m. (Prevailing Central
Time) to consider approval of the adequacy of the Comprehensive
Disclosure Statement for the U.S. Joint Prepackaged Plan of
Reorganization and the Netherlands Wet homologatie onderhands
akkoord ("WHOA") Plan of Diebold Nixdorf Dutch Holding B.V. and the
Dutch Scheme Parties dated June 1, 2023, and to confirm the U.S
plan of reorganization. Objections to the approval of the
disclosure statement and confirmation of the plan, if any, must be
filed no later than 4:00 p.m. (Prevailing Central Time) on July 5,
2023.
According to the Troubled Company Reporter on June 6, 2023 (
Source: TCR) On May 30, 2023, the Company entered into the RSA
with certain holders of (a) 80.4% in aggregate amount of the
Superpriority Term Loan; (b) 79% in aggregate amount of First Lien
Term Loans; (c) 78% in aggregate amount of First Lien Notes; and
(d) 58.3% in aggregate amount of Second Lien Notes.
The U.S. Plan and the WHOA Plan are the outcome of extensive
arms'-length negotiations among the Company and certain of its key
stakeholders including the Consenting Creditors.
To implement a comprehensive financial restructuring of their
funded debt, the U.S. Debtors will commence chapter 11 cases in the
Bankruptcy Court seeking confirmation of the U.S. Plan, and the
Netherlands Debtor will institute proceedings in the Dutch Court
seeking sanctioning of the WHOA Plan.
As set forth in the U.S. Plan and the WHOA Plan, the Restructuring
Transactions provide for a comprehensive restructuring of Claims
against and Interests in the Company, significant deleveraging of
the Company's capital structure, enhanced operating liquidity in
order to preserve the going-concern value of the Company's
businesses, maximize recoveries available to creditors and an
equitable distribution to stakeholders.
More specifically, the Restructuring Transactions provide, among
other things, that:
* Pursuant to the U.S. Plan, all Allowed Administrative
Claims, Allowed Priority Tax Claims, Allowed Other Priority Claims,
and Allowed Other Secured Claims will be paid in full in cash or
receive such treatment that renders them Unimpaired under the
Bankruptcy Code;
* Pursuant to the U.S. Plan, all Allowed General Unsecured
Claims will be Reinstated and paid in the ordinary course of
business in accordance with the terms and conditions of the
particular transaction or agreement giving rise to such Allowed
General Unsecured Claim;
* DNI will seek approval of a new $1.25 billion debtor-in
possession term loan facility, to be provided by certain of the
Company's existing first lien lenders on the terms set forth in the
DIP Term Sheet and such other terms that are acceptable to the U.S.
Debtors and a requisite number of lenders under the DIP Facility.
The proceeds of the DIP Facility will be used to: (i) repay in full
the term loan obligations, including a make-whole premium, under
the Superpriority Credit Agreement; (ii) repay in full the ABL
Facility and cash collateralize letters of credit thereunder; (iii)
pay costs and reasonable and documented out-of pocket fees and
expenses related to the court-supervised restructuring proceedings;
(iv) make certain adequate protection payments; and (v) fund the
working capital needs and expenditures of the Company Parties and
their non-debtor affiliates during the pendency of the court
supervised restructuring proceedings;
* Holders of Allowed First Lien Claims shall receive their pro
rata share of 98% of the New Common Stock, subject to dilution on
account of the Backstop Premium, the Upfront Premium, the
Additional Premium, the Participation Premium (each as defined in
the DIP Term Sheet) and New Management Incentive Plan;
* Holders of Allowed Second Lien Notes Claims shall receive
their pro rata share of 2% of the New Common Stock, subject to
dilution on account of the Backstop Premium, the Upfront Premium,
the Additional Premium and New Management Incentive Plan;
* Holders of Allowed 2024 Unsecured Notes Claims shall receive
their pro rata share of an amount of cash that would provide a
holder of an Allowed 2024 Unsecured Notes Claim with the same
percentage recovery on its Allowed 2024 Stub Unsecured Notes Claim
that a holder of an Allowed Second Lien Notes Claim is receiving in
respect of its Allowed Second Lien Notes Claim under Article
III.B.6 of the U.S. Plan; and
* Cancellation of DNI's existing equity Interests.
Class 8 consists of any General Unsecured Claims against any U.S.
Debtor. On the Effective Date or as soon as reasonably practicable
thereafter, except to the extent that a 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, each Allowed General
Unsecured Claim, each Allowed General Unsecured Claim shall be
Reinstated and paid in the ordinary course of business in
accordance with the terms and conditions of the particular
transaction or agreement giving rise to such Allowed General
Unsecured Claim. Class 8 is Unimpaired under the U.S. Plan.
The U.S. Debtors shall fund distributions under the U.S. Plan with
(a) Cash on hand, (b) the loan proceeds of the Exit Facility, and
(c) the issuance of the New Common Stock. Each distribution and
issuance referred to in Article VI of the U.S. Plan shall be
governed by the terms and conditions set forth in the U.S. Plan
applicable to such distribution or issuance and by the terms and
conditions of the instruments or other documents evidencing or
relating to such distribution or issuance, which terms and
conditions shall bind each Entity receiving such distribution or
issuance.
A full-text copy of the Disclosure Statement dated June 1, 2023 is
available at https://urlcurt.com/u?l=07aP2o from PacerMonitor.com
at no charge.
About Diebold Holding
Diebold Nixdorf, Incorporated automates, digitizes and transforms
the way people bank and shop. As a partner to the majority of the
world's top 100 financial institutions and top 25 global retailers,
its integrated solutions connect digital and physical channels
conveniently, securely and efficiently for millions of consumers
each day.
After reaching terms with lenders on a prepackaged reorganization
plan, Diebold Holding Company, LLC and its affiliates, including
Diebold Nixdorf, Incorporated, sought Chapter 11 protection (Bankr.
S.D. Tex. Lead Case No. 23-90602) on June 1, 2023.
In the petitions signed by Jonathan B. Leiken, president, the
Debtors disclosed $3,090.7 million in assets and $2,571.7 million
in liabilities.
The Debtors tapped Jackson Walker LLP and Jones Day as attorneys;
and FTI Consulting, Inc, as investment banker. Ducera Partners LLC
is special counsel. Kroll Restructuring Administration, LLC, is
the claims agent.
DIOCESE OF SANTA ROSA: Committee Taps Berkeley as Financial Advisor
-------------------------------------------------------------------
The official committee of unsecured creditors of The Roman Catholic
Bishop of Santa Rosa received approval from the U.S. Bankruptcy
Court for the Northern District of California to employ Berkeley
Research Group, LLC as financial advisor.
The committee requires a financial advisor to:
a. assist the committee in investigating the assets,
liabilities, financial condition, and operations of the Debtor,
including an independent analysis of any alleged donor restrictions
on the Debtor's assets;
b. assist the committee in the review of financial-related
disclosures required by the court or the Bankruptcy Code;
c. analyze the Debtor's accounting reports and financial
statements;
d. review transfers of the Debtor's assets;
e. assist the committee in evaluating the Debtor's ownership
interests of property alleged to be held in trust by the Debtor for
the benefit of third parties or property alleged to be owned by
non-debtor entities;
f. assist the committee in reviewing and evaluating any
proposed asset sales or other asset dispositions;
g. assist the committee in evaluating the Debtor's cash
management system, including unrestricted and restricted funds,
deposit and loan programs, and pooled income or investment funds;
h. assist the committee in the review of financial information
that the Debtor may distribute to the committee and others, and
analyze proposed transactions for which court approval is sought;
i. assist in the review or preparation of information and
analyses necessary for the confirmation of a Chapter 11 plan or for
the objection to any plan filed in the Debtor's Chapter 11 case,
which the committee opposes;
j. assist the committee in the evaluation and analysis of
claims, and on any litigation matters, including, but not limited
to, avoidance actions for fraudulent conveyances and preferential
transfers, and declaratory relief actions concerning the property
of the Debtor's estate; and
k. analyze the flow of funds in and out of accounts the Debtor
contends contain assets held in trust for others, to determine
whether the funds were commingled with non-trust funds and lost
their character as trust funds, under applicable legal and
accounting principles.
The firm will be paid at these rates:
Managing Director $725 to $1,130 per hour
Director & Associate Director $450 to $725 per hour
Professional Staff $225 to $450 per hour
Support Staff $150 to $225 per hour
Matthew Babcock $725 per hour
Ray Strong $780 per hour
Paul Shields $815 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Matthew Babcock, a partner at Berkeley, 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:
Matthew K. Babcock
Berkeley Research Group, LLC
201 South Main Street Suite 450
Salt Lake City, UT 84111
Tel: (385) 212-3237
Email: mbabcock@thinkbrg.com
About The Roman Catholic Bishop of Santa Rosa
The Roman Catholic Bishop of Santa Rosa is a diocese, or
ecclesiastical territory, of the Roman Catholic Church in the
northern California region of the United States, named in honor of
St. Rose of Lima.
Abuse victims filed hundreds lawsuits after the state of California
paused for three years its statute of limitation on claims for
child sexual abuse. The pause ended on Dec. 31, 2022.
Facing more than 200 new legal claims over childhood sexual abuse,
the Roman Catholic Bishop of Santa Rosa, also known as the Diocese
of Santa Rosa, filed a Chapter 11 petition (Bankr. N.D. Calif. Case
No. 23-10113) on March 13, 2023. The Debtor estimated $10 million
to $50 million in both assets and liabilities.
The Hon. Charles Novack is the case judge.
The Debtor tapped Felderstein Fitzgerald Willoughby Pascuzzi &
Rios, LLP as bankruptcy counsel; GlassRatner Advisory & Capital
Group, LLC as financial advisor; and Donlin, Recano & Company, Inc.
as claims agent. Shapiro Galvin Shapiro & Moran, Weinstein &
Numbers, LLP, and Foley & Lardner, LLP serve as special counsels.
The U.S. Trustee for Region 17 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case.
Stinson, LLP and Berkeley Research Group, LLC serve as the
committee's legal counsel and financial advisor, respectively.
DIVISION SEVEN: Files Emergency Bid to Use Cash Collateral
----------------------------------------------------------
Division Seven Contracting Inc. asks the U.S. Bankruptcy Court for
the Eastern District of New York for authority to use cash
collateral and provide adequate protection.
The Debtor needs access to cash collateral to, inter alia, pay
ordinary and critical pre-petition expenses to continue to operate
its business in the ordinary course of business during the Chapter
11 Case and to prosecute the Chapter 11 Case.
Pursuant to a judgment and lien report received for the Debtor and
its assets, there are a number of UCC and Federal Tax Lien filings.
The Notice of Federal Tax Liens filed:
(a) May 15, 2019 (approximately $190,000)
(b) July 30, 2019 (approximately $34,653) and
(c) 27, 2019 (approximately $259,282), the United States of
America is a secured creditor of the Debtor. The tax liens attach
to all property and rights to property of the Debtor.
The IRS lien of May 15, 2019 is a debt owed by Division 7
Incorporated. At the time the Debtor purchased Division 7 Inc.'s
assets on January 23, 2020, the IRS had a security interest in the
assets by virtue of the May 15, 2019 tax lien (approximately
$190,000 claim). Four days after the sale of assets to the Debtor,
the Debtor received a Notice of Levy from the IRS to pay the
Seller's debt referenced in the May 15, 2019 Federal Tax Lien. It
is assumed that any funds payable to the Seller in this case, if
any, would need to be first paid to satisfy the Seller's debt owed
the IRS pursuant to the notice of levy received by the Debtor in
2020 and the priority encumbrance the IRS has on the assets
purchased by the Debtor from the Seller.
There are also two other creditors with alleged security interests
in the Debtor. At the time the Debtor purchased Division 7's assets
on January 23, 2020, an entity by the name of CHTD had a UCC-1 on
file with the New York Secretary of State against the Seller's
assets. CHTD purports to have a security interest in all "assets"
and "accounts" of the Seller by virtue of a UCC-1 filed April 30,
2015. Notwithstanding the content of the UCC, the Debtor believes
the CHTD lien does not attached to the Debtor's cash collateral and
the CHTD lien may only be a claim/lien against a certain vehicle in
the possession of the Seller. It is unknown what if anything is
owed CHTD.
At the time of the sale of assets from the Seller to the Debtor in
2020, the Debtor also entered into a security agreement. The
Seller's UCC-1 finance statement was recorded with the Secretary of
State on February 10, 2020. The Seller claims a principal amount
due of $831,321 from the Debtor. The Seller purports in its UCC-1
filing to have a lien on all of the Debtor's assets.
The liens of CHTD, the IRS, and Division 7, in order of priority by
timing of their filing, and without regard to or acknowledgment of
their amount, validity, priority or extent, or their encumbrance on
cash collateral, are as follows:
(a) CHTD UCC-1 filed April 30, 2015 (unknown amount owed);
(b) IRS Federal Tax Lien filed May 15, 2019 (approximately
$190,000);
(c) IRS Federal Tax Lien filed July 30, 2019 (approximately
$34,653);
(d) IRS Federal Tax Lien filed December 27, 2019
(approximately $259,282); and
(e) Division 7 Inc. (Seller) UCC-I filed February 10, 2020
Security Agreement dated January 2020 (approximately $831,321).
As adequate protection, the Debtor proposes to provide the IRS with
replacement liens in the same order of priority and to the extent
the IRS had pre-petition.
The Debtor's right to use cash collateral pursuant to the Interim
Order will terminate on the earlier to occur of any of these
events, subject in certain instances, to notice requirements:
(1) the use of Cash Collateral that is found by the Court to
be material and that was used for any purpose not authorized by the
Interim Order;
(2) the dismissal of the Chapter 11 Case, the conversion of
the Chapter 11 Case to a case under chapter 7 of the Bankruptcy
Code; or
(3) an order of the Court is entered (other than the Final
Order) reversing, staying, vacating, or otherwise modifying in any
material respect the terms of this Interim Order.
A copy of the motion is available at https://urlcurt.com/u?l=vyXyAz
from PacerMonitor.com.
About Division Seven Contracting, Inc.
Division Seven Contracting, Inc. is a foundation, structure, and
building exterior contractor.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. N.Y. Case No. 23-71998) on June 5,
2023. In the petition signed by John Lima, president, the Debtor
disclosed up to $1 million in assets and up to $10 million in
liabilities.
Judge Louis A. Scarcella oversees the case.
Robert J. Spence, Esq., at Spence Law Office, P.C. represents the
Debtor as legal counsel.
FIRST BANCORP: Fitch Alters Outlook on 'BB' IDR to Positive
-----------------------------------------------------------
Fitch Ratings has affirmed the Long- and Short-Term Issuer Default
Ratings (IDRs) of First Bancorp (FBP) and its subsidiaries at 'BB'
and 'B', respectively. The Rating Outlook has been revised to
Positive from Stable.
KEY RATING DRIVERS
Ratings Affirmed: The affirmation and Positive Rating Outlook
reflect FBP's financial resilience and solid market position, above
average profitability and capitalization relative to U.S. mainland
banks, proven business model, and strategic execution.
Operating Environment a Constraint: The ratings continue to be
constrained by the local operating environment in Puerto Rico;
however, positive economic trends, including resolution of local
government debt restructuring, continued disaster recovery and
pandemic relief inflows, strong tourism sector performance and
slowing outmigration trends are near-term tailwinds. FBP's
financial profile has demonstrated resilience during the island's
protracted period of economic contraction, local government debt
crisis, severe hurricane losses and outmigration.
While federal aid will continue to have a positive effect on the
island's economy over the rating horizon, operating conditions over
the longer term are likely to remain considerably less stable than
the U.S. mainland. FBP's overall operating environment considers
its Puerto Rican, U.S. mainland and U.S. Virgin Islands presence.
Business Profile and Earnings Underpin Positive Outlook: FBP
maintains a strong local franchise, evidenced by its number two
position in Puerto Rico across most business lines, solidified
following its 2020 acquisition of Banco Santander. FBP's financial
profile has also demonstrated sustained resilience under
challenging local economic conditions over several years.
Conversely, FBP's elevated spread reliance (86% of operating income
at 1Q23) is a constraint on its business profile assessment.
FBP's financial performance is a ratings strength and benefits from
a low-cost business model. At 1Q23, non-interest expenses were
50.2% of revenues, a moderate sequential increase, but lower than
the bank's 5-year average of 53.8%. A softening macroeconomic
backdrop has driven a rebound in loan loss provisions relative to
the prior year, partly offsetting 7% revenue growth as of 1Q23. The
bank's operating profit to risk-weighted assets of 3.3% at 1Q23
remains stronger than most U.S. mainland peers.
Improved Risk Appetite: FBP's risk profile is characterized by its
adequate management of interest rate risk, as evidenced by the
moderate duration of its investment portfolio, the low share of
securities classified as held-to-maturity (7% at 1Q23) and the
manageable decline in its tangible common equity ratio to 6.6%
(9.1% at YE2021). A long-term de-risking process has contributed to
the improvement in credit quality measures over the last five years
and should limit normalization to below pre-COVID levels.
Asset Quality Normalizing: Fitch adjusted the ratings for the
revised accounting standard governing troubled debt restructurings,
which has supported a decline in FBP's impaired loan ratio. FBP's
net charge-offs rose to 47 bps as of 1Q23 from 31 bps at YE22 but
remained well below pre-COVID levels. The bank's commercial real
estate (CRE) loans represent 20% of gross loans, with a moderate
exposure to office CRE, which predominantly consist of low
loan-to-value (LTV) exposures.
Similar to peers, Fitch expects deterioration across consumer and
commercial loan portfolios through the second half of 2023.
However, Fitch does not anticipate credit deterioration to exceed
pre-COVID levels, as local operating environment trends, including
federal aid and a recovering tourism industry, should offset wider
pressures related to elevated rates.
Healthy Capital Levels: FBP's capital ratios, which are maintained
at higher levels compared to most U.S. mainland banks, are solid
and supportive of the bank's rating. The bank's regulatory common
equity Tier 1 (CET 1) ratio as of 1Q23 was 16.3%, a modest decline
from 16.5% at YE2022. Adjusted for accumulated other comprehensive
income, FBP's CET1 ratio would be approximately 10.5%. FBP's
tangible common equity ratio of 6.6% compared favorably to local
and U.S. mainland peers.
Solid Funding Profile: Similar to peers, FBP experienced deposit
outflows and deposit migration from demand to term products. At
1Q23, deposits contracted by 7% yoy. However, the bank's overall
loan-to-deposit ratio remained lower than the long-term average at
72.2% at 1Q23. Excluding public sector collateralized deposits,
FBP's loan-to-deposit ratio would be approximately 83%, a level,
which was comparable to the U.S. mainland peer average.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
A significant deterioration in asset quality, particularly a
reversion of the net charge off ratio above the long-term
historical average, or a sustained decline of the CET1 ratio below
the benchmark level for this operating environment (13%) could
result in negative rating action. Pressure could also emerge if the
bank were to experience volatility or a decline in operating
profitability below 1% of risk weighted assets over multiple
quarters.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Continued strategic execution, revenue growth, maintenance of
market position, and stability in financial performance, without
altering its risk profile, could result in upward rating momentum
over the rating horizon. Although some normalization of credit
quality is likely, positive rating action would be dependent on
FBP's ability to maintain its net charge-off ratio at the low end
of its long-term historical range, particularly in light of
anticipated economic headwinds related to monetary policy
tightening.
Over the longer term, further rating momentum would likely be
contingent on improved non-interest income contribution, a positive
revision to the bank's operating environment score, and/or
improvement in the bank's franchise without materially increasing
its risk appetite.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
Long- and Short-Term Deposit Ratings: Long-term deposits at FBP's
subsidiary bank are rated one-notch higher than FBP's Long-Term IDR
because U.S. uninsured deposits benefit from depositor preference.
U.S. depositor preference gives deposit liabilities superior
recovery prospects in the event of default.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
Long- and Short-Term Deposit Ratings Sensitivities: The long-term
deposit ratings and short-term deposit ratings of FBP's subsidiary
banks are sensitive to changes in the company's Long-Term IDR.
VR ADJUSTMENTS
The Earnings and Profitability score has been assigned below the
implied score due to the following reason: Revenue
Diversification.
The Funding and Liquidity score has been assigned below the implied
score due to the following reason: Historical and Future Metrics.
ESG CONSIDERATIONS
First Bancorp's ESG Relevance Score for 'Exposure to Environmental
Impacts' is a '3', which is above the bank sector default score of
'2' due to the heightened risk of natural disasters in the bank's
primary operating environment of Puerto Rico. While an emerging
factor that bears monitoring, an ESG Relevance Score of '3' implies
it is minimally relevant to the rating currently.
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 minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Prior
----------- ------ -----
FirstBank
Puerto Rico LT IDR BB Affirmed BB
ST IDR B Affirmed B
Viability bb Affirmed bb
Government Support ns Affirmed ns
long-term
deposits LT BB+ Affirmed BB+
short-term
deposits ST B Affirmed B
First BanCorp LT IDR BB Affirmed BB
ST IDR B Affirmed B
Viability bb Affirmed bb
Government Support ns Affirmed ns
FORTREA HOLDINGS: Fitch Assigns 'BB+(EXP)' Rating on Secured Notes
------------------------------------------------------------------
Fitch Ratings has assigned a 'BB+(EXP)'/'RR2' rating to Fortrea
Holdings Inc.'s senior secured notes issuance. Proceeds of the
notes, together with proceeds of the company's senior secured
credit facility, are expected to fund a cash distribution to
Laboratory Corporation of America (LabCorp). Fortrea is in the
process of a spinoff from LabCorp, and the distribution will
provide partial consideration for the assets Fortrea will receive
in connection with the spinoff. Proceeds will also be used to pay
fees and expenses related to the financing and spinoff
transactions.
Fitch expects to convert Fortrea's expected ratings to final
ratings upon completion of its separation from LabCorp and of the
debt transactions and upon receipt of final documentation.
KEY RATING DRIVERS
Healthy Long-Term Industry Trends: Fortrea will be a standalone
company dedicated to clinical-stage contract research studies
following its spinoff from LabCorp in 2H23. According to Fortrea,
it participates in the clinical development segment of the contract
research organization (CRO) industry with a total addressable
market size of approximately $35 billion, a near-term growth rate
in the 3%-5% range, and a long-term growth rate in the 6%-9%
range.
Healthy long-term growth prospects are driven by increasing
biopharmaceutical R&D spend, increased demand for longer and more
complex clinical trials, and scientific innovation. However,
short-term growth can be volatile due to less robust funding
activities for biotechnology companies.
Competitive Player in a Consolidating Industry: The once-fragmented
CRO industry has undergone significant consolidation such that a
large portion of market share is controlled by a select group of
vendors. Fortrea is meaningfully smaller (measured by revenue)
compared with larger competitors such as IQVIA Holdings, Inc. and
ICON plc. Despite its smaller scale and less diversified business
mix, Fitch expects Fortrea to hold a top-10 market share in
clinical CRO post-spinoff. Fitch expects Fortrea's track record of
operations and broad range of offerings will allow the company to
remain competitive in the consolidating market.
Slower Backlog Conversion and Business Awards: Fitch expects flat
to low-single digit revenue growth in 2023 and forecasts mid- to
high-single digit revenue growth thereafter, assuming improvement
in macroeconomic conditions and operational optimization
post-spinoff.
The 1Q23 backlog conversion rate and net book-to-bill ratio are
lower than 2022 levels. The slower backlog conversion rate was
driven by investigator site constraints due to staffing challenges,
increased time to fill patient recruitment in certain therapeutic
areas and geographic redistributions. Net new orders were lower
than expected as some customers are waiting for the completion of
the spinoff to award new businesses.
Margin Improvement in Focus: Fitch expects EBITDA margin to
compress in 2023 by about 160 bps from 13.3% in 2022 before
expanding to the mid-teens by 2026. The margin compression in 2023
is primarily attributable to credit loss provisions on certain
biotech receivables and limited operating leverage due to marginal
revenue growth. The margin expansions post 2023 are expected to be
driven by operating leverage on higher revenue base and improved
operating efficiencies.
Fortrea's ability to realize operational improvements and expand
margins to levels similar to those of its public peers are
important in achieving its stated financial policy of maintaining a
net leverage target of 2.5x-3.0x in the medium term.
Prioritizing Organic Investments: Fitch forecasts EBITDA leverage
above 4.5x by YE 2023 and expects Fortrea to deleverage to just
below 4.0x by YE 2024 through EBITDA growth and modest voluntary
debt repayments. The 'BB(EXP)' IDR takes into account that Fortrea
will maintain EBITDA leverage below 4.0x over the long term.
Near- to medium-term capital deployment priorities are expected to
be organic investments and opportunistic tuck-ins in selective
verticals. Excess cashflows are assumed to be deployed toward
voluntary debt repayments, with no shareholder returns over the
forecast period.
DERIVATION SUMMARY
The 'BB(EXP)' IDR reflects Fortrea's competitive position as a CRO
that offers a broad range of clinical development solutions and
services to biopharmaceutical and medical device customers. Fitch
expects Fortrea to implement a prudent financial policy comparable
with some public peers by maintaining net leverage of 2.5x-3.0x.
However, Fitch expects gross EBITDA leverage at or under 4.0x for
the foreseeable future.
Fortrea's credit profile is further supported by solid CFO relative
to capital and debt service needs. However, these strengths are
offset by uncertainties around margin expansion, as well as near-
to medium-term macroeconomic conditions and biotech funding
volatilities.
The majority of Fortrea's public peers benefit from larger scale,
more diversified business mix and higher profitability levels. A
CRO peer rated by Fitch is Charles River Laboratories International
(BBB-/Stable), which participates in the pre-clinical CRO space (as
opposed to Fortrea in the clinical CRO space) and maintains a
strong competitive position with a track-record of leverage
maintenance.
KEY ASSUMPTIONS
- For 2023, revenue in the $3.0 billion-$3.1 billion range and
EBITDA margin in the 11%-12% range;
- Post 2023, organic revenue growth in the mid to high single-digit
range and EBITDA margins gradually increase to the mid-teens;
- Effective interest rates in the range of 6.0%-7.0% over the
forecast period, moving with SOFR;
- Capex in the 2.0%-2.5% of revenue range over the forecast
period;
- Positive FCF of $60 million-$70 million per year in 2023-2024
that gradually increases to $150 million-$200 million per year
thereafter;
- Voluntary debt repayments of $50 million per year and total
acquisitions of $400 million over the forecast period;
- No allocation of FCF toward shareholder-friendly actions.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Operational stability that leads to EBITDA margin expansion to
levels similar to those of Fortrea's public peers;
- Capital deployment strategies that lead to Fitch's expectation of
EBITDA leverage sustaining below 3.5x and (CFO-capex)/debt
sustaining above 10%;
- Increased scale and diversification that strengthen Fortrea's
competitive position among global CROs.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Operational instability that leads to EBITDA margins sustaining
below the low-teens;
- Capital deployment strategies that lead to Fitch's expectation of
EBITDA leverage sustaining above 4.0x and (CFO-capex)/debt
sustaining below 5.0%.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: Fortrea has sufficient liquidity given the
expectation of an undrawn $450 million revolving credit facility,
$120 million of cash on hand and positive FCF during the forecast
despite one-time stand-up costs and duplicative costs while
operating under the transition services agreement with LabCorp.
Fortrea will have no meaningful debt maturities beyond term loan
amortization, and Fitch assumes as FCF expands it will be directed
toward organic investments, tuck-in acquisitions and debt
repayments. Fitch has not assumed any shareholder-friendly actions
over the rating horizon.
Debt Maturities: Fitch expects Fortrea's debt maturities to range
between five to seven years. Term loan amortization is assumed to
be approximately $31 million per year. Fitch assumes that the
effective interest rate will be in the 6.0%-7.0% range.
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.
ISSUER PROFILE
Fortrea Holdings Inc. is a CRO that provides clinical development
and commercialization services and software applications supporting
clinical trials to the biopharmaceutical and medical device
industries. It has more than 21,000 staff worldwide, and supports
clinical trial activities in more than 90 countries.
Entity/Debt Rating Recovery
----------- ------ --------
Fortrea Holdings
Inc.
senior secured LT BB+(EXP) Expected Rating RR2
FORTREA HOLDINGS: Moody's Rates New $570MM Secured Notes 'Ba3'
--------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to the proposed new
$570 million secured notes issued by Fortrea Holdings Inc. Proceeds
from the new notes will be used together with borrowings under the
new credit facilities to fund a $1.6 billion cash distribution to
Laboratory Corporate of America ("Labcorp") and to pay related fees
in conjunction with the proposed spin off from Labcorp. There are
no changes to Fortrea existing ratings including the Ba3 Corporate
Family Rating, Ba3-PD Probability of Default Rating, Ba3 senior
secured rating, and SGL-2 Speculative Grade Liquidity rating. The
outlook remains stable.
Assignments:
Issuer: Fortrea Holdings Inc
Senior Secured Notes, Assigned Ba3
RATINGS RATIONALE
The Ba3 rating reflects the company's sizeable global scale,
diversification, and strong market position in the Contract
Research Organization ("CRO") business which will benefit from
growing outsourcing from large pharmaceutical companies. The rating
also reflects Fortrea's good margins, with opportunities for
improvement from cost efficiencies, moderate free cash flow and
good liquidity. The Ba3 rating also considers execution risks
including Fortrea fully separating from Labcorp and establishing a
credible track record. Moody's also believes the company's growth
prospects are constrained by strong competition and an uncertain
funding environment from biotech companies. Fortrea's credit
profile also encompasses the risks inherent in the pharmaceutical
services industry, including project delays and cancellations.
Moody's expects that Fortrea will reduce its currently elevated
starting leverage (4.3x) to below 4.0x by year-end 2025 reflecting
earnings growth and modest outlays for business development.
The outlook is stable and reflects Moody's expectation for a
successful transition and stable operating performance with
debt/EBITDA sustained below 4.5x.
The Speculative Grade Liquidity rating of SGL-2 reflects Moody's
expectation that Fortrea liquidity will remain good over the next
12 to 18 months. Liquidity is supported by $120 million of cash on
hand at the close of the proposed spin off, modest positive free
cash flow and no debt maturities until 2028. Liquidity will be
further supported by a $450 million revolving credit facility.
Moody's expect this facility to be undrawn at close.
The Ba3 instrument ratings, which are in line with the Corporate
Family Rating, reflect the presence of only one class of debt
within the capital structure.
ESG CONSIDERATIONS
Fortrea's ESG credit impact score is CIS-3 indicating that ESG
considerations have a limited impact on the credit rating with
potential for greater negative impact over time. Social risk
considerations relate to pharmaceutical drug pricing and
competitive pressure stemming from industry consolidation.
Governance risk considerations include execution risk as Fortrea
operates for the first time as a standalone entity and the
company's appetite for leverage and debt-funded acquisitions.
Mitigating factors include Fortrea's public net leverage target of
2.5-3.0x over the medium term, absence of planned dividend payment
and plan to use excess cash flow to pay down debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Moody's does not expect a rating upgrade in the near-term as the
company transitions into a standalone entity over the next 12-24
months. Thereafter, the ratings could be upgraded if the company
demonstrates consistent profitable growth with strong free cash
flow. In addition, the ratings could be upgraded if Fortrea manages
its internal strategic initiatives and external growth
opportunities (i.e., acquisitions), under conservative financial
policies. Quantitatively, debt/EBITDA sustained below 3.5 times on
Moody's adjusted basis would support an upgrade.
The ratings could be downgraded if Fortrea is unable to
successfully manage the transition to a standalone entity and/or
faces operating disruptions related to the separation from Labcorp
or if financial policies become more aggressive. In addition, a
sustained and material decline in operating margins and cash flow
could support a downgrade. Quantitatively, debt/EBITDA sustained
above 4.5 times on Moody's adjusted basis for an extended period
could result in a downgrade.
Fortrea Holdings Inc - headquartered in Durham, NC - is a leading
global contract research organization ("CRO") providing
comprehensive phase I through IV biopharmaceutical product and
medical device services, patient access solutions and other
enabling services to pharmaceutical, biotechnology and medical
device organizations. Fortrea Holdings Inc is being spun off from
Labcorp and will become a public company. In 2022, the company had
pro forma revenue of $3.1billion.
The principal methodology used in this rating was Business and
Consumer Services published in November 2021.
GAI REMODELING: Seeks Cash Collateral Access
--------------------------------------------
GAI Vape, LLC and GAI Remodeling, LLC ask the U.S. Bankruptcy Court
for the Eastern District of Wisconsin for authority to use cash
collateral and provide adequate protection.
The Debtor requires the use of cash collateral to continue its
operations without interruption.
GAI Vape's secured creditors are summarized as follows:
(a) Byline Bank loan of $272,653, and
(b) the Small Business Administration that provided an
Economic Injury Disaster Loan totaling $1,041,500 under which GAI
Vape is a guarantor. All the liens appear to be properly
perfected.
GAI Remodeling's secured creditors are summarized as follows:
(a) Fund-Ex loan of $100,000; and
(b) the SBA provided an Economic Injury Disaster Loan totaling
$1,041,500 under which GAI Remodeling is a guarantor. All the liens
appear to be properly perfected.
As of the Petition Date, the Debtors' records show GAI Vape had
pre-petition cash in its bank accounts of $27,000 and accounts
receivable of $4,000 and GAI Remodeling had pre-petition cash in
its bank accounts of $10,000 and accounts receivable of $25,000.
As adequate protection, the Debtors will grant all creditors with
an interest in cash collateral replacement liens of the same
priority to the same extent in the cash collateral as existed
immediately before the Petition Date. The Replacement Liens offered
will be deemed automatically perfected upon entry of an order
granting the Motion without the necessity of a creditor taking
possession, filing financing statements, mortgages or other
documents; provided, however, that the Debtors will execute any
necessary perfection documents upon the request of a creditor
holding a valid interest in cash collateral.
The liens of the creditors with an interest in the cash collateral
pursuant to any security agreements will extend to the collateral
under the Replacement Liens, and the products and proceeds thereof
under 11 U.S.C. section 552(b).
As further adequate protection to Byline and Fund-Ex, they will
receive, without limitation, the following adequate protection
payments from the Debtors: beginning July 5, 2023, and continuing
the fifth of each month until the Court orders otherwise, the
Debtors will pay Byline its regular monthly payment of principal
and interest in the amount of $4,810 toward the secured amounts of
their allowed claim relating to their loan.
The Debtors will continue to maintain their insurance consistent
with their coverage before the Petition Date and any requirements
under the loan documents that existed as of the Petition Date with
respect to the collateral.
A copy of the motion is available at https://urlcurt.com/u?l=mGVWyT
from PacerMonitor.com.
About GAI Remodeling LLC
GAI Remodeling LLC and GAI Vape, LLC sought protection under
Chapter 11 of the U.S Bankruptcy Code (Bankr. E.D. Wis. Lead Case
No. 23-22646) on June 9, 2023. In the petition signed by Hunter G.
Arms, manager, the Debtors disclosed up to $1 million in both
assets and liabilities.
Nicholas W. Kerkman, Esq., at Kerkman and Dunn, represents the
Debtor as legal counsel.
GAMESTOP CORP: Incurs $50.5 Million Net Loss in First Quarter
-------------------------------------------------------------
GameStop Corp. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $50.5
million on $1.23 billion of net sales for the three months ended
April 29, 2023, compared to a net loss of $157.9 million on $1.37
billion of net sales for the three months ended April 30, 2022.
As of April 29, 2023, the Company had $3.07 billion in total
assets, $1.79 billion in total liabilities, and $1.27 billion in
total stockholders' equity.
Cash, cash equivalents and marketable securities were $1.310
billion at the close of the quarter.
Long-term debt remains limited to one low-interest, unsecured term
loan associated with the French government's response to COVID-19.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1326380/000132638023000028/gme-20230429.htm
About GameStop
Grapevine, Texas-based GameStop Corp. is a specialty retailer
offering games and entertainment products through its E-Commerce
platforms and thousands of stores.
GameStop reported a net loss of $313.1 million for the fiscal year
ended Jan. 28, 2023, a net loss of $381.3 million for the fiscal
year ended Jan. 29, 2022, a net loss of $215.3 million in 2020, a
net loss of $470.9 million in 2019, and a net loss of $673 million
in 2018. As of Oct. 29, 2022, the Company had $3.32 billion in
total assets, $2.07 billion in total liabilities, and $1.24 billion
in total stockholders' equity.
GARCIA GRAIN: Taps Sanchez Devanny as Counsel for Rio Bravo
-----------------------------------------------------------
Garcia Grain Trading Corp. seeks approval from the U.S. Bankruptcy
Court for the Southern District of Texas to employ the Law Firm of
Sanchez Devanny Eseverri, S.C. as counsel for Granos y Cereales Rio
Bravo, S.A. de C.V.
The Debtor requires the services of a Mexican law firm to institute
foreign collection proceedings related to its accounts receivable
in Mexico. The receivables owed by customers in Mexico are owned by
Rio Bravo, a Mexican importer.
Sanchez Devanny Eseverri will charge these hourly fees:
Senior Partner $440 to $465 per hour
Senior Associate $288 to $350 per hour
Associate $200 to 335 per hour
Law Clerk/Paralegal $100 to 190 per hour
In court papers, Sanchez Devanny, a partner at the Law Firm of
Sanchez Devanny Eseverri, disclosed that his firm is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached at:
Sanchez Devanny
Law Firm of Sanchez Devanny Eseverri, S.C.
335 4-401, Col. Valle Oriente
San Pedro Garcia, C.P. 666269
Nuevo Leon, Mexico
Tel: +52 81 8153 3900
About Garcia Grain Trading Corp.
Garcia Grain Trading Corp.'s line of business includes buying and
marketing grain, dry beans, soybeans, and inedible beans. The
company is based in Donna, Texas.
Garcia Grain Trading sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Texas Case No. 23-70028) on Feb. 17,
2023, with $10 million to $50 million in both assets and
liabilities. Octavio Garcia, chief executive officer and president,
signed the petition.
Judge Eduardo V. Rodriguez oversees the case.
David R. Langston, Esq., at Mullin Hoard & Brown, LLP represents
the Debtor as legal counsel.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case.
Jordan & Ortiz, P.C. serves as the committee's legal counsel.
GARDNER AGENCY: Files Emergency Bid to Use Cash Collateral
----------------------------------------------------------
Gardner Agency of Texas, LLC asks the U.S. Bankruptcy Court for the
Southern District of Texas, Houston Division, for authority to
continue using cash collateral under the exact same terms of the
order dated April 19, 2023, except that the expenses of Lincoln
Benefit Life ($178.33 per month) and Prudential Life ($194.22 per
month) have been added.
The Debtor has complied with every provision of the order. It has
made the required payments to Bankwell Bank, the subchapter V
trustee and the Debtor's counsel. More importantly, the Debtor has
timely filed all reports required under the order as well as the
monthly operating report.
Bankwell Bank is the only creditor with an interest in cash
collateral.
As previously reported by the Troubled Company Reporter, as of the
Petition Date, the Debtor is liable to Bankwell Bank in the
aggregate principal amount of $1.759 million, plus interest in the
amount of $77,338, late fees in the amount of not less than $11,340
and legal fees in the amount of $26,721 that is due and owing under
Prepetition Facility Documents or applicable law.
As adequate protection, the Lender was granted valid, enforceable,
nonavoidable and fully perfected, first-priority postpetition
security interests in and liens on any collateral, valid,
enforceable, nonavoidable and fully perfected, junior priority
security interests in and postpetition liens, valid, enforceable,
nonavoidable and fully perfected, first priority postpetition
security interests in and replacement liens on, and first-priority
superpriority administrative expense claims under 11 U.S.C. section
507(b).
As additional adequate protection, the Debtor was directed to make
the adequate protection payments provided in the Approved Budget,
which include weekly payments of the greater of $3,300 or 15% of
weekly commission revenue starting on March 27, 2023.
A copy of the order is available at https://urlcurt.com/u?l=k2Z1cI
from PacerMonitor.com.
About Gardner Agency of Texas, LLC
Gardner Agency of Texas, LLC is an insurance agency in Woodlands,
Texas. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. S.D. Tex. Case No. 23-30883) on March 13,
2023. In the petition signed by Steven C. Gardner, managing member,
the Debtor disclosed $10,643 in assets and $1,909,966 in
liabilities.
Judge Jeffrey P. Norman oversees the case.
Dean W. Greer, Esq., at West & West Attorneys at Law, P.C.,
represents the Debtor as legal counsel.
GAUCHO GROUP: Falls Short of Nasdaq Bid Price Requirement
---------------------------------------------------------
Gaucho Group Holdings, Inc. received a deficiency letter from the
Listing Qualifications Department of the Nasdaq Stock Market,
notifying the Company that for the 30 consecutive business days
prior to June 1, 2023, the closing bid price for the Company's
common stock was trading below the minimum $1.00 per share
requirement for continued inclusion on The Nasdaq Capital Market
pursuant to Nasdaq Listing Rule 5450(a)(1). The notification has
no immediate effect on the Company's Nasdaq listing and the
Company's Common Stock will continue to trade on Nasdaq under the
ticker symbol "VINO."
In accordance with Nasdaq Rules, the Company has been provided an
initial period of 180 calendar days, or until Nov. 28, 2023, to
regain compliance with the Bid Price Requirement. If at any time
before the Compliance Date the closing bid price for the Company's
Common Stock is at least $1.00 for a minimum of 10 consecutive
business days, the Staff will provide the Company written
confirmation of compliance with the Bid Price Requirement.
If the Company does not regain compliance with the Bid Price
Requirement by the Compliance Date, the Company may be eligible for
an additional 180 calendar day compliance period. To qualify, the
Company would then be required to meet the continued listing
requirement for market value of publicly held shares and all other
initial listing standards for The Nasdaq Capital Market, with the
exception of the Bid Price Requirement, and will need to provide
written notice of its intention to cure the deficiency during the
additional 180 calendar day compliance period, which compliance
could be achieved by effecting a reverse stock split, if necessary.
If the Company does not regain compliance with the Bid Price
Requirement by the Compliance Date and is not eligible for an
additional compliance period at that time, the Staff will provide
written notification to the Company that its common stock will be
subject to delisting. At that time, the Company may appeal the
Staff's delisting determination to a Nasdaq Hearings Panel.
The Company gives no assurance that it will regain compliance or
otherwise maintain compliance with any of the other listing
requirements. Nonetheless, the Company intends to monitor the
closing bid price of its Common Stock and may, if appropriate,
consider available options, including a reverse stock split, to
regain compliance with the Bid Price Requirement.
About Gaucho Group
Headquartered in New York, NY, Gaucho Group Holdings, Inc. --
http://www.algodongroup.com-- was incorporated on April 5, 1999.
Effective Oct. 1, 2018, the Company changed its name from Algodon
Wines & Luxury Development, Inc. to Algodon Group, Inc., and
effective March 11, 2019, the Company changed its name from Algodon
Group, Inc. to Gaucho Group Holdings, Inc. Through its wholly owned
subsidiaries, GGH invests in, develops and operates real estate
projects in Argentina. GGH operates a hotel, golf and tennis
resort, vineyard and producing winery in addition to developing
residential lots located near the resort. In 2016, GGH formed a new
subsidiary and in 2018, established an e-commerce platform for the
manufacture and sale of high-end fashion and accessories. The
activities in Argentina are conducted through its operating
entities: InvestProperty Group, LLC, Algodon Global Properties,
LLC, The Algodon - Recoleta S.R.L, Algodon Properties II S.R.L.,
and Algodon Wine Estates S.R.L. Algodon distributes its wines in
Europe through its United Kingdom entity, Algodon Europe, LTD.
Gaucho Group reported a net loss of $21.83 million for the year
ended Dec. 31, 2022, compared to a net loss of $2.39 million for
the year ended Dec. 31, 2021. As of March 31, 2023, the Company
had $21.01 million in total assets, $8.60 million in total
liabilities, and $12.40 million in total stockholders' equity.
New York, NY-based Marcum LLP, the Company's auditor since 2013,
issued a "going concern" qualification in its report dated April
17, 2023, citing that the Company has a significant working capital
deficiency, has incurred significant losses and needs to raise
additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
GESCO INDUSTRIES: Gets CCAA Initial Stay Order; PwC as Monitor
--------------------------------------------------------------
Gesco Industries Inc., Gesco Gp ULC, and Tierra Sol Ceramic Tile
Ltd. sought and obtained an initial order ("Initial Order") from
the Ontario Superior Court of Justice (Commercial List) ("Court")
pursuant to the Companies' Creditors Arrangement Act ("CCAA").
Pursuant to the Initial Order, PricewaterhouseCoopers Inc., LIT was
appointed as monitor of the Applicants ("Monitor"). A copy of the
Initial Order is available on the Monitor's website
https://www.pwc.com/ca/gesco. Pursuant to the Initial Order, Gesco
Holdings and Gesco LP, although not the Companies to the CCAA
Proceedings, were given similar protection to that given to Gesco.
During the CCAA Proceedings, the Companies, with the assistance of
the Monitor, expect that they will continue to operate in the
normal course as they determine next steps and contemplate a path
forward to maximize value for the Companies and their
stakeholders.
Pursuant to the Initial Order, all proceedings against the
Companies, their directors and officers and the Monitor (among
others) are stayed and no such proceedings may be commenced or
continued without leave of the Court ("Stay"). The Stay also
prohibits any contractual parties from ceasing to perform their
contracts with the Companies on account of the CCAA filing or there
being any outstanding amounts due as of the Filing Date. In
addition, except as provided for in the Initial Order, all amounts
owing by the Companies to their creditors for the period prior to
the Filing Date are stayed and cannot be paid at this time.
According to Court Documents, since 2019, the Companies have been
operating at a loss. The Companies suffered a net loss for the
fiscal year ended Sept. 30, 2022, of nearly $11.5 million and an
EBITDA loss of approximately $3.8 million from operating
activities. For the six months Oct. 1, 2022 to March 31, 2023, the
Companies suffered a net loss of approximately $5.7 million and an
EBITDA loss of approximately $4.2 million from operating
activities. The Companies' current financial difficulties largely
stem from issues encountered during the COVID-19 pandemic. While
there are other contributing factors to the Companies' financial
difficulties which are specific to the Companies’ operations,
some of these were exacerbated by the COVID-19 pandemic, supply
chain issues, high product and freight costs and a subsequent slow
down in demand and contraction in revenue and profit margins.
The Companies have negotiated the terms of a letter of intent
("Ironbridge LOI") with Ironbridge Equity Partners Management
Limited ("Ironbridge"), providing the framework for a going concern
transaction with the Companies. Ironbridge is completing its due
diligence and the parties are continuing negotiations in an effort
to enter into a definitive acquisition agreement ("Acquisition
Agreement") by no later than June 8, 2023, with a proposed closing
date of no later than June 15, 2023.
Absent access to further funding, the Companies are unable to
satisfy their obligations as they come due. Accordingly, the
Companies have commenced these proceedings to obtain the
flexibility and breathing space afforded by the CCAA to permit them
the opportunity to complete discussions with Ironbridge and enter
into and implement the Acquisition Agreement, which will permit the
going concern sale for some or all of the business. The largest
secured creditor of the Companies is prepared to provide funding
through the terms of the DIP Facility Agreement while the
Acquisition Agreement is negotiated.
In order to fund the operations of the Companies during these CCAA
proceedings, the Companies commenced negotiations with BNS to
provide debtor-in-possession financing. Based on the results of
the Pre-Filing Strategic Process, which included solicitation of
potential third-party financing, the Companies did not believe any
third parties would be interested in providing such financing.
The parties have negotiated the terms of the DIP Facility Agreement
which provides:
a) Borrowers: Gesco Industries Inc., Gesco Limited Partnership by
its general Partner Gesco GP ULC.
b) Guarantors: Gesco GP ULC, and Tierra Sol Ceramic Tile Inc.
c) DIP Facility available in Canadian dollars up to a maximum
principal amount
equal to the lesser of (i) $8,600,000 or (ii) $6,500,000 if a
Liquidation Trigger Event has occurred ("Maximum Amount").
d) Availability: during the initial stay period, an Initial
Available Amount to a maximum of $1,500,000; a Further Availability
Amount after the Comeback Motion, to a maximum of $8,600,000.
e) Interest Rate: Prime plus 6% per annum. Commitment Fee of
$50,000.44
The form of DIP is structured such that the current cash management
structure continues to remain in effect, which provides for the
daily sweeping of cash on hand from the Blocked Accounts through to
BNS. The amounts required to fund the DIP Budget, as agreed to in
the Interim DIP Agreement, would remain available to the Companies
through DIP Draw Advances to be provided.45
If you have any questions in respect of these CCAA Proceedings,
please contact the Monitor at:
PricewaterhouseCoopers Inc., LIT
Attention: Tammy Muradova
Monitor of Gesco Industries Inc.,
Gesco GP ULC, and
Tierra Sol Ceramic Tile Ltd.
PwC Tower
18 York Street, Suite 2600
Toronto ON M5J 0B2
Tel: +1 416 416 941 8383
Fax: +1 416 814 3219
Email: ca_gesco@pwc.com
Lawyers for the Companies:
Stikeman Elliott LLP
5300 Commerce Court West 199 Bay Street
Toronto, ON M5L 1B9
Elizabeth Pillon
Tel: 416-869-5623
Email: lpillon@stikeman.com
Philip Yang
Tel: 416-869-5593
Email: pyang@stikeman.com
Lawyers for the Court-appointed Monitor:
Cassels Brock & Blackwell LLP
Suite 2100, Scotia Plaza, 40 King St. W.
Toronto, ON M5H 3C2
Jane O. Dietrich
Tel: 416-860-5223
Email: jdietrich@cassels.com
Monique Sassi
Tel: 416-860-6886
Email: msassi@cassels.com
Lawyers for The Bank of Nova Scotia and BNS in its capacity as the
DIP Lender:
McMillan LLP
Brookfield Place, Suite 4400 Bay Wellington Tower
181 Bay Street
Toronto, ON M5J 2T3
Jeffrey Levine
Tel: 416-865-7791
Email: jeffrey.levine@mcmillan.ca
Wael Rostom
Tel: 416-865-7790
Email: wael.rostom@mcmillan.ca
Lawyers for Ironbridge Equity Partners Management Limited:
Davies Ward Phillips & Vineberg LLP
155 Wellington Street West
Toronto, ON M5V 3J7
Natasha MacParland
Tel: 416-863-5567
Email: nmacparland@dwpv.com
Gesco Industries Inc. distributes various floor covering
alternatives and comprise one of the largest flooring distributors
in Canada and North America in in terms of market share.
GOGO INC: S&P Alters Outlook to Positive, Affirms 'B+' ICR
----------------------------------------------------------
S&P Global Ratings revised the rating outlook on Gogo Inc. to
positive from stable and affirmed all ratings, including its 'B+'
issuer credit rating on the company.
The positive outlook reflects the likelihood that Gogo's leverage
will decline below its 4x upgrade threshold within the next 12
months and stay there on a sustained basis, supported by continued
strength in top-line growth and a more favorable capital allocation
policy.
Management has taken a more prudent approach toward its capital
allocation priorities. On the 2022 fourth quarter earnings call,
management revised its target net leverage down to a range of 2.5x
to 3.5x, from 4x previously. By revising its target net leverage
down, Gogo has indicated a commitment toward more conservative
financial policy management. This includes prioritizing
credit-favorable actions like debt repayments over returning
capital to shareholders. For example, on the most recent 2023 first
quarter earnings call, the company reported 3.1x net leverage and
announced a $100 million paydown of its term loan in May 2023. Pro
forma the paydown, management reported a gross leverage of 3.6x.
S&P views the paydown favorably since it reduced pro forma S&P
Global Ratings-adjusted leverage to 3.7x and will keep the company
85%-90% interest rate hedged even after the July 2023 notional step
down occurs in its derivatives contract.
S&P said, "Over the remainder of the year, we expect leverage to
increase up to half a turn (compared to the pro forma 3.7x
following the debt repayment) due to margin compression. While
margin compression will prevent further reduction in debt to
EBITDA, we expect the company to deploy a disciplined approach such
that leverage is sustained in the 4x area on an S&P Global
Ratings-adjusted basis for the rest of the year with the
expectation that leverage will decline below our 4x upgrade trigger
in the first half of 2024.
"We expect margin compression for the next few years as Gogo
develops and deploys its two strategic initiatives, Gogo 5G and
Global Broadband. With Gogo 5G expected to launch in the fourth
quarter of 2023, and GBB in 2025, we expect the company to invest
in research and development (R&D) as part of its ongoing
development and eventual deployment. As a part of the Gogo 5G
launch expected in the fourth quarter of 2023, we are anticipating
roughly $16 million of additional operating expenses as well as $20
million in additional capital expenditures (capex) this year. GBB
specifically will account for $14 million in incremental operating
expenses this year. The resulting S&P Global Ratings-adjusted
EBITDA margin will be roughly 800 basis points (bps) lower than the
47.9% in 2022. Although Gogo's growth prospects will increase, and
we expect the company to be able to grow its top line by 10%-12% in
2023 and 16%-18% in 2024, this subjects the company to short-term
margin compression and execution risk over the next two to three
years. As a result, this will increase leverage slightly to 4.5x in
2023 compared with 4.2x in 2022, before declining below 4x in
2024.
"We believe there is significant opportunity to increase earnings
and cash flow in 2024 and beyond, but competition will intensify.
Increasing aircraft online, coupled with rising data usage, will
likely result in robust revenue growth for several years. The
company expects its revenue to grow at a compound annual rate of
17% from 2022 to 2027, with management adjusted EBITDA margins
approaching the mid-40% area by 2027 (from the mid-30% area in
2023). For 2023, management set its revenue guidance at $440
million-$455 million and said that company-adjusted EBITDA would
fall by $15 million-$25 million to the $150 million-$160 million
range compared with $174 million in 2022. This includes
approximately $30 million in operating expenses for Gogo 5G and
GBB. Management expects its short-term strategic initiatives and
elevated investments will result in free operating cash flow (FOCF)
exceeding $200 million by 2025. However, we believe the company's
investments will lead to more modest cash flow generation over the
next couple years before generating FOCF of roughly $165 million in
2025.
"That said, we expect increasing competition over time from newer
entrants. For example, SmartSky Networks (which also operates an
air-to-ground [ATG] network) has made inroads into the private jet
market and could become a more significant threat, notwithstanding
the challenges the company has faced executing its plan. In
addition, low earth orbit (LEO) providers such as Starlink are
starting to gain momentum, and although Starlink is more focused on
larger commercial aircraft right now, it could eventually develop
the technology necessary to take market share in the small, private
jet space as well. Though Gogo is likely to maintain its dominant
market share through 2023, we believe the added competition could
cause some pricing pressure in the coming years.
"We expect Gogo's partnership with OneWeb to expand its network
coverage and revenue opportunities globally. Gogo operates a
terrestrial ATG network that targets approximately 24,000 business
aircraft based in North America. Once OneWeb's LEO constellation is
fully launched and operational (expected in late 2024), Gogo will
be able to pursue the approximately 14,000 business aircraft
outside of North America in addition to large North American jets
that fly globally. Gogo expects the added capacity from OneWeb's
LEO network (which can operate in tandem with its ATG network) will
enable it to offer higher speeds and lower latency broadband
services to its customers in North America. Still, Gogo's global
broadband product will require significant upfront investment
(estimated at around $50 million) over the next few years,
including $14 million in 2023 and $19 million in 2024.
Gogo's target market consists of high-net-worth individuals who may
cut back on discretionary private travel spending during an
economic downturn. S&P Global's economic forecast calls for a
shallow recession this year, which will slow economic growth to
0.7% in 2023, and 1.2% in 2024. While the S&P 500 is currently down
10%-15% from its all-time high, it is uncertain whether a hawkish
Fed will continue to raise rates and, if so, how fast. If equities
continue to decline, it could wipe out additional wealth from the
economy, forcing high net-worth individuals to cut back on
discretionary spending including private flying. Additionally, the
company is subject to aircraft supply chain disruptions, which can
stunt growth in Gogo's niche industry.
The positive outlook reflects the likelihood that Gogo's leverage
will decline below S&P's 4x upgrade threshold within the next 12
months and stay there on a sustained basis, supported by ongoing
strength in top-line growth and a more favorable capital allocation
policy.
S&P could raise the rating if Gogo reduced debt to EBITDA to below
4x on a sustained basis, which is likely to occur in the first half
of 2024 due to the successful execution of the company's Gogo 5G
initiative.
S&P could revise the outlook to stable if debt to EBITDA remained
above 4x for the next year. This could occur if margins declined
more than expected during the investment cycle or performance from
the company's Gogo 5G initiative lagged expectations.
ESG credit indicators: E-2 S-2 G-2
GRAYSON UNLIMITED: Taps Law Office of Matthew A. Lazroe as Counsel
------------------------------------------------------------------
Grayson Unlimited, LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of New York to employ Law Office of
Matthew A. Lazroe as counsel.
The firm's services include:
a. advising the Debtor of its rights, powers and duties in the
continued operation and management of its business and properties
under Chapter 11 of the Bankruptcy Code;
b. preparing legal documents and reviewing financial reports to
be filed in the Debtor's Chapter 11 case;
c. representing the Debtor in all hearings, meetings of
creditors, conferences, trials and other proceedings related to the
bankruptcy case; and
d. other necessary legal services.
The Law Office of Matthew A. Lazroe will be paid at the rate of
$125 per hour and will be reimbursed for out-of-pocket expenses
incurred.
The firm received from the Debtor a retainer of $5,000.
Matthew Lazroe, Esq., 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:
Matthew A. Lazroe, Esq.
Law Office of Matthew A. Lazroe
43 Court Street, Suite 1111
Buffalo, NY 14202
Tel: (716) 989-0090
Email: Matthew@LazroeLaw.com
About Grayson Unlimited
Grayson Unlimited, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D.N.Y. Case No. 23-10380) on April 26,
2023, with $100,001 to $500,000 in both assets and liabilities.
Judge Carl L. Bucki oversees the case.
Matthew A. Lazroe, Esq., at the Law Office of Matthew A. Lazroe is
the Debtor's legal counsel.
HIGHLAND CARGO: Court OKs Deal on Cash Collateral Access
--------------------------------------------------------
Highland Cargo Inc. and the U.S. Small Business Administration
sought and obtained entry of an order from the U.S. Bankruptcy
Court for the Central District of California, Los Angeles Division,
authorizing the Debtor's use of cash collateral in accordance with
their agreement.
Pre-petition, on September 1, 2020, the Debtor executed a U.S.
Small Business Administration Note, pursuant to which the Debtor
obtained a $150,000 loan, which amount was increased on May 9, 2022
by an additional $89,700 pursuant to a first modification of the
Note dated May 9, 2022, for a total principal amount of $239,700.
The terms of the SBA Loan require the Debtor to pay principal and
interest payments of $1,222 every month beginning 24 months from
the date of the Note over the 30 year term of the SBA Loan. The SBA
Loan has an annual rate of interest of 3.75% and may be prepaid at
any time without notice or penalty.
Pursuant to the SBA Loan Authorization and Agreement executed by on
June 1, 2020, the Debtor is required to "use all the proceeds of
this Loan solely as working capital to alleviate economic injury
caused by disaster occurring in the month of January 31, 2020 and
continuing thereafter and to pay Uniform Commercial Code lien
filing fees and a third-party UCC handling charge of $100 which
will be deducted from the Loan amount." As evidenced by a Security
Agreement executed on September 1, 2020 (subsequently amended on
May 9, 2022) and a valid UCC-l filing on September 16, 2020 as
Filing Number U200019707526, the SBA Loan is secured by all
tangible and intangible personal property.
The Parties agree that any and all of the Personal Property
Collateral constitutes the cash collateral of the SB, pursuant to
11 U.S.C. section 363(a). The SBA consents to the Debtor's
continued use of cash collateral through and including July 6,
2023, on the terms set forth therein to pay for the necessary
expenses outlined in the Debtor's cash collateral budget.
The Debtor's use of cash collateral may be renewed upon subsequent
stipulation with the SBA or by Court order.
As adequate protection, retroactive to the Petition Date, the SBA
will receive a replacement lien(s) that is deemed valid, binding,
enforceable, non-avoidable, and automatically perfected, effective
as of the Petition Date, on all post-petition revenues of the
Debtor to the same extent, priority and validity that its lien
attached to the Personal Property Collateral. The scope of the
Replacement Lien is limited to the amount (if any) that the cash
collateral diminishes post-petition as a result of the Debtor's
post-petition use of the cash collateral. Notwithstanding any of
the foregoing, the Replace Lien shall not include any liens or
claims for relief arising under the U.S. Bankruptcy Code.
The Debtor will remit adequate protection payments to the SBA in
the amounts and terms as set forth in the applicable SBA Loan
documents, to be paid on or before June 1, 2023, and July 1, 2023,
to the extent not already made in the amount of $1,222, and
continuing until further Court order regarding interim and/or final
use of cash collateral, or the entry of an order confirming the
Debtor's plan of reorganization, whichever occurs earlier.
Adequate protection payments will include the Debtor's SBA Loan
number and be sent to the payment address on the SBA Proof of Claim
or may be paid by wire transfer or pay.gov. The Debtor agrees that
any SBA mailing of monthly billing statements to the Debtor shall
be for informational purposes only and will not be deemed a
violation of the automatic stay.
The SBA's claim under its Loan will be allowed as a secured claim
in the amount of $256,821 as between the Debtor and the SBA.
The Debtor agrees to maintain insurance on the Personal Property
Collateral and to designate the SBA as a loss payee or additional
insured in accordance with the SBA Loan and related loan documents
and agrees to provide proof of insurance within seven 12 days upon
written request of SBA.
The SBA replacement lien in favor of the SBA will continue in full
force and effect in the event of a dismissal of the case. The
Debtor may not assign this Stipulation without SBA’s consent. To
the extent the SBA has the right to assign its rights to a third
party under the SBA Loan and related loan documents, the SBA may
assign the Stipulation to any assignee to which it assigns its
rights under the SBA Loan and Deeds of Trust.
A copy of the stipulation is available at
https://urlcurt.com/u?l=Kd9o1H from PacerMonitor.com.
A copy of the order is available at https://urlcurt.com/u?l=LMMhZf
from PacerMonitor.com.
About Highland Cargo Inc.
Highland Cargo, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-11773) on March 24,
2023, with as much as $10 million in both assets and liabilities.
Mandeep Singh, president of Highland Cargo, signed the petition.
Judge Vincent P. Zurzolo oversees the case.
Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger,
is the Debtor's legal counsel.
HTG MOLECULAR: Court OKs Cash Collateral Access Thru June 15
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
HTG Molecular Diagnostics, Inc. to use cash collateral on an
interim basis in accordance with the budget, through June 15,
2023.
The Debtor requires the use of cash collateral to permit the
orderly conduct of its affairs and initiatives as contemplated in
the Case to minimize the disruption of its relationships with
essential constituents as they undertake efforts and activities to
preserve and maximize the value of the assets of the Debtor's
Estate and, in turn, to maximize the recovery to all creditors of
the Estate.
The Debtor in 2022 generated $6.366 million in revenue.
On June 24, 2020, the Debtor entered into the Term Loan and
Security Agreement with Silicon Valley Bank for 10 million. The
Term Loan was secured by certain of the Debtor's personal
property.
On July 7, 2022, the Debtor and SVB entered into a First Amendment
to the Term Loan, whereby the Debtor made a pre-payment of $2.5
million.
On September 8, 2022, the Debtor and SVB entered into a Second
Amendment to the Term Loan whereby SVB agreed to proportionately
reduce each of the Debtor's subsequent Term Loan payments.
HTG's only secured debt consists of a secured term loan from
Silicon Valley Bank with a current balance of $2.687 million, which
includes an $800,000 final fee premium. After SVB's failure, the
Debtor is advised that First Citizens Bank owns the loan. The loan
is secured by all of the company assets with the exception of the
company's intellectual property.
HTG's assets consist principally of (a) cash and cash equivalents
in the amount of $2.779 million, (b) inventory with a net value of
$792,383, (d) accounts receivable from customers and others in the
amount of $273,586, (e) prepaid expenses and vendor deposits in the
amount of $1.5 million, (f) operating lease right-of-use assets in
the amount of $892,685, and (g) property and equipment in the
amount of $488,241. In addition, its valuable intellectual property
rights are impossible to precisely value.
The Debtor estimates that its outstanding unsecured debt totals
approximately $6.5 million.
The Court said as adequate protection, SVB is granted continuing,
valid, binding, enforceable, non-avoidable, and automatically and
properly perfected postpetition security interests in and liens on
all prepetition and postpetition tangible and intangible property
and assets, whether real or personal of the Debtor.
SVB is also granted an allowed superpriority administrative expense
claim in the Chapter 11 Case and any successor cases.
A continued hearing on the matter is set for June 15 at 2:30 p.m.
A copy of the order is available at https://urlcurt.com/u?l=6TrenV
from PacerMonitor.com.
A copy of the budget is available at https://urlcurt.com/u?l=kLgvSI
from PacerMonitor.com.
The Debtor projects 751,176 in required cash.
About HTG Molecular Diagnostics, Inc.
HTG Molecular Diagnostics, Inc. is a commercial-stage company that
develops and markets a technology platform to facilitate the
routine use of complex molecular profiling. The Tucson,
Arizona-based Company's HTG Edge and HTG EdgeSeq platforms, which
is comprised of instrumentation, consumables and software
analytics, automates the molecular profiling of genes and gene
activity.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-10732) on June 5, 2023.
In the petition signed by Shaun McMeans, senior vice president and
chief financial officer, the Debtor disclosed up to $10 million in
both assets and liabilities.
Judge Kate Sickles oversees the case.
Frederick B. Rosner, Esq., at The Rosner Law Group, LLC, represents
the Debtor as legal counsel.
Silicon Valley Bank, as lender, is represented by:
Alex Rheaume, Esq.
Morrison & Foerster LLP
200 Clarendon Street, 21st Fl
Boston, MA 02116
HUNYGIRLS VENTURES: Unsecureds Will Get 12.4% of Claims in 3 Years
------------------------------------------------------------------
Hunygirls Ventures Inc., d/b/a Sun Graphic Technologies, submitted
an Amended Plan of Reorganization for Small Business under
Subchapter V dated June 8, 2023.
The key feature of the Plan, as amended, is the participation of
the Plan Sponsor, who will be funding required payments to holders
of allowed administrative expense claims and allowed general
unsecured claims.
The Plan Sponsor will fund the Plan Sponsor Contribution on the
Effective Date, which will fund payment of allowed administrative
expense claims and the General Unsecured Creditor Fund Amount. The
Debtor anticipates that the Effective Date of the Plan will be in
June of 2023. The total distributions to general unsecured
creditors will be at least approximately $118,736 and the payment
will be made in a lump-sum following the claims objection process.
Additionally, general unsecured creditors may receive additional
distributions following the prosecution of Causes of Action by the
Post-confirmation Trustee. The treatment for general unsecured
creditors under this Plan is better than the treatment proposed in
the initial plan of reorganization filed by the Debtor and the
total distributions are greater than the total amount of the
Debtor's projected disposable income over the three-year period
following the Effective Date of the Plan.
The distributions under the Plan will be derived from (i) funds
contributed by the Plan Sponsor, (ii) existing cash on hand on the
Effective Date, (iii) revenues generated by continued business
operations, and/or (iv) net proceeds from Cause of Action
Recoveries.
This Amended Plan of Reorganization proposes to pay creditors of
the Debtor from funds contributed by the Plan Sponsor, cash on
hand, cash flow from operations, and any Cause of Action
Recoveries.
Non-priority unsecured creditors holding allowed claims will
receive distributions from the Debtor's projected disposable income
over the three years following the Effective Date of the Plan.
Based on the General Unsecured Creditor Fund Amount of $118,736,
unsecured creditors are projected to receive approximately 12.4% of
their unsecured claim amount based on timely filed claims to date
and an estimated general unsecured claims pool of $950,000.
This estimated percentage may ultimately change (upwards or
downwards) based on the outcome of the Debtor's claim objections
and the allowance and disallowance of claims, in addition to the
potential of Cause of Action Recoveries. The plan also provides for
the payment of administrative and priority claims.
Class 13 consists of all non-priority unsecured claims. Each holder
of a non-priority general unsecured claim against the Debtor shall
receive, as an initial distribution, its pro rata share of the
General Unsecured Creditor Fund Amount ($118,736.00) on or before
the date that is 90 days after the Effective Date of the Plan, or
such earlier time if the Post-confirmation Trustee determines, in
his or her reasonable discretion, that the claims objection process
is concluded. The Post-confirmation Trustee shall be entitled to
file a motion with the Bankruptcy Court seeking a reasonable
extension of this distribution date to allow for the claims
resolution process to conclude.
Any Cause of Action Recoveries received by the Debtor, after
payment of any fees and costs in connection with such recoveries,
and after payment of any unpaid administrative expense claims,
shall be distributed to Class 13 general unsecured creditors within
a reasonable time after receipt by the Post-confirmation Trustee.
The amount of claim in this Class total $950,000. Class 13 claims
are impaired by the Plan.
Class 14 consists of all equity interests in the Debtor, which are
owned by Michael R. Kisha and Hunygirls Ventures, Inc. 401(k) Plan
FBO Michael R. Kisha (the "Existing Equity Holders"). In
consideration of the Plan Sponsor Contribution, the Existing Equity
Holders have agreed that, as of the Effective Date, their equity
interests in the Debtor will be cancelled, and the Existing Equity
Holders will not receive any distributions under the Plan on
account of their equity interests.
On the Effective Date, the Reorganized Debtor shall issue new
common stock to the New Equity Holder on account of the Plan
Sponsor Contribution.
Payments required under the Plan will be funded from (i) the Plan
Sponsor Contribution; (ii) existing cash on hand on the Effective
Date; (iii) revenues generated by continued operations; and (iv)
any Cause of Action Recoveries.
The Plan shall be implemented on the Effective Date, and the
primary source of the funds necessary to implement the Plan will be
the Plan Sponsor Contribution.
A full-text copy of the Amended Plan dated June 8, 2023 is
available at https://urlcurt.com/u?l=PBIMM1 from PacerMonitor.com
at no charge.
Attorney for Debtor:
Matthew B. Hale, Esq.
Stichter, Riedel, Blain & Postler, P.A.
110 East Madison Street, Suite 200
Tampa, FL 33602
Telephone: (813) 229-0144
Email: mhale@srbp.com
About Hunygirls Ventures
Hunygirls Ventures, Inc., is a wide-format graphics and signage
manufacturer and screen printer. Hunygirls Ventures, Inc. sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
M.D. Fla. Case No. 22-05092) on December 27, 2022.
In the petition signed by Michael R. Kisha, president, the Debtor
disclosed up to $10 million in both assets and liabilities.
Judge Roberta A. Colton oversees the case.
Matthew B. Hale, Esq., at Stichter, Riedel, Blain and Postler,
P.A., represents the Debtor as counsel.
IDAHO ALLERGY: Seeks Cash Collateral Access
-------------------------------------------
Idaho Allergy, LLC asks the U.S. Bankruptcy Court for the Central
District of California, Los Angeles Division, for authority to use
cash collateral in accordance with the budget, with a 15% variance
and provide adequate protection.
The Debtor requires the use of cash collateral to pay the
reasonable expenses it incurs during the ordinary course of its
business.
The secured creditors are JP Morgan Chase Bank, N.A, U.S. Small
Business Administration; Itria Ventures LLC, Brownstone Funding and
Kapitus LLC.
The Debtor's schedules value its assets at $277,697. The Debtor's
schedules reflect $2.902 million in secured claims and $37,426 in
unsecured claims.
The COVID-19 pandemic had a significant negative impact on the
Debtor's business, which decreased the Debtor's income. In an
effort to keep its doors open, the Debtor took out several hard
money loans, which the Debtor is now unable to pay back. Due to the
accumulating debts from weekly payments owed to the hard money
lenders, the Debtor's operational expenses, and debts owed to the
secured creditors, the Debtor was unable to meet its debt service
obligations. Creditors, most notably Itria Ventures LLC, began
intercepting the Debtor's receivables directly from the fifty plus
insurance companies who make up the vast majority of the Debtor's
income, resulting in the Debtor's inability to pay its current
lease obligations and other operating costs. The Debtor attempted
to negotiate reasonable settlement terms with its creditors, but
ultimately could not reach an agreement that made sense for the
Debtor, thus necessitating the filing of the bankruptcy case.
The Debtor additionally had issues with its former medical billers
who were not adequately billing and collecting the Debtor's
receivables. The former medical billers are no longer with the
Debtor, and the Debtor's uncollected receivables are not likely to
be paid by the insurance companies to the Debtor. As a result, CMD
Group, LLC has taken over management of the Debtor's billing.
The Debtor's strategy for its reorganization is to use
post-petition financing, which was approved by the Court on April
19, 2023, and restructure its prepetition debts. The Debtor is
optimistic about the prospects of its reorganizational efforts.
Without question, the COVID-19 pandemic has negatively impacted the
country's economy and devastated certain sectors of the economy.
The Debtor's operations have been impacted by the pandemic as well.
However, the Debtor believes it can reorganize its debts and be
cashflow-positive through a chapter 11 restructuring of the hard
money loans and debts owed to the landlord.
As adequate protection, the Secured Creditors will receive a
replacement lien(s) that is deemed valid, binding, enforceable,
non-avoidable, and automatically perfected, to the same extent,
priority and validity that its lien attached to the Secured
Creditors' collateral. The scope of the Replacement Lien is limited
to the amount (if any) that cash collateral diminishes
post-petition as a result of the Debtor's post-petition use of cash
collateral. Notwithstanding, the Replacement Lien will not include
any liens or claims for relief arising under the U.S. Bankruptcy
Code, including without limitation, 11 U.S.C. sections 506(c), 544,
545, 547, 548 and 549.
The Debtor proposes adequate protection to its Secured Creditors,
as follows:
-- In first position, the Debtor has a loan with JP Morgan
Chase, N.A. for approximately $1.859 million. Chase is secured by
the Debtor's assets by virtue of having filed a UCC Financing
Statement with California Secretary of State on March 6, 2020.
Based on the estimated valuation of the Debtor's assets of
approximately $277,697, Chase's first position claim is secured up
to the value of the collateral. The Debtor proposes to start making
adequate protection payments to Chase in the amount of $1,000
effective July 1, 2023, after obtaining this Court's order on the
Debtor's cash collateral motion.
-- In second position, the Debtor has a loan with the U.S.
Small Business Administration for $150,000. The SBA is secured by
the Debtor's assets by virtue of having filed a UCC Financing
Statement on June 8, 2020. Since the SBA is in second position, and
based on the valuation of the Debtor's assets is fully
undersecured, the Debtor is not proposing any adequate protection
payments to the SBA.
-- In third position, the Debtor has a loan with Itria
Ventures, LLC for $541,800. Itria is secured by the Debtor's assets
by virtue of having filed a UCC Financing Statement on May 9, 2022.
Since Itria is in third position, and based on the valuation of
Debtor's assets is fully undersecured, the Debtor is not proposing
any adequate protection payments to Itria.
-- In fourth position, the Debtor has a loan with the
Brownstone Funding for $142,000. Brownstone is secured by the
Debtor's assets by virtue of having filed a UCC Financing Statement
on September 22, 2022. Since Brownstone is in fourth position, and
based on the valuation of the Debtor's assets is fully
undersecured, the Debtor is not proposing any adequate protection
payments to Brownstone.
-- In fifth position, the Debtor has a loan with Kapitus LLC
for $296,096. Kapitus is secured by Debtor's assets by virtue of
having filed a UCC Financing Statement on January 12, 2023. Since
Kapitus is in fifth position, and based on the valuation of the
Debtor's assets is fully undersecured, the Debtor is not proposing
any adequate protection payments to Kapitus.
A copy of the motion is available at https://urlcurt.com/u?l=fecfDy
from PacerMonitor.com.
About Idaho Allergy, LLC
Idaho Allergy, LLC applies the latest scientific and medical
advances to provide patient care and treatment for allergies,
asthma, and COPD.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-12146) on April 10,
2023. In the petition signed by Sanjeev Jain, chief executive
officer, the Debtor disclosed up to $50,000 in assets and up to $10
million in liabilities.
Judge Deborah J. Saltzman oversees the case.
Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger,
represents the Debtor as legal counsel.
INITALY LLC: Wins Interim Cash Collateral Access
------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana,
Indianapolis Division, authorized Initaly, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 10% variance, through July 11, 2023.
Flagship Enterprise Center, Inc. d/b/a Bankable, will be granted
replacement liens on: (i) any additional cash collateral generated
post-petition, (ii) all cash collateral, and (iii) any and all
post-petition assets of the Debtor. Such replacement liens shall be
effective to the same extent and priority as Bankable enjoyed prior
to the Petition Date.
The use of cash collateral will be terminated by the (i) expiration
of the Interim Order; (ii) conversion or dismissal of the case;
(iii) removal of the debtor-in-possession pursuant to 11 U.S.C.
section 1185; or (iv) the entry of an order restricting or
prohibiting further use of cash collateral.
A final hearing on the matter is set for July 11 at 1:30 p.m.
A copy of the order is available at https://urlcurt.com/u?l=BZ64kv
from PacerMonitor.com.
The Debtor projects total expenses, on a weekly basis, as follows:
$18,685 for Week 1 of June 2023;
$6,353 for Week 2 of June 2023;
$18,055 for Week 3 of June 2023; and
$4,592 for Week 4 of June 2023.
About Initaly, LLC
Initaly, LLC is an owner and operator of an Italian restaurant.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Ind. Case No. 23-02259) on May 26,
2023. In the petition filed by Catello Avagnale, member, the Debtor
disclosed $157,552 in assets and $1,206,156 in liabilities.
Judge Robyn L. Moberly oversees the case.
Jeffrey Hester, Esq., at Hester Baker Krebs LLC, represents the
Debtor as legal counsel.
INNOVATIVE DESIGNS: Delays 10-Q Filing for Period Ended April 30
----------------------------------------------------------------
Innovative Designs, Inc. filed a Form 12b-25 with the Securities
and Exchange Commission with respect to its Quarterly Report on
Form 10-Q for the period ended April 30, 2023.
The Company said its outside auditors have not completed their work
in connection with compiling the financial information that is a
part of the Form 10-Q. It is expected that the work will be
completed within the extended filing period.
About Innovative Designs
Headquartered in Pittsburgh, Pennsylvania, Innovative Designs, Inc.
operates in two separate business segments: cold weather clothing
and a house wrap for the building construction industry. Both of
its segment lines use products made from INSULTEX, which is a
low-density foamed polyethylene with buoyancy, scent block, and
thermal resistant properties. The Company has a license agreement
directly with the owner of the INSULTEX Technology.
Innovative Designs reported a net loss of $225,489 for the year
ended Oct. 31, 2022, compared to a net loss of $322,732 for the
year ended Oct. 31, 2021. As of Oct. 31, 2022, the Company had
$1.48 million in total assets, $474,159 in total liabilities, and
$1 million in total stockholders' equity.
Kennett Square, PA-based RW Group, LLC, the Company's auditor since
2021, issued a "going concern" qualification in its report dated
Feb. 13, 2023, citing that the Company had net losses and negative
cash flows from operations for the years ended Oct. 31, 2022 and
2021 and an accumulated deficit at Oct. 31, 2022 and 2021. These
factors raise substantial doubt about the Company's ability to
continue as a going concern for one year from the issuance date of
these financial statements.
J.A.R. CONCRETE: Seeks Interim Cash Collateral Access
-----------------------------------------------------
J.A.R. Concrete, Inc. asks the U.S. Bankruptcy Court for the
Western District of Texas, El Paso Division, for authority to use
cash collateral on an interim basis in accordance with the budget.
J.A.R. needs to use the cash collateral to operate in the ordinary
course of business to complete bonded road construction contracts.
There are currently several road constructions contracts upon which
J.A.R. has rights to payment or expectations of rights to payment.
J.A.R. has one secured creditor with a perfected lien on rights to
payment and accounts receivable, Crum & Forster, as shown by the
UCC search from the Texas Secretary of State. The secured creditor
is Crum & Forster, the parent company of United States Fire
Insurance Company.
J.A.R. acknowledges USFIC is entitled to adequate protection for
the use of its cash collateral, i.e., the proceeds of the bonded
contracts. J.A.R. proposes the following measures of adequate
protection:
a. For USFIC to have a replacement lien on the payments to
come from the project owners, in the amount advanced to cover
bonded claims as of petition date;
b. For USFIC to have a replacement lien under 11 U.S.C.
section 552 on the payments to come from the project owners, in the
amounts that have been advanced by USFIC to cover bonded claims
since petition date (approximately another $224,000);
c. For USFIC to have a replacement lien under 11 U.S.C.
section 552 upon the payments to come from the bonded project
owners, up to the limit of all payments USFIC makes upon bonded
claims. And
d. For USFIC to be entitled to reimbursement by the CRRMA for
payments made by USFIC to subcontractors and suppliers on the
Pellicano Widening project, if it is determined that J.A.R. was
wrongfully terminated.
As further adequate protection for the right to continue to use
payments from the project owners, in the ordinary course of
business, and rights to request USFIC to cover project expenses and
general, J.A.R. proposes the additional measures of adequate
protection.
USFIC derives a measure of adequate protection from its fortunate
lien on already-owned equipment. Most of that lien is comprised of
equipment owned by the affiliated co-Debtor Paso Del Norte
Materials, LLC, the Debtor-in-Possession in case 23-30252, which is
one of the Indemnitors in the August 15, 2019 general Indemnity
Agreement. Both Debtors expect to be selling equipment through
their Section 363 Motions and Plans, so there should be substantial
paydowns to USFIC on its junior lien from those sales, to reduce
the balances that will be owed to USFIC from payments made on
bonded claims or on operating expenses necessary for job
completion.
J.A.R.'s affiliate, ARS Development, LLC, owns the land and
building at 8000 Escobar, El Paso County, Texas, which is rented to
J.A.R. and to its affiliated Debtor, Paso Del Norte Materials. ARS
Development's sole and managing member is Joe A. Rosales, Jr., who
is also the sole shareholder of J.A.R.
ARS Development is to execute a promissory note in the amount of $2
million that is secured by a first-lien deed of trust upon 8000
Escobar, both in favor of USFIC. The proceeds of the note, which
are expected to materialize from an impending sale, are to be
placed into several bank accounts to be titled "Bonded Projects
Account for Benefit of J.A.R. CONCRETE and UNITED STATES FIRE
INSURANCE COMPANY" and subnumbered I through VIII at a United
States Trustee-approved depository, where they will be insured for
$250,000 each. Checks on the accounts shall require joint
signatures from J.A.R. and from USFIC and shall be expended only
upon the project expenses and general overhead identified in this
cash collateral motion.
If J.A.R. and USFIC cannot agree on job expenses or general
overhead or bonded claims which should be paid from the joint
checking account, either party may ask the Court to decide the
matter, through motion practice. If the case is already
administratively closed at the time such a dispute requires
adjudicating, and the Debtor does not wish to pay resumed United
States Trustee's fees, the parties will take the matter to
arbitration under the rules of the American Arbitration
Association. Any and all parts of the Bonded Projects Accounts I
through VIII that are not needed for the completion of the Bonded
Projects, and to reimburse USFIC for payments made on bonded claims
and reasonable attorney's fees, will either be applied to plan
payments under a Plan of Reorganization if one can be confirmed by
J.A.R. or returned to ARS Development, if the Court will so
approve.
An interim hearing on the matter is set for June 13, 2023 at 11
a.m.
A copy of the motion is available at https://urlcurt.com/u?l=rXfpnX
from PacerMonitor.com.
About J.A.R. Concrete
J.A.R. Concrete, Inc., a company in El Paso, Texas, filed its
voluntary petition for Chapter 11 protection (Bankr. W.D. Tex. Case
No. 23-30242) on March 14, 2023, with as much as $1 million to $10
million in both assets and liabilities. Joe A. Rosales, Jr.,
president, director and shareholder of J.A.R. Concrete, signed the
petition.
Judge H. Christopher Mott oversees the case.
E.P. Bud Kirk, Esq., in El Paso, Texas, and Griffith Davison, P.C.
serve as the Debtor's bankruptcy counsel and special counsel,
respectively.
JOYCARE THERAPY: Amends Other Secured Claims Pay Details
--------------------------------------------------------
Joycare Therapy, LLC, submitted a Fourth Amended Plan of
Reorganization for Small Business under Subchapter V dated June 8,
2023.
This Plan provides the ability of Joycare to re-start operations
under new ownership and provide the much needed services.
Joycare ceased providing services to children in September of 2022
and therefore did not have any incoming revenue prior to the
Petition Date, other than the collection of prior billed services.
Joycare has now re-started operations pursuant to the terms of the
Management Agreement.
The real estate lease of Joycare currently has less than 4 years
left. The leasehold improvements cannot be taken or removed by the
Debtor and have no known value to the Debtor at this time.
Immediately prior to the filing of this case (but explicitly
subject to this Court's approval), Joycare and Pediatric Holdings,
LLC ("PHLLC") entered into a management services agreement (the
"Management Agreement") pursuant to which PHLLC agreed to fund and
to manage the operations of the Debtor until confirmation of this
Plan, unless terminated earlier pursuant to its terms.
The Management Agreement was approved by an order of this Court
dated December 23, 2022. Although PHLLC will not be providing care
to any patients during the case (that care will continue to be
provided by the Debtor), the Management Agreement allowed the
Debtor to open its doors again during this Case, and to provide
much needed pediatric care in Houston. If the Plan is confirmed,
the expenses incurred by PHLLC under the Management Agreement will
be paid by Joycare in the ordinary course of business if and when
it is able to do so. If the Plan is not confirmed, PHLLC will have
an administrative claim for the costs it incurred under the
Management Agreement. To date, PHLLC has funded approximately
$180,000 for the operations of the Debtor.
Class 4 consists of all other secured claims, including but not
limited to the Economic Injury Disaster Loan provided to the Debtor
by the Small Business Administration, Generators of Houston, Marlin
Business Bank, and US Bank Equipment Finance, but only to the
extent a security interest, if any, is perfected and only to the
extent the collateral securing such claim has value.
The collateral, if any, securing the claims of the Class 4
creditors has no value. As a result, the claims of the Class 4
creditors will be deemed to be unsecured, and will be treated as
unsecured creditors in Class 5. Because Class 4 creditors are
receiving no distribution on account of their class 4 claims (but
will be treated as Class 5 creditors), Class 4 is not entitled to
vote on the Plan and is deemed to reject the Plan pursuant to
Section 1126(g) of the Bankruptcy Code.
Like in the prior iteration of the Plan, Joycare will fund an
"Unsecured Creditors Payment Pool" in the amount of $50,000 on the
effective date. Within 5 business days of the later of (1) the
Effective Date or (2) the date by which claims for rejected
executory contracts must file a claim, the Subpart V Trustee (or
the Debtor, if this Court appoints the Debtor as disbursing agent
under the Plan) will pay all allowed Class 5 Unsecured claims a pro
rata amount of the Unsecured Creditors Payment Pool, calculated
based on the aggregate amount of all allowed Class 5 claims.
Under the Management Agreement between Joycare and PHLLC, PHLLC has
agreed to provide funds to the Debtor so that the Debtor may pay
the operational expenses during the term of the Management
Agreement. In addition, pursuant to the terms of the Support
Agreement and this Plan, PHLLC has agreed to specific terms
regarding the repayment of its administrative expense claims, and
will provide funds to the Debtor to (A) pay the administrative
expense claims, (B) fund the Unsecured Creditors Payment Pool, and
(C) support the Debtor's operations after confirmation.
Debtor will retain the property of the bankruptcy estate. In order
to re-start operations, the Debtor has entered into the Management
Agreement with PHLLC. PHLLC will be responsible for the management
of the operations of Joycare prior to the Effective Date. As of the
Effective Date, the equity of Joycare will be issued to PHLLC, and
PHLLC shall be solely responsible for the operation of the business
thereafter.
PHLLC has agreed to provide funds to Joycare for the payment of
administrative claims and the funding of the Unsecured Creditors
Payment Pool for payments to general unsecured creditors. After the
Effective Date, the reorganized Debtor, under the ownership of
PHLLC, shall be responsible for payments to the Class 1 (JPMorgan
Chase) and Class 2 (Ally), in accordance with the terms of this
Plan. The Debtor may also elect to pay other amounts in advance.
A full-text copy of the Fourth Amended Plan dated June 8, 2023 is
available at https://urlcurt.com/u?l=BuE1jz from PacerMonitor.com
at no charge.
Debtor's Counsel:
Reese W. Baker, Esq.
BAKER & ASSOCIATES
950 Echo Ln Ste 300
Houston, TX 77024-2824
Email: courtdocs@bakerassociates.net
About Joycare Therapy
Joycare Therapy, LLC, is a child health care centre in Houston,
Texas.
Joycare Therapy sought Chapter 11 protection (Bankr. S.D. Tex. Case
No. 22-33581) on Dec. 2, 2022. In the petition signed by Huan Le,
president, the Debtor disclosed $50,000 to $100,000 in assets and
$1 million to $10 million in liabilities. The Hon. Eduardo V.
Rodriguez oversees the case. Reese W. Baker, Esq. of BAKER &
ASSOCIATES is the Debtor's counsel.
LANNETT CO: Reaches Deal With Creditors Committee in Chapter 11
---------------------------------------------------------------
Generic-drug maker Lannett Company Inc., told a Delaware bankruptcy
judge on June 2, 2023, it has reached a deal with its unsecured
creditors committee to end a clash that saw Lannett seek to dismiss
the committee and the committee try to delay the hearing on
Lannett's Chapter 11 plan.
As a result, the Bankruptcy Court on June 8, 2023, entered an order
confirming the Joint Prepackaged Chapter 11 Plan of Reorganization
of Lannett Company, Inc., et al.
The Plan is the culmination of months of effort by the Debtors and
their key stakeholders to right size the Debtors' capital structure
and position the Debtors for long-term success. The Plan (a)
deleverage the Debtors' balance sheet by approximately $597 million
by equitizing over $500 million of the Debtors' prepetition senior
secured debt, (b) provides the Debtors with access to a new RCF,
and (c) leaves General Unsecured Claims unimpaired to minimize
uncertainty for customers, vendors, and employees -- all of whom
are critical to the Reorganized Debtors' long-term success.
Prior to the Petition Date, the Debtors engaged in extensive,
arm's-length negotiations with an ad hoc group of creditors holding
more than 80 percent of their First Lien Senior Secured Notes and
100 percent of their Second Lien Term Loan (collectively, the
"Consenting Stakeholders"). As a result of these negotiations, on
April 30, 2023, the Debtors and the Consenting Stakeholders entered
into the Restructuring Support Agreement. At the same time, to
facilitate the implementation of the Restructuring Transactions
contemplated by the Restructuring Support Agreement and the Plan,
members of the Consenting Stakeholders consented to the Debtors'
use of cash collateral of the First Lien Senior Secured Noteholders
and Second Lien Term Lenders to fund these Chapter 11 Cases.
In negotiating the Plan, the Consenting Stakeholders recognized
that an efficient, prepackaged Chapter 11 cases would reduce the
negative impact that these Chapter 11 Cases would have on trade
vendors and business partners. Accordingly, the Consenting
Stakeholders determined to provide a material gift to all Holders
of General Unsecured Claims -- including vendors, trade partners,
litigation counterparties, and all other unsecured creditors other
than convertible noteholders -- in the form of 100 percent recovery
for such Holders.
To implement the restructuring transactions in the most efficient
manner possible, the Debtors launched solicitation of votes to
accept or reject the Plan on May 2, 2023. The Voting Classes
unanimously voted to accept the Plan, with 100 percent of Holders
of First Lien Senior Secured Notes Claims and Second Lien Term Loan
Claims who submitted valid ballots voting in support of the Plan.
Importantly, no Holder of Claims in any of the Voting Classes voted
to reject the Plan or opt-out of the Third-Party Release.
Despite the full recovery provided to Holders of General Unsecured
Claims under the Plan, on May 19, 2023, the U.S. Trustee appointed
an official committee of unsecured creditors. Shortly thereafter,
the Debtors filed a motion to disband the Committee to prevent any
value-destructive delay in their timeline that would potentially
jeopardize the comprehensive balance sheet restructuring
contemplated by the Restructuring Support Agreement. While the
Motion to Disband was pending, the Committee filed a motion to
reconsider the confirmation timeline and delay these Chapter 11
Cases by 60 days. As the parties prepared to litigate the issues
in the Motion to Disband and the Motion to Reconsider, they engaged
in arm’s-length, good faith negotiations to see if there was a
mutually beneficial path forward that could further maximize value
for all stakeholders. These negotiations culminated in a global
resolution among the Debtors, the Consenting Stakeholders, and the
Committee.
The key terms of the Restructuring Transactions, as set forth in
the Restructuring Support Agreement and the Plan, as amended, are
as follows:
a. the First Lien Senior Secured Noteholders will receive their
Pro Rata share of 97% of both the New Common Stock and the Takeback
Exit Facility;
b. the Second Lien Term Loan Lenders will receive their Pro
Rata share of 3% of both the New Common Stock (subject to dilution)
and the Takeback Exit Facility, as well as their Pro Rata share of
the Second Lien New Warrant Recovery;
c. Holders of an Allowed General Unsecured Claim will be either
(a) Reinstated or (b) paid in full in Cash on the later of (i) the
Effective Date and (ii) the date on which such payment would
otherwise be due in the ordinary course of business in accordance
with the terms and conditions of the particular transaction giving
rise to such Allowed General Unsecured Claim;
d. Holders of Convertible Notes will receive their Pro Rata
share of the New Warrants to purchase up to 1.25% (pre-dilution) of
the New Common Stock on same terms as proposed for others under the
Plan; and
e. Holders of Section 510(b) Claims and Existing Interests will
receive no distribution.
In a hypothetical chapter 7 liquidation, Holders of First Lien
Senior Secured Notes Claims (Class 3) would receive a recovery of
between 24% and 30%, which is significantly less than their 91%
recovery under the Plan. Holders of Second Lien Term Loan Claims
(Class 4) and General Unsecured Claims (Class 5) would not receive
any recovery at all, which is significantly less than their 5% and
100% recovery, respectively, under the Plan.
About Lannett Co. Inc.
Founded in 1942, Lannett Company, Inc. -- http://www.lannett.com/
-- develops, manufactures, packages, markets and distributes
generic pharmaceutical products for a wide range of medical
indications.
Lannett and its affiliates sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10559) on May
3, 2023. Lannett disclosed total assets of $334,600,000 and total
debt of $708,940,000 as of March 31, 2023.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped Kirkland & Ellis International, LLP as
bankruptcy counsel; Fox Rothschild, LLP as local counsel; FTI
Consulting, Inc. as financial advisor; and Guggenheim Securities,
Inc. as investment banker; and Street Advisory Group as
communications advisor. Omni Agent Solutions is the claims agent.
Secured creditors are being advised by Sullivan & Cromwell LLP as
legal counsel and Houlihan Lokey Inc. as financial advisor.
LANNETT COMPANY: Has Cash Collateral Access on Final Basis
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Lannett Company, Inc. and affiliates to use cash collateral on a
final basis in accordance with the budget.
The Debtor requires the use of cash collateral for the continued
operation of its business.
As of the Petition Date, the Debtors have approximately $657.17
million in aggregate outstanding principal amount of funded debt
obligations.
Each of the Debtors in the Chapter 11 cases are obligors under the
First Lien Indenture and the Second Lien Credit Agreement.
Lannett Company, Inc., as issuer, certain subsidiaries of Lannett,
as guarantors from time to time, and Wilmington Trust, National
Association, as trustee and note collateral agent, are each party
to the Indenture, dated as of April 22, 2021, supplemented April
22, 2021.
The First Lien Senior Secured Notes are guaranteed by Debtor
Kremers Urban Pharmaceuticals, Inc., Debtor Cody Laboratories,
Inc., and Debtor Silarx Pharmaceuticals, Inc., and are secured on a
first priority basis by substantially all of the Debtors' assets.
The First Lien Senior Secured Notes mature in April 2026, unless
earlier redeemed or repurchased in accordance with their terms, and
accrue interest at a rate of 7.750% per annum. As of the Petition
Date, approximately $350 million in principal amount of the First
Lien Senior Secured Notes are outstanding.
Lannett, as borrower, certain subsidiaries of Lannett, as
guarantors, the lenders party thereto, and Alter Domus (US) LLC, as
Administrative Agent and collateral agent, are each party to the
Second Lien Credit and Guaranty Agreement, dated as of April 22,
2021.
The Second Lien Term Loan is secured on a second-priority basis to
the First Lien Senior Secured Notes by substantially all of the
Debtors' assets. The Second Lien Term Loan Facility matures on July
21, 2026, and accrues interest at a rate of 10% per annum. As of
the Petition Date, approximately $221 million, plus applicable
interest, fees, costs and expenses remains outstanding under the
Second Lien Term Loan Facility.
Lannett, as issuer and Wilmington Trust, National Association, as
trustee, are each party to the certain Indenture, dated as of
September 27, 2019. The obligations under the Convertible Notes are
unsecured. Interest on the Convertible Notes is payable
semi-annually on each April 1 and October 1. The Convertible Notes
are scheduled to mature in October 2026. As of the Petition Date,
approximately $86.25 million in principal amount of the Convertible
Notes are outstanding.
As adequate protection, the Prepetition First Lien Secured Parties
and the Prepetition Second Lien Secured Parties are granted valid,
binding, continuing, enforceable, fully perfected, nonavoidable,
first-priority senior, additional and replacement security
interests in and liens on (i) the Prepetition Collateral and (ii)
all of the Debtors' other now-owned and hereafter-acquired real and
personal property, assets and rights of any kind or nature.
As further adequate protection, the First Lien Notes Agents, for
the benefit of itself and the other Prepetition First Lien Secured
Parties, are granted an allowed superpriority administrative
expense claims in each of the Cases ahead of and senior to any and
all other administrative expense claims in such Cases to the extent
of, and in an aggregate amount equal to, any Diminution in Value,
but junior to the Carve Out.
The Termination Events include:
(a) The violation of any term of the Final Order by the
Debtors that is not cured within five business days of receipt by
the Debtors of notice of such default, violation or breach;
(b) Entry of any order modifying, reversing, revoking, staying
for a period in excess of five business days, rescinding, vacating,
or amending this Interim Order in a manner materially adverse to
the rights, interests, priorities, or entitlements of the
Prepetition Secured Parties or that materially modifies any of the
Debtors' obligations to the Prepetition Secured Parties, in each
case, without the express written consent of the Required
Noteholders; and
(c) Any of the Cases is dismissed (other than following the
effective date of the Plan) or converted to a case under chapter 7
of the Bankruptcy Code, without the express written consent of the
Required Noteholders, or a trustee under chapter 11 of the
Bankruptcy Code or an examiner with expanded powers is appointed in
any of the Cases, or any of the Debtors seeks entry of an order
accomplishing any of the foregoing.
A copy of the order is available at https://urlcurt.com/u?l=3SeFdY
from PacerMonitor.com.
About Lannett Co. Inc.
Founded in 1942, Lannett Company, Inc. -- http://www.lannett.com/
-- develops, manufactures, packages, markets and distributes
generic pharmaceutical products for a wide range of medical
indications.
Lannett and its affiliates sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10559) on
May 3, 2023. Lannett disclosed total assets of $334.6 million and
total debt of $708.94 million as of March 31, 2023.
Judge Kate Stickles oversees the cases.
The Debtors tapped Kirkland & Ellis International, LLP as
bankruptcy counsel; Fox Rothschild, LLP as local counsel; FTI
Consulting, Inc. as financial advisor; and Guggenheim Securities,
Inc. as investment banker; and C Street Advisory Group as
communications advisor. Omni Agent Solutions is the claims agent.
Secured creditors are being advised by Sullivan & Cromwell LLP as
legal counsel and Houlihan Lokey Inc. as financial advisor.
LANNETT COMPANY: Prepackaged Plan Confirmed by Judge
----------------------------------------------------
Judge J. Kate Stickles has entered findings of fact, conclusions of
law and order confirming the Amended Joint Prepackaged Chapter 11
Plan of Lannett Company, Inc., et al.
The Debtors have proposed the Plan in good faith, with the
legitimate and honest purpose of maximizing the value of the
Debtors' Estates for the benefit of their stakeholders. The Plan
accomplishes this goal, including by incorporating a global
settlement by and among the Debtors, the Consenting Stakeholders,
and the Committee.
Accordingly, the Debtors, the Released Parties, and the Exculpated
Parties have been, are, and will continue to be acting in good
faith within the meaning of section 1125(e) of the Bankruptcy Code
if they proceed to: (a) consummate the Plan, the Restructuring
Transactions, and the agreements, settlements, transactions,
transfers, and other actions contemplated thereby, regardless of
whether such agreements, settlements, transactions, transfers, and
other actions are expressly authorized by this Confirmation Order;
and (b) take any actions authorized and directed or contemplated by
this Confirmation Order.
On the Effective Date, Reorganized LCI shall issue the New Common
Stock pursuant to the Plan. The issuance of the New Common Stock,
including equity awards reserved for the Management Incentive Plan,
by the Reorganized Debtors shall be authorized without the need for
any further corporate action or without any further action by the
Debtors or Reorganized Debtors or by Holders of any Claims or
Interests, as applicable.
The Debtors have satisfied the business judgment standard with
respect to the propriety of the Debtor Release set forth in Article
VIII.C of the Plan. The Debtor Release is a necessary and integral
element of the Plan, and is fair, reasonable, and in the best
interests of the Debtors, the Estates, Holders of Claims and
Interests, and all of the Debtors' stakeholders.
On or before the Effective Date, the applicable Debtors or the
Reorganized Debtors shall enter into and shall take any actions as
may be necessary or appropriate to effect the Restructuring
Transactions, as set forth in the Restructuring Steps Memorandum
and may take all actions as may be necessary or appropriate to
effect any transaction described in, approved by, contemplated by,
or necessary to effectuate the Plan that are consistent with and
pursuant to the terms and conditions of the Plan and the
Restructuring Support Agreement.
A copy of the Plan Confirmation Order dated June 8, 2023 is
available at https://urlcurt.com/u?l=h6Ht3P from PacerMonitor.com
at no charge.
About Lannett Co. Inc.
Lannett Company, Inc., founded in 1942, develops, manufactures,
packages, markets and distributes generic pharmaceutical products
for a wide range of medical indications. On the Web:
http://www.lannett.com/
Lannett Co. Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-10559) on May 3, 2023.
Lannett disclosed total assets of $334,600,000 and total debt of
$708,940,000 as of March 31, 2023.
The Debtor tapped KIRKLAND & ELLIS INTERNATIONAL LLP as bankruptcy
counsel; FOX ROTHSCHILD LLP as local counsel; FTI CONSULTING, INC.,
as financial advisor; and GUGGENHEIM SECURITIES, INC., as
investment banker. OMNI AGENT SOLUTIONS is the claims agent. C
STREET ADVISORY GROUP is the communications advisor.
The secured creditors are being advised by Sullivan & Cromwell LLP
as legal counsel and Houlihan Lokey Inc. as financial advisor.
LANTERN 18 LLC: Taps Aframe & Barnhill as Legal Counsel
-------------------------------------------------------
Lantern 18, LLC seeks approval from the U.S. Bankruptcy Court for
the District of Massachusetts to employ Aframe & Barnhill, P.A. as
its legal counsel.
The firm's services include:
a. advising the Debtor with respect to its duties in connection
with its Chapter 11 case;
b. advising the Debtor with respect to any plan of
reorganization and any other matters relevant to the formulation
and negotiation of a Chapter 11 plan of reorganization;
c. representing the Debtors at all hearings in the bankruptcy
case;
d. preparing legal documents and reviewing all financial reports
to be filed in the bankruptcy case;
e. reviewing and analyzing the nature and validity of any liens
asserted against the Debtor's property;
f. reviewing and analyzing claims against the Debtor and the
treatment of such claims, and preparing, filing or prosecuting any
objections to claims; and
g. other necessary legal services.
Aframe & Barnhill will be paid at the rate of $375 per hour and
will be reimbursed for out-of-pocket expenses incurred.
The firm received a $3,738 retainer.
Carl Aframe, Esq., a partner at Aframe & Barnhill, 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:
Carl D. Aframe, Esq.
Aframe & Barnhill, P.A.
390 Main Street, Suite 901
Worcester, MA 01608
Tel: (508) 756-6940
Fax: (508) 753-8219
Email: aframe@aframebarnhill.net
About Lantern 18
Lantern 18, LLC filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. D. Mass. Case No. 23-10592) on April
18, 2023, with $100,001 to $500,000 in both assets and liabilities.
Stephen Darr, Esq., a partner at Huron Consulting Group has been
appointed as Subchapter V trustee.
Judge Janet E. Bostwick oversees the case.
The Debtor is represented by Carl D. Aframe, Esq., at Arame &
Barnhill, P.A.
LEAR CAPITAL: Amended Small Business Plan Confirmed by Judge
------------------------------------------------------------
Judge Brendan L. Shannon has entered findings of fact, conclusions
of law and order confirming the First Amended Small Business Plan
of Reorganization of Lear Capital, Inc.
The Debtor proposed the Plan in good faith and not by any means
forbidden by law, thereby satisfying Section 1129(a)(3). The
Debtor's good faith is evident from the facts and records of the
Chapter 11 Case and the record of the Confirmation Hearing and
other proceedings held in this Chapter 11 Case, the extensive
negotiations undertaken to reach the terms of the Plan, and the
Debtor's decision to proceed with the Plan notwithstanding its
ability under the Plan to withdraw the Plan due to the opt outs
received by certain of the Participating States.
The Plan satisfies Section 1129(a)(7). The liquidation analysis,
the Miller Declaration and other evidence proffered or adduced at
the Confirmation Hearing: (a) are persuasive and credible; (b) have
not been controverted by other evidence; and (c) establish that
each holder of an impaired Claim or Interest either has accepted
the Plan or will receive or retain under the Plan, on account of
such Claim or Interest, property of a value, as of the Effective
Date, that is not less than the amount that such holder would
receive or retain if the Debtor were liquidated under Chapter 7 of
the Bankruptcy Code on such date.
The Miller Declaration, the Ohanesian Declaration, and the DeMeritt
Declaration, in addition to the other evidence proffered or adduced
at the Confirmation Hearing regarding feasibility: (a) is
persuasive and credible; (b) has not been controverted by other
evidence; and (c) establishes that the Debtor will have sufficient
funds to administer and consummate the Plan and to close the
Chapter 11 Case. Accordingly, the Plan satisfies the requirements
of Section 1129(a)(11).
All documents and agreements necessary to implement the Plan have
been negotiated in good faith at arm's-length, are in the best
interest of the Debtor and its Estate, and shall upon execution be
valid, binding and enforceable documents and agreements not in
conflict with any federal or state law.
The Exculpated Parties under the Plan will be acting in good faith
if they proceed to: (a) consummate the Plan and the agreements,
settlements, transactions and transfers contemplated thereby, and
(b) take the actions authorized and directed by this Confirmation
Order.
A copy of the Plan Confirmation Order dated June 8, 2023 is
available at https://urlcurt.com/u?l=TQWpwv from BMC Group, Inc.,
claims agent.
Attorneys for Debtor:
Jeffrey R. Waxman, Esq.
Morris James, LLP
500 Delaware Avenue, Suite 1500
Wilmington, DE 19801
Tel: 302-888-5842
Email: jwaxman@morrisjames.com
- and -
Alan J. Friedman, Esq.
Shulman Bastian Friedman & Bui LLP
100 Spectrum Center Dr Ste 600
Irvine, CA 92618
Phone: 949-340-3400
Fax: 949-340-3000
About Lear Capital
Lear Capital, Inc., is a silver and gold coin dealer based in Los
Angeles, Calif.
Lear Capital filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Del. Case No. 22-10165) on March 2,
2022, to weather possible future legal claims associated with its
sales practices as well as customer disclosures. Jami B. Nimeroff
serves as Subchapter V trustee.
As of Feb. 28, 2022, Lear Capital had assets of $34,449,619 against
liabilities of $22,355,066.
Judge Brendan Linehan Shannon oversees the case.
The Debtor tapped Shulman Bastian Friedman & Bui, LLP as general
bankruptcy counsel; Morris James, LLP as local counsel; Mitchell
Silberberg & Knupp, LLP, The Cook Law Firm, P.C. and Fernald Law
Group, APC as special counsels; Paladin Management Group as
financial advisor; and Baker Tilly US, LLP as accountant. BMC
Group, Inc., is the claims, noticing and administrative agent.
On July 13, 2022, the U.S. Trustee appointed the committee of
customers in this Chapter 11 case. The committee tapped Potter
Anderson & Corroon, LLP, as legal counsel and Dundon Advisors, LLC,
as financial advisor.
LEGACY CARES: Committee Taps AlixPartners as Financial Advisor
--------------------------------------------------------------
The official committee of unsecured creditors of Legacy Cares, Inc.
received approval from the U.S. Bankruptcy Court for the District
of Arizona to employ AlixPartners, LLP as financial advisor.
The committee requires a financial advisor to:
a. review and evaluate the Debtor's current financial condition,
business plans and cash and financial forecasts, and periodically
report to the committee;
b. review the Debtor's cash management, tax sharing and
intercompany accounting systems, practices and procedures;
c. evaluate any proposed sale process and related bids and
participate in any meetings with bidders or auction, as required;
d. review and investigate (i) related party transactions,
including those between the Debtor and non-debtor subsidiaries or
affiliates, including, but not limited to, shared services expenses
and tax allocations, and (ii) selected other pre-bankruptcy
transactions;
e. identify and review potential preference payments, fraudulent
conveyances and other causes of action that the Debtor's estate may
hold against third parties;
f. analyze the Debtor's assets and claims, and assess potential
recoveries to the various creditor constituencies under different
scenarios;
g. assist in the development and review of the Debtor's plan of
reorganization and disclosure statement;
h. review and evaluate court motions filed or to be filed by the
Debtor or any other parties involved in the Debtor's Chapter 11
case, as appropriate;
i. render expert testimony and litigation support services;
j. attend committee meetings and court hearings; and
k. assist with such other matters as may be requested that fall
within AlixPartners' expertise and that are mutually agreeable.
The firm will be paid at these rates:
Managing Director $1,140 to $1,400 per hour
Partner $1,115 per hour
Director $880 to $1,070 per hour
Senior Vice President $735 to $860 per hour
Vice President $585 to $725 per hour
Consultant $215 to $565 per hour
Paraprofessional $360 to 380 per hour
David MacGreevey, managing partner at AlixPartners, disclosed in a
court filing that his firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
David MacGreevey
AlixPartners, LLP
909 Third Avenue, Floor 30
New York, NY 10022
Tel: (212) 490-2500
Email: dmacgreevey@alixpartners.com
About Legacy Cares
Legacy Cares, Inc. is a 501c3 non-profit organization dedicated to
providing athletes and non-athletes of all ages, economic
backgrounds and levels of athletic proficiency the opportunity to
participate in sports and e-sports while fostering the enjoyment
and camaraderie of teamwork and perseverance, key components in
athletic competition and lifetime success. The organization is
based in Mesa, Ariz.
Legacy Cares sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ariz. Case No. 23-02832) on May 1,
2023,
with $242,329,104 in assets and $366,719,676 in liabilities.
Douglas Moss, president of Legacy Cares, signed the petition.
Judge Daniel P. Collins oversees the case.
The Debtor tapped Henk Taylor, Esq., at Warner Angle Hallam Jackson
Formanek, PLC as bankruptcy counsel; Papetti Samuels Weiss
McKirgan, LLP and Slania Law, PLLC as special counsels; and Miller
Buckfire & Co., LLC and its affiliate, Stifel, Nicolaus & Co.,
Inc., as investment banker. Epiq Corporate Restructuring, LLC is
the noticing, claims and balloting agent.
The U.S. Trustee for Region 14 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case.
Pachulski Stang Ziehl & Jones, LLP and AlixPartners, LLP serve as
the committee's legal counsel and financial advisor, respectively.
LG TRUCKING: Seeks Cash Collateral Access
-----------------------------------------
LG Trucking, LLC asks the U.S. Bankruptcy Court for the Middle
District of Alabama for authority to use cash collateral incident
to expenses incurred in the normal course of business.
The Debtor requires the use of cash collateral for administrative,
general and necessary costs and expenses.
Throughout the last 12 to 18 months, the Debtor has suffered
financial problems related, at least in part, to the negative
economic impacts of the COVID-19 pandemic including, but not
limited to, the decrease in the demand for paper and wood products
manufactured from pulp wood.
Recently, the Debtor received notice that a Writ of Garnishment
arising from a judgment related to personal injury matter had been
served to one or more of the Debtor-in-Possession's sources of
income related to the logging and/or pulpwood industry. The Debtor
is informed and believes the judgment exceeds $1 million, including
interest.
The entities that acquired or may have acquired security interests
in, among other property, the Debtor's cash and cash equivalents
are Farmers and Merchants Bank, Alabama Department of Revenue, and
Industree Logging, LLC.
As of the Petition Date, the Debtor's account reflected that
$31,567 was on deposit with Farmers and Merchants Bank. This amount
takes into consideration a deposit that was made on the Petition
Date.
The Debtor proposes that adequate protection to these identified
entities includes a replacement lien on the Debtor's post-petition
receivables and projected positive cash flow.
A copy of the motion is available at https://urlcurt.com/u?l=XHr4Fr
from PacerMonitor.com.
About LG Trucking, LLC
LG Trucking, LLC operates a timber harvesting and/or logging
business in Lee County, Alabama.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Ala. Case No. 23-80613) on June 9,
2023. In the petition signed by Grady Holmes, Jr., member, the
Debtor disclosed up to $1 million in assets and up to $10 million
in liabilities.
Anthony Bush, Esq., at The Bush Law Firm, LLC, represents the
Debtor as legal counsel.
LSF9 ATLANTIS: Fitch Affirms LongTerm IDR at 'B', Outlook Positive
------------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) at LSF9 Atlantis Holdings, LLC (Victra) at 'B'. The Outlook
is Positive.
The rating reflects Victra's stable position as the largest
authorized retailer for leading personal communications provider
Verizon Communications Inc. (A-/Stable) and the company's good
long-term operating track record, albeit mitigated by some declines
in recent years. The rating considers the company's narrow product
and brand focus within the U.S. retail industry. The Positive
Outlook reflects the company's good operating trajectory, which, in
combination with deployment of internally generated cash flow
toward debt reduction could yield adjusted leverage declining below
5.5x.
KEY RATING DRIVERS
GoWireless Acquisition: In March 2022, Victra acquired Go Wireless,
Inc. (GoWireless), the fifth largest authorized Verizon retailer in
the U.S. The transaction improved Victra's scale, adding around 70%
to store count (now and around 60% to revenue and EBITDA, prior to
synergies. Victra has indicated it has achieved nearly all of its
planned $55 million in expense synergies from scale benefits and
reduction of duplicative costs. Additional revenue synergies are
possible if the company can implement successful Victra topline
strategies at the acquired locations.
Fitch views the acquisition as a credit positive given improvements
to scale and FCF, now forecast to be around $100 million annually
from pre-acquisition forecasts in the $50 million to $75 million
range. FCF could be used toward debt reduction, including the $620
million secured term loan issued to fund the GoWireless
transaction, in line with management's net leverage target at or
below 3.5x, which equates to Fitch-defined EBITDAR leverage of 5x.
Assuming Victra deploys FCF toward debt reduction, EBITDAR leverage
could decline below 5.5x, supporting an upgrade of Victra's
ratings.
Modest Medium-Term EBITDA Growth Expected: Fitch expects Victra to
generate low-single digit annual EBITDA growth over time on
modestly positive topline growth. Following a strong 2021, revenue
in the four quarters following the GoWireless acquisition was up
approximately 60%, suggesting stable organic results despite some
sales contraction exhibited more broadly in consumer electronics.
EBITDA during the same four quarters was approximately $290
million, above post acquisition pro forma EBITDA of around $275
million given some synergy achievement.
Fitch expects organic revenue could decline modestly in 2023 given
softening consumer spending on goods with low-single digit revenue
growth beginning 2024. EBITDA over the medium term could expand
toward $300 million, given modest top-line growth and realization
of additional GoWireless expense synergies.
Consumer Wireless Focus: Victra is a leading independent retailer
for Verizon, with nearly two-thirds of gross profits generated from
the sale of a device such as a phone or tablet. Fitch views
Victra's end market focus as essentially neutral to the rating.
Exposure to the consumer wireless category limits Victra's economic
cyclicality relative to other discretionary retail categories,
evidenced by the growing importance of wireless telephony to
consumers' lives. The complex nature of device/contract purchases
has limited ecommerce incursion relative to other segments,
although growing consumer knowledge and activation process
simplification could prove to be disruptive over time.
The consumer wireless industry has shown recent signs of maturation
following a long period of good growth, likely due to tapering
penetration of smartphones and tablets and elongated replacement
cycles due to better-made hardware and successively less compelling
device upgrade features. The expansion of 5G networks could
modestly accelerate industry growth over the next two to three
years, largely as consumers upgrade devices to 5G-enabled
products.
Verizon Relationship: Victra exclusively partners with Verizon to
offer wireless contracts although offers devices produced by a wide
variety of manufacturers. Victra is Verizon's largest retail
partner, operating approximately 24% of Verizon-branded stores
managed by Verizon or third parties. This channel represents around
70% of Verizon's device activations, with the remaining share split
amongst stores operated by Verizon and original equipment
manufacturers (including Apple), retailers like Walmart Inc.
(AA/Stable) and Best Buy, and ecommerce operators like Amazon.com,
Inc. (AA-/Stable).
Victra benefits from its strong and longstanding relationship with
one of the leading players in the industry. The strength of the
relationship and Fitch's expectations for stable growth at Verizon
partially mitigate the lack of brand and category diversification
inherent in Victra's business model. The relationship also somewhat
protects the company competitively, as on a standalone basis it is
a relatively small player within retail and even the wireless
industry. Victra's position and scale could benefit if Verizon
further optimizes its retail footprint as it has in the past
through rationalizing its partner-operated store fleet and
allocating the stores to its largest partners.
DERIVATION SUMMARY
Victra's 'B' rating reflects its stable position as the largest
authorized retailer for leading personal communications provider
Verizon Communications Inc. (A-/Stable) and the company's good
long-term operating track record. The rating considers the
company's narrow product and brand focus within the U.S. retail
industry. The Positive Outlook reflects the company's improving
operating trajectory, which, in combination with achievement of
GoWireless synergies and debt reduction, could yield EBITDAR
leverage declining below 5.5x.
Victra has limited retail peers in the 'B' rating category.
AutoZone, Inc., like Victra, is a hardlines retailer albeit in the
auto parts segment, but is rated significantly higher than Victra
at 'BBB'/Stable given its substantial scale, FCF generation, and
expectation of EBITDAR leverage in the high 2x range. Signet
Jewelers Ltd. is another single-category retailer (jewelry),
although its 'BB'/Stable rating reflects its materially greater
scale and financial policy which yields expectations of EBITDAR
leverage in the low-4x. Drug retailer Rite Aid Corporation is rated
three notches lower than Victra at 'CCC' given concerns around
capital structure sustainability following years of operational
challenges, weak FCF and limited optionality as it approaches its
2025 debt maturities.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within The Rating Case for the Issuer:
- Fitch expects Victra's 2023 revenue to be approximately $3
billion, modestly below the $3.1 billion recorded in the four
quarters ending March 2023 given some slowdown in consumer spending
on goods, including consumer electronics. Beginning 2024, revenue
could grow modestly supported by new device introductions,
expanding 5G penetration and good execution.
- EBITDA in 2023 could be in the $280 million to $290 million
range, modestly below the approximately $290 million achieved in
the four quarters ending March 2023 as modest sales declines are
mitigated by GoWireless synergy achievement. EBITDA could grow
towards $300 million beginning 2024 with margins trending in the
mid-9% range.
- Cash flow prior to dividends, which was modestly positive in 2022
given working capital growth somewhat related to the GoWireless
acquisition, could trend around $100 million beginning 2023
assuming neutral working capital. Given the company's net leverage
target of at or below 3.5x, cash could be used for debt reduction
and tuck-in acquisitions.
- Victra's term loan has a floating interest rate structure and
Fitch assumes 3.5% to 5% base rates over the forecast horizon,
given the higher interest rate environment. Victra's notes have a
fixed interest rate structure.
- EBITDAR leverage, which was 5.5x in 2020/2021 prior to the March
2022 GoWireless transaction, is projected to be in the mid-5x range
beginning 2023. Assuming modest EBITDA growth and deployment of FCF
toward debt repayment beyond required amortization, EBITDAR
leverage could decline below 5.5x and support a one-notch update in
Victra's rating to 'B+'.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- An upgrade could result from EBITDA sustaining around $300
million through successful achievement of synergies, which, in
combination with debt reduction, would yield EBITDAR leverage
(adjusted debt/EBITDAR, capitalizing leases at 8x) sustaining below
5.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A stabilization of Victra's ratings could result from EBITDAR
leverage (capitalizing leases at 8x) sustained above 5.5x based on
some combination of EBITDA performance and financial policy actions
such as debt reduction or, alternatively, debt-financed dividends;
- A downgrade could result from weaker than expected operating
performance, yielding EBITDA in the low $200 million range,
moderating FCF generation and adjusted debt/EBITDAR above 6.5x. A
downgrade could also result from debt-financed dividends which
yield adjusted leverage sustained above 6.5x.
LIQUIDITY AND DEBT STRUCTURE
As of March 31, 2023, Victra had $65.2 million of cash on hand and
$67 million of borrowing capacity on its $115 million ABL facility
due March 2027. As of this date, the company's outstanding debt
consisted of $820 million in secured notes due in February 2026 and
$604.5 million in secured term loans due March 2029.
In February 2021, the company issued $660 million in secured notes
due February 2026, which were used to pay down the outstanding
amount on the company's term loan facility as well as fund a $125
million dividend to the company's then sponsor, Lone Star. In May
2021, the company issued a $75 million add-on to its existing $660
million in notes. The proceeds of this add-on funded a $90 million
dividend to the sponsor.
To finance the company's sale to a consortium of investors
including the company's CEO from an affiliate of Lone Star Funds in
November 2021, Victra issued an $85 million add-on to the secured
notes. In March 2022, the company issued $620 million in term loans
due March 2029 to fund its GoWireless acquisition. Through March
31, 2023, the company made $15.5 million of amortization payments
on the loan and indicated that in May 2023 prepaid its remaining
2023 required amortization of $23.3 million. The company's owners
are targeting net leverage at or below 3.5x, which equates to at or
below approximately 5.0x on Fitch-defined EBITDAR leverage.
ABL availability is governed by a borrowing base, which includes
inventory and receivables, largely from Verizon. The secured notes
and term loans have a second lien on ABL assets and a first lien on
Victra's remaining assets, including net property, plant and
equipment. The notes are co-borrowed by LSF9 Atlantis Holdings, LLC
and Victra Finance Corp while the term loan is co-borrowed by LSF9
Atlantis Holdings, LLC and Victra Finance Corp.
RECOVERY CONSIDERATIONS
Fitch's recovery assumes Victra is maximized as a going concern in
a post default scenario, given a going-concern valuation of
approximately $1 billion compared with around $300 million in value
from a liquidation of assets.
Fitch's going concern value is derived from a projected EBITDA of
around $200 million. The scenario, which assumes Victra's contract
with Verizon remains intact, assumes revenue of approximately $2.2
billion, around 20% below revenue for trailing twelve months ended
March 31, 2023, assuming closing of around 150 lower-revenue stores
and around 10% sales declines at the remaining base. EBITDA margins
could trend around 9% in a recovery scenario, below the mid-9%
recently achieved.
A going concern multiple of 5x was selected, within the 4x-8x range
observed for North American corporates, reflecting Fitch's
assessment of Victra's industry dynamics and company-specific
factors.
The approximately $900 million in value available to service debt,
after deducting 10% for administrative claims, yields full recovery
for the$115 million ABL, which is limited by a borrowing base
including eligible receivables and inventory and is assumed to be
70% drawn at default. The ABL, which is co-borrowed by LSF9 and A2Z
Wireless Holdings, Inc., is therefore affirmed at 'BB'/'RR1'.
The $820 million in secured notes and $589 million in remaining
term loans (following the May 2023 prepayment), which have a second
lien on ABL collateral and a first lien on Victra's remaining
assets, are expected to have good recovery prospects. The secured
notes, which are co-borrowed by LSF9 Atlantis Holdings, LLC and
Victra Finance Corp, and the term loan, which is co-borrowed by
LSF9 Atlantis Holdings, LLC and Victra Finance Corp., are therefore
affirmed at 'B+'/'RR3'.
ISSUER PROFILE
Victra is a leading independent retailer for Verizon Wireless, and
offers a full range of wireless devices and services including,
phones, tablets, mobile broadband, wearable technology, accessories
and product insurance.
SUMMARY OF FINANCIAL ADJUSTMENTS
- Fitch adjusts for one-time charges and stock-based compensation;
- Rent expense capitalized by 8.0x to calculate historical and
projected adjusted debt.
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
----------- ------ -------- -----
A2Z Wireless
Holdings, Inc.
senior secured LT BB Affirmed RR1 BB
Victra Finance
Corp.
senior secured LT B+ Affirmed RR3 B+
LSF9 Atlantis
Holdings, LLC LT IDR B Affirmed B
senior secured LT BB Affirmed RR1 BB
senior secured LT B+ Affirmed RR3 B+
LUMEN TECHNOLOGIES: $5B Bank Debt Trades at 28% Discount
--------------------------------------------------------
Participations in a syndicated loan under which Lumen Technologies
Inc is a borrower were trading in the secondary market around 71.6
cents-on-the-dollar during the week ended Friday, June 9, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $5 billion facility is a Term loan that is scheduled to mature
on March 15, 2027. About $3.93 billion of the loan is withdrawn
and outstanding.
Lumen Technologies, Inc., headquartered in Monroe, Louisiana, is an
integrated communications company that provides an array of
communications services to large enterprise, mid-market enterprise,
government and wholesale customers in its larger Business segment.
The company's smaller Mass Markets segment primarily provides
broadband services to its residential and small business customer
base.
MADERA COMMUNITY: Committee Hires FTI as Financial Advisor
----------------------------------------------------------
The official committee of unsecured creditors of Madera Community
Hospital seeks approval from the U.S. Bankruptcy Court for the
Eastern District of California to employ FTI Consulting, Inc. as
financial advisor.
The committee needs the assistance of a financial advisor to:
a. review financial-related disclosures required by the court,
including schedules of assets and liabilities, statement of
financial affairs and monthly operating reports;
b. prepare analyses required to assess any proposed
debtor-in-possession (DIP) financing or use of cash collateral;
c. assess and monitor the Debtor's short-term cash flow,
liquidity and operating results;
d. review the Debtor's proposed employee compensation and
benefits programs;
e. review the Debtor's potential disposition or liquidation of
both core and non-core assets;
f. review the Debtor's cost/benefit analysis with respect to
the affirmation or rejection of various executory contracts and
leases;
g. review the Debtor's identification of potential cost
savings, including overhead and operating expense reductions and
efficiency improvements;
h. review and monitor the asset sale process;
e. review any tax issues associated with, but not limited to,
claims/stock trading, preservation of net operating losses, refunds
due to the Debtor, plans of reorganization, and asset sales;
f. review claims reconciliation and estimation process;
h. review other financial information prepared by the Debtor,
including, but not limited to, cash flow projections and budgets,
business plans, cash receipts and disbursement analysis, asset and
liability analysis, and the economic analysis of proposed
transactions for which court approval is sought;
i. participate in discussions with the Debtor, potential
investors, secured lenders and other parties involved in the
Debtor's Chapter 11 case;
j. review or prepare information and analysis necessary for
the confirmation of a Chapter 11 plan and related disclosure
statement;
l. evaluate and analyze avoidance actions, including
fraudulent conveyances and preferential transfers;
m. monitor, develop and implement communications strategies
with various stakeholders; and
n. prosecute committee responses or objections to the Debtor's
motions.
The firm will be paid at these rates:
Senior Managing Directors $1,045 to
1,495 per hour
Directors/Senior Directors/Managing Directors $785 to 1,055
per hour
Consultants/Senior Consultants $435 to 750
per hour
Administrative/Paraprofessionals $175 to 325
per hour
Cliff Zucker, senior managing director at FTI, 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:
Cliff Zucker
FTI Consulting, Inc.
1166 Avenue of the Americas 15th Floor
New York, NY 10036
Tel: (212) 841-9355
Email: cliff.zucker@fticonsulting.com
About Madera Community Hospital
Madera Community Hospital operates a general medical and surgical
hospital in Madera, Calif.
Madera Community Hospital sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D. Calif. Case No. 23-10457) on
March 10, 2023. In the petition signed by its chief executive
officer, Karen Paolinelli, the Debtor disclosed $50 million to
$100
million in assets and $10 million to $50 million in liabilities.
Judge Rene Lastreto II oversees the case.
The Debtor tapped Riley C. Walter, Esq., at Wanger Jones Helsley,
as bankruptcy counsel; McCormick Barstow LLP and Ward Legal, Inc.
as special counsels; and JWT & Associates, LLP as accountant.
The U.S. Trustee for Region 17 appointed an official committee of
unsecured creditors in the Debtor's Chapter 11 case. The committee
tapped Perkins Coie, LLP and Sills Cummis & Gross PC as legal
counsels and FTI Consulting, Inc. as financial advisor.
MERIDIEN ENERGY: $1.6MM DIP Loan from ICT-DIP Wins Final OK
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia,
Richmond Division, authorized Meridien Energy, LLC to use cash
collateral and obtain postpetition financing, on a final basis.
As previously reported by the Troubled Company Reporter, the Debtor
commenced the Chapter 11 Case with firm commitments for $1.6
million delayed-draw term loan facility to be provided by ICT-DIP
LLC, to support the Debtor's business.
The DIP facility matures through the earliest to occur of (a)
September 4, 2023, (b) the effective date of a confirmed Acceptable
Plan, and (c) the date of acceleration of the Loans or termination
of the Commitment by the DIP Lender following an Event of Default.
The Debtor agreed to comply with these milestones:
(a) On or before the third Business Day after the Petition
Date, the Interim DIP Order will have been entered, and such order
will not have been reversed, modified, amended, stayed or vacated;
(b) On or before the 30th day after the entry of the Interim
DIP Order, the Final DIP Order will have been entered, and such
order will not have been reversed, modified, amended, stayed or
vacated;
(c) On or before July 3, 2023, the Borrower will have filed
with the Bankruptcy Court an Acceptable Plan and Disclosure
Statement;
(d) On or before July 6, 2023, the Borrower will have sourced
supplemental cash flow either from operations, assets or otherwise
in an amount of no less than $350,000;
(e) On or before August 2, 2023, the Disclosure Statement
Order will have been entered;
(f) On or before August 31, 2023, the Confirmation Order will
have been entered; and
(g) On or before September 4, 2023, an Acceptable Plan will
have been substantially consummated.
The combination of the cost associated with the litigation filed by
MarkWest Liberty Midstream & Resources, LLC and the cloud of
uncertainty surrounding that Litigation for the past four years has
severely impaired the Debtor's ability to bid contracts and by
extension its operations as a whole.
As of the Petition Date, the Debtor had approximately $19.5 million
in total debt obligations, inclusive of the disputed Judgment.
Approximately $5.2 million of that debt is secured by substantially
all of the Debtor's assets.
The Debtor is indebted to Bank7 Corporation pursuant to the
Promissory Note in the principal amount of $3.966 million, dated
November 15, 2020, and the Commercial Security Agreement, dated
November 15, 2020. Pursuant to an Extension Agreement between the
parties dated February 9, 2023, the maturity date of the Bank7 Note
was extended to February 15, 2024, and the Debtor agreed to pay
Bank7 a principal payment in the amount of $500,000 on August 15,
2023, and quarterly payments of accrued interest commencing on May
15, 2023.
As of the Petition Date, the Debtor was indebted and liable to
Bank7 in the aggregate principal amount of $3.966 million.
Additionally, the Debtor is indebted to William C. Schettine in the
amount of approximately $1.160 million pursuant to the Third
Amended and Restated Line of Credit Secured Demand Promissory Note,
dated March 30, 2023, and the Security Agreement, dated January 3,
2023.
The Debtor will provide adequate protection to the Prepetition
Secured Lenders:
-- Bank7 will receive:
(i) the Bank7 Replacement Liens;
(ii) the Bank7 Superpriority Claims; and
(iii) payment of the Bank7 Payments.
-- WCS will receive:
(i) WCS Replacement Liens; and
(ii) the WCS Superpriority Claims.
A copy of the Court's order is available at
https://urlcurt.com/u?l=LYNebt from PacerMonitor.com.
About Meridien Energy, LLC
Meridien Energy, LLC is a full-service pipeline construction
company headquartered in New York state with division offices in
Pennsylvania, Virginia, and Florida.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Va. Case No. 23-31377) on April 20,
2023. In the petition signed by John W. Teitz, chief restructuring
officer, the Debtor disclosed up to $10 million in assets and up to
$50 million in liabilities.
Judge Keith L. Phillips oversees the case.
Brandy M. Rapp, Esq., at Whiteford, Taylor and Preston, LLP,
represents the Debtor as legal counsel.
MOBIQUITY TECHNOLOGIES: Taps Assurance Dimensions as New Auditor
----------------------------------------------------------------
The Board of Directors dismissed D. Brooks & Associates CPAs as the
Mobiquity Technologies, Inc.'s independent accountants on June 5,
2023, as disclosed in a Form 8-K filed by the Company with the
Securities and Exchange Commission.
DB's report on the financial statements for the year ended Dec. 31,
2022, contained no adverse opinion or disclaimer of opinion and was
not qualified or modified as to audit scope or accounting.
According to the Company, the Audit Committee of its Board of
Directors participated in and approved the decision to change
independent accountants. Through the period covered by the
financial review of financial statements of the quarterly period
ending March 31, 2023, there have been no disagreements with DB on
any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of DB, would
have caused them to make reference thereto in their report on the
financial statements. Through the interim period June 5, 2023 (the
date of dismissal of the former accountant), there have been no
disagreements with DB on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or
procedure, which disagreements if not resolved to the satisfaction
of DB would have caused them to make reference thereto in their
report on the financial statements.
Subsequent to notifying D. Brooks & Associates CPAs of the firm's
dismissal, the Company engaged Assurance Dimensions , Inc. as its
new registered independent public accountant. During the year
ended Dec. 31, 2022 and prior to June 5, 2023 (the date of the new
engagement), the Company did not consult with Assurance Dimensions
, Inc. regarding (i) the application of accounting principles to a
specified transaction, (ii) the type of audit opinion that might be
rendered on the Company's financial statements by Assurance
Dimensions, Inc. in either case where written or oral advice
provided by Assurance Dimensions , Inc. would be an important
factor considered by us in reaching a decision as to any
accounting, auditing or financial reporting issues or (iii) any
other matter that was the subject of a disagreement between the
Company and its former auditor or was a reportable event (as
described in Items 304(a)(1)(iv) or Item 304(a)(1)(v) of Regulation
S-K, respectively).
About Mobiquity Technologies Inc.
Headquartered in Shoreham, NY, Mobiquity Technologies, Inc.,
together with its operating subsidiaries, is a next generation
location data intelligence company. The Company provides precise
unique, at-scale location data and insights on consumer's
real-world behavior and trends for use in marketing and research.
Mobiquity reported a net loss of $8.06 million in 2022, compared to
a net loss of $18.33 million in 2021. As of Dec. 31, 2022, the
Company had $2.63 million in total assets, $2.65 million in total
liabilities, and a total stockholders' deficit of $10,830.
Palm Beach Gardens, FL-based D. Brooks & Associates, the Company's
auditor since 2022, issued a "going concern" qualification in its
report dated March 31, 2023, citing that the Company has incurred
operating losses, has incurred negative cash flows from operations
and has an accumulated deficit. These and other factors raise
substantial doubt about the Company's ability to continue as a
going concern.
MOVIA ROBOTICS: Seeks to Extend Plan Exclusivity by 90 Days
-----------------------------------------------------------
Movia Robotics, Inc. asks the U.S. Bankruptcy Court for the
District of Connecticut to extend its exclusive period to file a
plan of reorganization for a period of 90 days.
The Debtor claims that while its bankruptcy case is not
extraordinarily complex, additional time is necessary to prepare
and negotiate a plan of reorganization or, more likely, a plan of
liquidation. The Debtor is working with its largest lenders in an
effort to preserve the value of its assets and ensure that the
value (economic and social) of its intellectual property is
preserved in either a sale or a reorganization.
Less than four months have elapsed since the commencement of this
case, and Movia is not seeking an extension of the exclusivity
period to pressure pre-petition creditors. Rather, Movia seeks an
extension of the exclusivity period to finalize its discussions
with its creditors.
The Debtor is represented by:
Timothy D. Miltenberger, Esq.
COHN BIRNBAUM & SHEA, P.C.
CityPlace II, 15th Floor
185 Asylum Street
Hartford, CT 06103
Telephone: (860) 493-2200
E-mail: Tmiltenberger@cbshealaw.com
About Movia Robotics, Inc.
Movia Robotics, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Conn. Case No. 23-20024) on January 18,
2023. In the petition signed by Timothy Gifford, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge James J. Tancredi oversees the case.
Timothy D. Miltenberger, Esq., at Cohn Birnbaum & Shea, P.C.,
represents the Debtor as legal counsel.
MOXI ENTERPRISES: Case Summary & Seven Unsecured Creditors
----------------------------------------------------------
Debtor: Moxi Enterprises, LLC
f/d/b/a Moxi Holdings Group, LLC
160 Scarlet Blvd
Oldsmar, FL 34677
Chapter 11 Petition Date: June 12, 2023
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 23-02420
Debtor's Counsel: Alberto ("Al") F. Gomez, Jr., Esq.
JOHNSON, POPE, BOKOR, RUPPEL & BURNS, LLP
401 East Jackson Street #3100
Tampa, FL 33602
Tel: 813-225-2500
Fax: 813-223-7118
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Kevin P Farrell as CEO.
A full-text copy of the petition containing, among other items, a
list of the Debtor's seven unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/AUZYHMQ/Moxi_Enterprises_LLC__flmbke-23-02420__0001.0.pdf?mcid=tGE4TAMA
NA LAND INVESTMENTS: Case Summary & Five Unsecured Creditors
------------------------------------------------------------
Debtor: NA Land Investments, LLC
21480 Applewhite Rd
San Antonio TX 78264
Chapter 11 Petition Date: June 11, 2023
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 23-50735
Debtor's Counsel: Brandon J. Tittle, Esq.
GLAST, PHILLIPS & MURRAY, P.C.
14801 Quorum Dr., Ste. 500
Dallas Texas 75254
Tel: 972-419-7186
Email: btittle@gpm-law.com
Debtor's
Financial
Advisor: LANE GORMAN TRUBITT, LLC
Total Assets as of June 10, 2023: $2,011,340
Total Liabilities as of June 10, 2023: $1,892,921
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Anirban Haldar as member.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/X4TBJWY/NA_Land_Investments_LLC__txwbke-23-50735__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's Five Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. I.M. Investments, LLC $0
c/o Drought, Drought & Bobbitt LLP
Attn: Sean Caporaletti
2632 Broadway, Suite 401-S
San Antonio, TX 78215
2. Ignacio Martinez $0
c/o Drought, Drought & Bobbitt LLP
Attn: Sean Caporaletti
3632 Broadway, Suite 401-S
San Antonio, TX 78215
3. Bexar County Tax Office
$0
P.O. Box 839950
San Antonio, TX 78207
4. Internal Revenue Service $0
Centralized Insolvency Operation
P.O. Box 7346
Philadelphia, PA 19101
5. Comal County Tax Office
$0
P.O. Box 659480
San Antonio TX 78265
NORTHERN CONTRACTORS: Seeks Cash Collateral Access
--------------------------------------------------
Northern Contractors, LLC asks the U.S. Bankruptcy Court for the
Western District of Washington for authority to use cash collateral
on an interim basis in accordance with the budget, with a 15%
variance and pay the June 16, 2023 payroll for hours worked from
June 5 through June 11, 2023.
The Debtor requires the use of cash collateral to pay all other
ongoing operating expenses of the Debtor including future payroll
expenses for the period from the petition date through September
15, 2023, or until the effective date of the Plan, whichever is
earlier.
During 2022, Northern Contractors became involved in disputes with
three major customers which resulted in litigation costs and loss
of anticipated income. In response to the unanticipated costs and
reduction in income, the Debtor incurred high interest debt which
was beyond its ability to pay. The reduction in cash flow also
impacted Debtors ability to service its equipment debt and the
Debtor also became delinquent on this tax compliance payments.
Facing mounting collection pressure from creditors, the Debtor
filed for protection under Chapter 11, Subchapter V, in order to
remain in business.
Based on a search of the Washington State Department of Licensing,
performed on May 17 and 21, 2023, the Debtor has identified 6
filers of UCC-1 financing statements, including Caterpillar
Financial Services Corporation, Financial Pacific Leasing Inc.,
Properum Capital Partners, LLC/Arsenal Funding, and Steven
Shulman.
A review of the loan documents appended to the Declaration of Rory
Butler supports that any security intertest of Caterpillar
Financial Services Corporation is limited to financed equipment and
accessions thereto and does not extend to cash collateral of the
Debtor.
Any security interest of Financial Pacific Leasing Inc. is limited
to the equipment and does not extend to cash collateral and the
Debtor has requested the loan documents to verify.
The contract between the Debtor and Steven Shulman appended to the
Declaration of Rory Butler is void of any pledge of a security
interest in the personal property of the Debtor and the filed UCC-1
Financing statements are ineffectual to perfect a security interest
in favor of Steven Shulman and the statements were wrongly filed.
Ventures, LLC and Prosperum Capital Partners, LLC/Arsenal Funding
assert an interest in the Debtor's cash collateral.
The Declaration further sets forth that, as of the petition date,
the Debtor's deposit accounts with a balance of $9,100, and
accounts receivable of $497,186. Accordingly, on the date of the
petition, the Debtor's cash collateral was estimated to be valued
at $506,286.
As adequate protection and for the Debtor's use of the cash
collateral, the Secured Creditor will be granted replacement liens
in the Debtor's post-petition cash, accounts receivables, and the
proceeds of each of the foregoing, to the same extent and priority
as any duly perfected and unavoidable liens in cash collateral held
by the Secured Creditor as of the Petition Date, limited to the
amount of any cash collateral of the Secured Creditor as of the
petition date, to the extent that any cash collateral of the
Secured Creditor is actually used by the Debtor.
A copy of the motion is available at https://urlcurt.com/u?l=1pVoJ3
from PacerMonitor.com.
About Northern Contractors, LLC
Northern Contractors, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No. 23-11047) on June
5, 2023. In the petition signed by Rory Butler, managing member,
the Debtor disclosed up to $1 million in both assets and
liabilities.
Thomas D. Neeleman, Esq., at Neeleman Law Group, P.C., from
PacerMonitor.com.
NOTTINGHAM ACADEMY: Court OKs Cash Collateral Access Thru June 30
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland, Baltimore
Division, authorized West Nottingham Academy in Cecil County to use
cash collateral on an interim basis in accordance with the budget,
through June 30, 2023.
First National Bank asserts a secured claim against the Debtor
pursuant to, among other things, a term loan promissory note and
credit line promissory note dated January 4, 2011, and a UCC-1
Financing Statement filed with the Maryland State Department of
Assessments and Taxation. FNB asserts an aggregate unpaid balance
as of the Petition Date in the amount of approximately $4.9
million, comprised of an alleged outstanding balance under term
loan promissory note in the amount of $3.9 million, and an
outstanding balance under the credit lien promissory note in the
amount of $998,900.
FNB asserts a security interest in and lien upon, among other
things, all equipment, accounts, notes, notes receivables,
instruments, intangibles, chattel paper, deposits accounts, and the
proceeds of the foregoing, as well as the bank account titled in
the name of the Debtor and held at FNB, which is believed to hold
approximately $162,000.
In addition, VAR Technology Finance asserts a secured claim against
the Debtor pursuant to, among other things, Restructure Agreement
dated March 20, 2022, and UCC-1 Financing Statements filed with the
Maryland State Department of Assessments and Taxation on January
18, 2021 and April 28, 2022. VAR also asserts a security interest
in and lien upon, the Pre-Petition Collateral that is junior to the
position of FNB and, on its face, there appears to be no equity to
VAR's lien position.
The Court ruled that at any time during the first two weeks of June
2023, FNB is authorized to withdraw from the Escrow Account the sum
of $23,658 as adequate protection to FNB, without prejudice to
FNB's right to seek different or other adequate protection in any
subsequent cash collateral order.
As adequate protection, FNB is granted a replacement lien in and to
all post-petition assets of the Debtor to the same extent and with
the same priority as FNB’s interest in the Pre-Petition
Collateral.
The liens and security interests granted to FNB, including the
Adequate Protection Liens, will become and are duly perfected
without the necessity for the execution, filing or recording of
financing statements, security agreements and other documents which
might otherwise be required pursuant to applicable non-bankruptcy
law for the creation or perfection of such liens and security
interests.
The provisions of the Interim Order and any actions taken pursuant
thereto will survive the entry of any order (i) confirming any plan
of reorganization in the Chapter 11 case; (ii) converting the case
to a Chapter 7 case; or (iii) dismissing the case, and the terms
and provisions of the Interim Order as well as the Adequate
Protection Liens granted pursuant to the Order will continue in
full force and effect notwithstanding the entry of any such order,
and such claims and liens will maintain their priority as provided
by the Interim Order and to the maximum extent permitted by law.
A further hearing on the matter is set for June 28, 2023 at 11
a.m.
A copy of the order is available at https://urlcurt.com/u?l=WpYTKF
from PacerMonitor.com.
About The West Nottingham Academy in Cecil County
The West Nottingham Academy in Cecil County is a college
preparatory boarding and day school for grades 9-12 and
postgraduates. West Nottingham offers a wide variety of athletic
programs, competitive and non-competitive clubs, visual, and
performing arts.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Md Case No. 23-13830) on May 31, 2023.
In the petition signed by Jim Shone, trustee, the Debtor disclosed
$2,212,793 in assets and $7,238,821 in liabilities.
Judge Michelle M. Harner oversees the case.
Matthew Abbott, Esq., at Wolff and Orenstein LLC, represents the
Debtor as legal counsel.
P&L DEVELOPMENT: S&P Affirms 'CCC+' ICR, Outlook Negative
---------------------------------------------------------
S&P Global Ratings affirmed its 'CCC+' issuer credit rating on
U.S.-based P&L Development Holdings LLC (PLD) due to its improved
performance in the first quarter of 2023, although it still
believes the capital structure is unsustainable as the company
depends upon favorable business, economic, and financial conditions
to meet its obligations—including the maturity of its senior
secured notes in November 2025.
S&P said, "We also affirmed our 'CCC+' issue-level rating on the
company's $465 million senior secured notes. The recovery rating is
'4', indicating our expectations for average (30% - 50%; rounded
estimate: 35%) recovery in the event of a payment default.
"The negative outlook reflects the potential for a lower rating in
the next few quarters if profitability does not continue to improve
as we expect and we believe the prospects of a default—including
a debt restructuring or missed debt service payment—is likely
within the subsequent 12 months."
PLD depends on favorable business conditions and its current credit
metrics reflect an unsustainable capital structure after
significantly underperforming in 2022.
Persistently high inflation, weak macroeconomic conditions and the
resulting effect on operating performance in 2022 forced the
company to finance operations, cash interest, growth capital
expenditures for oral electrolyte solutions (OES), mouthwash, and
nutritional gummies, and working capital using its $125 million
asset-based lending (ABL) credit facility. The company's top-line
grew 15% due to elevated demand for personal sanitization, a strong
cough, cold, and flu season, incremental OES sales, the addition of
new business contracts, and cost-mitigating price increases.
However, PLD's S&P Global Ratings'-adjusted EBITDA decreased 25%
and the margin contracted roughly 300 basis points (bps) from the
prior year. PLD has commodity exposure to chemical grade propylene
(CGP; an active ingredient used to produce isopropyl alcohol) and
resin (used for packaging, bottles, and caps), both of which were
severely inflated. This caused leverage to reach 24x and prompted
negative funds from operations (FFO) as PLD could not fully pass
these costs to its customers for the majority of last year until
pricing benefits were completely implemented. S&P recognizes the
company has taken steps to hedge 90% of its 2023 volume for CGP,
which should result in potentially $7 million cost of goods sold
improvement this year. Further, due to higher growth driven capital
spending in pursuit of expanding manufacturing capacity and new
product development capabilities, and increased working capital
outflows, free operating cash flow (FOCF) was a use of around $70
million in 2022.
S&P expects profitability will improve in 2023 as raw material
costs decrease, though it continues to expect negative FOCF.
S&P said, "We now expect leverage will improve to about 13x and
interest coverage to remain slightly above 1x in 2023. However, we
also anticipate the company will use more of its ABL facility
throughout the year as a result of $40 million FOCF use. Raw
material inflation and inbound and outbound freight has declined,
and we think gross margin will increase roughly 300 bps in 2023. We
expect double-digit revenue growth given favorable demand for
private-label goods due to the recessionary macroeconomic
environment, volume-driven OES sales growth, expansion in
over-the-counter (OTC) cough, cold, and flu sales, and incremental
revenues from mouthwash and gummy launches in the back half of the
year. However, after interest payments, we expect the company will
need to finance all cash outflows using the ABL and, as a result,
ABL balances will approach a level which would cause the
fixed-charge covenant to spring at fiscal year-end.
"We have revised our liquidity assessment to less than adequate
from adequate because we expect liquidity will decline given
increased intra-year working capital needs and capital spending.
"We expect the company will make greater seasonal inventory
investments, given strong revenue growth and expectation of
continued growth from increased production of OES, OTC liquids, and
mouthwash. We note that the current market environment shows strong
point-of-sale demand for consumer health care products,
particularly private-label, which does coincide with the company
increasing capacity recently. We also believe the company will
prioritize growth, which will result in greater net working capital
investment for at least the next 12 months. These factors, along
with carryover capex from 2022, will keep sources of liquidity
barely above uses over the next 12 months.
"Our base-case forecast does not reflect a credit or payment crisis
over the next 12 months.
"We note that the company has a track record of underperforming,
which may require PLD to use more of its ABL than we expect.
However, after a strong first quarter, we believe there are
favorable growth prospects that will allow the company to perform
in line with our base case and not face significant liquidity
shortfalls. Furthermore, the company has indicated it is exploring
external financing via purchase money and receivables
securitization, though nothing is committed at this point. We
believe the threshold for the fixed-charge covenant may be
triggered over the next year as we expect ABL availability to
decrease. Our base-case forecast indicates PLD will exhaust its
committed liquidity sources over the next 24 months, which could
lead to a payment default. However, we forecast about a 25% cushion
on the covenant over the next 12 months."
The negative outlook reflects the potential for a lower rating in
the next few quarters if profitability does not continue to improve
as we expect and we believe the prospects of a default—including
a debt restructuring or missed debt service payment—is likely
within the subsequent 12 months. This could happen if:
-- The company demonstrates an inability to successfully manage
its growth trajectory or operational missteps results in continued
profit pressures;
-- New projects and capacity investments do not deliver returns as
anticipated; or
-- Significant cash burn results in a liquidity crisis,
potentially including a financial covenant violation.
S&P could take a positive rating action over the next 12 months if
the company begins to generate positive FOCF while successfully
sustaining EBITDA interest coverage above 1.5x. This could happen
if:
-- The company continues to execute new profitable contracts and
diversify its customer base; and
-- Key product categories maintain strong performance and growth.
For a positive ration action on PLD, S&P would also need more
confidence that the company can manage its future debt maturities,
particularly its $465 million secured notes due November 2025.
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 PLD. The board
consists of four people--a representative from Stephens in addition
to three members of the Singer family. We believe the board
manifests a lack of independence from management and provides
insufficient oversight and scrutiny of key enterprise risks. The
company has a history of negative free cash flow generation and not
hitting the budget."
PANEVAS LLC: Court OKs Interim Cash Collateral Access
-----------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, authorized Panevas, LLC to use cash collateral on an
interim basis in accordance with the budget, with a 10% variance.
The Debtor owns two parcels of real property and its improvements
located at 19206 U.S. Highway 19 N. and Harn Boulevard, Clearwater,
Florida 33764. The Debtor also utilizes office space located at
5210 Webb Road, Tampa, FL 33615, which property is owned by
Astartis LLC. There is no lease between the Debtor and Astartis for
the utilization of the office space nor is any rent paid for the
same.
The Debtor is indebted to BayFirst National Bank, formerly known as
First Home Bank, a national banking who holds a mortgage on the
Real Property and its improvements.
As of the Petition Date, the Debtor's obligation to the Bank was
$1.9 million.
Based upon information currently available to the Debtor, the value
of the Real Property does not exceed $1 million.
As adequate protection of the Bank's asserted interests in the cash
collateral, the Bank will have a replacement lien and security
interest in property acquired or generated by the Debtor subsequent
to the Petition Date and which is of the same type and class of
property as any cash collateral used pursuant to the Order. The
replacement liens and security interests will be to the same
extent, validity, and priority as existed in the cash collateral on
the Petition Date.
The Debtor will maintain hazard and casualty insurance coverage on
all of its assets. The Debtor will also name the Bank as a loss
payee on such insurance coverage and will furnish to the Bank an
appropriate certificate evidencing such insurance coverage.
A copy of the order is available at https://urlcurt.com/u?l=XaBFJz
from PacerMonitor.com.
About Panevas LLC
Panevas, LLC, a company in Tampa, Fla., filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
M.D. Fla. Case No. 23-01589) on April 21, 2023, with $1,011,963 in
assets and $2,613,430 in liabilities. Panayiotis Vasiloudes,
manager, signed the petition.
Judge Roberta A. Colton oversees the case.
Stephenie Biernacki Anthony, Esq., at Anthony & Partners, LLC,
represents the Debtor as counsel.
PERFECTLY PRISCILLA: Seeks Cash Collateral Access
-------------------------------------------------
Perfectly Priscilla, LLC asks the U.S. Bankruptcy Court for the
Middle District of Georgia, Valdosta Division, for authority to use
cash collateral upon a showing of adequate protection.
The Debtor requires the use of cash collateral to manage and pay
the expenses required for the continued operation of the Business.
As of the Petition Date, Shopify Capital, Inc., asserts that it is
owed $165,736 by the Debtor. On April 6, 2020, Shopify filed UCC
No. 038-2020-006693.
The U.S. Small Business Administration asserts it is owed $498,160
by the Debtor under a Small Business Administration Economic Impact
Disaster Loan. The SBA filed the UCC Financing Statement No.
038-2020-009435 on May 8, 2020.
FC Market Place, LLC d/b/a Funding Circle, asserts it is owed
$219,549 by the Debtor. Funding Circle may assert that its claim is
secured by, among other things, "cash collateral" in the form of
"inventory and accounts receivable" and proceeds of such
collateral, as reflected on UCC Financing Statement No.
038-2022-003738, as amended by Amendment dated April 14, 2023 No.
038-2023-008302.
The Debtor proposes to adequately protect the Respondents via the
following, as may be applicable:
(a) paying all post-petition property taxes on any collateral
held by Respondents as and when they become due;
(b) continuing to maintain and, as necessary, replace the
Respondents' collateral;
(c) providing the replacement liens, or adequate protection
payments to the extent required by the Bankruptcy Code, required
to avoid economic depreciation on the Respondents' collateral while
the Case is pending, ordered by the Court, and/or agreed on between
the Debtor and any one or more of the Respondents;
(d) continuing to maintain, as necessary, adequate insurance
on the Respondents' collateral; and
(e) continuing to operate the business in substantial
compliance with the Budget.
A copy of the motion is available at https://urlcurt.com/u?l=dQyOep
from PacerMonitor.com.
About Perfectly Priscilla, LLC
Perfectly Priscilla, LLC operates an in-store and online plus size
women's clothing boutique. Headquartered in Valdosta, Georgia,
Perfectly Priscilla provides a full suite of women's clothing and
accessories.
Perfectly Priscilla sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Ga. Case No. 23-70575) on June 9,
2023. In the petition filed by Thomas Thompson, managing member,
the Debtor disclosed up to $1 million in assets and up to $10
million in liabilities.
G. Daniel Taylor, Esq., at Stone & Baxter, LLP, represents the
Debtor as legal counsel.
PGX HOLDINGS: Court OKs $12MM DIP Loan from Blue Torch
------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
PGX Holdings, Inc. and affiliates are authorized to use cash
collateral and obtain postpetition financing.
The Debtors are permitted to receive senior secured postpetition
financing on a superpriority basis in the form of a senior secured,
super priority multiple draw term loan facility in an aggregate
principal amount of up to $19.925 million, consisting of, subject
to the DIP Loan Agreement,
(i) upon entry of the interim order, one or more draws in an
aggregate principal amount not exceeding $12 million; and
(ii) upon entry of the Final Order, additional draws in an
aggregate principal amount that will not, when combined with
amounts advanced prior to such date, exceed the remaining unfunded
New Money DIP Loans;
(iii) a roll-up, subject to entry of the Interim Order, by the
DIP Lenders of their ratable share of Prepetition First Lien
Obligations in the amount of $2.9 million equal to the Prepetition
First Lien Obligations advanced to the Loan Parties pursuant to the
Collateral Agent Advance Letter, dated as of May 31, 2023, by and
among the Prepetition First Lien Agent, Prepetition First Lien
Lenders and Loan Parties, which amounts represent emergency
financing that was necessary to allow the Debtors to operate prior
to and transition smoothly into chapter 11; and
(iv) a roll-up, subject to entry of the Final Order, by the DIP
Lenders of their ratable share of Prepetition First Lien
Obligations in the amount of $39.850 million, pursuant to the terms
and conditions of the Interim Order, the Final Order and that
Superpriority Secured Debtor-in-Possession Financing Agreement, by
and among Progrexion Holdings, Inc., a Delaware corporation,
Credit.com, Inc., a Delaware corporation, eFolks Holdings, Inc., a
Delaware corporation and Creditrepair.com Holdings, Inc., a
Delaware corporation, John C. Heath, Attorney At Law PC (d/b/a
Lexington Law) and the other guarantors party thereto, the lenders
party thereto from time to time and Blue Torch Finance LLC, as
administrative agent.
The Debtors are required to comply with these milestones:
a. No later than two business days after the Petition Date,
the Debtors will file an appropriate motion with the Court for the
sale of any of the Debtors' assets pursuant to 11 U.S.C. section
363, and the bid procedures that establishes a date that is no
later than 60 calendar days after the Petition Date as the deadline
for the submission of binding bids with respect to their assets;
b. No later than four business days after the Petition Date,
the Court will have entered the Interim Order;
c. No later than 25 calendar days after the Petition Date, the
Court will have entered the Final Order, subject to the
availability of the Court to conduct a Final Hearing on the DIP
Facility;
d. No later than 30 calendar days after the Petition Date, the
Court will have entered an order approving the Bid Procedures,
which order will be in form and substance acceptable to the DIP
Agent at the direction of the Required DIP Lenders;
e. No later than 65 calendar days after the Petition Date, the
Debtors will commence an auction for the Acquired Assets, in
accordance with the Bid Procedures Order; provided that if there is
no higher or better offer submitted in comparison to the stalking
horse bid(s), no auction will be held;
f. No later than 70 calendar days after the Petition Date, the
Court will have entered one or more sale order(s) approving each of
the winning bid(s) resulting from such sale(s); and
g. Consummation of the sale and transactions contemplated
thereby will occur no later than the date that is 105 calendar days
after the Petition Date.
Prior to the Petition Date and pursuant to the Prepetition
Financing Agreements, the Prepetition Secured Obligors were
indebted and liable to the Prepetition Secured Lenders (a) with
respect to the outstanding obligations under the Prepetition First
Lien Financing Agreement, for term loans in the aggregate principal
amount of $243.447 million, which amounts are inclusive of the
Emergency Bridge, and (b) with respect to the outstanding
obligations under the Prepetition Second Lien Financing Agreement,
for term loans in the aggregate principal amount of $179.986
million.
The Prepetition First Lien Agent and the Prepetition Second Lien
Agent entered into the Intercreditor Agreement, dated as of July
21, 2021, which governs certain rights, interests, obligations,
priorities and positions as between the Prepetition First Lien
Lenders and the Prepetition Second Lien Lenders with respect to the
assets and properties of the Debtors and the Prepetition Secured
Obligors.
The Debtors' borrowings from the DIP Lenders under the DIP Facility
will be used in a manner consistent with the terms and conditions
of the applicable DIP Documents and the Interim Order for:
(a) working capital and other general corporate purposes of
the Debtors solely in accordance with the Approved Budget, subject
to Permitted Variances;
(b) payment of amounts due under the DIP Facility, including
interest and fees payable thereunder, in accordance with the
Approved Budget, subject to Permitted Variances;
(c) payment of the costs of administering the Chapter 11
Cases;
(d) funding of a wind-down budget in form and substance
acceptable to the Required DIP Lenders in an amount not less than
$2.625 million, to be held in escrow by the DIP Agent and to be
released only upon the closing of the Sale Transaction, which will
automatically be increased on a dollar-for-dollar basis to the
extent, as of the date of the consummation of the Sale Transaction,
the Loan Parties have capital in excess of the amount set forth in
the then Approved Budget; provided, however, such that in no event
shall the wind-down budget exceed $3 million; and
(e) making any other payments consistent with the
then-applicable Approved Budget, subject to Permitted Variances.
Except with the prior written consent of the DIP Agent, at the
direction of the Required DIP Lenders in their sole discretion, the
Debtors will not be permitted to use the proceeds of the DIP
Facility and the proceeds of the Prepetition Collateral in
contravention of the provisions of the orders entered in the
Chapter 11 Cases.
As adequate protection, the Prepetition Secured Lenders are granted
a valid, binding, enforceable, non-avoidable and automatically and
properly perfected replacement security interest in and lien upon
all of the DIP Collateral.
The Prepetition Secured Lenders are also granted an allowed
superpriority administrative expense claim in each of the Chapter
11 Cases and any Successor Cases as provided for in 11 U.S.C
section 507(b).
A final hearing on the matter is set for June 28. 2023 at 2 p.m.
A copy of the order is available at https://urlcurt.com/u?l=C3QMpe
from PacerMonitor.com.
About PGX Holdings, Inc.
PGX Holdings, Inc. and affiliates are credit repair service
providers, helping customers repair their credit and achieve their
credit goals. PGX Holdings help consumers access and understand the
information contained in their credit reports, ensure that the
information contained in those reports is fair, accurate, and
complete, and address other factors that may negatively impact
their credit scores.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10718) on June 4,
2023. In the petition signed by Chad Wallace, chief executive
officer and president, the Debtor disclosed up to $500 million in
assets and up to $10 billion in liabilities.
Judge Craig T. Goldblatt oversees the case.
Kirkland and Ellis LLP, Kirkland and Ellis International LLP, and
300 North LaSalle represents the Debtor as bankruptcy counsel.
The Debtors also tapped Klehr Harrison Harvey Branzburg LLP as
local bankruptcy counsel, Alvarez & Marsal North America, LLC as
financial advisor, Greenhill and Co., LLC as investment banker,
Kurtzman Carson Consultants LLC as notice and claims agent, and
Landis Rath and Cobb as conflicts counsel.
Blue Torch Finance LLC, as administrative agent, is represented
by:
Roger Schwartz, Esq.
Geoffrey King, Esq.
Robert Nussbaum, Esq.
King & Spalding LLP
Avenue of the Americas, 34th Floor
New York, NY 10036
Email: rschwartz@kslaw.com
gking@kslaw.com
rnussbaum@kslaw.com
PHASEBIO PHARMACEUTICALS: Committee Wants Plan Exclusivity Denied
-----------------------------------------------------------------
The official committee of unsecured creditors of PhaseBio
Pharmaceuticals, Inc. asks the U.S. Bankruptcy Court for the
District of Delaware to deny the Debtor's request for an order
extending the exclusive periods to file plan of reorganization and
obtain acceptances thereto by 90 days.
The Debtor is asking the Court to further extend its exclusive plan
filing period through and including August 21, and its exclusive
solicitation period through and including October 18, without
prejudice to the Debtor's right to seek further extensions.
The Committee expresses serious concerns about the Debtor's lack of
meaningful progress towards a consensual plan of liquidation and
the Debtor's exit from the Chapter 11 case to date. From the
Committee's perspective, the Debtor's requested extension
demonstrates a purposeful delay tactic designed to garner
additional leverage for the benefit of the Debtor (and its proposed
release beneficiaries) and, if granted, will only result in further
significant delays in the Chapter 11 Case, all to the severe
detriment of unsecured creditors. And even though there is no
business to administer, the Debtor's directors and officers still
claim entitlement to their own fees, meaning that they continue to
be enriched with each passing day at the expense of unsecured
creditors.
The Committee tells the Court every day a plan is not filed,
solicited, and confirmed in this Chapter 11 Case means accrual of
additional administrative expenses as well as delayed distributions
and diminished recoveries for the Debtor's creditors. Given the
Debtor's precarious administrative solvency, continued
administrative fee burn, and lack of progress to date, the
Committee submits an additional 90-day extension of the Exclusive
Periods is neither necessary nor merited here.
The Committee is represented by:
David R. Hurst, Esq.
David W. Giattino, Esq.
MCDERMOTT WILL & EMERY LLP
1007 North Orange Street, 10th Floor
Wilmington, DE 19801
Telephone: (302) 485-3900
Facsimile: (302) 351-8711
E-mail: dhurst@mwe.com
dgiattino@mwe.com
- and -
Darren Azman, Esq.
Michael Huttenlocher, Esq.
MCDERMOTT WILL & EMERY LLP
One Vanderbilt Avenue
New York, NY 10017
Telephone: (212) 547-5400
Facsimile: (212) 547-5444
E-mail: dazman@mwe.com
mhuttenlocher@mwe.com
- and -
Felicia Gerber Perlman, Esq.
Bradley Thomas Giordano, Esq.
Emily C. Keil, Esq.
MCDERMOTT WILL & EMERY LLP
444 West Lake Street, Suite 4000
Chicago, IL 60606
Telephone: (312) 372-2000
Facsimile: (312) 984-7700
E-mail: fperlman@mwe.com
bgiordano@mwe.com
ekeil@mwe.com
About Phasebio Pharmaceuticals
PhaseBio Pharmaceuticals, Inc. -- https://www.phasebio.com/ -- is
focused on the development and commercialization of novel therapies
to treat orphan diseases, with an initial focus on cardiopulmonary
indications. It is based in Malvern, Pa.
PhaseBio Pharmaceuticals filed a petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Case No. 22-10995) on
Oct. 24, 2022. In the petition filed by its chief executive
officer, Jonathan Mow, the Debtor reported $17,970,000 in assets
and $21,320,000 in debt as of Aug. 31, 2022.
Judge Laurie Selber Silverstein oversees the case.
The Debtor tapped Cooley LLP as lead bankruptcy counsel; Richards,
Layton & Finger, PA as Delaware bankruptcy counsel;
SierraConstellation Partners, LLC as financial advisor; KPMG, LLP
as tax consultant; and Miller Buckfire & Co. as investment banker.
Omni Agent Solutions is the claims, noticing and administrative
agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors in the Debtor's case on Nov. 3, 2022. McDermott
Will & Emery, LLP and FTI Consulting, Inc. serve as the committee's
legal counsel and financial advisor, respectively.
POWER ON INC: Seeks Cash Collateral Access
------------------------------------------
Power On, Inc. asks the U.S. Bankruptcy Court for the Western
District of Texas, Austin Division, for authority to use cash
collateral for expenses set forth on the budget and any other
unforeseeable expenses that may arise and pose a threat to the
Debtor's continued operations.
The Debtor depends on the use of cash collateral for payroll,
insurance, and general operating expenses. Revenue is generated
through Architectural Millwork Installation, the Debtor's
electrical contractor focusing on solar and power backup systems
business.
A search in the Texas Secretary of State shows that allegedly
secured positions are held by Bernard Johnson, Liquidibee 1 LLC and
Forward Financing.
The Debtor entered into agreements with multiple Merchant Cash
Advance lenders as follows:
Lender Amount Advanced Amount Purchased
------ --------------- ----------------
Forward Financing $297,005 $411,000
Liquidibee $148,500 $239,250
Specifically, the Debtor requests authority to use the cash
collateral to pay up to 110% of each expense in the budget, so long
as the total of cash collateral spent during the month does not
exceed by more than 5% of that month's total.
About Power On, Inc.
Power On, Inc. is a residential electrical contractor focusing on
solar and power backup systems.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-10404) on June 7,
2023. In the petition signed by Richard Scardino, director, the
Debtor disclosed $413,618 in assets and $1,637,468 in liabilities.
Judge Shad Robinson oversees the case.
Robert C. Lane, Esq., at the Lane Law Firm, represents the Debtor
as legal counsel.
PRESTIGE CONSTRUCTION: Anderson's Contribution to Fund Plan
-----------------------------------------------------------
Prestige Construction Group of Texas, LLC, submitted an Amended
Plan of Reorganization dated June 8, 2023.
The Debtor filed this case on January 31, 2023 and has been able to
complete a number of projects since that time. The Debtor will be
unable to complete the remaining projects unless this Plan is
accepted by the creditors and the Debtor is allowed to complete the
remaining projects.
The Debtor originally proposed a Plan which would have the Debtor
to continue in operations and complete projects. In order for that
Plan to succeed the requisite number of customers would have needed
to allow the Debtor to complete their projects. Unfortunately, the
requisite number did not vote to allow the Debtor to complete their
projection to made the original Plan feasible.
As a result, the Debtor is proposing this amended plan. Under this
Plan, the Debtor's principal Cory Anderson will commit personal
funds to fund the payment under the Plan.
Class 4 shall consist on all creditors with claims against the
Debtor. All Class 4 creditors shall share pro rata in the unsecured
creditors pool. The unsecured Class 4 creditors pool shall consist
of monthly payments in the amount of $2,500. These payments will
come from Cory Anderson personally. The Debtor shall make
distributions to the Class 4 creditors commencing 90 days after the
first payment into the unsecured creditors pool. The Debtor shall
make 36 payments into the unsecured creditors pool. The Class 4
creditors are impaired under this Plan.
The current owner will receive no payments under the Plan, however,
he will be allowed to retain his ownership in the Debtor.
Debtor anticipates that there will not be continued operations of
the business. The Plan will be wholly funded by contributions from
Cory Anderson personally. Cory Anderson will guaranty all payments
under the Plan.
A full-text copy of the Amended Plan dated June 8, 2023 is
available at https://urlcurt.com/u?l=ic7OfX from PacerMonitor.com
at no charge.
Proposed Attorneys for Debtor:
Eric A. Liepins, Esq.
Eric A. Liepins, PC
12770 Coit Road, Suite 850
Dallas, TX 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
Email: eric@ealpc.com
About Prestige Construction Group of Texas
Prestige Construction Group of Texas, LLC, a company in Prosper,
Texas, filed its voluntary petition for Chapter 11 protection
(Bankr. E.D. Tex. Case No. 23-40170) on Jan. 31, 2023, with up to
$50,000 in assets and $1 million to $10 million in liabilities.
Cory Anderson, managing member of Prestige, signed the petition.
Judge Brenda T. Rhoades oversees the case.
Eric A. Liepins, PC, serves as the Debtor's legal counsel.
PRIMAL MATERIALS: Case Summary & Nine Unsecured Creditors
---------------------------------------------------------
Debtor: Primal Materials, LLC, a Texas limited liability company
4695 S 14th St
Abilene, TX 79605-4734
Business Description: Primal Materials is a locally owned and
operated company, providing dirt moving and
excavation services for ranchers and new
construction sites in the Big Country
surrounding Abilene, Texas.
Chapter 11 Petition Date: June 12, 2023
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 23-10081
Judge: Hon. Robert L. Jones
Debtor's Counsel: Joseph F. Postnikoff, Esq.
ROCHELLE MCCULLOUGH, LLP
300 Throckmorton St Ste 520
Fort Worth TX 76102-2929
Tel: (817) 347-5260
Email: jpostnikoff@romclaw.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Victor John Hirsch, III as
member/manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's nine unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/HFL2YGQ/Primal_Materials_LLC_a_Texas_limited__txnbke-23-10081__0001.0.pdf?mcid=tGE4TAMA
PRIME PLUMBING: Case Summary & Eight Unsecured Creditors
--------------------------------------------------------
Debtor: Prime Plumbing Services, LLC
1646 Oakbrook Drive
Gainesville, GA 30507
Business Description: The Debtor is a building equipment
contractor.
Chapter 11 Petition Date: June 13, 2023
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 23-20661
Judge: Hon. James R. Sacca
Debtor's Counsel: Douglas Jacobson, Esq.
LAW OFFICES OF DOUGLAS JACOBSON, LLC
11539 Park Woods Circle
Suite 304
Alpharetta, GA 30005
Tel: 678-341-9114
Fax: 888-990-1740
Email: douglas@douglasjacobsonlaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by James Coberly as sole member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's eight unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/DSFFK2Q/Prime_Plumbing_Services_LLC__ganbke-23-20661__0001.0.pdf?mcid=tGE4TAMA
PROJECT BOOST: Fitch Affirms LongTerm IDR at 'B', Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) of Project Boost Purchaser, LLC and its parent Boost Parent,
LP (d/b/a J.D. Power) at 'B'. The Rating Outlook is Stable. Fitch
has also affirmed the company's first-lien senior secured revolver
and term loan at 'BB-'/'RR2'.
J.D. Power has valuable data sets and strong customer
relationships. Fitch projects stable and strong FCF generation over
the rating horizon. Leverage will likely remain in the range of
6.0x to 7.0x, but the strong fundamentals limit credit default risk
compared with other issuers in Fitch's 'B-' to 'B' coverage
universe.
KEY RATING DRIVERS
High Leverage: High leverage is a limiting factor for the IDR, but
it is improving. The company finished 2022 with Fitch-calculated
leverage just below 7.0x, down from 8.0x at the end of 2021.
Leverage could continue to drop in the coming year, simply as a
result of EBITDA growth that is partially supported by a highly
recurring business model with significant cash flow predictability.
However, Fitch believes leverage will remain high due to additional
M&A and/or cash distributions to shareholders. The credit agreement
provides significant flexibility to increase leverage, with
relatively lenient maintenance covenants.
Focus on M&A: Fitch expects J.D. Power will continue to prioritize
its cash for M&A in the future, with a focus on higher margin data
and analytics capabilities. The company has aggressively used its
balance sheet to consolidate industry players since the 2019 merger
of J.D. Power and Autodata Solutions Group, Inc. The rapid pace of
acquisitions in recent years enabled the company to meaningfully
increase its scale but presents credit risk given the high leverage
profile and integration risks.
Liquidity, Maturity Risk Limited: Fitch views liquidity and
maturity risk as limited in the medium term despite continued macro
concerns. Even in a stressed scenario, Fitch believes J.D. Power
could generate EBITDA of $200 million or higher per year. Higher
interest expense will reduce FCF, but the company should have
sufficient headroom. It also has a $80 million secured revolver
that provides additional flexibility. Maturity risk is also limited
given its current debt structure was put in place in 2019 with the
merger, and its nearest term loan maturity is 2026.
Increased Scale: Fitch views increased scale and diversification
into new data and analytics solutions as positive for the rating.
The company is projecting annual revenue of more than $650 million
and EBITDA above $300 million for 2023. Fitch believes J.D. Power's
increased scale could help strengthen its overall competitive
position. However, customer concentration risk remains, which is
negative for the rating.
Critical, Industry Embedded Data Sets: Fitch believes J.D. Power's
data sets are critical to its customers' workflows and are
difficult to replicate. This is evidenced by more than 75% of its
customers having tenure of 10 or more years and net customer
revenue retention that has been above 100%. Its products are highly
embedded in the decision-making processes, with multiple customer
touch points across the value chain. J.D. Power's offerings outside
of auto to industries such as financial services, and utilities are
less entrenched but provide some diversification.
Recurring Revenue Business Model: Subscription-based revenue
constitutes the majority of the mix (more than 75% of sales), which
Fitch believes provides significant visibility and stability to FCF
generation. A meaningful portion of customers operate under annual
or multiyear contracts, and net revenue retention has been high
historically and more than 100%. The company also has limited
working capital and capex requirements, which translates to strong
FCF conversion metrics that Fitch projects could be near 40% or
more of EBITDA in the coming years.
Concentrated Exposure to Cyclical Market: The business is heavily
reliant on the auto industry, constituting more than 75% of revenue
including manufacturers (Ford Motor Company, General Motors
Company, and others), dealers and suppliers. J.D. Power experienced
a roughly 13% revenue decline during the 2008-2009 recession, and
adjusted EBITDA margin contracted to 10% from 12% while legacy
Autodata sales fell in the high single-digit percentage range.
DERIVATION SUMMARY
Fitch's IDR reflects J.D. Power's position as a market leader in
data and analytics solutions for the automotive industry, with
strong market share and high brand awareness among industry
participants. The company has a growing top-line largely composed
of recurring revenues, strong EBITDA margins in the mid-40% range
and a solid FCF generation profile. Each of these attributes
positions it well versus other data/analytics companies Fitch
reviews.
These factors are partially offset by lack of end-market
diversification (a majority of its business is exposed to auto),
cyclicality inherent in the auto industry, customer concentration
and high financial leverage. Gross leverage near 7.0x has improved
due to the company's strong recent results. Leverage and lack of
diversification are key limiting factors that Fitch believes
positions the IDR in the 'B' rating category.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for The Issuer:
- Organic revenue growth for the core sectors ranging from 5% to 7%
for the next several years;
- Fitch assumes stable margins over the next several years;
- FCF remains relatively strong over the rating horizon;
- Fitch has not modelled additional M&A, but believes the company
will allocate the majority of its excess cash flow to incremental
acquisitions.
Recovery Assumptions:
For entities rated 'B+' and below, where default is closer and
recovery prospects are more meaningful to investors, Fitch
undertakes a tailored, or bespoke, analysis of recovery upon
default for each issuance. The resulting debt instrument rating
includes a Recovery Rating or published 'RR' (graded from 'RR1' to
'RR6') and is notched from the IDR accordingly. In this analysis,
there are three steps: (i) estimating the distressed enterprise
value (EV); (ii) estimating creditor claims; and (iii) distribution
of value. Fitch assumes J.D. Power would emerge from a default
scenario under the going concern approach versus liquidation.
Key assumptions used in the recovery analysis are as follows:
Fitch envisions a hypothetical situation including missteps
following an acquisition that results in the loss of several large
clients as well as the revenue associated with the recently
acquired firm. Significant revenue loss in this scenario could
result in the inability to service the debt.
- Fitch estimates going concern EBITDA of $215 million, which is
almost 30% below pro forma EBITDA including recent acquisitions;
- Fitch assumes an 8.0x multiple, which is in-line with its
assessment of historical trading multiples in the data & analytics
industry, sector M&A, and historic bankruptcy emergence multiples
Fitch has observed in the technology, media and telecom (TMT)
sectors.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Leverage sustained at or below 6.0x;
- (CFO -- Capex)/Debt above 7.5% on a sustained basis.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Fitch could downgrade the IDR if leverage is expected to remain
above 7.5x for a sustained period;
- Interest coverage sustained below 2.0x
- Adverse operating performance, material changes to industry
dynamics and/or the loss of a key customer that meaningfully alters
the overall operating profile;
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: J.D. Power has sufficient liquidity to
navigate its business even through a moderate downturn. The pace of
M&A will likely be a determining factor in the level of liquidity
over time. The company had ~$200 million of cash at the end of
2022, and Fitch projects FCF of more than $100 million in 2023
(assuming no dividends). Liquidity is further supported by a
first-lien, senior secured $80 million, undrawn revolver. Fitch
estimates FCF could range from $100 million to $150 million per
year over the next few years.
Debt Profile: The company's debt structure consists of a mix of
first-lien secured term loans ($1.6 billion, or 79% of debt) and
second-lien term loans ($415 million, or 21% of debt). The company
also has an $68 million first-lien secured revolver in place that
is undrawn. All of its debt is floating rate and matures in
2026-2027.
ISSUER PROFILE
J.D. Power is a market leader in data and analytics solutions for
the automotive industry, with high market share and brand awareness
among industry participants. It is privately owned by Thoma Bravo.
ESG CONSIDERATIONS
Boost Parent, LP has an ESG Relevance Score of '4' for Governance
Structure due to private equity ownership, which has a negative
impact on the credit profile, and is relevant to the ratings in
conjunction with other factors.
Project Boost Purchaser, LLC has an ESG Relevance Score of '4' for
Governance Structure due to private equity ownership, which 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.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Boost Parent, LP LT IDR B Affirmed B
Project Boost
Purchaser, LLC LT IDR B Affirmed B
senior secured LT BB- Affirmed RR2 BB-
PROPPANT TECH: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Proppant Tech Services, LLC
21480 Applewhite Rd
San Antonio TX 78264
Chapter 11 Petition Date: June 11, 2023
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 23-50734
Debtor's Counsel: Brandon J. Tittle, Esq.
GLAST, PHILLIPS & MURRAY, P.C.
14801 Quorum Dr., Suite 500
Dallas Texas 75254
Tel: 972-419-7186
Email: btittle@gpm-law.com
Debtor's
Financial
Advisor: LANE GORMAN TRUBITT, LLC
Total Assets as of March 31, 2023: $8,622,400
Total Liabilities as of March 31, 2023: $8,770,018
The petition was signed by Anirban Haldar as member.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/J34WIAQ/Proppant_Tech_Services_LLC__txwbke-23-50734__0003.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/XXJHI4Q/Proppant_Tech_Services_LLC__txwbke-23-50734__0001.0.pdf?mcid=tGE4TAMA
QUANTUM CORP: Incurs $37.9 Million Net Loss in FY Ended March 31
----------------------------------------------------------------
Quantum Corporation filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$37.94 million on $412.75 million of total revenue for the year
ended March 31, 2023, compared to a net loss of $32.28 million on
$372.83 million of total revenue for the year ended March 31,
2022.
As of March 31, 2023, the Company had $213.65 million in total
assets, $300.54 million in total liabilities, and a total
stockholders' deficit of $86.89 million.
Quantum said, "The Company generated negative cash flows from
operations of approximately $4.9 million, $33.7 million and $0.8
million for the fiscal years ended March 31, 2023, 2022 and 2021,
respectively, and generated net losses of approximately $37.9
million, $32.3 million, and $35.5 million for the fiscal years
ended March 31, 2023, 2022 and 2021, respectively. The Company has
funded operations through the sale of common stock, term debt
borrowings and revolving credit facility borrowings...Management
believes that it has the ability to obtain additional debt or
equity financing, if required, and has historically been able to do
so. Management also believes that current working capital,
borrowings available under the revolving credit facility and future
equity financing or debt financing... will provide the Company with
sufficient capital to fund operations for at least one year from
the consolidated financial statement issuance date. There is no
assurance that the Company would be able to obtain sufficient
additional funds when needed or that such funds, if available,
would be obtainable on terms satisfactory to the Company."
Management Commentary
"We ended fiscal 2023 with positive momentum as fourth quarter
revenue and EBITDA results exceeded our guidance on improved
operational execution," said Jamie Lerner, chairman and CEO of
Quantum. "We also began to see increased stability across the
supply chain through greater availability of parts and lower
inflationary costs. Additionally, our focused efforts to improve
working capital and decrease inventory yielded positive results as
we continue to carefully manage cash flow."
"Having weathered a macro environment marked by a global pandemic,
supply chain challenges, and disruptive inflation, we are beginning
to see signs of improvement across our business. As we continue to
chart our business transformation for improved performance,
subsequent to the end of the fourth quarter, we implemented a
global efficiency plan that includes a cost reduction action which
we expect to yield approximately $14 million in annualized savings
by the end of fiscal year 2025, with a payback of under six months.
Also, to support greater operational flexibility in the near term,
we proactively secured an additional $15 million of liquidity and
greater covenant flexibility from our current lenders to capitalize
on the cost savings initiative and position the company for growth
as we bring our recent product innovations to market."
"These actions, combined with our focus on the fastest-growing
storage market segment and our investment in sales and marketing to
drive future growth, further bolster our business transformation
strategy. Although we anticipate the first fiscal quarter to be
seasonally lower, we expect a resumption of revenue rotation to
higher margin products and EBITDA expansion throughout the
remainder of the year."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/709283/000070928323000013/qtm-20230331.htm
About Quantum Corp.
Based in San Jose, California, Quantum Corp. (NYSE:QTM) --
http://www.quantum.com-- provides technology and services that
stores and manages video and video-like data delivering streaming
for video and rich media applications, along with low cost, high
density massive-scale data protection and archive systems. The
Company helps customers capture, create and share digital data and
preserve and protect it for decades.
Quantum reported a net loss of $32.28 million for the year ended
March 31, 2022, a net loss of $35.46 million for the year ended
March 31, 2021, and a net loss of $5.21 million for the year ended
March 31, 2020. As of Sept. 30, 2022, the Company had $209.68
million in total assets, $289.02 million in total liabilities, and
a total stockholders' deficit of $79.34 million.
* * *
This concludes the Troubled Company Reporter's coverage of Quantum
Corp. until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
REMODEL 615: Amends SBA Secured Claims Pay Details
--------------------------------------------------
Remodel 615, LLC, Robert Baughman, and Noah Stewart submitted a
First Amended Joint Plan of Reorganization dated June 8, 2023.
This First Amended Plan is Debtors' comprehensive proposal intended
to balance honoring their obligations to creditors while
restructuring their finances in a manner sufficient to ensure
continuation of the business
Class 3 consists of the Allowed Claim of the SBA, secured by valid,
perfected, first priority liens on substantially all assets of
Debtor Remodel 615, LLC as more particularly described in the
documents creating and perfecting the liens (the "Class 3
Collateral"). During the course of this Chapter 11 case, Debtor has
been making monthly payments to the SBA of $3,303.00 which are in
excess of the amounts due under the SBA loan documents (which
require only $303.00 in interest-only payments for a 30-year
period).
In this First Amended Plan, Debtors propose to make the interest
only payments during the Commitment Period, with the SBA to retain
its first lien position at the end of the Commitment Period. This
allows additional funds to move to the unsecured creditors, while
maintaining the contract terms of the SBA loan (and in fact
exceeding them because Debtors have been outperforming the contract
terms during the course of this Chapter 11 case). Debtors assert
that the SBA is not impaired under the First Amended Plan.
During the Commitment Period, Remodel 615 shall make payments in
the amount of $303.00/month per section 3 of the SBA Note. The
Class 3 Claimant shall retain its lien on the Class 3 Collateral,
and such lien retention shall continue after the end of the
Commitment Period until the SBA is paid in full.
Class 4 consists of the Allowed Claims of NEWCO Capital Group VI,
LLC; Fox Capital Group, Inc., IOU Central, Inc., Small Business
Financial Solution, LLC (d/b/a Rapid Finance), and Intuit
Financing, Inc. The Class 4 Creditors assert that they are secured
creditors, but based on the value of Debtor's collateral, and given
the first-position SBA claim ahead of the Class 4 claims, the
Debtors assert that the Class 4 creditors are entirely unsecured,
and accordingly this First Amended Plan proposes to treat the Class
4 creditors on par with the Class 10 Unsecured Claims.
Class 10 consists of all Unsecured Claims against Debtor Remodel
615, LLC, including Deficiency Claims. This includes all Unsecured
Claims against Remodel 615 for which Robert Baughman and/or Noah
Stewart are also liable. Each Holder of an Allowed Class 10 Claim
shall be paid its Pro Rata portion of Debtor Remodel 615, LLC's
Disposable Income in quarterly disbursements during the Commitment
Period, with the first such payment due on the Effective Date.
Class 11 consists of all Unsecured Claims against Debtor Robert
Baughman that are not included in another Class. Each Holder of an
Allowed Class 11 Claim shall be paid its Pro Rata portion of Debtor
Robert Baughman's Disposable Income in quarterly disbursements
during the Commitment Period, with the first such payment due on
the Effective Date.
Class 12 consists of all Unsecured Claims against Debtor Noah
Stewart that are not included in another Class. Each Holder of an
Allowed Class 12 Claim shall be paid its Pro Rata portion of Debtor
Noah Stewart's Disposable Income in quarterly disbursements during
the Commitment Period, with the first such payment due on the
Effective Date.
The Debtors shall use proceeds from operations to pay all required
payments on the Effective Date and all payments due under the Plan
on an on-going basis.
A full-text copy of the First Amended Joint Plan dated June 8, 2023
is available at https://urlcurt.com/u?l=X1fa2x from
PacerMonitor.com at no charge.
Attorneys for Debtors:
Michael G. Abelow
Robert J. Mendes
SHERRARD ROE VOIGT & HARBISON, PLC
150 3rd Avenue South, Suite 1100
Nashville, Tennessee 37201
Telephone: (615) 742-4532
About Remodel 615
Remodel 615, LLC, a company in Murfreesboro, Tenn., sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
M.D. Tenn. Case No. 23-00435) on February 6, 2023. In the petition
signed by Robert Adam Baughman, sales and marketing director and
co-owner, the Debtor disclosed up to $500,000 in assets and up to
$10 million in liabilities.
Judge Randal S. Mashburn oversees the case.
The Debtor tapped Michael G. Abelow, Esq., at Sherrard Roe Voigt &
Harbison, PLC as bankruptcy counsel; Bradley Arant Boult Cummings,
LLP as special construction counsel; and Moglia Advisors as
financial advisor.
RLI SOLUTIONS: Mediation Delays Filing of Chapter 11 Plan
---------------------------------------------------------
The Hon. Gregory L. Taddonio of the U.S. Bankruptcy Court for the
Western District of Pennsylvania granted RLI Solutions Company's
request for extension of its exclusive periods within which to file
a Chapter 11 plan and disclosure statement and to solicit
acceptances thereof.
Specifically, the exclusive period for which only the Debtor may
file a Chapter 11 Plan is extended for 20 days from the date the
parties file a report of mediation. The exclusive period for which
only the Debtor may solicit acceptance and seek confirmation of a
Chapter 11 Plan is extended for 60 days following the filing of the
Chapter 11 plan.
RLI Solutions said it has been diligently working to try and
maximize value to pay its creditors. The Debtor also has been
working with several creditors regarding adequate protection
arrangements.
The Debtor also disclosed it is engaged in an Adversary Proceeding,
docketed at 22-02067-GLT, with Norman Lane (POC #26), to recover
money that was fraudulently transferred. The parties are currently
in discovery.
The Debtor and Norman Lane have agreed to enter into Mediation to
attempt to resolve their disputes.
The Debtor is also continuing to investigate the other claims filed
in this bankruptcy.
The new extension order directs the Debtor to file a status report
with the Court on or before August 31, 2023 unless, prior to that
time, a final mediation report is submitted that concludes the
mediation process.
About RLI Solutions Company
RLI Solutions Company, doing business as Ronald Lane Inc., sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
W.D. Pa. Case No. 22-21375) on July 17, 2022, listing as much as
$10 million in both assets and liabilities. Christopher Lane,
president of RLI Solutions Company, signed the petition.
Judge Thomas P. Agresti oversees the case.
Donald R. Calaiaro, Esq., at Calaiaro Valencik is the Debtor's
legal counsel.
SAN JORGE CHILDREN'S: Has Deal on Cash Collateral Access
--------------------------------------------------------
San Jorge Children's Hospital Inc. and Oriental Bank advised the
U.S. Bankruptcy Court for the District of Puerto Rico that they
have reached an agreement regarding the Debtor's use of cash
collateral and now desire to memorialize the terms of this
agreement into an agreed order.
The parties agree the Debtor may continue using cash collateral up
to August 31, 2023.
All terms, requirements, acknowledgments, assurances, and adequate
protection remedies already granted to the secured creditor and
approved by the Court regarding its rights and claim will remain
unaltered as specifically detailed in the Stipulation for the
interim use of cash collateral dated November 1, 2022, and the Cash
Collateral Order dated November 11, 2022.
A copy of the motion is available at https://urlcurt.com/u?l=Bpq0jz
from PacerMonitor.com.
About San Jorge Children's Hospital
San Jorge Children's Hospital, Inc. operates a hospital
specializing in pediatrics in San Juan, P.R.
San Jorge Children's Hospital filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case
No. 22-02630) on Sept. 1, 2022, with between $10 million and $50
million in both assets and liabilities. Edward P. Smith, chief
operating officer, signed the petition.
Judge Maria De Los Angeles Gonzalez presides over the case.
The Debtor tapped Wigberto Lugo Mender, Esq., at Lugo Mender Group,
LLC as bankruptcy counsel and Galindez, LLC as external auditor.
Cardona Jimenez Law Offices, P.S.C. represents the official
committee of unsecured creditors appointed in the Debtor's case.
SANDY ROAD: Gets OK to Hire Seigfreid Bingham as Substitute Counsel
-------------------------------------------------------------------
Sandy Road Farms, LLC received approval from the U.S. Bankruptcy
Court for the District of Kansas to employ Seigfreid Bingham, P.C.
to substitute for McDowell, Rice, Smith & Buchanan.
The Debtor requires legal counsel to:
a. give advice with respect to the powers and duties of the
Debtor in the continued management and operation of its business
and properties;
b. attend meetings and negotiate with representatives of
creditors and other parties involved in the Debtor's Chapter 11
case on matters affecting the Debtor's business operations, claims
by and against the estate, and issues relating to the
reorganization;
c. prepare legal documents;
d. take all necessary action to protect and preserve Debtor's
estate including the prosecution of actions on its behalf, the
defense of any actions commenced against Debtor or the estate,
negotiations concerning litigation in which the Debtor may be
involved and objections to claims filed against the estate;
e. attend all hearings and advocate Debtor's positions on the
applicable issues, negotiate and prosecute on the Debtor's behalf,
contracts, lease agreements and all necessary documents;
f. formulate, negotiate, and seek approval of any disclosure
statements and plans of reorganization;
g. handle all appeals of the Debtor and appear before any
appellate courts;
h. address all requirements of the Office of the United States
Trustee in this proceeding; and
i. perform all other necessary legal services.
The firm will be paid at these rates:
Jonathan A. Margolies $505 per hour
Robert D. Maher $450 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Jonathan Margolies, Esq., a partner at Seigfreid Bingham, 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:
Jonathan A. Margolies, Esq.
Seigfreid Bingham, P.C.
2323 Grand Boulevard, Suite 1000
Kansas City, MO 64108
Telephone: (816) 421-4460
Facsimile: (816) 474-3447
Email: jmargolies@sb-kc.com
About Sandy Road Farms
Sandy Road Farms, LLC owns and previously operated a head hog farm
based in Plains, Kansas. Situated in Seward and Meade Counties, the
production facilities consist of numerous buildings and barns for
commercial breeding, farrowing, nursery, feeding, and preparation
for market. The facilities are spread out over 15 farm locations.
Sandy Road Farms sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Kan. Case No. 22-40446) on Aug. 1, 2022,
with $1 million to $10 million in assets and $50 million to $100
million in liabilities. Glenn Karlberg, manager and chief
restructuring officer, signed the petition.
Judge Dale L. Somers oversees the case.
Jonathan A. Margolies, Esq., at Seigfreid Bingham, P.C. serves as
the Debtor's legal counsel.
SCUNGIO BORST: Exclusivity Period Extended to September 20
----------------------------------------------------------
The Hon. Ashely M. Chan of the U.S. Bankruptcy Court for the
Eastern District of Pennsylvania extended Scungio Borst &
Associates, LLC's exclusive periods within which to file a Chapter
11 plan and to solicit acceptances thereof to September 20 and
November 19, 2023, respectively.
Absent an extension, the Debtor's plan exclusivity period was
slated to expire May 8 and its exclusive solicitation period July
5.
In seeking an extension, the Debtor explained it will negotiate in
good faith with the Official Committee of Unsecured Creditors for a
consensual plan of liquidation.
About Scungio Borst & Associates
Camden, N.J.-based Scungio Borst & Associates, LLC is a worldwide
construction services firm specializing in general construction,
consulting and project management.
Scungio Borst & Associates filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No.
22-10609) on March 11, 2022, listing as much as $50 million in both
assets and liabilities. Judge Ashely M. Chan oversees the case.
Judge Ashely M. Chan oversees the case.
Aris J. Karalis, Esq., at Karalis, PC and Bochetto & Lentz, PC
serve as the Debtor's bankruptcy counsel and special litigation
counsel, respectively.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors in the Debtor's case on April 11,
2022. The committee is represented by Obermayer Rebmann Maxwell &
Hippel, LLP.
SOLER & SOLER: Unsecureds Will Get 1.26% of Claims in Plan
----------------------------------------------------------
Soler & Soler Hauling, Inc., filed with the U.S. Bankruptcy Court
for the Southern District of Florida a Plan of Reorganization dated
June 8, 2023.
The Debtor is a small, family-owned, Florida corporation that was
incorporated in 2011. The Debtor is a trucking company.
Its owners are brothers Edisley Soler Negrin (52% stock ownership)
and Elisbel Soler Negrin (48% stock ownership). Due to a variety of
factors, including without limitation, unfavorable payment terms
with certain vendors, a general downturn in business revenue, and
the COVID-19 pandemic, the Debtor has been unable to service its
unsecured debt.
In addition, the Debtor became unable to service its obligations
under a Truck Lease and Service Agreement ("TLSA") with Ryder Truck
Rental, Inc., d/b/a Ryder Transportation Services ("Ryder"). Prior
to the Petition Date, the Debtor leased 38 vehicles from Ryder,
which were used in the ordinary course of the Debtor's business. As
a result, the Debtor was in default under the TLSA, and Ryder has
asserted that the TLSA was terminated prior to the Petition Date.
Ryder has asserted that such default resulted in a payment
obligation to Ryder in excess of $4.5 million.
The Debtor's financial projections show that the Debtor will have
projected disposable income of $4,493.95. The final Plan payment is
expected to be paid on August 1, 2028.
Creditors will receive payment from the Debtor from the cash flow
of the Debtor's operations for a period of 5 years.
This Plan provides for 1 class of priority claims, 4 classes of
secured claims, 1 class of nonpriority unsecured claims and 1 class
of equity security holders. General unsecured creditors holding
allowed claims will receive distributions, which the Debtor has
valued at approximately 1.2613 cents on the dollar. This Plan also
provides for the payment of administrative and priority claims.
Class 7 consists of all allowed general unsecured claims. The Class
7 Creditors shall share pro rata in a total distribution in the
amount of $60,000.00. Any allowed general unsecured claimant
scheduled to receive a total distribution of $250.00 or less shall
be paid in a lump sum on the First Payment Date. The Debtor
estimates that the lump sum payment(s) will total $119.33.
Any allowed general unsecured claimants scheduled to receive a
total distribution of more than $250.00 shall receive payment over
5 years (60 months), in 20 quarterly payments totaling $2,994.03
per payment, with the first payment due on the First Payment Date
and continuing on the first day of every quarter thereafter.
Unsecured creditors will be receiving a distribution of
approximately 1.2613% of their allowed claim(s), which is an amount
in excess of what claimants would receive in a hypothetical Chapter
7 proceeding, in which case such claimants would receive 0.00%. The
allowed unsecured claims total $4,756,818.19.
All Equity Security Holders of the Debtor will retain their
interest(s) in the Debtor as such interest(s) existed prior to the
Petition Date, with Edisley Soler Negrin retaining a 52% stock
interest and Elisbel Soler Negrin retaining a 48% stock interest.
The means necessary for the implementation of this Plan include the
Debtor's cash flow from operations for a period of 5 years. The
Debtor's financial projections show that the Debtor will have
sufficient cash over the life of the Plan to make the required Plan
payments and operate its business. The estimated cash on hand
necessary as of the First Payment Date of this Plan is $70,000.00.
A full-text copy of the Plan of Reorganization dated June 8, 2023
is available at https://urlcurt.com/u?l=lQltNR from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Timothy S. Kingcade, Esq.
KINGCADE, GARCIA & MCMAKEN, P.A.
1370 Coral Way
Miami, FL 33145
Telephone: (305) 285-9100
Email: scanner@miamibankruptcy.com
Zach B. Shelomith, Esq.
LSS LAW
2699 Stirling Road, Suite C401
Ft. Lauderdale, FL 33312
Tel: (954) 920-5355
Fax: (954) 920-5371
Email: zbs@lss.law
Soler & Soler Hauling
Soler & Soler Hauling, Inc. is a family-owned cargo hauling company
that operates interstate in 48 states. Cargo hauled by the company
includes fresh produce, general freight, metal sheet, building
materials, grain feed hay, coal, meat, refrigerated food,
beverages, and paper products.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-11917) on March 10,
2023. In the petition signed by Edisley Soler Negrin, its
president, the Debtor disclosed $1,187,949 in assets and $5,946,472
in liabilities.
Judge Laurel M. Isicoff oversees the case.
Timothy S. Kingcade, Esq., at Kingcade, Garcia, and McMaken, P.A.,
represents the Debtor as legal counsel.
SRPC PROPERTIES: Seeks Cash Collateral Access
---------------------------------------------
SRPC Properties, LLC asks the U.S. Bankruptcy Court for the
District of Wyoming for authority to use cash collateral and
setting a final hearing.
The Debtor requires cash collateral to continue its operations.
The primary focus of the Debtor's operations is to subsequently
lease its properties, which all consist of residential housing, and
generate rental income to then service the debt that was incurred
in order to purchase the investment properties.
The Debtor owns four different investment properties, albeit one of
the properties is a single parcel of real estate upon which sits
three different, separate, housing units:
a. Cascade Property
1. Community Loan Servicing, LLC holds a first lien/deed of
trust on this property and is owed approximately $576,000. Because
the Debtor is not the primary obligor on this debt, the Debtor does
not have access to the underlying loan documents. Nonetheless, it
is presumed that Community Loan Servicing, LLC has been granted an
assignment of rents against the property.
2. Jump and Shout, LLC, the primary obligor to Community Loan
Servicing, LLC, holds a second lien/deed of trust on this property
and is owed approximately $350,000. Jump and Shout, LLC has been
granted an assignment of rents against the property.
b. Corpus Christi Property
1. Planet Home Lending is presumed to have a first lien/deed
of trust on the property located at 10638 Kingwood Dr, Corpus
Christi, TX 78410 and is owed $82,300. The Debtor has attempted to
confirm the status of this lien, but has been unable to obtain the
requisite documentation. The Debtor will treat Planet Home Lending
as a secured lender, with an assignment of rents against the
property, but reserves the right to treat its obligation
differently if documents demonstrate that Planet Home Lending is
not a secured lender.
2. Winpro Funds, LLC has a first lien/deed of trust against
the properties located at 1645, 1649 and 1653 14th Street, Corpus
Christi, TX 78410 and is owed approximately $294,770. Winpro Funds,
LLC has been granted an assignment of rents against the property.
c. Pueblo Property
1. Emerald Isle Lending Company has a first lien/deed of trust
against this property and is owed approximately $171,620. Emerald
Isle Lending Company has been granted an assignment of rents
against the property.
d. Accounts
1. The Debtor has a commercial loan with Bankers Healthcare
Group, LLC. Bankers lent the Debtor $224,995. The purpose of the
loan was for working capital in order for the Debtor to attempt to
restructure its debt with Jump and Shout, LLC, and to enhance the
value of its properties through major improvements. Bankers has a
UCC-1 and its debt is secured by the Debtor's "Accounts" (including
cash) amongst other collateral. Bankers may have assigned its loan
to Peoples Bank.
To provide adequate protection for the Debtor's use of cash
collateral, the Debtor proposes to grant adequate protection for
each secured creditors interest in the cash collateral. In
particular, the Debtor will continue to pay its secured creditors
in the ordinary course of business and provide its secured
creditors post-petition liens on all rents and post-petition cash,
to the extent the use of such cash collateral results in a decrease
in the value of the creditor's interest pursuant to 11 U.S.C.
section 361(2). All replacement liens will hold the same relative
validity and priority in the Debtor's assets and cash collateral as
did the pre-petition liens.
A copy of the motion is available at https://urlcurt.com/u?l=ieluyd
from PacerMonitor.com.
A copy of the budget is available at https://urlcurt.com/u?l=GZbIIw
from PacerMonitor.com.
About SRPC Properties, LLC
SRPC Properties, LLC is in the business of purchasing investment
properties.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Wyo. Case No. 23-20180) on May 25, 2023.
In the petition signed by Shirley Carson, member, the Debtor
disclosed $2,694,635 in assets and $1,725,437 in liabilities.
Bradley T. Hunsicker, Esq., at Markus Williams Young and Hunsicker,
represents the Debtor as legal counsel.
STRUCTURLAM MASS: Committee Taps Buchalter as Lead Counsel
----------------------------------------------------------
The official committee of unsecured creditors of Structurlam Mass
Timber U.S., Inc. and its affiliates received approval from the
U.S. Bankruptcy Court for the District of Delaware to employ
Buchalter, P.C. as lead bankruptcy counsel.
The committee requires legal counsel to:
(a) negotiate with the Debtors and other parties involved in
their Chapter 11 cases on any proposed bankruptcy plan or exit
strategy for the cases;
(b) attend meetings of the committee;
(c) review financial and operational information furnished by
the Debtors to the committee;
(d) analyze and negotiate the budget and the terms and use of
the debtor-in-possession financing and cash collateral
arrangement;
(e) assist in the Debtors' efforts to market and sell their
assets in a manner that maximizes value for creditors;
(f) confer with the Debtors' management, counsel, and financial
advisor and any other retained professional;
(g) confer with the principals, counsel, and advisors of the
Debtors' lenders and equity holders;
(h) review the Debtors' schedules, statements of financial
affairs, and business plan;
(i) advise the committee as to the ramifications regarding all
of the Debtors' activities and motions before this court;
(j) review and analyze the Debtors' financial advisors' work
product and report to the committee;
(k) investigate and analyze certain of the Debtors'
pre-bankruptcy conduct, transactions, and transfers;
(l) provide the committee with legal advice;
(m) prepare various pleadings to be submitted to the court for
consideration; and
(n) perform other necessary legal services for the committee.
The firm will be paid at these rates:
Julian Gurule, Shareholder $895 per hour
Khaled Tarazi, Associate $495 per hour
Dakota Pearce, Associate $450 per hour
Nicholas Couchot, Associate $440 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Julian Gurule, Esq., a partner at Buchalter, disclosed in a court
filing that his 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,
Buchalter 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 postpetition, explain the
difference and the reasons for the difference.
Response: Not applicable.
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: The committee and its counsel are currently
formulating a budget and staffing plan that is consistent with the
U.S. Trustee Guidelines, recognizing that in the course of complex
and fast-moving Chapter 11 cases such as the Debtors' cases, there
is the potential for a number of unforeseen circumstances that will
need to be addressed by the committee and its counsel giving rise
to additional fees and expenses.
The firm can be reached through:
Julian I. Gurule, Esq.
Buchalter, P.C.
18400 Von Karman Ave., Suite 800
Irvine, CA 92612
Tel: (949) 760-1121
Email: jgurule@buchalter.com
About Structurlam Mass Timber U.S.
Structurlam Mass Timber U.S., Inc. -- http://structurlam.com/-- is
a North American provider of mass timber solutions for construction
and industrial markets in Canada and the U.S. Established in 1962,
Structurlam is based in Penticton, British Columbia and has mass
timber production facilities in Canada and the U.S.
After reaching a deal with Mercer International Inc. to sell assets
in British Columbia and Arkansas for US$60 million, Structurlam and
certain of its affiliates sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 23-10497) on April 21, 2023.
The Debtors also have sought recognition of the Chapter 11
proceedings in the Supreme Court of British Columbia.
Structurlam Mass Timber estimated assets and debt of $100 million
to $500 million as of the bankruptcy filing.
Judge Craig T. Goldblatt oversees the Debtors' Chapter 11 cases.
The Debtors tapped Chipman Brown Cicero & Cole, LLP and Potter
Anderson Corroon, LLP as bankruptcy counsels; Paul Hastings, LLP as
special counsel; Gowling WLG as Canadian counsel; Alvarez & Marsal
Canada, Inc. as financial advisor; and Stifel, Nicolaus & Company,
Incorporated and Miller Buckfire & Co., LLC as investment bankers.
Kurtzman Carson Consultants, LLC is the claims and noticing agent
and administrative advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors in the Debtors' Chapter 11 cases.
The committee hired Buchalter, P.C. and Morris, Nichols, Arsht &
Tunnell, LLP as bankruptcy counsels; Goodmans, LLP as Canadian
counsel; and Dundon Advisers, LLC as financial advisor.
STRUCTURLAM MASS: Committee Taps Dundon as Financial Advisor
------------------------------------------------------------
The official committee of unsecured creditors of Structurlam Mass
Timber U.S., Inc. and its affiliates received approval from the
U.S. Bankruptcy Court for the District of Delaware to employ Dundon
Advisers as its financial advisor.
The committee requires a financial advisor to:
a. assist in the analysis, review and monitoring of the
restructuring or liquidation process, including, but not limited
to, an assessment of the unsecured claims pool and potential
recoveries for unsecured creditors;
b. develop a complete understanding of the Debtors' businesses
and their valuations;
c. determine whether there are viable alternative paths for the
disposition of the Debtors' assets;
d. monitor and, to the extent appropriate, assist the Debtors in
efforts to develop and solicit transactions that would support
unsecured creditor recovery;
e. assist the committee in identifying, valuing and pursuing
estate causes of action, including, but not limited to, relating to
pre-bankruptcy transactions, control person liability, and lender
liability;
f. assist the committee to analyze, classify and address claims
against the Debtors and participate effectively in any effort to
estimate, in any formal or informal sense, contingent, unliquidated
and disputed claims;
g. assist the committee in identifying, preserving, valuing, and
monetizing tax assets of the Debtors, if any;
h. advise the committee in negotiations with the Debtors, the
Debtors' lenders, and third parties;
i. assist the committee in reviewing the Debtors' financial
reports, including, but not limited to, statements of financial
affairs, schedules of assets and liabilities, cash budgets, and
monthly operating reports;
j. assist the committee in reviewing the Debtors' cost/benefit
analysis with respect to the assumption or rejection of various
executory contracts and leases;
k. review and provide analysis of the present and any subsequent
proposed debtor-in-possession financing or use of cash collateral;
l. assist the committee in evaluating and analyzing avoidance
actions, including fraudulent conveyances and preferential
transfers;
m. review and provide analysis of any proposed disclosure
statement and chapter 11 plan and, if appropriate, assist the
committee in developing an alternative Chapter 11 plan;
n. attend meetings and assist in discussions with the committee,
the Debtors, the secured lenders, the U.S. Trustee and other
parties involved in the cases;
o. attend meetings of the committee and other key stakeholders
and parties;
p. provide testimony; and
q. perform other financial advisory services for the committee.
The firm will be paid at these rates:
Principal $890 per hour
Managing Director/Senior Adviser $790 per hour
Senior Director $700 per hour
Director $650 per hour
Associate Director $550 per hour
Senior Associate $475 per hour
Associate $350 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Joshua Nahas, managing director at Dundon Advisers, 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:
Joshua Nahas
Dundon Advisers, LLC
Ten Bank Street, Suite 1100
White Plains, NY 10606
Tel: (914) 341-1188
Fax: (212) 202-4437
Email: jn@dundon.com
About Structurlam Mass Timber U.S.
Structurlam Mass Timber U.S., Inc. -- http://structurlam.com/-- is
a North American provider of mass timber solutions for construction
and industrial markets in Canada and the U.S. Established in 1962,
Structurlam is based in Penticton, British Columbia and has mass
timber production facilities in Canada and the U.S.
After reaching a deal with Mercer International Inc. to sell assets
in British Columbia and Arkansas for US$60 million, Structurlam and
certain of its affiliates sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 23-10497) on April 21, 2023.
The Debtors also have sought recognition of the Chapter 11
proceedings in the Supreme Court of British Columbia.
Structurlam Mass Timber estimated assets and debt of $100 million
to $500 million as of the bankruptcy filing.
Judge Craig T. Goldblatt oversees the Debtors' Chapter 11 cases.
The Debtors tapped Chipman Brown Cicero & Cole, LLP and Potter
Anderson Corroon, LLP as bankruptcy counsels; Paul Hastings, LLP as
special counsel; Gowling WLG as Canadian counsel; Alvarez & Marsal
Canada, Inc. as financial advisor; and Stifel, Nicolaus & Company,
Incorporated and Miller Buckfire & Co., LLC as investment bankers.
Kurtzman Carson Consultants, LLC is the claims and noticing agent
and administrative advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors in the Debtors' Chapter 11 cases.
The committee hired Buchalter, P.C. and Morris, Nichols, Arsht &
Tunnell, LLP as bankruptcy counsels; Paul Hastings, LLP as special
counsel; Goodmans, LLP as Canadian counsel; and Dundon Advisers,
LLC as financial advisor.
STRUCTURLAM MASS: Committee Taps Goodmans as Canadian Counsel
-------------------------------------------------------------
The official committee of unsecured creditors of Structurlam Mass
Timber U.S., Inc. and its affiliates received approval from the
U.S. Bankruptcy Court for the District of Delaware to employ
Goodmans, LLP, a law firm based in Ontario, Canada.
The committee requires a Canadian counsel to give advice on
Canadian law and regulations in the context of, among other things,
(i) the proceedings filed before the Supreme Court of British
Columbia in Canada under Part IV of the Companies' Creditors
Arrangement Act; (ii) the sale of the Debtors' Canadian assets and
the closing related thereto; and (iii) the Debtors' ongoing
Canadian operations.
The firm will be paid at these rates:
Joseph Latham, Partner $890 per hour
Jeffrey Citron, Partner $890 per hour
Associates $415 to $450 per hour
Maureen Buckley, Paralegal $415 per hour
Joseph Latham, Esq., a partner at Goodmans, disclosed in a court
filing that his 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,
Goodmans 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 postpetition, explain the
difference and the reasons for the difference.
Response: Not applicable.
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: The committee and its counsel are currently
formulating a budget and staffing plan that is consistent with the
U.S. Trustee Guidelines, recognizing that in the course of complex
and fast-moving Chapter 11 cases such as the Debtors' Chapter 11
cases, there is the potential for a number of unforeseen
circumstances that will need to be addressed by the committee and
its counsel giving rise to additional fees and expenses.
The firm can be reached at:
Joseph Latham, Esq.
Goodmans, LLP
333 Bay Street, Suite 3400
Toronto, ON M5H 2S7
Tel: (416) 979-2211
About Structurlam Mass Timber U.S.
Structurlam Mass Timber U.S., Inc. -- http://structurlam.com/-- is
a North American provider of mass timber solutions for construction
and industrial markets in Canada and the U.S. Established in 1962,
Structurlam is based in Penticton, British Columbia and has mass
timber production facilities in Canada and the U.S.
After reaching a deal with Mercer International Inc. to sell assets
in British Columbia and Arkansas for US$60 million, Structurlam and
certain of its affiliates sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 23-10497) on April 21, 2023.
The Debtors also have sought recognition of the Chapter 11
proceedings in the Supreme Court of British Columbia.
Structurlam Mass Timber estimated assets and debt of $100 million
to $500 million as of the bankruptcy filing.
Judge Craig T. Goldblatt oversees the Debtors' Chapter 11 cases.
The Debtors tapped Chipman Brown Cicero & Cole, LLP and Potter
Anderson Corroon, LLP as bankruptcy counsels; Paul Hastings, LLP as
special counsel; Gowling WLG as Canadian counsel; Alvarez & Marsal
Canada, Inc. as financial advisor; and Stifel, Nicolaus & Company,
Incorporated and Miller Buckfire & Co., LLC as investment bankers.
Kurtzman Carson Consultants, LLC is the claims and noticing agent
and administrative advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors in the Debtors' Chapter 11 cases.
The committee hired Buchalter, P.C. and Morris, Nichols, Arsht &
Tunnell, LLP as bankruptcy counsels; Paul Hastings, LLP as special
counsel; Goodmans, LLP as Canadian counsel; and Dundon Advisers,
LLC as financial advisor.
STRUCTURLAM MASS: Committee Taps Morris Nichols Arsht as Co-Counsel
-------------------------------------------------------------------
The official committee of unsecured creditors of Structurlam Mass
Timber U.S., Inc. and its affiliates received approval from the
U.S. Bankruptcy Court for the District of Delaware to employ Morris
Nichols Arsht & Tunnell, LLP as co-counsel with Buchalter, P.C.
The firm's services include:
a. advising the committee with respect to its rights, duties,
and powers in the Debtors' Chapter 11 cases;
b. assisting the committee in its consultations with the Debtors
relative to the administration of the cases;
c. assisting in the committee's investigation of the acts,
conduct, assets, liabilities, and financial condition of the
Debtors and of the operation of the Debtors' business, including
certain of the Debtors' pre-bankruptcy conduct, transactions and
transfers;
d. assisting the committee in negotiations with the Debtors and
other parties involved in the bankruptcy cases on any proposed
Chapter 11 plan and exit strategy for the cases;
e. conferring and attending meetings with the Debtors, the
secured lenders, the U.S. Trustee and other parties involved in the
cases;
f. advising the committee as to the ramifications regarding the
Debtors' activities and motions before the court;
g. attending meetings of the committee;
h. representing the committee at all hearings and other
proceedings;
i. assisting the committee in preparing pleadings; and
j. other necessary legal services.
The firm will be paid at these rates:
Partners $825 to $1,595 per hour
Associates and Counsel $505 to 915 per hour
Paraprofessionals $375 per hour
Legal Assistants $195 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Matthew Harvey, Esq., a partner at Morris, disclosed in a court
filing that his 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, Morris
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 postpetition, explain the
difference and the reasons for the difference.
Response: Not applicable.
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: The committee and its counsel are currently
formulating a budget and staffing plan that is consistent with the
U.S. Trustee Guidelines, recognizing that in the course of complex
and fast-moving Chapter 11 cases such as the Debtors' cases, there
is the potential for a number of unforeseen circumstances that will
need to be addressed by the committee and its counsel giving rise
to additional fees and expenses.
The firm can be reached at:
Matthew B. Harvey, Esq.
Morris, Nichols, Arsht & Tunnell, LLP
1201 N. Market Street, 16th Floor
Wilmington, DE 19801
Tel: (302) 658-9200
Email: mharvey@morrisnichols.com
About Structurlam Mass Timber U.S.
Structurlam Mass Timber U.S., Inc. -- http://structurlam.com/-- is
a North American provider of mass timber solutions for construction
and industrial markets in Canada and the U.S. Established in 1962,
Structurlam is based in Penticton, British Columbia and has mass
timber production facilities in Canada and the U.S.
After reaching a deal with Mercer International Inc. to sell assets
in British Columbia and Arkansas for US$60 million, Structurlam and
certain of its affiliates sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 23-10497) on April 21, 2023.
The Debtors also have sought recognition of the Chapter 11
proceedings in the Supreme Court of British Columbia.
Structurlam Mass Timber estimated assets and debt of $100 million
to $500 million as of the bankruptcy filing.
Judge Craig T. Goldblatt oversees the Debtors' Chapter 11 cases.
The Debtors tapped Chipman Brown Cicero & Cole, LLP and Potter
Anderson Corroon, LLP as bankruptcy counsels; Paul Hastings, LLP as
special counsel; Gowling WLG as Canadian counsel; Alvarez & Marsal
Canada, Inc. as financial advisor; and Stifel, Nicolaus & Company,
Incorporated and Miller Buckfire & Co., LLC as investment bankers.
Kurtzman Carson Consultants, LLC is the claims and noticing agent
and administrative advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors in the Debtors' Chapter 11 cases.
The committee hired Buchalter, P.C. and Morris, Nichols, Arsht &
Tunnell, LLP as bankruptcy counsels; Goodmans, LLP as Canadian
counsel; and Dundon Advisers, LLC as financial advisor.
STRUCTURLAM MASS: Taps Paul Hastings as Special Counsel
-------------------------------------------------------
Structurlam Mass Timber U.S., Inc. and its affiliates seek approval
from the U.S. Bankruptcy Court for the District of Delaware to
employ Paul Hastings, LLP as special counsel.
The firm's services include:
(a) advising and assisting the Debtors in connection with any
potential asset sales and property dispositions; and
(b) advising the Debtors as to corporate transactions and
corporate governance, negotiations, review of documents,
preparation of agreements, review and preparation of pleadings,
court appearances, and such other actions as Paul Hastings and the
Debtors deem necessary.
The firm will be paid at these rates:
Partners $1,400 to $2,075 per hour
Counsels $1,400 to $2,000 per hour
Associates $800 to $1,320 per hour
Paralegals $275 to $600 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The Debtors paid the firm an advance retainer of $50,000.
Todd Schwartz, Esq., a partner at Paul Hastings, disclosed in a
court filing that his 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, Paul
Hastings 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 postpetition, explain the
difference and the reasons for the difference.
Response: Paul Hastings provided the Debtors with a 10 percent
discount with respect to certain contract and litigation services
provided before January 2023, but all services to be provided after
the petition date shall be pursuant to Paul Hastings' standard
billing and customary arrangements. In addition, as is customary,
Paul Hastings adjusted its hourly rates effective Jan. 1, 2023 to
reflect step increases and economic and market conditions.
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: Paul Hastings and the Debtors expect to further
develop a prospective budget and staffing plan to comply with the
U.S. Trustee's requests for information and additional disclosures,
and any orders of the court.
The firm can be reached through:
Todd M. Schwartz, Esq.
Paul Hastings, LLP
1117 S. California Avenue
Palo Alto, CA 94304
Tel: (650) 320-1883
Email: toddschwartz@paulhastings.com
About Structurlam Mass Timber U.S.
Structurlam Mass Timber U.S., Inc. -- http://structurlam.com/-- is
a North American provider of mass timber solutions for construction
and industrial markets in Canada and the U.S. Established in 1962,
Structurlam is based in Penticton, British Columbia and has mass
timber production facilities in Canada and the U.S.
After reaching a deal with Mercer International Inc. to sell assets
in British Columbia and Arkansas for US$60 million, Structurlam and
certain of its affiliates sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 23-10497) on April 21, 2023.
The Debtors also have sought recognition of the Chapter 11
proceedings in the Supreme Court of British Columbia.
Structurlam Mass Timber estimated assets and debt of $100 million
to $500 million as of the bankruptcy filing.
Judge Craig T. Goldblatt oversees the Debtors' Chapter 11 cases.
The Debtors tapped Chipman Brown Cicero & Cole, LLP and Potter
Anderson Corroon, LLP as bankruptcy counsels; Paul Hastings, LLP as
special counsel; Gowling WLG as Canadian counsel; Alvarez & Marsal
Canada, Inc. as financial advisor; and Stifel, Nicolaus & Company,
Incorporated and Miller Buckfire & Co., LLC as investment bankers.
Kurtzman Carson Consultants, LLC is the claims and noticing agent
and administrative advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors in the Debtors' Chapter 11 cases.
The committee hired Buchalter, P.C. and Morris, Nichols, Arsht &
Tunnell, LLP as bankruptcy counsels; Paul Hastings, LLP as special
counsel; Goodmans, LLP as Canadian counsel; and Dundon Advisers,
LLC as financial advisor.
SUSTAINABLE SAN DIEGO: Product Sales & Rental Income to Fund Plan
-----------------------------------------------------------------
Sustainable San Diego, Inc., filed with the U.S. Bankruptcy Court
for the Southern District of California a Plan of Reorganization
for Small Business dated June 8, 2023.
The Debtor is a corporation. Since 2019 the Debtor has been in the
business of selling health products and obtaining rental income
from tenants.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income for a step plan starting at
$179 and increasing to $1179 within the first year.
The final Plan payment is expected to be paid on June 1, 2027. The
projections are based on Debtor's experience with sales of its'
product. However, the bulk of Debtor's income is based on
stabilized rents supported by the current leases.
Class 2 Secured Claims:
* Joseph E. Balogh, Trustee in the amount of $695,000 shall be
paid for 2 years. Debtor agrees to keep current with property taxes
and insurance and provide lender with proof of payments. This claim
is impaired and entitled to vote.
* Brncic, Inc. in the amount of $10,000 will be paid in full
on the Effective Date. The claim is not impaired and not entitled
to vote.
* County of San Diego Tax Collector in the amount of
$50,997.51 will be paid in 60 months. Debtor may prepay this class,
without penalty, at any time during the plan period. The plan
payment is determined by the amount stated on any filed proof of
claim, including any amendment made prior to confirmation. This
claim is impaired and entitled to vote.
* Capital A Investments, Inc. in the amount of $80,000.
Capital A is an insider and not entitled to vote. It has agreed to
defer any payments during the plan period.
* Josh Young in the amount of $120,000. Loan is due in 24
months from the first of the month following the Order Confirming
Plan. Interest was deferred by the lender for the 24-month term of
the loan. The total amount due at the end of 24 months is $120,000.
This claim is impaired and entitled to vote.
There are no unsecured creditors or claims.
This Plan of Reorganization proposes to pay creditors of the Debtor
from product sales and rental income and if necessary capital
infusion from the sole shareholder.
A full-text copy of the Plan of Reorganization dated June 8, 2023
is available at https://urlcurt.com/u?l=y6GKMA from
PacerMonitor.com at no charge.
Attorney for the Plan Proponent:
Michael R. Totaro, Esq.
Maureen J. Shanahan & Associates
dba Totaro & Shanahan
Pacific Palisades, CA 90272
Phone: +1 310-573-2107
Email: ocbkatty@aol.com
About Sustainable San Diego
Sustainable San Diego, Inc. owns in fee simple title a commercial
building with yoga studio located at 4862 St. San Diego, Calif.,
valued at $1.65 million.
Sustainable San Diego sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-02982) on Nov.
19, 2022. In the petition signed by Dustin T. Johnston, president,
the Debtor disclosed $1,661,000 in total assets and $931,322 in
total liabilities.
Judge Laura S. Taylor oversees the case.
Michael R. Totaro, Esq., at Totaro & Shanahan, serves as the
Debtor's counsel.
TRICIDA INC: Plan Exclusivity Period Extended to August 9
---------------------------------------------------------
The Hon. John T. Dorsey of the U.S. Bankruptcy Court for the
District of Delaware extended Tricida, Inc.'s exclusive periods
within which to file a Chapter 11 plan and to solicit acceptances
thereof to August 9 and October 9, 2023, respectively.
The Debtor explained that under four months in Chapter 11, the
Debtor and its advisors have devoted a significant amount of time
and effort to ensuring a smooth transition into Chapter 11, and to
preserving and maximizing the value of the Debtor's estate for the
benefit of all stakeholders.
The Debtor and its advisors also negotiated two distinct purchase
agreements and related documentation with two separate buyers,
obtained entry of the sale orders, and closed the sales.
Accomplishing these tasks and addressing the concerns of the
Debtor's creditors and stakeholders along the way, among other
things, required the full attention of the Debtor's employees and
advisors.
In light of these circumstances, the Debtor said the requested
extensions are both appropriate and necessary to afford the Debtor
sufficient time to seek confirmation of a Plan.
The Debtor said it is not seeking the extension of the exclusive
periods to delay administration of the Chapter 11 case or to exert
pressure on its creditors, but rather to continue the orderly,
efficient, and cost-effective Chapter 11 process.
About Tricida Inc.
Tricida Inc. -- https://www.tricida.com/ -- is a pharmaceutical
company working to turn the tide on metabolic acidosis and
progression of chronic kidney disease. The company is based in
South San Francisco, Calif.
Tricida filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 23-10024) on Jan. 12,
2023, It disclosed $93,879,000 in total assets against $229,977,000
in total debt as of Sept. 30, 2022.
The Debtor tapped Sidley Austin, LLP and Young Conaway Stargatt &
Taylor, LLP, as counsels; SierraConstellation Partners, LLC as
financial advisor; and Stifel, Nicolaus & Company, Inc., and Miller
Buckfire, LLC as investment bankers. Kurtzman Carson Consultants,
LLC is the claims agent and administrative advisor.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case.
Womble Bond Dickinson (US) LLP and Rock Creek Advisors, LLC serve
as the committee's legal counsel and financial advisor,
respectively.
US FOODS: Moody's Upgrades CFR & Senior Secured Notes to Ba3
------------------------------------------------------------
Moody's Investors Service upgraded the ratings for US Foods,
Inc.'s, including the corporate family rating to Ba3 from B1,
probability of default rating to Ba3-PD from B1-PD, senior secured
bank facility and senior secured notes rating to Ba3 from B1 and
senior unsecured notes rating to B2 from B3. The SGL-1
speculative-grade liquidity rating remains unchanged and the
outlook is stable.
The upgrades reflect the improvement in US Foods' credit metrics,
driven by both earnings growth and debt repayment. Moody's-adjusted
debt/EBITDA declined to 4.3x and EBITA/interest expense was 2.7x as
of April 1, 2023. Moody's expects that operating performance would
be resilient in a scenario of a shallow US recession, due to the
company's diversified operations and ability to gain market share
from smaller distributors. The upgrades also reflect governance
considerations, including the company's commitment to reaching and
maintaining a net leverage range of 2.5-3x (equivalent to roughly
3.2-3.7x Moody's-adjusted debt/EBITDA) and the exit of KKR's
preferred equity position and board seat.
Moody's took the following rating actions for US Foods, Inc.:
Corporate Family Rating, Upgraded to Ba3 from B1
Probability of Default Rating, Upgraded to Ba3-PD from B1-PD
Senior Secured Bank Credit Facility, Upgraded to Ba3 from B1
Senior Secured Regular Bond/Debenture, Upgraded to Ba3 from B1
Senior Unsecured Regular Bond/Debenture, Upgraded to B2 from B3
Outlook, Remains Stable
RATINGS RATIONALE
US Foods' Ba3 CFR is supported by the company's scale and market
position as a top 3 player with national reach in US food
distribution, with diversified operations across multiple end
markets. US Foods has opportunities to expand margins by executing
on its 2022-2025 strategic plan, which includes profitably gaining
market share from smaller competitors, expanding gross margins and
implementing operational efficiencies. Moody's expects these
structural benefits to largely mitigate near-term challenges in the
industry, including modest volume declines, labor cost increases
and gross profit pressure from deflation in some product
categories. In addition, US Foods should benefit from a continued
recovery in hospitality and healthcare volumes, which still lag
pre-pandemic levels. Moody's projects leverage to decline to 3.7x
Moody's-adjusted debt/EBITDA in 2023 from 4.3x as of April 1, 2023,
driven by organic case volume growth and modest margin improvement.
The company has committed to deleveraging to its 2.5-3x target net
leverage range in 2023, and maintaining that range going forward,
while also allocating cash towards tuck-in acquisitions and share
repurchases. Moody's projects very good liquidity over the next
12-18 months, including strong positive free cash flow and ample
availability under the $2.3 billion asset-based revolver.
US Foods' CFR is constrained by the fragmented and highly
competitive nature of the food distribution industry. US Foods' low
operating margin reflects both industry competition and
inefficiencies in its operations, which the company is addressing
with its strategic initiatives. In addition, while US Foods has
significantly reduced leverage over the past 2 years, it employed
an aggressive acquisition strategy in the past, highlighted by the
debt-funded acquisitions of SGA's Food Group of Companies and Smart
Foodservice.
The stable outlook reflects Moody's expectations for very good
liquidity and continued earnings growth.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded should US Foods generate sustained
earnings growth, reflecting increasing market share and margin
expansion in line with the company's strategic plan.
Quantitatively, the ratings could be upgraded if Moody's-adjusted
debt/EBITDA is maintained under 3.75 times and EBITA/interest
expense above 3.25 times. An upgrade would also require maintaining
a balanced financial strategy and very good liquidity.
Ratings could be downgraded should US Foods' operating performance
decline or should the company adopt a more aggressive financial
strategy, including debt-financed acquisitions or debt-financed
share repurchases. Quantitatively, the ratings could be downgraded
if debt/EBITDA is sustained above 4.5 times or EBITA/interest
expense below 2.5 times. A sustained deterioration in liquidity for
any reason could also lead to a downgrade.
Headquartered in Rosemont, Illinois, US Foods, Inc. (US Foods) is a
leading North American broadline foodservice distributor, with
revenue of around $35 billion as of twelve months ended April 1,
2023. The company serves the restaurant, healthcare, hospitality,
education, and other end segments.
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in February 2023.
VERO PARENT: $180M Bank Debt Trades at 16% Discount
---------------------------------------------------
Participations in a syndicated loan under which Vero Parent Inc is
a borrower were trading in the secondary market around 83.8
cents-on-the-dollar during the week ended Friday, June 9, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $180 million facility is a Term loan that is scheduled to
mature on August 16, 2025. The amount is fully drawn and
outstanding.
Vero Parent, Inc. provides software solutions. The Company develops
software for data processing and transaction processing purposes.
VISIONARY LABELS: Has Deal on Cash Collateral Access
----------------------------------------------------
Visionary Labels and Packaging LLC and the U.S. Small Business
Administration advised the U.S. Bankruptcy Court for the Central
District of California, Riverside Division, that they have reached
an agreement regarding the Debtor's use of cash collateral and now
desire to memorialize the terms of this agreement into an agreed
order.
On August 3, 2021, the Debtor executed a U.S. Small Business
Administration Note, pursuant to which the Debtor obtained a
$500,000 COVID-19 Economic Injury Disaster Loan. The terms of the
Note require the Debtor to pay principal and interest payments of
$2,505 every month beginning 18 months from the date of the Note
over the 30-year term of the SBA Loan, with a maturity date of on
or about August 3, 2051. The SBA Loan has an annual rate of
interest of 3.75% and may be prepaid at any time without notice or
penalty. As of the Petition Date, the amount due on the SBA Loan
was $530,000.
Pursuant to the SBA Loan Authorization and Agreement executed on
August 3, 2021, the Debtor is required to "use all the proceeds of
this Loan solely as working capital to alleviate economic injury
caused by disaster occurring in the month of January 31, 2020 and
continuing thereafter and to pay Uniform Commercial Code lien
filing fees and a third-party UCC handling charge of $100 which
will be deducted from the Loan amount."
As evidenced by a Security Agreement executed on August 3, 2021,
and a valid UCC-1 filing on August 17, 2021, as Filing Number
U210076078227. The SBA Loan is secured by all tangible and
intangible personal property.
The Parties agree that portions of the Personal Property Collateral
constitute the cash collateral of the SBA, pursuant to 11 U.S.C.
sections 361. 362, 363(a), (c)(2), and (e). The SBA consents to the
Debtor's continued use of cash collateral until further Court order
regarding use of cash collateral, or the entry of an order
confirming the Debtor's plan of reorganization entry for payment of
the ordinary and necessary expenses as set forth in the budget.
As adequate protection, the SBA will receive a replacement lien(s)
that is deemed valid, binding, enforceable, non-avoidable, and
automatically perfected, effective as of the Petition Date, on all
post-petition revenues of the Debtor to the same extent, priority
and validity that its lien attached to the Personal Property
Collateral. The scope of the Replacement Lien is limited to the
amount (if any) that the cash collateral diminishes post-petition
as a result of the Debtor's post-petition use of the cash
collateral.
The Debtor will continue to remit adequate protection payments to
the SBA before the third of each month in the amount of $2,505, and
continuing until further Court order regarding use of cash
collateral, or the entry of an order confirming the Debtor's plan
of reorganization, whichever occurs earlier.
The SBA will be entitled to a super-priority claim over the life of
the Debtor's bankruptcy case, pursuant to 11 U.S.C. sections
503(b), 507(a)(2) and 507(b), which claim will be limited to any
diminution in the value of the SBA's collateral, pursuant to the
SBA Loan, as a result of the Debtor's use of cash collateral on a
post-petition basis.
The Debtor will use its best efforts to diligently seek
confirmation of a Chapter 11 plan of reorganization. The SBA
reserves its right to object to the Debtor's proposed Chapter 11
plan of reorganization, and does not waive any rights, claims or
interests in the Chapter 11 bankruptcy case. The Parties agree that
as and for additional adequate protection, the Debtor agrees it
will not propose any Plan of Reorganization that pays the SBA less
than $2,505 per month on account of its claim.
The Debtor agrees to maintain insurance on the Personal Property
Collateral and designate the SBA as a loss payee or additional
insured in accordance with the SBA Loan and related loan documents
and agrees to provide proof of insurance within seven days' upon
the SBA's written request.
A copy of the stipulation and the Debtor's budget is available at
https://urlcurt.com/u?l=IjRRI5 from PacerMonitor.com.
The Debtor projects $1,646,467 in gross profit and $1,200,128 in
total expenses for 12 months.
About Visionary Labels and Packaging, LLC
Visionary Labels and Packaging, LLC is in the business of labeling
and providing labeled cans to beer brewers and other makers of
canned beverages.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-11032) on March 17,
2023. In the petition signed by Frank Sanchez, chief executive
officer, the Debtor disclosed up to $500,000 in assets and up to
$10 million in liabilities.
Judge Magdalena Reyes Bordeaux oversees the case.
Giovanni Orantes, Esq., at The Orantes Law Firm, A.P.C., represents
the Debtor as legal counsel.
XPLORNET COMMS: $995M Bank Debt Trades at 19% Discount
------------------------------------------------------
Participations in a syndicated loan under which Xplornet
Communications Inc is a borrower were trading in the secondary
market around 81 cents-on-the-dollar during the week ended Friday,
June 9, 2023, according to Bloomberg's Evaluated Pricing service
data.
The $995 million facility is a Term loan that is scheduled to
mature on October 1, 2028. The amount is fully drawn and
outstanding.
Xplornet Communications Inc operates as a broadband service
provider. The Company offers voice and data communication services
through wireless and satellite networks. Xplornet Communications
serves customers in Canada.
ZAYO GROUP: $4.96B Bank Debt Trades at 20% Discount
---------------------------------------------------
Participations in a syndicated loan under which Zayo Group Holdings
Inc is a borrower were trading in the secondary market around 79.8
cents-on-the-dollar during the week ended Friday, June 9, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $4.96 billion facility is a Term loan that is scheduled to
mature on March 9, 2027. The amount is fully drawn and
outstanding.
Zayo Group Holdings, Inc., or Zayo Group, is a privately held
company headquartered in Boulder, Colorado, with European
headquarters in London, England. The company provides
communications infrastructure services.
ZIP MAILING: Wins Continued Cash Collateral Access Thru June 24
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland, Greenbelt
Division, authorized Zip Mailing Services, Inc. to use cash
collateral, on an interim basis, in accordance with the budget,
though June 24, 2023.
The Debtor requires the use of cash collateral to meet its ordinary
and necessary expenses.
Newco Capital Group, VI, LLC asserts a secured claim against the
Debtor pursuant to a purchase agreement and a UCC-1 Financing
Statement filed with the Maryland State Department of Assessments
and Taxation. Newco Capital asserts an unpaid balance as of the
Petition Date in the amount of approximately $169,328, exclusive of
fees, costs and amounts that Newco Capital is owed pursuant to the
Agreement.
Breakout Capital, LLC asserts a secured claim against the Debtor
pursuant to a loan and a UCC-1 Financing Statement filed with the
Maryland State Department of Assessments and Taxation. Breakout
asserts an unpaid balance as of the Petition Date in the amount of
approximately $682,681, exclusive of fees, costs and amounts
Breakout is owed pursuant to the Business Loan and Security dated
February 27, 2023. Pursuant to the Breakout Agreement, Breakout
asserts a security interest in and lien upon, inter alia, all of
the Debtor's accounts, chattel paper, deposit accounts, personal
property, goods, assets and fixtures and the proceeds thereof, as
more fully described on the Breakout Agreement and Breakout UCC-1.
The Debtor and Breakout have agreed for purposes of the Second
Interim Order that the value of the Breakout Collateral is $76,000.
The Debtor has agreed to provide $600 as the adequate protection
payment to Breakout for the use of the Breakout Collateral during
the term of the Second Interim Order.
To the extent the cash collateral is used by the Debtor and the use
results in a diminution of the value of the cash collateral, Newco
is entitled a replacement lien in the Debtor's accounts receivable,
and the proceeds of the foregoing, to the same extent and with the
same priority as Newco's interest in the Pre-Petition Collateral.
The liens and security interests granted are duly perfected without
the necessity for the execution, filing or recording of financing
statements, security agreements and other documents which might
otherwise be required pursuant to applicable non-bankruptcy law for
the creation or perfection of such liens and security interests.
Breakout is entitled to replacement liens in the Debtor's accounts,
chattel paper, deposit accounts, personal property, goods, assets
and fixtures and the proceeds thereof, as more fully described on
the Breakout Agreement and Breakout UCC-1, to the same extent and
with the same priority as Breakout's pre-petition liens in the
Breakout Collateral.
The creditors who assert liens in the Debtor's property retain
their liens to the same extent and with the same priority as their
pre-petition liens during the term of the Second Interim Order.
The liens and security interests granted will become and are duly
perfected without the necessity for the execution, filing or
recording of financing statements, security agreements and other
documents which might otherwise be required pursuant to applicable
non-bankruptcy law for the creation or perfection of such liens and
security interests.
A further hearing on the matter is set for June 22 at 12 p.m.
A copy of the Court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=UqWi2t from PacerMonitor.com.
The Debtor projects total expenses, on a weekly basis, as follows:
$17,158 for the week of June 4, 2023;
$23,669 for the week of June 11, 2023; and
$10,536 for the week of June 18, 2023.
About Zip Mailing Services, Inc.
Zip Mailing Services, Inc. operates a commercial mailing service
out of Landover, Maryland.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Md. Case No. 23-13736) on May 26, 2023.
In the petition signed by Darryl Jackson, Jr., its president, the
Debtor disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Judge Maria Elena Chavez-Ruark oversees the case.
Christopher L. Hamlin, Esq., at McNamee Hosea, P.A., represents the
Debtor as legal counsel.
[*] Prime Commercial Space Up for Sale on June 30
-------------------------------------------------
JSJ Auctions will hold a foreclosure sale on June 30, 2023, at
11:00 a.m., at 59 Optical Avenue Keene, New Hampshire, for a prime
commercial space, which is a 53,280 +/- sq industrial zoned
building located on a 5.55 +/- acre lot & abutting 4.38+/- vacant
lot located just off route 101, Tax Map 241, Lots 5& 6. The total
value is $2,398,100. 2022 Taxes: $74,413.
Sale per order of mortgagee by its attorneys: Orr & Reno, P.A.,
Concord, New Hampshire: John L. Arnold, Esq.
A $20,000 deposit by cash, certified check, or bank check, payable
to mortgagee at time of sale, balance due with 45 days. Other
terms may be announced at time of sale. All information herein is
believed but not warranted to be correct.
*********
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