/raid1/www/Hosts/bankrupt/TCR_Public/230710.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, July 10, 2023, Vol. 27, No. 190
Headlines
227 FAIRVIEW: Court Approves Disclosure Statement
2377 GLENDON: Unsecureds Owed $3.7M Out of Money in Plan
29TH AVE: Seeks to Extend Confirmation Period to October 7
2CM LLC: Files Emergency Bid to Use Cash Collateral
3I AVI: Taps Botz Deal & Company as Accountant
5280 AURARIA: Seeks to Extend Exclusivity Period to September 29
AD1 URBAN: Palm Beach Holiday Inn Gets $24.6M Bid From Activate
ADAMS HOMES: Fitch Assigns First Time 'B+' LongTerm IDR
ADVANCED INFRASTRUCTURE: Case Summary & 20 Top Unsecured Creditors
AEROSPACE ENGINEERING: Case Summary & 20 Top Unsecured Creditors
AFTERSHOCK COMICS: Seeks to Extend Plan Exclusivity to October 16
AGOGIE INC: Unsecureds Will Get 1.42% of Claims over 5 Years
AH DEVELOPMENT: Gets OK to Hire Jill M. Flinton as Accountant
AJM MANAGEMENT: Taps Hirsch & Hirsch as Accountant
ALASKA LOGISTICS: Case Summary & 20 Largest Unsecured Creditors
ALISAL WATER: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
ALL FLORIDA SAFETY: Court OKs Interim Cash Collateral Access
ALPHIA INC: Moody's Raises CFR to B2, Outlook Stable
ALWAYS CARING: Income Generated From Estate Will Fund Plan
AMADEUS TRUST: Seeks to Hire Golden Goodrich as Legal Counsel
ARS SPECIALTY: Wins Interim Cash Collateral Access
BALLY'S CORP: Fitch Affirms 'B+' IDR, Outlook Negative
BAUSCH + LOMB: Fitch Keeps 'B-' IDR on Rating Watch Evolving
BDC GROUP: Seeks to Hire BerganKDV as Accountant
BENEFYTT TECHNOLOGIES: Taps Jefferies LLC as Investment Banker
BETTER TRANSPORT: Taps Lane Law Firm as Bankruptcy Counsel
BOARDRIDERS INC: $450M Bank Debt Trades at 36% Discount
BOND EXPRESS INC: Seeks November 15 Extension to File Plan
BOND EXPRESS: Seeks Nov. 15 Extension to File Plan
BRAND MARINADE: Unsecureds Will Get 18% to 25% in Liquidating Plan
BW HAPTON GROUP: Taps Portillo Ronk Legal Team as Counsel
CALLON PETROLEUM: Fitch Hikes IDR to 'B+' on Percussion Transaction
CALPLANT I: Gets OK to Hire Onyx, Rabin Worldwide as Sale Agents
CALPLANT I: To Seek Plan Confirmation on Aug. 15
CARTER TABERNACLE: Seeks Cash Collateral Access
CASA SYSTEMS: S&P Upgrades ICR to 'CCC+', Outlook Stable
CENTER FOR ALTERNATIVE: Wins Cash Collateral Access Thru July 15
CENTEX REI: Unsecureds to Get 100 Cents on Dollar in Plan
CHIMICHURRI CHICKEN: Seeks Dec 6 Extension to File Ch. 11 Plan
CHRISTMAS TREE SHOPS: Taps SSG Advisors as Investment Banker
CITY BREWING: $850M Bank Debt Trades at 35% Discount
COBRA HOLDINGS: $560M Bank Debt Trades at 16% Discount
COLONY DONKEY: Files Emergency Bid to Use Cash Collateral
CONTEMPORARY MANAGEMENT: Wins Cash Collateral Access Thru Aug 3
CONTOUR PROPCO: Property Sale Proceeds to Fund Plan
DAMON CAPITAL: Court Approves Disclosure Statement
DAWN ACQUISITIONS: $550M Bank Debt Trades at 38% Discount
DEYO ENTERPRISES: Taps Charles A. Higgs as Litigation Counsel
EARTHSTONE ENERGY: Fitch Rates New Unsec. Notes Due 2031 'B+'
EAST MISSION 8: Seeks to Hire Chan & Chen as Accountant
EAST ROCKAWAY: Seeks to Hire Alla Kachan P.C. as Legal Counsel
EAST ROCKAWAY: Taps Wisdom Professional Services as Accountant
ENDO PARENT: $156.3M Bank Debt Trades at 19% Discount
ENTERCOM MEDIA: Calamos GDIF Marks $320,000 Loan at 39% Off
ENVISION HEALTHCARE: $2.20B Bank Debt Trades at 50% Discount
ENVISTACOM LLC: Committee Taps Scroggins & Williamson as Counsel
ENY LLC: Case Summary & One Unsecured Creditor
EVANGELICAL RETIREMENT: Gets OK to Hire Dopkelaw as Legal Counsel
EVANGELICAL RETIREMENT: Gets OK to Hire WYSE as Financial Advisor
EVANGELICAL RETIREMENT: Seeks to Hire Grandbridge as Broker
FOREST CITY: $1.24B Bank Debt Trades at 20% Discount
FREEDOM MORTGAGE: Fitch to Rate New Unsecured Debt 'B+(EXP)'
FULTON FILMS: Unsecureds Owed $5K Unimpaired in PLan
FUSION PROMOTIONS: Chapter 11 Estate Fully Administered
GALA SERVICE: Seeks 90-Day Extension to Confirm Plan
GALILEO SCHOOL: Moody's Affirms Ba1 Rating on 2021A Revenue Bonds
GENAPSYS INC: Paul Hastings Accused of Causing Demise
GIBSON BRANDS: $300M Bank Debt Trades at 16% Discount
GLOBAL FOOD: EUR245M Bank Debt Trades at 16% Discount
GOPHER RESOURCE: $510M Bank Debt Trades at 16% Discount
GUNTHER CHARTERS: Aug. 30 Hearing on Disclosure Statement
H2O INVESTMENT: Unsecureds to Get Share of Income for 3 Years
HORNBLOWER SUB: $349.4M Bank Debt Trades at 53% Discount
IGNITION MIDCO: EUR325M Bank Debt Trades at 45% Discount
INDEPENDENT ENERGY: Financial Difficulties Cue CCAA Filing
INDEPENDENT PET: Court Confirms Committee-Backed Plan
INDRA HOLDINGS: $50M Bank Debt Trades at 50% Discount
INNERLINE ENGINEERING: Cash Collateral Access OK'd Thru Oct 31
JEFFERSON CAPITAL: Fitch Affirms BB- LongTerm IDR, Outlook Stable
KCW GROUP: Court OKs Cash Collateral Access Thru Aug 8
KINGS 828 TRUCKING: Court Confirms Amended Plan as Modified
KOTAI INVESTMENTS: Seeks to Hire Chan & Chen as Accountant
LACKAWANNA ENERGY: Moody's Rates $730MM Secured Term Loan 'Ba3'
LACKAWANNA ENERGY: S&P Assigns Preliminary 'BB-' Rating on Loans
LARRY BARBER: Amends IRS Secured Claims Pay Details
LEHMAN BROTHERS: Assured Guaranty Wants to Recover $58M Trial Fees
LEWISVILLE DONKEY: Files Emergency Bid to Use Cash Collateral
LONG & ASSOCIATE: Taps Perry G. Gruman as Legal Counsel
LUMINOUS MOBILE: Taps Ian Bolton Law as Special Counsel
MACEDON CONSULTING: Seeks Conditional Approval of Disc. Statement
MACEDON CONSULTING: Unsecureds Unimpaired in Amended Plan
MADERA COMMUNITY: Seeks to Extend Plan Exclusivity to October 6
MARINER HEALTH: Seeks to Extend Plan Exclusivity to September 30
MEDHAWK POOLS: Case Summary & 20 Largest Unsecured Creditors
MIRACLE CENTER: Unsecured Claims to Be Paid in Installments
MOUNTAINEER MERGER: $200M Bank Debt Trades at 19% Discount
MUSE THREADS: Unsecureds Owed $253K to be Paid in Full in 5 Years
NATIONAL MENTOR: $1.70B Bank Debt Trades at 22% Discount
NEW AMI: $550M Bank Debt Trades at 16% Discount
NICK'S CREATIVE: Court Approves Reorganization Plan
NIELSEN & BAINBRIDGE: Court Confirms Plan, Rejects Black Diamond
NORTHWOODS PETS: Has Deal on Cash Collateral Access
OMNIA PARTNERS: Moody's Rates New $1.625BB 1st Lien Term Loan 'B2'
ORION ADVISOR: Fitch Lowers IDR to 'B-', Outlook Negative
PALACE CAFE: Gets OK to Hire Keller as Real Estate Broker
PATAGONIA HOLDCO: Calamos GDIF Marks $199,000 Loan at 18% Off
PBF HOLDING: Fitch Hikes LongTerm IDR to 'BB', Outlook Stable
PERFECTLY PRISCILLA: Seeks to Hire Stone & Baxter as Legal Counsel
PLASTIQ INC: Asset Sale Proceeds to Fund Plan Payments
PRA GROUP: Fitch Affirms BB+ LongTerm IDR, Outlook Still Negative
PRO FIT 26: Taps Law Office of Mark S. Roher as Bankruptcy Counsel
PUG LLC: EUR452M Bank Debt Trades at 20% Discount
QUALTEK SERVICES: Gets OK to Hire Kirkland & Ellis as Legal Counsel
QUALTEK SERVICES: Seeks to Hire Jefferies LLC as Investment Banker
QUALTEK SERVICES: Taps Alvarez & Marsal as Restructuring Advisor
QUALTEK SERVICES: Taps Milbank as Counsel to Special Committee
REAL VISION: Seeks to Hire ShemanoLaw as Bankruptcy Counsel
SABRE GLBL: $625M Bank Debt Trades at 19% Discount
SAFFIRE VAPOR: Wins Interim Cash Collateral Access
SAN JORGE CHILDREN'S: Taps Engineering Recovery as Consultant
SHUTTERFLY LLC: Moody's Affirms Caa2 CFR & Alters Outlook to Stable
SKINNY & CO: Plan Deadline Extended to September 5
SORRENTO THERAPEUTICS: Court OKs $20MM DIP Loan from Scilex
SP PF BUYER: $744.4M Bank Debt Trades at 27% Discount
SPIRIPLEX INC: Court OKs Cash Collateral Access Thru Aug 30
ST. CHARLES MEMORY: Wins Interim Cash Collateral Access
T. JONES TRUCKING: Court OKs Cash Collateral Access Thru Aug 22
TEAM HEALTH: Calamos GDIF Marks $637,818 Loan at 34% Off
TESSEMAE'S LLC: Seeks to Hire 'Ordinary Course' Professionals
THRASIO LLC: $325M Bank Debt Trades at 24% Discount
THRASIO LLC: $740M Bank Debt Trades at 15% Discount
TKEES INC: Court OKs Cash Collateral Access Thru Aug 31
TRIMED HEALTHCARE: Taps Allen B. Dubroff as Legal Counsel
UC HOLDINGS: S&P Withdraws 'CCC+' Issuer Credit Rating
UPSTREAM NEWCO: $140M Bank Debt Trades at 21% Discount
UPSTREAM NEWCO: Moody's Rates $35MM Incremental Term Loan 'B3'
US RENAL CARE: $225M Bank Debt Trades at 52% Discount
WALLACE CAREY: Seeks Restructuring Under CCAA
WE KICK BRASS: Seeks to Hire Brian K. McMahon as Legal Counsel
WEXFORD LABS: Court OKs Cash Collateral Access Thru July 11
WHOLE EARTH: $375M Bank Debt Trades at 18% Discount
WOODHAVEN MEDICAL: Taps Richard S. Feinsilver as Legal Counsel
WW INTERNATIONAL: Calamos GDIF Marks $363,825 Loan at 31% Off
YELLOW CORP: S&P Downgrades ICR to 'CCC-' on Looming Maturities
ZAYO GROUP: EUR750M Bank Debt Trades at 21% Discount
[^] BOND PRICING: For the Week from July 3 to 7, 2023
*********
227 FAIRVIEW: Court Approves Disclosure Statement
-------------------------------------------------
Judge Vincent F. Papalia has entered an order approving 227
Fairview LLC's Disclosure Statement dated May 24, 2023.
Aug. 3, 2023, at 2:30 p.m., is fixed as the date and time for the
hearing on confirmation of the Plan.
Written acceptances, rejections or objections to the Plan referred
to above must be filed with the attorney for the plan proponent not
less than 7 days before the hearing on confirmation of the Plan.
Within 14 days after entry of this order, copies of this order, the
approved Disclosure Statement and the Plan, together with a ballot
conforming to Official Form 14, must be mailed by the plan
proponent to all creditors, equity security holders and other
parties in interest as provided by Fed. R. Bankr. P. 3017(d).
About 227 Fairview
227 Fairview LLC owns a two-family, residential property located at
227 7th Street, Fairview (Bergen County), New Jersey 07022 and
having a value of $550,000.
The Debtor suffered from financial difficulty because the Debtor's
rental income declined due to extensive repairs required to be
undertaken at the Property.
In November 2015, Debtor's primary creditor Specialized Loan
Servicing, LLC (as agent for Wilmington Savings) commenced a
foreclosure action in the Bergen County Superior Court. SLS
obtained final judgment in the amount of $403,122 on July 5, 2022
and a sheriff sale was scheduled.
To stop foreclosure, 227 Fairview LLC sought Chapter 11 protection
(Bankr. D.N.J. Case No. 22-19722) on Dec. 9, 2022.
Stephen B. McNally, at McNALLYLAW, LLC, is the Debtor's counsel.
2377 GLENDON: Unsecureds Owed $3.7M Out of Money in Plan
--------------------------------------------------------
2377 Glendon LLC submitted a Chapter 11 Plan of Reorganization and
a Disclosure Statement.
The Debtor is the owner of a single-family residence which is under
construction which is nearly completed located at 2377 Glendon LLC,
Los Angeles, CA 90064 ("Property"). Mr. Montero believes the value
of the Property is approximately $3,800,000.
Under the Plan, Class 3 General Unsecured Claims total $3,716,504.
Class 3 claims will be discharged as it is not expected any funds
will be available for this class. Class 3 claims will be discharged
as it is not expected any funds will be available for this class.
Class 3 is impaired.
The Plan will be funded through the sale or refinance of the
Property. In addition, Mr. Montero, as an interest holder of the
Debtor, shall contribute new value by providing a cash infusion of
$10,000 upon the effective date of the plan.
Attorney for the Debtor:
Thomas B. Ure, Esq.
URE LAW FIRM
8280 Florence Avenue, Suite 200
Downey, CA 90240
Tel: (213) 202-6070
Fax: (213) 202-6075
E-mail: tom@urelawfirm.com
A copy of the Disclosure Statement dated June 30, 2023, is
available at https://tinyurl.ph/WAvoq from PacerMonitor.com.
About 2377 Glendon LLC
2377 Glendon LLC is engaged in activities related to real estate.
It owns in fee simple title a real property located at 2377 Glendon
Ave Los Angeles, CA, valued at $3.8 million.
2377 Glendon LLC filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-10498) on Jan.
30, 2023. In the petition filed by Guillermo Montero, as managing
member, the Debtor reported total assets of $3,800,000 and total
liabilities of $6,323,136.
The case is overseen by Honorable Bankruptcy Judge Neil W. Bason.
The Debtor is represented by:
Thomas B Ure, Esq.
Ure Law Firm
12991 NW 1st Street #106
Pembroke Pines, FL 33028-3207
Tel: 213-202-6070
Fax: 213-202-6075
Email: tom@urelawfirm.com
29TH AVE: Seeks to Extend Confirmation Period to October 7
----------------------------------------------------------
29th Ave, LLC asks the U.S. Bankruptcy Court for the Eastern
District of New York to extend the confirmation period within
which it must file a disclosure statement to October 7, 2023.
The Debtor explained that the likelihood of success of its
disclosure depends on the outcomes of its claim and lawsuit. The
Debtor stated that since it purchased real property as a pro bide
purchaser, it has a high likelihood of success in the claim from
the insurance company. The Debtor pointed out that it cannot
propose a disclosure statement and negotiate with its creditor
until it knows how much (if any) will be paid to it by the
insurance company.
29th Ave, LLC is represented by:
Kevin K. Tung, Esq.
KEVIN KERVENG TUNG
136-20 38th Avenue, Suite 3D
Flushing, NY 11354
Tel: (718) 939-4633
Email: ktung@kktlawfirm.com
About 29th Ave
29th Ave, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
23-40745) on March 3, 2023, with $828,425 in assets and
$1,132,290 in liabilities. Jia Yun Wang, a member of 29th Ave,
signed the petition.
Judge Elizabeth S. Stong presides over the case.
Kevin Tung, Esq., at Kevin Kerveng Tung, P.C. represents the
Debtor as counsel.
2CM LLC: Files Emergency Bid to Use Cash Collateral
---------------------------------------------------
2CM, LLC asks the U.S. Bankruptcy Court for the Middle District of
Florida, Jacksonville Division, for authority to use cash
collateral to continue its operations.
The Debtor relies on current revenues to fund its operations. The
Debtor primarily generates income from its two restaurant sales. At
the time of filing, the Debtor had a total balance of approximately
$7,000 in its two Operating Accounts the business generates
approximate gross receipts of $45,000 per month.
The Debtor has financed its operations on a cash basis and via
business credit cards. The Debtor has three pre-petition merchant
cash advances/lenders that have a lien on the Debtor's cash and
receivables. Those lenders are Expansion Capital Group, Fox Capital
Group, Inc., and Rapid Finance.
As adequate protection, the lenders will be granted a replacement
lien on the Debtor's receivables.
2CM, LLC believes the combination of (i) the Debtor's ability to
preserve the going concern value of the business with the use of
cash collateral; and (ii) providing the Lenders with the other
protections set forth therein, adequately protects their alleged
secured position under 11 U.S.C. section 361(2) and (3).
A copy of the Debtor's motion and budget is available at
https://urlcurt.com/u?l=255KA4 from PacerMonitor.com.
The Debtor projects $46,300 in net revenue and $43,244 in total
expenses.
About 2CM, LLC
2CM, LLC is a Florida corporation based in Jacksonville, Florida.
It sells pet supplies both online and at its brick-and-mortar
store.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-01569) on July 5,
2023. In the petition signed by Howland Russell, owner, the Debtor
disclosed up to $500,000 in both assets and liabilities.
Thomas Adam, Esq. represents the Debtor as legal counsel.
3I AVI: Taps Botz Deal & Company as Accountant
----------------------------------------------
3i AVI, LLC seeks approval from the U.S. Bankruptcy Court for the
Eastern District of Missouri to employ Botz Deal & Company, P.C.
The Debtor requires an accountant to:
a. communicate with the agent in charge regarding the time and
place of the audit and the documents requested;
b. perform a preliminary review of the adequacy of documents
provided; and
c. assist in negotiating a settlement with respect to any
disputed items.
The firm will be paid at the rate of $317 per hour.
The retainer fee is $3,000.
Tina Johnson, a partner at Botz Deal & Company, 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:
Tina Johnson
Botz Deal & Company, P.C.
4 East Pearce
Wentzville, MO 63385
Tel: (636) 332-8299
About 3i AVC
3i AVC LLC -- https://blackwidowimaging.com/ -- is an Internet
software and services provider in Wentzville, Mo. The company
conducts business under the name Black Widow Imaging.
3i AVI filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. E.D. Mo. Case No. 22-41053) on April 12,
2022, with $61,420,000 in total assets and $159,339 in total
liabilities. Stephen D. Coffin has been appointed as Subchapter V
trustee.
Judge Kathy A. Surratt-States oversees the case.
The Debtor tapped David M. Dare, Esq., at Herren, Dare & Streett as
bankruptcy counsel; Stinson, LLP as special patent counsel; and
Favazza & Associates, LLC as accountant.
5280 AURARIA: Seeks to Extend Exclusivity Period to September 29
----------------------------------------------------------------
5280 Auraria, LLC asks the U.S. Bankruptcy Court for the District
of Colorado to extend the exclusivity period to obtain
acceptances of their chapter 11 plan to September 29, 2023.
The Debtor explains that good cause exists for granting an
extension of the acceptance period as it has a plan and
disclosure statement on file, but the confirmation hearing
currently set to commence on August 15, 2023 will not be held
until after the acceptance period expires on June 30, 2023.
The Debtor explained further that the Court is currently in the
process of resetting the confirmation hearing to a date in
September, which is why the Debtor is requesting the acceptance
period be extended through the end of that month.
5280 Auraria, LLC is represented by:
Michael J. Pankow, Esq.
Anna-Liisa Mullis, Esq.
Amalia Y. Sax-Bolder, Esq.
BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 17th Street, Suite 2200
Denver, CO 80202
Tel: (303) 223-1100
Email: mpankow@bhfs.com
amullis@bhfs.com
asax-bolder@bhfs.com
About 5280 Auraria
5280 Auraria, LLC, owns Auraria Student Lofts, a high-rise
building in downtown Denver aimed at providing housing for
college students. 5280 Auraria's sole member and manager is
Nelson Partners, LLC, a Utah limited liability company. The
individual principal is Patrick Nelson.
5280 Auraria sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Colo. Case No. 22-12059) on June 9,
2022. In the petition filed by Patrick Nelson, as managing
member, the Debtor listed between $50 million and $100 million in
both assets and liabilities.
Judge Kimberley H. Tyson oversees the case.
Michael J. Pankow, Esq., at Brownstein Hyatt Farber Schreck, LLP,
is the Debtor's counsel.
AD1 URBAN: Palm Beach Holiday Inn Gets $24.6M Bid From Activate
---------------------------------------------------------------
Alex Wolf of Bloomberg Law reports that Activate Hospitality LLC
offered a $24.6 million bid that will open the bankruptcy auction
of the Holiday Inn Palm Beach Airport hotel owned by a unit of AD1
Global Hotels LLC.
Subject to court approval, Activate, a hotel investment firm
founded by Sagar Desai, will collect a $200,000 break-up fee if
another bidder outbids its stalking horse bid, according to a
Sunday, July 2, 2023, court filing with the US Bankruptcy Court for
the District of Delaware.
AD1 Global, which owns 25 hotels and other properties in
development, placed several units into Chapter 11 bankruptcy in
January to sell eight properties.
About AD1 Urban Palm Bay
AD1 Urban Palm Bay, LLC, operates in the traveler accommodation
industry. The company is based in Hollywood, Fla.
AD1 Urban Palm Bay and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10074) on Jan. 22, 2023. In the petition signed by Alex
Fridzon, as responsible fiduciary, AD1 Urban Palm Bay disclosed $10
million to $50 million in both assets and liabilities.
Judge Karen B. Owens oversees the cases.
The Debtors tapped Ian J. Bambrick, Esq., at Faegre Drinker Biddle
and Reath, LLP as legal counsel; RobertDouglas as investment
banker; CR3 Partners, LLC as financial advisor; and Stretto, Inc.,
as claims and noticing agent and administrative advisor.
ADAMS HOMES: Fitch Assigns First Time 'B+' LongTerm IDR
-------------------------------------------------------
Fitch Ratings has assigned a Long-Term Issuer Default Rating (IDR)
of 'B+' to Adams Homes, Inc. Fitch has also assigned a 'BB+'/'RR1'
rating to the company's senior secured revolving credit facility
and a 'BB-'/'RR3' rating to the company's senior unsecured notes.
The Rating Outlook is Stable.
The 'B+' IDR reflects the company's modest leverage, limited
geographic and product diversity, limited financial flexibility and
concentrated ownership structure. The company's leading positions
within its local markets, balanced land strategy and cash flow
profile are also factored into the rating. The Stable Outlook
reflects Fitch's expectation for a relatively stable demand
environment in Adams' markets and meaningful headroom relative to
Fitch's leverage negative sensitivity.
KEY RATING DRIVERS
Limited Geographic Diversification: The company is meaningfully
less geographically diversified compared with most of the U.S.
homebuilders in Fitch's coverage. Adams' geographic concentration
in the southeastern U.S. leaves the company exposed to an outsized
impact during cyclical downturns, or a meaningful pullback in
housing demand in this region. As of March 31, 2023, Adams had 119
average active communities across seven states.
Modest Leverage: Adams has meaningful rating headroom relative to
the negative rating sensitivities for the 'B+' IDR, as
Fitch-calculated net debt to capitalization (excluding $50 million
of cash classified by Fitch as not readily available for working
capital) was 29.2% at March 31, 2023 and EBITDA leverage was 2.0x
for the LTM period. Fitch expects these ratios will weaken as
revenue growth moderates and margins compress, resulting in net
debt to capitalization of around 38%-40% and EBITDA leverage in the
2.5x-3.5x range in 2023 and 2024.
Management has a leverage target of total debt to capitalization
below 50%, and has kept net debt to capitalization below 45% in
recent years. Fitch expects Adams to increase debt during the
forecast period to replenish its inventory and continue growing its
footprint, which could push net debt to capitalization closer to
45%.
Lower Growth and Margins through 2024: Adams' revenue grew 25% in
2022, but Fitch expects growth to moderate to 5.5%-6.5% in 2023 and
2%-4% in 2024 as affordability issues, a softer economic
environment and low consumer confidence continue to weigh on
demand. EBITDA margin was 15% in 2022 but is expected to fall to
12%-13% in 2023 and 2024. Continued affordability constraints and
weakening demand have diminished homebuilders' pricing power and
incentives will likely remain prominent to drive demand.
Adams' EBITDA margin in 2023 is forecast to fall less than the
other homebuilders in Fitch's coverage given the relative strength
of the markets in which it operates, as home prices and demand in
the southeastern U.S. have remained relatively stable.
Financial Flexibility: Adams has sufficient liquidity in terms of
cash, revolver availability and FFO generation to sustain its
operations, replenish its existing land portfolio and grow
modestly. However, Fitch views the company's financial flexibility
as a limiting factor in terms of upward mobility of the rating.
Adams is structured as an S-Corporation and does not pay income
taxes. However, it distributes a meaningful portion of net income
to Bryan Adams, its CEO and sole shareholder, to pay taxes. As a
result, residual investment in land is likely to result in
persistently negative FCF generation, requiring the company to
continue to raise capital (likely debt) to fund growth.
Entry-Level Focus: Adams sells homes specifically targeting
entry-level segments. This strategy has resulted in strong
operating performance and order growth in recent years as home
affordability constraints have led to higher demand for affordable
product offerings. Fitch expects demographic trends to continue to
support long-term demand for entry-level homes. However, Fitch
believes demand at lower price points can be more cyclical and
volatile as first-time buyers are more sensitive to higher mortgage
rates, home prices and deteriorating economic conditions.
Land Strategy: Adams has one of the shorter owned-land positions
among the builders in Fitch's coverage. This strategy reduces the
risk of downside volatility and impairment charges in a contracting
housing market. This is due, in part, to the company's strategy of
only purchasing developed lots, which mitigates risk as Adams does
not hold raw land on its balance sheet.
As of March 31, 2023, Adams controlled 12,486 lots (including homes
in backlog), representing a 17% yoy decrease in total lots
controlled. About 58% of lots under control as of March 31, 2023
were owned, and the remainder were controlled through options.
Based on LTM closings, Adams controlled 4.0 years of land and owned
2.3 years of land.
Ownership Structure: Adams is a privately-held company with
concentrated ownership and weak governance controls relative to
larger, public homebuilders in Fitch's coverage. The capital
allocation decisions are made entirely by one individual, which
poses significant key-person risk. The company's organizational
structure is also tied to this individual as it does not pay income
taxes, but distributes enough income annually for the shareholder
to pay the respective taxes on those earnings.
The company's credit agreement and bond indentures contain
restrictive covenants that protect debtholders, but sizable cash
distributions could weaken the balance sheet and pressure the
ratings.
Cash Flow: Fitch expects Adams will generate cash flow from
operations (CFO) of $30 million to $35 million in 2023 due to
slightly lower land acquisition. By comparison, the company
generated CFO of $6 million in 2022 and negative $87 million in
2021. Fitch expects Adams will generate modestly negative CFO in
2024 and beyond, which assumes increased inventory spending amid a
stable demand environment.
Adams' IDR reflects Fitch's expectation that management will lower
inventory spending if market conditions deteriorate and monetize
its housing inventory. This should allow the company to generate
strong cash flow, which can then be used to pay down debt or build
cash on the balance sheet during housing downturns.
DERIVATION SUMMARY
Adams Homes is meaningfully smaller and less diversified
geographically compared with public homebuilders in Fitch's
coverage, including M/I Homes, Inc. (BB/Stable) and Meritage Homes
Corporation (BB+/Stable). The company's net debt to capitalization
ratio of 29% and EBITDA leverage of 2.0x are weaker than these
higher-rated peers, and these metrics are expected to weaken. Adams
and Meritage both control about 4.0 years of land, though Adams
controls a greater proportion through options. Both Adams and M/I
have about 40%-45% of land controlled through options. Adams and
M/I have similar build strategies, in which both have a fairly even
mix of pre-sold and spec homes, while Meritage has a much more
aggressive speculative build strategy. All three issuers have
meaningful exposure to entry-level homes, but Adams lacks exposure
to other price points and buyer segments.
KEY ASSUMPTIONS
- Revenues grow 5.5%-6.5% in 2023 and 2%-4% in 2024;
- EBITDA margin of 12%-13% in 2023 and 2024;
- CFO of 2%-3% of revenues in 2023 and modestly negative in 2024;
- Net debt to capitalization situates in the 35%-40% range and
EBITDA leverage remains in the 2.5x-3.5x range through 2024;
- Annual shareholder distributions of about 60% of net income.
Recovery Analysis
The recovery analysis assumes that Adams would be reorganized as a
going-concern (GC) in bankruptcy rather than liquidated. Fitch
assumed a 10% administrative claim.
GC Approach
The GC EBITDA estimate of $70 million reflects Fitch's view of a
sustainable, post reorganization EBITDA level, upon which the
agency bases the enterprise value (EV). The GC EBITDA is based on
Fitch's assumption that distress would arise from further weakening
in the housing market combined with loss of market share;
Fitch estimates that annual revenues, which are about 30% below
LTM levels, and Fitch-adjusted EBITDA margins of about 9.0%-9.5%,
would capture the lower revenue base of the company after emerging
from a housing downturn, plus a sustainable margin profile after
right sizing. This results in Fitch's $70 million GC EBITDA
assumption, which is about 55% lower than EBITDA for the LTM ended
March 31, 2023;
An EV multiple of 5.5x EBITDA is applied to the GC EBITDA to
calculate a post-reorganization EV. The choice of the multiple
considered the following factors:
Fitch used a 6x EBITDA multiple to calculate the EV for Empire
Communities Corp. (B-/Negative). Empire is one of the largest
low-rise builders in the Greater Golden Horseshoe and Greater
Toronto Area and a growing presence in the U.S.;
Trading multiples (EV/EBITDA) for public homebuilders currently
average about 8.4x and have been in the 3.5x-8.5x range for the
past 24 months;
The senior secured revolving credit facility is assumed to be
fully drawn upon default;
The allocation of the value in the liability waterfall results in
a recovery corresponding to an 'RR1' for the senior secured
revolving credit facility and a recovery corresponding to an 'RR3'
for the unsecured notes.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- The company increases its size, further enhances its geographic
diversification and market leadership positions, and/or broadens
its product offering beyond the entry-level segment;
- Net debt-to-capitalization consistently below 45% and the company
maintains a healthy liquidity position;
- Fitch's expectation that EBITDA leverage will sustain below
4.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Net debt-to-capitalization sustained above 55%;
- EBITDA interest coverage falls below 2.0x;
- Inventory to debt consistently below 1.2x;
- Deterioration in the company's liquidity profile, including
consistently negative CFO and limited availability under its
revolving credit facility.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: Adams has sufficient liquidity with $177.9
million of cash $105.7 million of borrowing availability under its
$215 million secured revolving credit facility that matures
September 2024. Fitch expects the company to extend the maturity
date of its revolver well before it comes due. Fitch's rating case
assumes the company remains FCF negative over the intermediate term
as it continues investing in and to replenish its lot position and
bolster its footprint, but expects it will maintain an adequate
level of liquidity in terms of balance sheet cash and revolver
availability.
Manageable Debt Maturity Schedule: The company has no near-term
debt maturities beyond its revolver. Adams' $211.3 million 7.5%
senior unsecured notes mature in February 2025. The company also
has industrial revenue bonds due November 2028, with an outstanding
amount of $8.4 million as of March 31, 2023. Fitch assumes that the
effective interest rate on the company's revolver borrowings will
be in the range of 8.0%-8.5%.
ISSUER PROFILE
Adams Homes designs, markets, constructs and sells single-family
homes and attached townhomes to entry-level buyers. The company
offers homes for sale in 119 communities across Florida, Alabama,
Mississippi, North Carolina, South Carolina, Georgia and Texas.
ESG Considerations
Adams Homes has an ESG Relevance Score of '4' for Governance
Structure due to its weak governance controls, 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.
ADVANCED INFRASTRUCTURE: Case Summary & 20 Top Unsecured Creditors
------------------------------------------------------------------
Lead Debtor: Advanced Infrastructure Technologies, LLC
55 Baker Blvd
Suite 205
Brewer ME 04412
Business Description: Advanced Infrastructure is a provider of
composite solutions for the infrastructure &
construction industry. AIT designs and
manufactures composite bridge systems
designed with AASHTO LRFD bridge design
specifications. AIT manufactures a variety
of composite products for the infrastructure
and construction industry including, AIT
Wall and GPole.
Chapter 11 Petition Date: July 7, 2023
Court: United States Bankruptcy Court
District of Maine
Three affiliates that concurrently filed voluntary petitions for
relief
under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Advanced Infrastructure Technologies, LLC 23-10128
55 Baker Blvd
Suite 205
Brewer ME 04412
AIT Manufacturing, LLC 23-10129
20801 Mile Road
Suite C-1
North Randall OH 44128
Advanced Infrastructure Technologies, Inc. 23-10130
2658 Aft Ave
Naples FL 34109
Judge: Hon. Peter G. Cary
Debtors' Counsel: Adam Prescott, Esq.
BERNSTEIN SHUR SAWYER & NELSON, P.A.
100 Middle Street
P.O. Box 9729
Portland ME 04101
Tel: 207-774-1200
Email: aprescott@bernsteinshur.com
Advanced Infrastructure
Technologies, LLC's
Total Assets as of May 31, 2023: $8,112,131
Advanced Infrastructure
Technologies, LLC's
Total Liabilities as of May 31, 2023: $18,865,299
AIT Manufacturing's
Total Assets as of May 31, 2023: $3,265,632
AIT Manufacturing's
Total Liabilities as of May 31, 2023: $9,622,437
Advanced Infrastructure
Technologies, Inc.'s
Total Assets as of May 31, 2023: $18,339,287
Advanced Infrastructure
Technologies, Inc.'s
Total Liabilities as of May 31, 2023: $7,620,746
The petitions were signed by Brit E. Svoboda as chief executive
officer.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/BOUSMNI/Advanced_Infrastructure_Technologies__mebke-23-10128__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/HEWKGVI/AIT_Manufacturing_LLC__mebke-23-10129__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/E77KUPA/Advanced_Infrastructure_Technologies__mebke-23-10130__0001.0.pdf?mcid=tGE4TAMA
List of Advanced Infrastructure's 17 Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Commercial Metals Company Promissory Note $2,745,746
6565 N MacArthur Blvd.
Suite 800
Irving, TX, 75039
Robert C. Martin
Tel: 214-589-2700
Email: Rob.Martin@cmc.com
2. Tomlin IRA Senior Secured $220,000
c/o: Forge Trust Co Note
1160 Industrial Road, Suite 1
San Carlos, CA, 94070-4128
3. The Europe Trust Senior Secured $200,000
c/o: Steven Levin, Trustee Note
6400 Georgetown Pike
McLean, VA, 22101
4. The James and Gayle Halperin Senior Secured $200,000
Foundation Note
c/o: James Halperin, President
5933 Saint Andrews Drive
Dallas, TX, 75205
5. John Levy Senior Secured $150,000
6923 Greentree Drive Note
Naples, FL, 34108
6. Tomlin IRA Senior Secured $150,000
c/o: Forge Trust Co Note
1160 Industrial Road, Suite 1
San Carlos, CA, 94070-4128
7. Dennis Mehiel Senior Secured $150,000
3 East 95th Street Note
New York, NY, 10128
8. The Europe Trust Senior Secured $100,000
c/o: Steven Levin, Trustee Note
6400 Georgetown Pike
McLean, VA, 22101
9. Robert Frier Senior Secured $100,000
1220 Bank St, Apt 311 Note
Baltimore, MD, 21202
10. Quetzal Osprey, LLC Senior Secured $75,000
c/o Bill Derrough, Moelis & Company Note
399 Park Avenue, 5th Floor
New York, NY, 10022
11. The Europe Trust Senior Secured $50,000
c/o: Steven Levin, Trustee Note
6400 Georgetown Pike
McLean, VA, 22101
12. Jay F Vinsel Roth IRA Senior Secured $50,000
2890 Lookout Drive Note
Zanesville, OH, 43701
13. Dennis Mehiel Senior Preferred $50,000
3 East 95th Street Note
New York, NY, 10128
14. Terrence P Bean Revocable Senior Secured $50,000
Living Trust Note
c/o: Terrence P Bean, Trustee
1800 SW First Ave, Suite 620
Portland, OR, 97201
15. Nancy Hollander & Senior Preferred $25,000
Kenneth Sunshine Note
1050 Fifth Avenue
Apt 2F
New York, NY, 10028
16. Nancy Hollander & Senior Secured $25,000
Kenneth Sunshine Note
1050 Fifth Avenue
Apt 2F
New York, NY, 10028
17. EFF 401(k) Trust Senior Secured $25,000
c/o Edward Feighan Note
918 Beach Road
Lakewood, OH, 44107
AEROSPACE ENGINEERING: Case Summary & 20 Top Unsecured Creditors
----------------------------------------------------------------
Debtor: Aerospace Engineering & Support, Inc.
1307 W. 2550 S.
Ogden, UT 84401
Business Description: The Debtor is part of the aerospace products
and parts manufacturing industry.
Chapter 11 Petition Date: July 7, 2023
Court: United States Bankruptcy Court
District of Utah
Case No.: 23-22868
Judge: Hon. Peggy Hunt
Debtor's Counsel: M. Darin Hammond, Esq.
SMITH KNOWLES, P.C.
2225 Washington Blvd, Suite 200
Ogden UT 84401
Tel: (801) 476-0303
Fax: (801) 476-0399
Email: dhammond@smithknowles.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Lacey Remkes as president.
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/32UGMJY/Aerospace_Engineering__Support__utbke-23-22868__0002.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/35FXJXQ/Aerospace_Engineering__Support__utbke-23-22868__0001.0.pdf?mcid=tGE4TAMA
AFTERSHOCK COMICS: Seeks to Extend Plan Exclusivity to October 16
-----------------------------------------------------------------
AfterShock Comics, LLC and its affiliate, Rive Gauche Television,
ask the U.S. Bankruptcy Court for the Central District of
California to extend their exclusive periods to file a plan of
reorganization and obtain acceptances thereof to October 16, 2023
and December 14, 2023, respectively.
The Debtors explained that although they have begun discussing
and analyzing the possible terms of a plan which provides for
the restructuring of the debts of both the Debtors, they are not
yet prepared to formulate and finalize the terms of a plan
because, among other things: they have been inundated with tasks
related to closing a transaction that which would provide them
with funds from a debtor-in-possession loan in the amount of
$17.5 million, to allow them to: (1) pay off ARC's claim at the
agreed-upon amount, and (2) pay other creditors pursuant to a
Chapter 11 plan.
The Debtors further explained that they require additional time
to carefully analyze the amount, validity, and extent of the
claims asserted against them which will need to be addressed in
the plan, and to develop accurate financial projections for the
plan.
This is the Debtors' second request to extend the plan
exclusivity periods. Unless extended, the Debtors' exclusive
periods to file a plan and obtain acceptances thereof will
expire on July 17, 2023 and September 15, 2023, respectively.
AfterShock Comics, LLC and Rive Gauche Television are represented
by:
David L. Neale, Esq.
Jeffrey S. Kwong, Esq.
LEVENE, NEALE, BENDER, YOO & GOLUBCHIK L.L.P.
2818 La Cienega Avenue
Los Angeles, CA 90034
Tel: (310) 229-1234
Email: dln@lnbyg.com
jsk@lnbyg.com
About AfterShock Comics
AfterShock Comics, LLC -- https://Aftershockcomics.com -- is an
American comic book publisher launched in 2015. The company is
based in Sherman Oaks, Calif. AfterShock Comics and affiliate
Rive Gauche Television filed petitions for relief under Chapter
11 of the Bankruptcy Code (Bankr. C.D. Calif. Lead Case No.
22-11456) on Dec. 19, 2022.
Judge Martin R. Barash oversees the cases.
At the time of filing, AfterShock Comics reported $10 million to
$50 million in both assets and liabilities while Rive Gauche
reported $50 million to $100 million in assets and $10 million to
$50 million in liabilities.
The Debtors are represented by David L. Neale, Esq., at Levene,
Neale, Bender, Yoo & Golubchik L.L.P.
The U.S. Trustee for Region 16 appointed two separate committees
to represent unsecured creditors in the Chapter 11 cases of
AfterShock Comics, LLC and Rive Gauche Television.
AGOGIE INC: Unsecureds Will Get 1.42% of Claims over 5 Years
------------------------------------------------------------
Agogie, Inc., submitted a Small Business First Amended Plan of
Reorganization dated July 6, 2023.
The Plan contemplates the Debtor continuing its business post
confirmation as a going concern. The Plan proposes to pay creditors
of the Debtor from funds generated by its operations as a going
concern.
The Plan provides for the full payment of administrative and
priority claims in accordance with the Bankruptcy Code.
The Debtor has operated post-petition, albeit, with severe
liquidity constraints in the first two months of this case due to
certain limitations/holds that had been placed on its PayPal and
Amazon accounts. The Debtor's post-petition financial data are set
forth in filed operating reports and budgets. In the first 15 weeks
of the bankruptcy case, the Debtor had gross receipts of
$77,541.09.
The Debtor's financial projections show that the Debtor projects
earning enough over the next 5 years to pay all administrative and
priority claims in full, pay allowed secured claims the full value
of their collateral, cure the pre-petition arrearage due to
Kickfurther, and make a pro rata distribution to allowed general
unsecured creditors in the total amount of $55,000.
Class 1(b) consists of the allowed claim of Kickfurther, a
non-insider. Under this Plan, the Debtor will retain possession and
control over the consigned inventory. The Class 1(b) creditor is
deemed to hold an allowed and perfected ownership interest in the
consigned inventory in the total amount of $303,878.13, and a
general unsecured claim in the amount of $0.00.
Class 1(b) will be paid its pre-petition arrearage of $91,924.65 in
full and in accordance with the Debtor's projections, in 19
installment payments over the course of the next 5 years. All
ordinary debt to Kickfurther incurred by the Debtor after the
Petition Date will be paid on an ongoing basis in accordance with
the ordinary business practices and terms between the Debtor and
Kickfurther.
Class 3 consists of the allowed general unsecured claims against
Debtor. Under this Plan, Class 3 will be paid the Debtor's 5 years
worth of projected disposable income on a pro rata basis and in
accordance with the Debtor's projections, with 5 annual
installments over the course of the next 5 years. The estimated
percent of the claims paid shall be 1.42%. Class 3 is impaired.
Class 4 consists of the claim of the Debtor's equity interest
holders. Under this Plan, the Class 4 equity interest holders will
retain all such interest. Class 4 interests are unimpaired.
The distributions to the creditors of the Debtor that are to be
made on and after the Effective Date under this Plan shall be
funded from the ongoing operations of the Debtor.
On Confirmation of the Plan, all property of the Debtor, tangible
and intangible, including, without limitation, inventory, accounts
and intellectual property will revert, free and clear of all Claims
and Equitable Interests except as provided in the Plan, to the
Debtor. The Debtor expects to have sufficient cash on hand to make
the payments required on the Effective Date.
A full-text copy of the First Amended Plan dated July 6, 2023 is
available at https://urlcurt.com/u?l=HbgsNy from PacerMonitor.com
at no charge.
Counsel to Debtor:
Jenny R. Kasen, Esq.
David A. Kasen, Esq.
Michael J. Kasen, Esq.
Kasen & Kasen, P.C.
1213 N. King Street, Suite 2
Wilmington, DE 19801
Telephone: (302) 652-3300
Facsimile: (856) 424-7565
Email: jkasen@kasenlaw.com
dkasen@kasenlaw.com
mkasen@kasenlaw.com
About Agogie Inc.
Agogie, Inc. designs and manufactures resistance integrated
clothing for the sports performance, fitness, and athleisure
industries. The company is based in Saint Louis, Mo.
Agogie sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 23-10215) on Feb. 17,
2023, with as much as $1 million in both assets and liabilities.
Judge J. Kate Stickles oversees the case.
The Debtor tapped Kasen & Kasen, P.C., as bankruptcy counsel and
Dickinson Wright, PLLC, as special counsel.
AH DEVELOPMENT: Gets OK to Hire Jill M. Flinton as Accountant
-------------------------------------------------------------
AH Development Group, LLC received approval from the U.S.
Bankruptcy Court for the Northern District of New York to employ
Jill M. Flinton CPA, PLLC.
The Debtor requires an accountant to prepare its monthly operating
reports, periodic tax filings and other financial documents during
the pendency of its Chapter 11 case.
The firm will be compensated at $250 per hour for professional CPA
services and $125 per hour for bookkeeping services.
As disclosed in court filings, Jill M. Flinton is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Jill M. Clinton, Esq.
Jill M. Flinton CPA PLLC
800 Route 146, Suite 385
Cliffton Park, NY 12065
Email: jill@jillflintoncpa.com
About AH Development Group
AH Development Group LLC owns various real estate holdings located
throughout the City of Albany, N.Y., having an aggregate value of
$1.037 million.
AH Development Group sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D.N.Y. Case No. 23-10387) on April 17,
2023. In the petition signed by its managing member, Ben Gaspard,
the Debtor disclosed $1.037 million in assets and $944,887 in
liabilities.
Judge Robert E. Littlefield Jr. oversees the case.
The Debtor tapped Michael L. Boyle, Esq., at Boyle Legal, LLC as
legal counsel and Jill M. Flinton CPA, PLLC as accountant.
AJM MANAGEMENT: Taps Hirsch & Hirsch as Accountant
--------------------------------------------------
AJM Management, LLC seeks approval from the U.S. Bankruptcy Court
for the Eastern District of New York to employ Hirsch & Hirsch
Certified Public Accountants, PLLC as its accountant.
The firm's services include:
a. preparing federal, state and local tax returns and supporting
schedules;
b. performing general tax consulting services, including routine
tax advice concerning federal, state and local tax matters related
to the preparation of federal, state and local tax returns;
c. providing routine tax advice concerning federal, state and
local tax matters related to the computation of the Debtor's
taxable income for the current year or future years;
d. preparing monthly operating reports, variance reports,
financial statements and other relevant financial documents; and
e. furnishing such other services that the Debtor may request
from time to time.
The firm will be paid at these rates:
Partners/Principals $350 per hour
Paraprofessionals $200 per hour
Warren Hirsch, a partner at Hirsch & Hirsch, 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:
Warren Hirsch
Hirsch & Hirsch Certified Public Accountants, PLLC
273 Merrick Rd.
Lynbrook, NY 11563
Tel: (516) 791-5280
Fax: (516) 791-5283
Email: info@hirschhirschcpa.com
About AJM Management
AJM Management, LLC is the fee simple owner of real property
located at 405 Rockaway Parkway, Brooklyn, N.Y., valued at $3.9
million.
AJM Management filed it voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-41664) on
May 12, 2023, with $4,117,194 in assets and $2,262,346 in
liabilities. Ray Jones, managing director, signed the petition.
Judge Nancy Hershey Lord oversees the case.
The Debtor tapped Avrum J. Rosen, Esq., at The Law Offices of Avrum
J. Rosen, PLLC as legal counsel and Hirsch & Hirsch Certified
Public Accountants, PLLC as accountant.
ALASKA LOGISTICS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Alaska Logistics LLC
d/b/a Alaska Logistics
755 S Portland St
Seattle, WA 98108
Business Description: Alaska Logistics transports materials and
equipment of all sizes, shapes and types
from Seattle to Western Alaska.
Chapter 11 Petition Date: July 7, 2023
Court: United States Bankruptcy Court
Western District of Washington
Case No.: 23-11250
Debtor's Counsel: Faye C. Rasch, Esq.
WENOKUR RIORDAN PLLC
600 Stewart Street
Suite 1300
Seattle, WA 98101
Tel: 206-672-0846
Email: faye@wrlawgroup.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Allyn Long as general
manager/president.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/E7IFCJI/Alaska_Logistics_LLC__wawbke-23-11250__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Affordable Storage $720,250
Containers
1670 Marine View Drive
Tacoma, WA 94722
2. Alaska Railroad Corp $47,479
PO Box 100520
Anchorage, AK
99510-3515
3. American Express $39,648
PO Box 650448
Dallas, TX
75265-0448
4. Bank of America $112,000
Po Box 30750
Los Angeles, CA
90030-0750
5. Bristol Alliance $94,045
Fuels, LLC
PO Box 1529
Dillingham, AK 99576
6. Bristol Bay Borough $51,922
PO Box 189
Naknek, AK
99633-0189
7. City of Bethel $78,043
PO Box 388
Bethel, AK
99559-0388
8. City of Dillingham $21,343
PO Box 889
Dillingham, AK 99576
9. Covich Williams $51,867
PO Box 17913
Seattle, WA
98127-1913
10. Cummins $30,875
3717 McDougall Ave.
Everett, WA 98201
11. JAG $175,000
PO Box 969
Seward, AK 99664
12. Kenai Peninsula Borough $24,650
Property Tax Division
PO Box 3040
Soldotna, AK 99669
13. Moss-Adams LLP $43,750
PO Box 101822
Pasadena, CA
91189-1822
14. PNW Equipment, Inc. $160,514
7701 South 200th St
Kent, WA 98032
15. Ream Family LLC $22,500
PO BOX 80925
Seattle, WA 98108
16. Rick Haskell $100,000
2205 Maple Valley
Hwy Apt. 610
Renton, WA 98057
17. Samson Tug and Barge $700,976
PO Box 94101
Seattle, WA
98124-9406
18. Sockeye Point $21,490
Marine Service
6000 C Street, Ste 205
Anchorage, AK
99518
19. Steve Sauerbrey $100,000
10629 SE 237th
Kent, WA. 98031
Kent, WA 98031
20. Uresco $200,000
PO Box 1778
Kent, WA
98035-1778
ALISAL WATER: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed Alisal Water Corporation's (Alco)
Long-Term Issuer Default Rating (IDR) at 'BB-' with a Stable Rating
Outlook. Fitch has also affirmed the Senior Secured rating at
'BBB-'/'RR2'.
The 'RR2' rating for the senior secured bonds reflects Fitch's
expectation of superior recovery for the debt security in an event
of default.
KEY RATING DRIVERS
Small Size and Concentrated Operations: The size of Alco's
operation limits the utility's ratings as small changes in revenue
and/or expenses can have a material impact on financial metrics.
However, such changes have a limited downside given that Alco's
regulatory rates include a 50% fixed-charge cost recovery,
Purchased Power Balancing Account (PPBA) and the Purchased Power
Expense Offset (PPEO) as a power cost recovery mechanism. The
latter allows the company to pass through power cost increases to
customers via surcharge rate. Fitch views the use of this mechanism
as positive since this mitigates the lag of collecting increased
power costs while adding a forward-looking component to recovering
costs that can be adjusted annually.
Fitch expects Alco's asset base and operations to generate an
average annual operating EBITDA of around $2 million and an average
annual FFO of around $1 million during the forecast period.
Expected Stability in Credit Metrics: Fitch expects FFO leverage to
trend down towards 3.0x in year 2023 & 2024, compared with 3.2x as
recorded at FYE 2022. In 2022, company benefitted from successful
recovery of prior-period power costs through PPBA and cost recovery
mechanisms (PPEO & WCBA) that led to a quicker recoupment of costs.
In addition to cost recovery mechanisms, the company also benefited
from local and federal funded low-income assistance programs such
as LIHWAP that aided in customer revenue collection and added
further stability to the company's overall cashflow.
With an assumed level water volume, supportive cost recovery
mechanism and regular debt amortization of $600,000-$800,000
annually, Fitch expects the credit metrics to further improve over
the forecast period.
Regulatory Environment: Alco is regulated by the California Public
Utilities Commission (CPUC) and is currently allowed to earn an
above-average 10.7% ROE on a below average 30% equity capital
structure based on a 2011 General Rate Case (GRC) decision. The
company is exposed to varying customer water usage patterns since
the revenues are not fully decoupled. Recent water conservation
efforts have caused Alco to not meet its annual revenue requirement
set in the 2011 GRC and, given these water conservation efforts
within Alco's region, Fitch does not expect an increase in water
volumes sold, unless its service territory experiences significant
growth via new development projects.
However, Alco's ability to recoup increasing power costs from
customers has offset some of the downward pressure caused by the
reduced water volumes sold due to region's water conservation
program.
Positive FCF Generation: Alco is unique compared with the rest of
Fitch's utilities coverage given its ability to directly collect
costs from developers for new projects prior to commencing
development. After the infrastructure is completed, Alco collects
the costs to operate and maintain the new facilities through bills
paid by the new customers, as well as recognize deprecation on the
new assets.
While the projects are added to Alco's balance sheet, they do not
earn a rate of return nor are they added to the company regulated
rate base. The ability to funded growth externally, prior to
construction, provides Alco the opportunity to be consistently FCF
positive while still growing.
Legal Structure: Alco is a private family-owned C-corporation, a
member of which is also the president and CEO. Alco is the
exclusive holder of the water utility assets and the issuer of all
debt outstanding with no material operating subsidiaries. The legal
structure is unlike most Fitch-rated utility peers, lacking the
benefit of being part of a larger utility family and is not subject
to private equity ownership
DERIVATION SUMMARY
Alco's rating is primarily driven by the utility's small scale of
operations, that generates annual operating EBITDA of $1.5
million-$2.0 million. Alco has a weaker business risk profile
compared with peer Mountaineer Gas Company (MGC; BBB-/Stable),
mainly due to its smaller size. MGC services approximately 220,000
natural gas customers in West Virginia compared with approximately
30,000 water customers at Alco. The two entities are similar on a
regulatory front since they lack full revenue decoupling and
weather normalization recovery mechanisms.
Similarly, Alco has a weaker business risk profile than peers, The
Berkshire Gas Company (BGC; A-/Stable) and The Southern Connecticut
Gas Company (SCG; A-/Stable), due to its small size of operations
and concentrated customer base. BGC and SCG also operate in more
favorable regulatory environments that allow full revenue
decoupling. BGC and SCG also benefit from their ownership by
AVANGRID, Inc. (BBB+/Stable), which owns and operates eight
regulated electric and natural gas distribution utilities, while
Alco is a stand-alone entity.
Assuming flat usage patterns, Fitch expects Alco's FFO leverage to
decline toward 3.0x in 2023 and 2024, lower than peers BGC, MGC,
and SCG.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
-- Revenue remains relatively flat throughout the forecast period
due to water conservation efforts placing downward pressure on
volume of water sold;
-- EBITDA margins to average between 20% and 25% over the forecast
period that is less than the EBITDA margin achieved in 2022;
-- Capex of $2.9 million throughout the forecast period related to
updating meters, main replacements and pumping equipment;
-- Secured debt repayments according to the amortization schedule
assumed over the forecast period;
-- Base interest rates applicable to the company's outstanding
variable rate debt obligations reflects the Fitch Global
Economic Outlook.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- A positive rating action is not likely due to Alco's small
scale of operations; however, Fitch would consider an upgrade
if operating EBITDA were to reach $10 million and FFO leverage
is maintained below 5.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- If Fitch were to expect FFO leverage to exceed 6.0x, on a
sustained basis;
-- An adverse regulatory decision that meaningfully reduces the
stability and predictability of earnings and cash flow;
-- Deterioration in liquidity.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: Alco ended fiscal year 2022 with $278,000 in
available cash. Alco does not have a revolving credit facility;
however, the CEO and his family (founders of the company in 1932)
have shown that they will support the company's liquidity position
if needed. The company is required to keep about $750,000 in
restricted cash ($425,000 in debt service reserve and $325,000 as
debt service payment account) to meet funding needs related to the
senior secured All State bond due in 2027. Debt amortization of
approximately $2.8 million is expected over the forecast period
(2023-2026) with the final payment of $210,000 expected in 2027.
ISSUER PROFILE
Alisal Water Corporation (Alco) is a privately-owned public water
utility company based in Salinas, California that began operations
in 1932. The utility was incorporated in 1950, and in the 1960s the
area served was annexed to the City of Salinas, California.
Alco currently serves approximately 9,100 residential and
commercial customers covering the eastern portion of Salinas and
Rosehart Industrial Park region. The company is regulated by the
California Public Utilities Commission (CPUC).
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.
ALL FLORIDA SAFETY: Court OKs Interim Cash Collateral Access
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Jacksonville Division, authorized All Florida Safety Institute, LLC
to use cash collateral on an interim basis in accordance with its
agreement with the U.S. Small Business Administration.
The Debtor requires the use of cash collateral to continue
operating the business and pay salaries.
As of the Petition Date, the Debtor was indebted to the U.S. Small
Business Administration in the approximate amount of $2.066 million
and Westlake Funding Company, LLC in the approximate amount of
$500,000. The Debtor's obligation is evidenced by a Promissory
Note, Security Agreement, Financing Statement, and Chattel Mortgage
executed on May 27, 2020, to USA/SBA and July 21, 2021 to
Westlake.
The Debtor is permitted to pay only expenses necessary for the
operation of the business and not any pre-petition expenses,
officer salaries, professional fees, or insiders without further
court order.
As adequate protection to each Lender's interest and the estate's
interest in cash collateral, the Lender is granted a replacement
lien to the same nature, priority, and extent the Lender may have
had immediately prior to the date that the case was commenced nunc
pro tunc to the Petition Date. Further, the Lender is granted a
replacement lien and security interest on property of the
bankruptcy estate to the same extent and priority as that which
existed pre-petition on all of the cash accounts, accounts
receivable and other assets and property acquired by the Debtor's
estate or by the Debtor on or after the Petition. The replacement
lien will be deemed effective, valid and perfected as of the
Petition Date, without the necessity of filing with any entity of
any documents or instruments otherwise required to be filed under
applicable non-bankruptcy law.
The Debtor is directed to make adequate protection payments:
a. $6,164.40 per month to the U.S. Small Business
Administration commencing November 1, 2022 and on the 1st of the
month thereafter or further Court Order;
b. $0.00 per month to Westlake Funding Company, LLC. Stay to
be lifted upon Court Order;
c. All other UCC-1 receivable Lenders including NewCo Capital
Group, Samson, Cloudfund/Delta and IOU shall receive no adequate
protection at this time. This order is without prejudice to a later
finding that such Lenders may be secured by receivables, personal
property, inventory and/or equipment.
As additional adequate protection of the Lender's interest in the
cash collateral, the Debtor will (a) maintain all necessary
insurance coverage on the Lender's collateral and under no
circumstances will the Debtor allow its insurance coverage to
lapse, (b) continue to pay such monthly insurance payment in a
timely manner, and (c) within two days of the Lender's request, the
Debtor will provide to the Lender's counsel a written statement
supported by evidence of Debtor's compliance with the foregoing.
The Debtor's authority to use the cash collateral will terminate
immediately and upon the earlier of (a) a Court order; (b) the
conversion of the case to a Chapter 7 case or the appointment of a
Chapter 11 trustee without the consent of the Lender; (c) the entry
of an Order that alters the validity or priority of the replacement
liens granted to the Bank; (d) the Debtor ceasing to operate all or
substantially all of its business; (e) the entry of an order
granting relief from the automatic stay that allows any entity to
proceed against any material assets of the Debtor that constitute
cash collateral; (f) the entry of an Order authorizing a security
interest under 11 U.S.C. section 364(c) or 364(d) in the collateral
to secure any credit obtained or debt incurred that would be senior
to or equal to the replacement lien; or (g) the dismissal of the
Chapter 11 case.
A copy of the order is available at https://urlcurt.com/u?l=ssGgOp
from PacerMonitor.com.
About All Florida Safety Institute, LLC
All Florida Safety Institute, LLC offers driving lessons, driver's
license testing and traffic school. All Florida Safety sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
M.D. Fla. Case No. 22-01926) on September 22, 2022. In the petition
signed by Mark Allen, manager, the Debtor disclosed $2,200,185 in
assets and $5,618,570 in liabilities.
Judge Jacob A. Brown oversees the case.
Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler,
LLP, is the Debtor's counsel.
ALPHIA INC: Moody's Raises CFR to B2, Outlook Stable
----------------------------------------------------
Moody's Investors Service upgraded Alphia, Inc.'s Corporate Family
Rating to B2 from B3, its Probability of Default Rating to B2-PD
from B3-PD, and the rating on the company's first lien credit
facility to B2 from B3. The first lien credit facility consists of
a $40 million revolver expiring in March 2025 and a $285 million
first lien term loan due March 2026. The outlook is stable.
The upgrades reflect Moody's view that Alphia will sustain the
higher earnings level and stronger credit metrics achieved over the
last year and that operating cash flow will continue to improve.
Good consumer demand for pet food combined with the company's
initiatives to improve margins are contributing to stronger
earnings. The company has expanded the EBITDA margin by about 200
basis points over the last 12 months through a combination of
favorable contracting and pricing initiatives, moderating commodity
costs, realization of operating efficiencies such as leveraging
purchasing power with suppliers and installing equipment to reduce
waste, strong customer demand and tight capacity in the contract
manufacturing pet food space. The company has also overcome the
significant problems with the initial rollout of a new enterprise
resource planning ("ERP") system and is now realizing operating
efficiency benefits from the technology upgrade. As a result,
Alphia's debt/EBITDA leverage (on a Moody's adjusted basis)
improved to below 3x for the 12 months ended March 2023, down from
about 3.5x in fiscal 2022.
The upgrades also reflect Moody's expectations for stronger
operating cash flow in 2023 and 2024. Investments to increase
production capacity may limit free cash flow over the next two
years but will provide growth opportunities. The company estimates
about 25% of competing dry pet food industry co-manufacturing
capacity is exiting the market including through asset sales to
more strategic branded providers that is creating good new business
opportunities for Alphia. Furthermore, the pet population in the
United States is expected to continue growing at a modest 1%,
driven by factors such as an aging population seeking a companion,
increasing urbanization, and a growing awareness of the benefits of
pet ownership. This trend is likely to support the long-term demand
for Alphia's products. The company is likely to continue to
experience some volume weakness over the next few quarters due to
ongoing U.S. retail inventory retrenchment and pullback in
international sales, though Moody's views this as temporary. The
timing of new business wins could also mitigate the volume impact.
Alphia's low leverage provides cushion within credit metrics
expected for the B2 CFR to absorb a modest earnings pullback.
Upgrades:
Issuer: Alphia, Inc.
Corporate Family Rating, Upgraded to B2 from B3
Probability of Default Rating, Upgraded to B2-PD from B3-PD
Backed Senior Secured 1st Lien Bank Credit Facility, Upgraded to
B2 from B3
Outlook Actions:
Issuer: Alphia, Inc.
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
Alphia's B2 CFR broadly reflects its small but growing scale with
annual revenue forecasted in excess of $1 billion in 2023,
improving debt-to-EBITDA leverage that Moody's expects to be
sustained below 3x in 2023, and very good liquidity. The current
economic environment is challenging due to a decrease in consumer
spending and recent volume softness, as retailers are normalizing
purchasing patterns. This reduces visibility into the company's
operating performance in the next 12 months. Despite the
challenges, Moody's expects Alphia will be able to sustain and
improve its operating margin while managing higher interest rate
costs without significantly affecting volumes. The company has end
market concentration in super premium pet food and treats, with
limited geographic diversity and sales concentrated in the United
States. However, Alphia's products are essential items, and
customers typically cannot delay purchases even during periods of
economic uncertainty. Although trade-downs are possible if
inflationary conditions continue, pet owners tend to remain brand
loyal and avoid frequent switches of their pet's food as that could
cause digestive and other health issues. Alphia should continue to
benefit more fully from the efficiencies related to the new ERP
system now that it has resolved the initial implementation issues,
leading to improving profitability and positive free cash flow.
Recipe formulations and ingredient solutions are typically
developed in close collaboration with customers, resulting in
strong long-standing relationships, providing a competitive
advantage and high switching costs. Moody's assumes in the ratings
that the company will proactively address the March 2025 revolver
expiration and March 2026 term loan maturity at a manageable cash
interest cost.
Alphia has very good liquidity, supported by $52.8 million of cash
on the balance sheet as of March 2023, Moody's expectations of
positive annual free cash flow in 2023 and 2024, and full access to
the undrawn $40 million revolving credit facility. Operating cash
flow will improve from $19 million generated over the last 12
months though free cash flow may be restrained by growth
investments. Moody's does not anticipate the company will utilize
the revolver to fund working capital or capital investments over
the next 12 months given the cash and projected operating cash
flow, but the facility provides flexibility should the need arise.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectations that Alphia's
profitability will continue to improve and demand for the company's
products will remain stable over the next 12 months. Moody's also
expects that Alphia will maintain very good liquidity, generate
positive free cash flow despite a rising interest rate environment
and capacity expansion investments, and maintain debt-to-EBITDA
leverage below 3x over the next 12 months. Moody's also assumes the
company will proactively address the revolver and term loan
maturities at a manageable cash interest cost.
The ratings could be upgraded if the company is able to demonstrate
consistent organic revenue growth with a stable or expanding EBITDA
margin and generate meaningful positive free cash flow above $50
million while maintaining good reinvestment. The company would also
need to sustain debt-to-EBITDA below 3x, EBITDA less capital
spending-to-interest above 3x and financial policies that support
such credit metrics to be considered for an upgrade.
The ratings could be downgraded if the company's earnings recovery
stalls or reverses, or if liquidity deteriorates for any reason
including high reliance on revolver borrowings. The ratings could
also be downgraded if the company generates weak free cash flow,
EBITDA less capital spending-to-interest is below 2.5x, or
debt/EBITDA leverage is above 4.0x. The ratings could also be
downgraded if the company's financial policy becomes more
aggressive, including undertaking a large debt-funded acquisition
or shareholder distribution.
Alphia, Inc. (headquartered in Denver, Colorado and founded in
1985) is a leading contract manufacturer of super premium dry pet
food and treats, and supplier of ingredients that are sold to pet
food companies and retailers. The company generated revenue in
excess of $1 billion million in the 12 months period ended March
31, 2023. Alphia has been majority owned by private equity firm
J.H. Whitney Capital Partners since 2014.
The principal methodology used in these ratings was Consumer
Packaged Goods published in June 2022.
ALWAYS CARING: Income Generated From Estate Will Fund Plan
----------------------------------------------------------
Always Caring Health Care Services, Inc., submitted a First Amended
Plan of Reorganization, as modified.
Class 5 General Unsecured Claim of Department of Labor for Unpaid
Wage total $120,465. The General Unsecured Claim of the DOL in the
amount of $120,465.05 will be paid in 36 monthly installments with
interest at 5.75% in the amount of $3,651.15 commencing on the
Effective Date. The $3,651 monthly payment includes interest.
Class 6 General Unsecured Claim of Department of Labor for
Liquidated Damages & General Unsecured Claim of the IRS. The Class
6 Creditors will receive 15% of their Allowed Claims to be paid
over 60 months with interest at 5.75%:.
* Internal Revenue Service with a total claim amount of
$94,955.47 and impaired. The amount to be paid under Plan is
$14,244.82 ($273.74 per month including interest at 5.75%).
* DOL with a total claim amount of $120,465.05 and impaired. The
amount to be paid under Plan is $18,069.75 ($359.31 per month
including interest at 5.75%).
ACHCS believes that the Estate will generate sufficient future
income to fund the obligations under the proposed Plan and that no
further reorganization proceedings will be likely.
Attorneys for debtor Always Caring Health Care Services, Inc.:
Carlos A. Miranda, Esq.
Carlos G. Maldonado, Esq.
MIRANDA & MALDONADO, P.C.
5915 Silver Springs, Bldg. 7
El Paso, TX 79912
Tel: (915) 587-5000
Fax: (915) 587-5001
E-mail: cmiranda@eptxlawyers.com
A copy of the First Amended Plan of Reorganization dated June 30,
2023, is available at https://tinyurl.ph/qwJAG from
PacerMonitor.com.
About Always Caring Health Care Services
Always Caring Health Care Services, Inc., filed a petition for
Chapter 11 protection (Bankr. W.D. Tex. Case No. 22-30120) on Feb.
18, 20212, listing up to $50,000 in assets and up to $10 million in
liabilities. J. Thomas Ullrich, authorized representative, signed
the petition.
Judge H. Christopher Mott oversees the case.
The Debtor tapped Miranda & Maldonado, PC, as legal counsel.
AMADEUS TRUST: Seeks to Hire Golden Goodrich as Legal Counsel
-------------------------------------------------------------
Amadeus Trust seeks approval from the U.S. Bankruptcy Court for the
Central District of California to employ Golden Goodrich, LLP as
its legal counsel.
The Debtor requires legal counsel to:
a. give advice with respect to the requirements and provisions
of the Bankruptcy Code, Federal Rules of Bankruptcy Procedure,
Local Bankruptcy Rules, U.S. Trustee Guidelines, and other
applicable requirements which may affect the Debtor;
b. assist the Debtor in preparing and filing schedules and
statement of financial affairs, comply with the U.S. Trustee
requirements, and prepare other documents;
c. assist the Debtor in selling its property;
d. assist the Debtor in obtaining court authority to employ and
pay a real estate broker to market and sell its property, and work
with the broker to resolve any related issues;
e. assist the Debtor in obtaining court authority to employ
special litigation counsel to represent the Debtor in a state court
action;
f. assist the Debtor in obtaining court authority to employ a
third-party vacation rental company to market and rent its
property;
g. assist the Debtor in negotiations with creditors and other
parties involved in its Chapter 11 case;
h. assist the Debtor in the preparation of a disclosure
statement and Chapter 11 plan;
i. prepare legal papers;
j. represent the Debtor in any proceeding or hearing in the main
bankruptcy case where the rights of the estate or the Debtor may be
litigated or affected; and
k. other necessary legal services.
Golden Goodrich will be paid at these rates:
Jeffrey I. Golden $750 per hour
Christopher A. Minier $625 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received a pre-bankruptcy retainer of $25,000 and another
$25,000 as post-petition retainer.
Jeffrey Golden, Esq., a partner at Golden Goodrich, 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:
Jeffrey I. Golden, Esq.
Golden Goodrich, LLP
650 Town Center Drive, Suite 600
Costa Mesa, CA 92626
Telephone No: (714) 966-1000
Facsimile No: (714) 966-1002
Email: jgolden@go2.law
About Amadeus Trust Under Declaration
of Trust of January 24, 2000
The Amadeus Trust under Declaration of Trust of January 24, 2000
filed its voluntary petition for Chapter 11 protection (Bankr. C.D.
Calif. Case No. 23-13086) on May 18, 2023, with as much as $1
million to $10 million in both assets and liabilities. Gerald
Goldstein, as trustee, signed the petition.
Judge Neil W. Bason oversees the case.
Jeffrey I. Golden, Esq., Golden Goodrich, LLP serves as the
Debtor's legal counsel.
ARS SPECIALTY: Wins Interim Cash Collateral Access
--------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Texas, San
Antonio Division, authorized ARS Specialty Contractors LLC to use
cash collateral on an interim basis in accordance with the budget.
The Debtor has an immediate need to use the cash collateral of
Frost Bank, Great American Insurance Group, and Advance Service
Group LLC, the Debtor's secured creditors claiming liens on the
Debtor's personal property including cash and accounts.
The cash collateral will be used to continue the Debtor's ongoing
operations.
As adequate protection for the diminution in value of the Secured
Creditors' interests, the Secured Creditors are granted replacement
liens and security interests, in accordance with Bankruptcy Code
Sections 361, 363, 364(c)(2), 364(e), and 552, co-extensive with
their prepetition liens.
The replacement liens granted to the Secured Creditors in the Order
are automatically perfected without the need for filing of a UCC-1
financing statement with the Secretary of State's Office or any
other such act of perfection.
The Debtor is also directed to maintain insurance on the Secured
Creditors' collateral and pay taxes when due.
A copy of the Court's order is available at
https://urlcurt.com/u?l=7RAp1d from PacerMonitor.com.
About ARS Specialty Contractors LLC
ARS Specialty Contractors LLC is a foundation, structure, and
building exterior contractor.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Texas Case No. 23-50751) on June 15,
2023. The petition was signed by Elizabeth Yetman Chavez, the
Debtor's president. The Debtor has $24.6 million in total assets
and total liabilities of $10.7 million, according to its
schedules.
Judge Craig A. Gargotta oversees the case.
Joyce W. Lindauer, Esq., at JOYCE W. LINDAUER ATTORNEY, PLLC,
represents the Debtor as legal counsel.
Frost Bank, as creditor, is represented by Luttrell + Carmody Law
Group.
Creditor Great American Insurance Company, as creditor, is
represented by Weinstein Radcliff Pipkin LLP.
BALLY'S CORP: Fitch Affirms 'B+' IDR, Outlook Negative
------------------------------------------------------
Fitch Ratings has affirmed Bally's Corporation's Issuer Default
Rating (IDR) at 'B+'. Fitch has also affirmed the issuer's senior
secured term loan B and revolver at 'BB+'/'RR1' and its unsecured
notes at 'B-'/'RR6'. The Rating Outlook is Negative.
The rating reflects Bally's diverse portfolio of regional gaming
properties, the stable International Interactive business, expected
reduction in losses in the Domestic Interactive business, and
adequate liquidity. This is offset by the relatively high leverage,
the execution risk on the Chicago development, and the continued
drag to EBITDA at the Domestic Interactive segment.
The Negative Outlook reflects leverage that is operating slightly
above Fitch's 5.5x downgrade sensitivities, which could remain
elevated during the Chicago construction period.
KEY RATING DRIVERS
Leverage Remains Relatively High: Fitch's expects Bally's will
operate with EBITDAR leverage in the mid-5.0xs in the intermediate
term absent the temporary impact from the Chicago casino's
development. Fitch believes Bally's leverage trajectory will remain
consistent with 'B+' as the cash flow burn from interactive
subsides and the international Gamesys operations continue to
modestly grow. The Chicago development is non-recourse and
financing of the development should not have a material impact on
the leverage of the restricted group, which should allow leverage
at the restricted group to fall below 5.5x. Fitch will ultimately
include the Chicago's property cash flows and associated debt in
its consolidated leverage metrics given the perceived strategic
importance of the property.
Sale Leaseback Activity: Bally's completed the sale-leaseback of
its Tiverton, RI and Biloxi, MS casinos for $635 million in January
2023. A portion of the proceeds were used to reduce debt. The
company now has six properties under a master lease with Gaming &
Leisure Properties, Inc., (BBB-/Stable) a predominately
gaming-related REIT. Bally's has other unencumbered properties,
which it may use to fund development and other capital allocation
opportunities, including partial financing for the permanent
Chicago development. Future sale leasebacks of Bally's remaining
owned real estate would further reduce the company's financial
flexibility and potentially increase lease adjusted leverage, which
could pressure the IDR.
Chicago Casino Development: The proposed $1.7 billion Chicago
casino development will lead to medium-term elevated consolidated
leverage metrics, with gross consolidated adjusted leverage likely
remaining outside of Fitch's sensitivities through construction.
Consolidated adjusted leverage will remain elevated through 2025
amid construction, though Fitch forecasts Bally's can ultimately
maintain adjusted leverage below 5.5x long-term under its set of
assumptions for Chicago's cash flow potential (notwithstanding
material recessionary pressures). Bally's also plans to open a
temporary casino facility amid construction, which should lead to a
small amount of incremental EBITDA.
There is execution risk around the property opening in a reasonable
timeframe and EBITDA meeting Fitch's expectations. Fitch is
forecasting a modest 12% return on investment for the property,
leading to fully-ramped EBITDA of about $200 million. This
considers market-wide win-per-unit metrics of comparable
Chicagoland casinos, the property's positioning in the market, and
the city's higher than average gaming tax rate. Chicago is a
robust, though saturated, gaming market with many casinos within
close proximity to the city. Fitch believes the proposed casino
should be able to generate above average win-per-day metrics when
compared to competitive properties.
Strong Diversification: Bally's currently operates or is developing
17 properties in 11 states. The M&A strategy focuses primarily on
buying underperforming properties at discounted valuations. Bally's
properties are typically not market leaders but the company's
ongoing growth capex in its properties will support
competitiveness.
The addition of Gamesys in 2021 further added to Bally's total
size, gaming offering and geographic presence. Bally's North
America Interactive will also help diversify the business, though
this segment is still in ramp up mode and generating negative
EBITDA. Longer-term, the Chicago property will be a flagship
Bally's property providing additional scale and diversification.
Lagging Domestic Interactive Business: The momentum in U.S. sports
betting and online gaming has led to multiple land-based and
digital operators entering the market, including Bally's. Despite
its benefit to Bally's product diversification, Fitch does not
expect the company's U.S. interactive presence to be a material
credit driver in the near-to-intermediate term. Bally's is still
rolling its product offering out and the segment remains a drag on
cashflows.
The company is focusing on its iGaming business, as the New Jersey
product continues to increase market share and recent launches in
Pennsylvania and Ontario, Canada should be additive. Bally's is
also likely to benefit from pending Rhode Island legislation, which
would allow the company to be the sole provider of iGaming in the
state.
Uncertain Regional Gaming Outlook: Concerns regarding an economic
downturn in late-2023/2024 could result in lower than expected
performance for regional gaming casinos, particularly given tough
comparisons to a strong 2022. Current revenues continue to
outperform pre-pandemic performance, which should allow this to
manageable for some operators. In addition, Bally's should offset
some of the weakness given its recent property redevelopment and
expansions at its existing properties, including Rhode Island and
Kansas City.
Solid International Interactive Performance: Gamesys provides
geographic and platform diversification to Bally's predominately
U.S. land-based operating profile, as well as strong FCF
generation. Gamesys has a bingo and online casino presence in the
U.K. (about 58% of total Gamesys revenue), while also realizing
growth in the unregulated Japan market. The subsidiary provides the
in-house technology tools needed for Bally's U.S. Interactive
strategy. These benefits are balanced against medium-term
regulatory concerns from the U.K.'s Gambling Act Review, whose
eventual outcome could weigh more negatively on online casino
operators relative to betting-focused operators.
An additional concern is the fact that about 36% of Gamesys revenue
is generated in unregulated jurisdictions (mainly Japan). The main
risk surrounding unregulated markets is they may develop more
stringent regulations, which can adversely affect Gamesys' margins
or may force Gamesys out of the market.
DERIVATION SUMMARY
The 'B+' rating reflects Bally's diversified U.S. regional gaming
footprint and international digital footprint, as well as its
moderate pro forma gross adjusted leverage. The rating also
considers Bally's good discretionary FCF and liquidity position.
The rating is similar to other regional gaming operators with
comparable credit metrics, though Bally's has higher execution risk
(related to recent M&A and expansionary opportunities) and certain
peers have slightly better land-based portfolios.
MGM Resorts is considered slightly strong given its higher quality
properties, better diversification with a solid presence on the Las
Vegas Strip, strong liquidity and a greater normalized FCF profile.
Bally's is more diversified than Great Canadian Entertainment
Corporation (GCEC; B+/Stable) although GCGC's Toronto properties
benefit from a long-term exclusivity period.
The Gamesys business has smaller scale and weaker diversification
than peers Flutter Entertainment (BBB-/Negative) and Entain plc
(BB/Stable), which are more focused on fixed-odds betting (online
and retail) and poker. Flutter has a strong existing footprint in
the growing U.S. sports betting market given its ownership of
Fanduel.
KEY ASSUMPTIONS
-- Same-store land-based revenues increase mid-teen double-digits
in 2023 and 2024 due to opening of the Chicago casino and other
property specific improvements. Total company EBITDAR margins
are forecasted to be in the mid 20% range through the forecast;
-- No further sale-leasebacks are assumed during the forecast
period;
-- The $1.7 billion Chicago casino temporarily opens in 2H23 and
the permanent casino opens in late-2026. Fitch forecasts about
$200 million in EBITDA at the fully ramped property, or a 12%
ROI;
-- Bally's US Interactive business continues to ramp up through
2024. Fitch expects the segment to turn cash flow neutral in
late-2023, with long-term margins around 20% possible;
-- International Interactive grows low single digits through the
forecast. Segment EBITDA margins (after allocated
administrative expense) remains in the low-30% range;
-- Base interest rates applicable to the company's outstanding
variable rate debt obligations reflects current SOFR forward
curve;
-- FCF to be positive in the near term, and Fitch expects FCF
allocation to primarily focus on growth capex and share
repurchases. Further debt paydown is unlikely, though the
company will have capacity to do so.
The recovery analysis assumes that Bally's would be considered a
going concern in bankruptcy and that the company would be
reorganized rather than liquidated. Fitch assumes Bally's roughly
$128 million in leases with gaming REITs are not rejected in
bankruptcy and Fitch also assumes the rent is not re-set by the
landlords. Fitch has assumed a 10% administrative claim and full
draw on Bally's approximately $620 million revolver. The current
recovery ratings contemplate roughly $2.5 billion of secured debt
claims and approximately $1.5 billion of unsecured debt claims.
Fitch utilizes an aggregate going-concern EBITDA of about $492
million, which includes roughly $250 million from the U.S.
land-based business, $224 million from Gamesys, and $16 million
attributable to Bally's U.S. Interactive business. With a blended
enterprise value (EV) multiple of roughly 5.77x, this equates to
$2.84 billion of enterprise value. This is about $70 million higher
than the prior review's going-concern EBITDA given the introduction
of the Chicago casino development and lower-than-anticipated
leases.
The U.S. land-based going-concern EBITDA reflects a moderate
recessionary environment, characterized by 50% flow-through to
EBITDAR less master lease rent. It also represents a forward view
from a hypothetical decline in EBITDA that could result in negative
FCF or a financial covenant breach under the credit agreement, a
decline below $380MM in EBITDA would result in breaching 5.0x first
lien leverage covenant). Fitch includes a small amount of Bally's
Interactive EBITDA ($165 million) which is equal to Fitch's 2026
estimate, which already assumes a long ramp-up. The Interactive
business has no historical operations, while the U.S. sports
betting and iGaming industries have limited operating history given
their more recent legalization.
The International Interactive going-concern EBITDA reflects reduced
economics in the U.K. as a result of medium-term regulatory
headwinds and/or the loss of its Asian business (about 30% of
revenues) given its unregulated nature. This level of EBITDA is
roughly 30% below Fitch's 2024 forecast.
Fitch's recovery analysis for Bally's is based on blended EV
multiples for its three segments that are slightly below historical
market and M&A implied multiples. This is to account for the
difficulty of estimating multiples at the time of default, which
could be several years out for healthier issuers. Fitch assigns a
6.0x multiple to Bally's land-based segment given they primarily
operate in competitive markets, are not market leaders, and have
some degree of fixed costs related to their lease agreements.
This is higher than the 5.5x multiple used for pure gaming OpCos
(higher fixed costs) and lower than peers in more advantageous
markets or that have higher property quality. The 6.0x multiple is
a discount to traditional gaming assets' M&A and trading multiples
of around 8.0x. As the Interactive business grows and becomes a
more meaningful piece of overall cash flow, this could support a
higher EV multiple.
Fitch applies a 5.5x EV multiple to the International Interactive
segment, which is lower than the recovery multiple used for The
Stars Group given its geographic exposure outside of the U.S.,
regulatory headwinds in the U.K., smaller scale, and risks
associated with operating in grey regulatory markets in Asian. In
2021, Bally's purchased Gamesys for about 11.0x 2020 EBITDA.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- EBITDAR leverage sustaining below 4.5x;
-- Greater long-term certainty around regulatory environments in
key non-U.S. jurisdictions;
-- Successful development of Bally's U.S. interactive business and
profitability or market share exceeding Fitch's expectation.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- EBITDAR leverage sustaining above 5.5x;
-- Financing of Chicago development is recourse to the issuer
credit;
-- Discretionary FCF margins sustained below 10% of revenues;
-- Evidence of integration challenges with company's M&A strategy
(e.g. Gamesys);
-- Adverse regulatory actions that significantly impact
profitability, market access or the company's ability to
maintain gaming licenses globally.
Fitch could revise the Outlook back to Stable should Bally's
de-lever back below 5.5x adjusted leverage by 2024 and Fitch has a
greater degree of confidence that pro forma leverage will be below
5.5x upon the Chicago casino's completion.
LIQUIDITY AND DEBT STRUCTURE
Bally's has full availability on its $620 million revolver and has
$344 million in cash as of March 31, 2023. Bally's nearest maturity
is not until 2028. The company currently generates strong
discretionary FCF, although this will likely reduce during the
construction of the Chicago permanent facility. Fitch anticipates
funding for the casino will come from various sources, including a
potential IPO of the Chicago casino, construction financing,
proceeds from the Chicago temporary casino, and a ground lease
facility, which already has $200 million drawn.
ISSUER PROFILE
Bally's Corporation is a U.S. regional gaming operator that owns
and developing owning 17 casinos in 11 states. BALY also operates
an International online gaming business and a North American sports
betting business and igaming business.
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.
BAUSCH + LOMB: Fitch Keeps 'B-' IDR on Rating Watch Evolving
------------------------------------------------------------
Fitch Ratings maintains Bausch + Lomb Corporation's (BLCO) 'B-'
Issuer Default Rating (IDR) and its 'BB-'/'RR1' senior secured debt
on Rating Watch Evolving. The rating actions reflect the proposed
$1.75 billion cash acquisition of Novartis' ocular surface
pharmaceuticals. Bausch + Lomb has obtained fully committed
financing from J.P. Morgan for the transaction and intends to
finance the $1.75 billion upfront cash purchase price with new debt
prior to closing.
The Rating Watch Evolving reflects the potential for BLCO's ratings
to move higher should it become an unrestricted subsidiary and if
Bausch Health Companies' and Bausch Health Americas' (collectively
BHC) ownership is diminished through the distribution and/or sale
of its remaining interests. Conversely, BLCO's ratings could move
lower should BHC's ratings be downgraded or in the absence of the
aforementioned separation.
BLCO's ratings could also be downgraded should Fitch reconsider the
strength of the linkage between the entities that results in
equalized ratings or a one-notch uplift rather than the two-notch
uplift. BHC has not made any announcements that indicate a change
to their intentions for or relationship with BLCO. Resolution of
the Rating Watches may occur more than six months in the future.
KEY RATING DRIVERS
Acquisition to Increase Leverage: BLCO has announced that it plans
to acquire Novartis' ocular surface pharmaceuticals portfolio,
which includes Xiidra. This is a growing product for the treatment
of Dry Eye Disease. The acquisition will also include a mid-stage
developmental pharmaceutical product and AcuStream (an
investigational device intended to facilitate precise dosing and
accurate delivery of certain topical ophthalmic medications). Fitch
views the acquisition as strategically sound, as it increases the
company's presence in the ophthalmic pharmaceutical market.
However, it will increase leverage in the intermediate term.
BLCO's Ratings Tied to BHC's: The primary driver of BLCO's ratings
is BHC's 'CCC' IDR until the complete separation is finalized.
Fitch views the ringfencing and access and control factors to be
porous, thereby allowing BHC's credit profile to influence BLCO's.
Until separation, any changes in the linkage could lower BLCO's
ratings.
Supply Chain/Inflation: Supply chain constraints and inflationary
pressures are moderating for many firms in the healthcare sector.
BLCO is generally managing these issues through building stocks of
raw materials and API. In addition, the company is adding
redundancies in its suppliers.
Reliably Increasing Demand: Aging demographics, improved income
demographics in emerging markets, increasing digital screen times
and the ongoing increase in the incidence of diabetes will likely
drive low- to mid-single-digit growth in the demand for eye health
products and services during the intermediate term. A significant
number of BLCO's products enjoy leading market positions and strong
brand recognition. Consumables and contracted services account for
roughly 78% of BLCO's revenues, and the company's product portfolio
has only limited exposure to market exclusivity losses.
Pipeline to Support Growth: Innovation is important to remain
competitive in the eye health market. Fitch believes the company's
R&D efforts will help to drive intermediate- and long-term revenue
growth while also supporting margins. BLCO makes consistent and
significant investments in new product development. Its R&D efforts
span all three businesses with intensity geared more towards
surgical and ophthalmic pharmaceuticals. Fitch expects the company
will also continue to pursue innovation in its Vision Care business
with technological advancements being more incremental in nature.
Margin Expansion: Fitch assumes that margins will improve over the
forecast period. Improving sales mix and manufacturing efficiency
gains should increase gross margins. SG&A as a percent of sales are
forecasted to decline owing to strong management of other operating
costs. Increasing revenue should provide additional operating
leverage. In addition, less than 15% of BLCO's revenues are exposed
to branded pharmaceuticals pricing issues in the U.S.
Consistently Positive FCF: Advancing sales, improving margins,
solid working capital management and moderate capex requirements
should support consistently positive and increasing FCF. Fitch does
not expect that BLCO will pay dividends or engage in share
repurchases during the near term. Capital deployment will focus on
internal investment, external collaborations and targeted
acquisitions.
For a leading global eye health company, Fitch believes BLCO has
relatively minimal contingent liability risk regarding product
liability, intellectual property and other regulatory issues. Fitch
expects the company to reduce leverage primarily through debt
reduction and EBITDA growth.
DERIVATION SUMMARY
BLCO's 'B-'/Rating Watch Evolving is based on it being a
majority-owned subsidiary of Bausch Health until the separation.
Fitch views BLCO as a stronger subsidiary than the weaker parent
and notches BLCO's ratings by up by two from the consolidated
parent's IDR. The notching is based on Fitch's assessment of the
ringfencing as porous due to the lack of significant restrictive
investment or dividend covenants. Fitch also views access and
control as porous due to some overlapping Board of Directors
members. Until separation, BLCO's ratings will be influenced by
BHC's whose Rating Derivation is described in Fitch's release
"Fitch Downgrades Bausch Health to 'RD' and Subsequently Upgrades
to 'CCC' Post Distressed Exchange" dated Oct. 6, 2022.
BLCO is significantly smaller than Boston Scientific Corp.
(BBB+/Stable), Baxter International (BBB/Negative), Becton,
Dickinson & Company (BBB/Stable) and Zimmer Biomet Holdings, Inc.
(BBB/Stable). BLCO also operates in consumer health and
prescription pharmaceuticals, providing some additional sector
diversification compared to Boston Scientific and Zimmer Biomet. It
also presents a moderate degree of regulatory risk regarding drug
pricing. BLCO is somewhat less diversified than Becton, Dickinson
and Baxter. In addition, BLCO is solely focused on eye health,
while all of its peers address a number of disease markets, with
Zimmer Biomet also being somewhat less diversified than the others.
Zimmer Biomet and Becton, Dickinson have lower EBITDA leverage than
BLCO.
Parent-Subsidiary Linkage
The approach taken is a weak parent (BHC)/strong subsidiary (BLCO).
Using Fitch's PSL criteria, Fitch conclude there is porous ring
fencing and porous access & control. As such, Fitch rate the parent
and subsidiary at the consolidated level while notching the
subsidiary's rating two notches above BHC's IDR.
KEY ASSUMPTIONS
-- Mid- to high-single-digit organic revenue growth driven by the
uptake of new product commercialization moderate offset by
increased competitive pressure for some established products;
-- Annual FCF generation greater than $400 million during the
forecast period with moderately improving operating EBITDA
margins;
-- Dividends are not included in the forecast, but if instituted
would decrease FCF by the same amount as Fitch defines as
CFFO-capex-dividends;
-- Novartis portfolio acquisition increases EBITDA leverage.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch viewing BLCO on a standalone basis;
-- An upgrade at BHC.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Evidence of factors related to ring-fencing and access and
control that would lead Fitch to rate BLCO on a consolidated basis
with BHC or with one notch uplift rather than two notches;
-- A downgrade at BHC.
LIQUIDITY AND DEBT STRUCTURE
BLCO Liquidity: Fitch expects BLCO will have sufficient liquidity
in the near term with a with a $100 million draw on its $500
million, five-year secured revolving credit facility and no
near-term debt maturities given a $2.5 billion secured five-year
term loan. The company has mandatory annual amortization on its
term loan of $25 million. At March 31, 2023, the company had $346
million of cash on hand.
Recovery and Notching Assumptions
The recovery analysis assumes that BLCO would be considered a going
concern in bankruptcy and that the company would be reorganized
rather than liquidated. Fitch estimates a going concern enterprise
value (EV) of $4.9 billion for BLCO and assumes that administrative
claims consume 10% of this value in the recovery analysis.
The going concern EV is based upon estimates of post-reorganization
EBITDA and the assignment of an EBITDA multiple. Fitch's estimate
of BLCO's going concern EBITDA of $700 million. The assumed going
concern EBITDA reflects Fitch's expectation of Xiidra's
contribution and the company experiences some shortfalls in
commercializing the R&D pipeline, thereby resulting in a
restructuring or default.
Fitch assumes a recovery EV/EBITDA multiple of 7.0x for BLCO. This
is generally in-line with the 6.0x-7.0x Fitch typically assigns to
medical device/specialty pharmaceutical manufacturers. Fitch views
BLCO's operating environment doesn't face many of the challenges
that pure pharmaceutical companies often face.
Fitch applies a waterfall analysis to the going concern EV based on
the relative claims of the debt in the capital structure, and
assumes that the company would fully draw the revolvers in a
bankruptcy scenario. The senior secured credit facility, including
the term loans and revolver have outstanding recovery prospects in
a reorganization scenario and are rated 'BB-'/'RR1'/Rating Watch
Evolving.
ISSUER PROFILE
BLCO is currently a majority-owned subsidiary of BHC and a leading
global eye health company with a portfolio of over 400 products.
The company has a global research, development, manufacturing and
commercial footprint of approximately 12,000 employees and a
presence in approximately 90 countries.
ESG CONSIDERATIONS
Bausch + Lomb Corporation has an ESG Relevance Score of '4' for
Exposure to Social Impacts due to pressure to contain health care
spending growth; highly sensitive political environment, and social
pressure to contain costs or restrict pricing, which has a negative
impact on the credit profile, and is relevant to the ratings in
conjunction with other factors. Pharmaceuticals account for less
than 15% of the firm's total sales.
BDC GROUP: Seeks to Hire BerganKDV as Accountant
------------------------------------------------
BDC Group, Inc, seeks approval from the U.S. Bankruptcy Court for
the Northern District of Iowa to hire BerganKDV, LLC as its
accountant.
The firm's services include:
a. preparing tax returns and amending previously filed tax
returns;
b. advising the Debtor of its tax and accounting obligations,
duties and responsibilities while in bankruptcy;
d. accounting for the estate's inventory and assembling books
and records; and
e. taking all other necessary actions incident to the proper
preservation and administration of the Debtor's Chapter 11
bankruptcy.
The firm will be paid at these rates:
Joe Benter: $400 per hour
NemaFalahpour $375 per hour
Steven Keppler: $250 per hour
Lindsay Phillips: $250 per hour
Davis Darby: $165 per hour
Alli McClain: $148 per hour
Support Staff: $100 to 125 per hour
Joe Benter, a partner at BerganKDV, 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:
Joe Benter
BerganKDV, LLC
100 East Park Ave., Suite 300
Waterloo, IA 50703
Tel: (319) 234-6885
Fax: (319) 234-6287
About BDC Group Inc.
BDC Group, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Iowa Case No. 23-00484) on June 13,
2023, with $10 million to $50 million in both assets and
liabilities. Dennis Bruce, president, signed the petition.
Judge Thad J. Collins oversees the case.
The Debtor tapped Austin J. Peiffer, Esq., at AG & Business Legal
Strategies as legal counsel and BerganKDV, LLC as accountant.
Mary Jensen, Acting U.S. Trustee for Region 12, appointed an
official committee to represent unsecured creditors in the Debtor's
Chapter 11 case. The committee is represented by Smith Gambrell &
Russell, LLP.
BENEFYTT TECHNOLOGIES: Taps Jefferies LLC as Investment Banker
--------------------------------------------------------------
Benefytt Technologies Inc. and its affiliates seek approval from
the U.S. Bankruptcy Court for the Southern District of Texas to
hire Jefferies, LLC as their investment banker.
The Debtors require the services of an investment banker in
connection with any restructuring, financing or merger and
acquisition (M&A) transaction.
The firm will be paid as follows:
(a) A monthly fee of $175,000 until the termination of the
engagement agreement. After the payment of five full monthly fees
to Jefferies, 50 percent of all monthly fees actually paid to the
firm shall be credited once, without duplication, against any
transaction fee.
(b) A transaction fee of $2,250,000 promptly upon the
consummation of a restructuring or an M&A transaction. Jefferies
shall only be entitled to one transaction fee under the engagement
agreement.
(c) at the sole discretion of the Board of Directors, a
"discretionary fee" of up to $750,000 promptly upon the
consummation of a restructuring or an M&A transaction.
(d) A financing fee promptly upon the consummation of a
financing transaction equal to an amount to be determined according
to the following schedule:
i. 1.0 percent of any senior secured debt securities or
senior secured bank debt; plus
ii. 3.0 percent of any junior secured or unsecured debt
securities or junior secured or unsecured bank debt; plus
iii. 5.0 percent of the aggregate gross proceeds received or
to be received from the sale of equity securities, including,
without limitation, aggregate amounts committed by investors to
purchase equity securities.
Richard Morgner, a managing director at Jefferies, 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:
Richard W. Morgner
Jefferies LLC
520 Madison Avenue
New York, NY 10022
Tel: (212) 284-2300
About Benefytt Technologies
Benefytt Technologies, Inc. is a technology-driven distributor of
insurance products covering Medicare-related insurance plans as
well as other types of health insurance and supplemental products.
It operates in 44 states including Texas, New York, California, and
Florida.
On May 23, 2023, Benefytt Technologies and 17 affiliated debtors,
including American Service Insurance Agency LLC, filed voluntary
petitions for relief under Chapter 11 of the United States
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 23-90566).
Benefytt Technologies disclosed assets of $1 billion to $10 billion
and liabilities of $500 million to $1 billion as of the bankruptcy
filing.
Judge Christopher M. Lopez oversees the cases.
The Debtors tap ped Kirkland & Ellis, LLP as general bankruptcy
counsel; Jackson Walker, LLP as local bankruptcy counsel; Ankura
Consulting, LLC as restructuring advisor; and Jefferies Group, LLC
as financial advisor. Stretto, Inc. is the claims agent.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors 'Chapter 11 cases. The
committee tapped McDermott Will & Emery, LLP and Lowenstein
Sandler, LLP as bankruptcy counsel and AlixPartners, LLP as
financial advisor.
BETTER TRANSPORT: Taps Lane Law Firm as Bankruptcy Counsel
----------------------------------------------------------
Better Transport Services, LLC seeks approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ Lane
Law Firm, PLLC as its counsel.
The Debtor requires legal counsel to:
a. assist, advise and represent the Debtor relative to the
administration of its Chapter 11 case;
b. assist, advise and represent the Debtor in analyzing the
Debtor's assets and liabilities, investigate the extent and
validity of lien and claims, and participate in and review any
proposed asset sales or dispositions;
c. attend meetings and negotiate with representatives of
secured creditors;
d. assist the Debtor in the preparation, analysis and
negotiation of any plan of reorganization and disclosure
statement;
e. take all necessary action to protect and preserve the
interests of the Debtor;
f. appear before the bankruptcy court or any other court; and
g. perform all other necessary legal services.
The firm will be paid at these rates:
Robert C. Lane, Partner $550 per hour
Joshua D. Gordon, Associate $375 to $425 per hour
Paralegals/legal assistants $150 to $190 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The retainer fee is $37,500.
Robert Lane, Esq., a partner at Lane Law Firm, 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:
Robert C. Lane, Esq.
The Lane Law Firm, PLLC
6200 Savoy, Suite 1150
Houston, TX 77036
Telephone: (713) 595-8200
Facsimile: (713) 595-8201
Email: notifications@lanelaw.com
joshua.gordon@lanelaw.com
About Better Transport Services
Better Transport Services, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. S.D. Texas Case No.
23-32218) on June 15, 2023, with up to $100,000 in assets and up to
$500,000 in liabilities. Hana Almomani, president, signed the
petition.
Judge Eduardo V. Rodriguez oversees the case.
Robert C. Lane, Esq., at The Lane Law Firm, represents the Debtor
as legal counsel.
BOARDRIDERS INC: $450M Bank Debt Trades at 36% Discount
-------------------------------------------------------
Participations in a syndicated loan under which Boardriders Inc is
a borrower were trading in the secondary market around 64
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $450 million facility is a Term loan that is scheduled to
mature on April 6, 2024. The amount is fully drawn and
outstanding.
Boardriders, Inc. operates as an action sports and lifestyle
company. The Company designs, produces, and distributes apparel,
footwear, and accessories for outdoor action sports.
BOND EXPRESS INC: Seeks November 15 Extension to File Plan
----------------------------------------------------------
Bond Express, Inc. asks the U.S. Bankruptcy Court for the
Eastern District of New York for a second extension of time
to file a chapter 11 small business plan of reorganization
and disclosure statement to November 15, 2023.
The Debtor's time to file a plan of reorganization and disclosure
statement is currently set to expire on August 17, 2023.
The Debtor explained that it needs an additional time to complete
negotiations with the U.S. Small Business Administration and
thereafter to file a plan of reorganization and disclosure
statement, offering treatment to the main and other remaining
creditors of the estate. The Debtor stated that it is awaiting a
response from the U.S. Small Business Administration.
Bond Express, Inc. is represented by:
Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
2799 Coney Island Avenue, Suite 202
Brooklyn, NY 11235
Tel: (718) 513-3145
About Bond Express
Bond Express, Inc. filed a Chapter 11 bankruptcy petition (Bankr.
E.D.N.Y. Case No. 22-42628) on Oct. 21, 2022, with as much as $1
million in both assets and liabilities. Judge Jil Mazer-Marino
oversees the case.
The Law Offices of Alla Kachan, PC and Wisdom Professional
Services, Inc. serve as the Debtor's legal counsel and
accountant, respectively.
BOND EXPRESS: Seeks Nov. 15 Extension to File Plan
--------------------------------------------------
Bond Express, Inc., filed a motion to extend its time to file a
Chapter 11 Small Business Plan of Reorganization and Disclosure
Statement pursuant to 11 U.S.C. Section 1121(e).
The Debtor requests an extension of the time period to file a Plan
of Reorganization through and including November 15, 2023, pursuant
to section 1121(e) of the Bankruptcy Code, without prejudice to the
Debtor's right to seek an additional extension of such Period.
Bond Express is a small business Debtor as defined by 11 U.S.C.
Sec. 101(51C).
This second extension is not made for the purpose of delay. The
second requested extension of the time period to file a plan is
necessary due to the fact, that the time to file a plan is set to
expire on August 17, 2023, and the Debtor needs an additional time
to complete negotiations with the U.S. Small Business
Administration and thereafter to file a plan of reorganization and
disclosure statement, offering treatment to the main and other
remaining Creditors of the estate. To date the Debtor is awaiting
a response from the U.S. Small Business Administration.
The extension of the Time period to file a plan will enable the
Debtor to harmonize the diverse and competing interests that exist
and seek to resolve any conflicts in a reasoned and balanced manner
for the benefit of all parties in interest.
Attorney for the Debtor:
Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
2799 Coney Island Avenue, Suite 202
Brooklyn, NY 11235
Tel: (718) 513-3145
About Bond Express
Bond Express, Inc., filed a Chapter 11 bankruptcy petition (Bankr.
E.D.N.Y. Case No. 22-42628) on Oct. 21, 2022, with as much as $1
million in both assets and liabilities. Judge Jil Mazer-Marino
oversees the case.
The Law Offices of Alla Kachan, PC and Wisdom Professional
Services, Inc. serve as the Debtor's legal counsel and accountant,
respectively.
BRAND MARINADE: Unsecureds Will Get 18% to 25% in Liquidating Plan
------------------------------------------------------------------
Brand Marinade, LLC, filed with the U.S. Bankruptcy Court for the
Southern District of Florida a Plan of Liquidation dated July 6,
2023.
Brand Marinade is a California limited liability company organized
on July 31, 2009, operating in Florida since January 2023.
Its principal administrative offices are located at 4800 N Federal
Hwy Suite B200 Boca Raton, FL 33431, and its warehouse facility is
located at 1785 Timothy Dr #5, San Leandro, CA 94577. The Debtor
specializes in the design, production, fulfillment, and support of
a wide range of apparel and other branded merchandise solutions for
businesses and individuals.
Debtor is presently negotiating the sale of substantially all of
its equipment, inventory and intangibles, and if the negotiations
are fruitful, intends to file a motion to approve the sale under
Section 363 of the Code prior to confirmation of this Plan.
The Debtor's intent, if the sale terms are agreed and approved, is
to continue processing work in progress and accepting new orders
until such time, for the benefit of the Estate. Given the high
volume of secured debt, over $1.2M, and the estimated liquidation
value of such assets at $100,000, the distributions to unsecured
creditors will be funded from cash on hand and accounts receivable
collected prior to the final distribution.
Class II consists of General Unsecured Claims. Holders of Allowed
General Unsecured Claims shall receive a one-time, pro rata
distribution, in cash of all funds remaining in the Estate after
payment of Allowed Administrative Claims, Allowed priority tax
Claims, Authorized Final Expenses, and turnover of cash collateral
to Holders of Allowed Secured Claims. If the Plan is confirmed on a
nonconsensual basis, the Subchapter V trustee will make all such
payments in accordance. Class 2 is Impaired.
The allowed unsecured claims total $740,089.00 to $527,099.00. This
Class will receive a distribution of 18.39% to 25.82% of their
allowed claims or $136,122.23.
Class 3 consists of Equity Interest Holders, Jeremy Castro (100% of
Class A and Class B Common Stock) and Fam1st Capital, LLC (100% of
Class C shares). The existing equity holders will retain their
Interests. Class 3 is Unimpaired.
Debtor's assets consist of equipment, intangible, inventory and
accounts receivable that are subject to blanket liens exceeding
$1.1M, on the Debtor's pre-petition assets and post-petition
replacement liens on cash collateral (totaling $43,190) which the
Debtor will seek to reduce to the liquidation value of such assets,
plus cash and unencumbered accounts receivable (totaling
approximately $263,316 as of this filing).
All cash remaining after payment of Allowed Administrative
expenses, Allowed priority tax Claims, Approved Final Expenses and
turnover of cash collateral to Holders of Allowed General Unsecured
Claims under the Plan. Under the current liquidation analysis for
liquidation in Chapter 11 as proposed in this Plan, Holders of
Allowed General Unsecured Claims are estimated to receive a
dividend between eighteen and twenty-five percent, depending on the
outcome of various claim objections and other motions, and
contingent upon the outcome of final business operations and
expenses.
If the Plan is confirmed on a consensual basis, distributions under
the Plan will be made by the Debtor. The Plan will be funded from
the Debtor's cash on hand, proceeds from the sale of Debtor's
assets, and the collection of accounts receivable.
A full-text copy of the Liquidating Plan dated July 6, 2023 is
available at https://urlcurt.com/u?l=T9W8Cm from PacerMonitor.com
at no charge.
Attorney for Debtor:
Malinda Hayes, Esq.
Law Offices of Malinda L. Hayes
378 Northlake Blvd Suite 218
North Palm Beach, FL 33408
Tel: (561) 537-3796
Email: malinda@mlhlawoffices.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.
BW HAPTON GROUP: Taps Portillo Ronk Legal Team as Counsel
---------------------------------------------------------
BW Hampton Group, Inc. seeks approval from the U.S. Bankruptcy
Court for the Central District of California to employ Portillo
Ronk Legal Team as bankruptcy counsel.
The firm's services include:
a. advising the Debtor regarding its rights, duties, powers,
and responsibilities;
b. advising the Debtor with respect to the rights and remedies
of its bankruptcy estate and the rights, claims and interest of all
parties involved in its Chapter 11 case;
c. representing the Debtor in all hearings and proceedings in
the bankruptcy court involving its estate and in all related
meetings and negotiations with representatives of creditors and
other parties involved in its bankruptcy case except in adversary
proceedings unless there is retention arrangement;
d. taking all necessary action to protect and preserve the
Debtors' estate, including participating in litigation commenced by
or against the Debtor and litigating objections to claims filed
against the state.
e. taking all necessary action to negotiate, prepare, and
obtain approval of a Chapter 11 plan and related required
documents.
f. preparing employment and fee applications for the Debtor's
professionals.
g. preparing other court filings; and
h. other necessary legal services.
The firm will be paid at these rates:
Partner Laura J. Portillo $425 per hour
Partner Kevin C. Ronk $380 per hour
Associate Ryan Fox $350 per hour
Paralegal $75 to 90 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received a retainer in the amount of $10,000.
Laura Portillo, Esq., a partner at Portillo Ronk Legal Team,
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:
Laura Portillo, Esq.
Portillo Ronk Legal Team
5716 Corsa Ave, Suite 207
Westlake Village, CA 91362
Telephone: (805) 203-6123
Facsimile: (805) 830-1717
Email: Attorneys@portilloronk.com
About BW Hampton Group
The BW Hampton Group, Inc., a company in Glendale, Calif., filed
its voluntary petition for Chapter 11 protection (Bankr. C.D.
Calif. Case No. 23-13518) on June 7, 2023, with as much as $1
million to $10 million in both assets and liabilities. Judge Sandra
R. Klein oversees the case.
Laura Portillo, Esq., at Portillo Ronk Legal Team serves as the
Debtor's bankruptcy counsel.
CALLON PETROLEUM: Fitch Hikes IDR to 'B+' on Percussion Transaction
-------------------------------------------------------------------
Fitch Ratings has upgraded Callon Petroleum Company's Long-Term
Issuer Default Rating (IDR) to 'B+' from 'B' following close of the
Percussion Petroleum Operating II acquisition and Eagle Ford
divestment. Fitch has also upgraded the issue-level rating of
Callon's senior secured reserve-based credit facility (RBL) to
'BB+'/'RR1' from 'BB'/'RR1' and upgraded the senior unsecured notes
ratings to 'BB-'/'RR3' from 'B+'/'RR3'. Fitch has removed Callon's
ratings from Rating Watch Positive and assigned a Stable Rating
Outlook.
Callon's 'B+' IDR reflects the credit-accretive transactions and
conservative funding mix, oil-oriented, Permian-focused asset base,
which should enhance operational and capital efficiencies, improved
post-close liquidity position and expectation for positive FCF
while maintaining mid-cycle EBITDA leverage below 2.0x. Credit
concerns include the company's limited hedge coverage, which leaves
future cash flows mores susceptible to market price fluctuations.
KEY RATING DRIVERS
Credit-Accretive Transactions: Fitch views Callon's announced Eagle
Ford (EF) divestiture and acquisition of Percussion Petroleum
Operating II positively, as the contemplated plan will immediately
result in gross debt reduction, improve mid-cycle leverage metrics
and the pro forma asset base will provide a path for further debt
reduction. The approximately $655 million EF divestiture will
sufficiently cover the $265 million cash portion of the purchase
price and related fees and will allow the company to reduce
revolver borrowings by approximately $300 million post-close.
Callon has reduced its gross debt by over $1.0 billion since the
start of 2021 and has meaningfully reduced drawing on its RBL
credit facility. Fitch forecasts pro forma mid-cycle EBITDA
leverage below 2.0x with expectations for further deleveraging in
the near and medium term as Callon continues reducing absolute debt
toward its long-term $1.5 billion gross debt target.
Permian-Focused Asset Base: Fitch believes the contemplated
transactions will further solidify Callon's core Permian position,
which should improve operational and capital efficiency. The
Percussion acreage, which is currently producing approximately 14
thousand barrels of oil equivalent per day (Mboepd), includes
approximately 18 thousand net acres in Ward, Winkler and Loving
counties, and is 92% operated and contiguous to Callon's existing
Delaware position. Management's expertise in this region and close
proximity to existing acreage should facilitate operational and
capital efficiency improvements along with G&A savings.
Positive FCF; Mixed Allocation: Management is guiding toward pro
forma 2023 capex of $960 million-$980 million. This is expected to
result in low-single-digit production growth and positive FCF,
which Fitch believes will be allocated between the newly announced
$300 million share repurchase program through second-quarter 2025
and further debt reduction. Fitch forecasts annual FCF generation
of approximately $200 million-$300 million in 2023 and 2024 at
Fitch's $75/bbl and $70/bbl WTI prices, respectively.
Sub-2.0x Leverage; Deleveraging Capacity: Fitch forecasts sub-2.0x
pro forma mid-cycle EBITDA leverage, which utilizes Fitch's $57/bbl
WTI oil and $2.75/mcf gas price assumptions, at the company's
post-close gross debt balance of approximately $1.9 billion. Fitch
projects mid-cycle leverage will improve toward 1.5x following
continued debt reduction toward management's stated long-term
target of less than $1.5 billion.
Fitch views management's announced plan to call the remaining $187
million of outstanding 8.25% notes due 2025 as relatively
credit-neutral as it extends the maturity profile while only
marginally reducing the revolver availability.
Reduced Hedge Coverage: Standalone Callon is currently hedging
approximately 15% of its oil volumes and 17% of its natural gas
volumes for 2H23, which is lower than prior years and leaves the
company more susceptible to lower commodity prices. The company
will assume Percussion's current hedge book which will improve 2H23
hedge coverage to approximately 30%. Fitch views the reduced
hedging as negative to the credit profile although the company is
hedging at similar levels to its public peers. The low hedge
coverage is partially supported by the company's strong financial
flexibility, including low pro forma RBL utilization, FCF
generation and expectation for continued gross debt reduction.
DERIVATION SUMMARY
Callon's pro forma production of approximately 105 Mboepd (60% oil)
is higher than Permian peers Moss Creek Resources Holdings, Inc.
(B/Stable; 48.8 Mboepd in 1Q22), but smaller than Earthstone
Energy, Inc. (B+/Positive; Approximately 130 Mboepd pro forma the
Novo acquisition), SM Energy Company (BB-/Stable; 146 Mboepd in
1Q23) and Matador Resources Company (BB-/Stable; 140-145 Mboepd pro
forma the Advance acquisition). The company's oil mix of
approximately 60% is on the higher end of the Permian peer average
and supports the FCF and margin profiles.
The company's Fitch-calculated unhedged cash netback of $34.2/boe
in 1Q23 is higher than both Earthstone ($27.2/boe) and SM Energy
($29.4/boe), but lower than Matador ($38.2/boe) and Moss Creek
primarily given differences in oil mix.
KEY ASSUMPTIONS
Base Case:
- WTI (USD/bbl) of $75 in 2023, $70 in 2024, $65 in 2025, $60 in
2026 and $57 thereafter;
- Henry Hub (USD/mcf) of $3.00 in 2023, $3.50 in 2024, $3.00 in
2025 and $2.75 thereafter;
- Total production of 105 Mboepd in 2023 followed by low
single-digit production growth thereafter;
- Capex of $970 million in 2023 with production-linked increases
thereafter;
- Forecast FCF allocated between share buybacks and debt
repayment.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- FCF generation that leads to gross debt reduction approaching
$1.5 billion;
- Organic and/or M&A growth resulting in total production
approaching 125 Mboepd;
- Maintenance of economic drilling inventory, proved reserve life
and unit costs;
- Mid-cycle EBITDA Leverage sustained below 2.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Inability to generate FCF leading to an erosion of the liquidity
profile and/or RBL utilization sustained at or above 50%;
- Inability to manage economic drilling inventory and/or
expectations for weakened unit economics;
- Mid-cycle EBITDA Leverage sustained above 2.5x.
LIQUIDITY AND DEBT STRUCTURE
Improved Liquidity: As of March 31, 2023, Callon had $3 million of
cash and $465 million outstanding under its RBL credit facility.
The credit facility supports a $2.0 billion borrowing base and $1.5
billion of elected commitments. Pro forma the transactions, Callon
is expected to reduce its RBL borrowings by approximately $300
million with proceeds from the EF divestiture. The RBL availability
is expected to be modestly reduced following management's announced
plan to call the remaining $187 million of outstanding 8.25% notes
due 2025.
Other than the redemption of the notes, Fitch does not expect any
material borrowings under the RBL in the near term and believes the
liquidity profile is further supported by the expectation for
strong FCF generation in 2023 and 2024. The company's RBL facility
was recently extended to October 2027 in fourth-quarter 2022.
KEY RECOVERY RATING ASSUMPTIONS
The recovery analysis assumes that Callon would be recognized as a
going-concern (GC) in bankruptcy rather than liquidated;
Fitch has assumed a 10% administrative claim.
GC Approach
Callon's going-concern EBITDA assumption reflects Fitch's
projections under a stressed case price deck, which assumes WTI oil
prices $65 in 2023, $47 in 2024, $32 in 2025, $42 in 2026 and $45
longer term.
The GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which it bases the enterprise
valuation, which reflects the decline from current pricing levels
to stressed levels, and then a partial recovery coming out of a
troughed pricing environment.
An EV multiple of 3.5x EBITDA is applied to the GC EBITDA to
calculate a post-reorganization enterprise value. The choice of
this multiple considers the following factors:
The company's oil-weighted assets and sizable tier-1 drilling
inventory in both the Midland and Delaware basins compared to
peers.
The historical bankruptcy case study exit multiples for peer
companies ranged from 2.8x to 7.0x, with an average of 5.2x and a
median of 5.4x.
Liquidation Approach
The liquidation estimate reflects Fitch's view of the value of
balance sheet assets that can be realized in sale or liquidation
processes conducted during a bankruptcy or insolvency proceeding
and distributed to creditors.
Fitch considers valuations such as SEC PV-10 and M&A transactions
for each basin including multiples for production per flowing
barrel, proved reserves valuation, value per acre, and value per
drilling location.
The revolver is assumed to be 80% drawn upon default with the
expectation that commitments would be reduced during a
redetermination. The RBL is senior to the senior unsecured notes in
the waterfall.
The allocation of value in the liability waterfall and its priority
position results in recovery corresponding to 'RR1' for the senior
secured RBL credit facility and 'RR3' for the senior unsecured
notes.
ISSUER PROFILE
Callon Petroleum Company is a public U.S. onshore-focused
exploration and production (E&P) company focused in West Texas. The
company's pro forma asset base consists of approximately 145,000
net acres split between the Delaware and Midland Basins.
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.
CALPLANT I: Gets OK to Hire Onyx, Rabin Worldwide as Sale Agents
----------------------------------------------------------------
Calplant I Holdco, LLC and its affiliates received approval from
the U.S. Bankruptcy Court for the District of Delaware to employ
Onyx Asset Advisors, LLC and Rabin Worldwide, Inc. as their sale
agents.
The Debtors need the services of the firms to market and sell
personal properties that were used to operate their business in
Willows, Calif.
The firms will be paid a commission of 4 to 5 percent of the gross
proceeds.
As disclosed in court filings, Onyx and Rabin are "disinterested
persons" pursuant to Section 101(14) of the Bankruptcy Code.
The firms can be reached at:
Kevin Otus
Onyx Asset Advisors, LLC
One Market Street
Spear Tower, 36th Floor
San Francisco, CA 94105
Telephone: (415) 799-3299
Email: kotus@thinkonyx.com
- and --
Shira Weissman
Rabin Worldwide, Inc.
21 Locust Avenue, Suite 2A
Mill Valley, CA 94941
Telephone: (415) 522-5700
Email: info@rabin.com
About Calplant I Holdco
CalPlant I, LLC -- http://www.eurekamdf.com/-- is a Northern
California-based company focused on manufacturing sustainably
sourced building products, including the creation of the world's
first no-added-formaldehyde, rice straw-based medium density
fiberboard, Eureka MDF. CalPlant and its predecessor company,
CalAg, LLC, have spent many years researching, developing, and
patenting a process to make high-quality MDF using annually
renewable rice straw as the feedstock, the disposal of which has
posed environmental issues in California for decades.
CalPlant I and CalPlant I Holdco, LLC sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 21-11302) on Oct. 5, 2021. The cases
are handled by Honorable Judge John T. Dorsey.
CalPlant I Holdco listed up to $100 million in assets and up to
$50,000 in liabilities as of the bankruptcy filing while CalPlant I
listed as much as $500 million in both assets and liabilities.
The Debtors tapped Morrison & Foerster, LLP as bankruptcy counsel;
Morris James, LLP as local bankruptcy counsel; Paladin Management
Group as financial advisor; and KCoe Isom, LLP as auditor and tax
services provider. Kroll's Restructuring Administration practice,
formerly known as Prime Clerk, is the claims, noticing and
administrative agent.
CALPLANT I: To Seek Plan Confirmation on Aug. 15
------------------------------------------------
Judge John T. Dorsey has entered an order approving CalPlant I
Holdco, LLC, et al.'s Combined Disclosure Statement and Plan on an
interim basis for solicitation purposes.
The Plan confirmation hearing is scheduled for August 15, 2023, at
11:00 a.m. (prevailing Eastern Time).
Objections to approval and/or confirmation of the Plan on any
grounds, including adequacy of the Disclosures therein, if any,
must be filed and served no later than 4:00 p.m. (prevailing
Eastern Time) on August 3, 2023.
To be counted as votes to accept or reject the Plan, a Ballot must
be properly executed so that it is actually received no later than
4:00 p.m. (prevailing Eastern Time) on August 4, 2023.
The Debtors must submit a proposed Confirmation Order by no later
than July 27, 2023 (or 7 calendar days prior to the date of any
deadline to object to confirmation of the Plan).
The Debtors are authorized to file and serve replies or an omnibus
reply to any objections to Disclosure or confirmation of the Plan,
along with their memoranda of law in support of confirmation of the
Plan, either separately or by a single, consolidated reply, and any
affidavits or declarations in support of confirmation of the Plan
by no later than 12:00 p.m. (prevailing Eastern Time) on August 10,
2023 (or 3 business days prior to the date of any adjourned
Confirmation Hearing).
The 3018 Motion Deadline will be July 14, 2023, at 4:00 p.m.
(prevailing Eastern Time); provided, however, that if an objection
to a Claim is filed on or after the date that is 7 days before the
3018 Motion Deadline, then the 3018 Motion Deadline shall be
extended as to such Claim such that the holder thereof shall have
at least 7 days to file a 3018 Motion.
About CalPlant
CalPlant I, LLC -- http://www.eurekamdf.com/-- is a Northern
California-based company focused on manufacturing sustainably
sourced building products, including the creation of the world's
first no-added-formaldehyde, rice straw-based medium density
fiberboard, Eureka MDF. CalPlant and its predecessor company,
CalAg, LLC, have spent many years researching, developing, and
patenting a process to make high-quality MDF using annually
renewable rice straw as the feedstock, the disposal of which has
posed environmental issues in California for decades.
CalPlant I and CalPlant I Holdco, LLC, sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 21-11302) on Oct. 5, 2021. The cases
are handled by Honorable Judge John T. Dorsey.
CalPlant I Holdco listed up to $100 million in assets and up to
$50,000 in liabilities as of the bankruptcy filing while CalPlant I
listed as much as $500 million in both assets and liabilities.
The Debtors tapped Morrison & Foerster, LLP as bankruptcy counsel;
Morris James, LLP as local bankruptcy counsel; Paladin Management
Group as financial advisor; and KCoe Isom, LLP as auditor and tax
services provider. Kroll's Restructuring Administration practice,
formerly known as Prime Clerk, is the claims, noticing and
administrative agent.
CARTER TABERNACLE: Seeks Cash Collateral Access
-----------------------------------------------
Tabernacle Christian Methodist Episcopal Church, Inc. asks the U.S.
Bankruptcy Court for the Middle District of Florida, Orlando
Division, for authority to use cash collateral and provide adequate
protection to American First Federal and, to the extent necessary,
to the U.S. Small Business Administration, which has an inferior
interest.
The Debtor requires the use of cash collateral to successfully
reorganize.
The Debtor previously filed for Chapter 11 on September 26, 2016,
Case No: 6:16-bk06350-CCJ. The Debtor's Plan was confirmed and
successfully completed other than a mortgage balloon owed to
American First Federal, due and payable on June 30, 2023. The
Debtor had a contract for sale and purchase of its real property
which recently fell through. The Debtor has received a new sale
offer of $3.6 million and is awaiting the written contract.
As of the Petition Date, the Debtor has about $112,089 of cash in
deposit accounts; and no accounts receivable. The Debtor's other
personal property -- consisting of deposits, office equipment,
fixtures and vehicles -- is valued at approximately $61,004. The
Debtor's real property is valued at $3.6 million.
The Debtor owes approximately $2.384 million to American First
Federal that is secured by a UCC Financing Statement filed on April
8, 2011.
The Debtor owes approximately $500,000 to the SBA that is secured
by a UCC Financing Statement filed on January 18, 2022 (Doc
#202200168954) and a UCC Financing Statement filed on January 19,
2022 (Doc #202200183488).
A copy of the Debtor's request is available at
https://urlcurt.com/u?l=lP8kRw from PacerMonitor.com.
About Carter Tabernacle Christian Methodist Episcopal Church
Carter Tabernacle Christian Methodist Episcopal Church, Inc. sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
M.D. Fla. Case No. 23-02613) on June 29, 2023. In the petition
signed by Lenita C. Frith, chair of the Board of Stewards, the
Debtor disclosed $3,773,092 in assets and $2,884,315 in
liabilities.
Jeffrey S. Ainsworth, Esq., at Bransonlaw, PLLC, represents the
Debtor as legal counsel.
CASA SYSTEMS: S&P Upgrades ICR to 'CCC+', Outlook Stable
--------------------------------------------------------
S&P Global Ratings upgraded Casa Systems Inc. to 'CCC+' from 'CCC'
to reflect its overall view of its improved credit prospects
following the Transaction Support Agreement (TSA), despite the
company's reliance on favorable supply chain conditions and
exposure to volatile telecom capex patterns.
S&P said, "We also assigned a 'B-' issue-level rating to the
super-priority term loan given the recent debt paydown and improved
protections, and downgraded the issue-level rating on the stub
portion of the existing TLB to CCC-.
"The stable outlook reflects our view that a debt restructuring or
distressed exchange is unlikely to occur within the next 12 months.
We believe, with its near-term maturity addressed, Casa will be
able to focus on driving growth and positive free operating cash
flow (FOCF) over the next 12 months."
On June 15, 2023, Casa Systems Inc. announced the successful
completion of its TSA. There was strong support for the TSA, with
98% participation from existing lenders, translating to a
dollar-for-dollar rollover of participating lender's commitments
into a new super-priority $220 million dollar ($180 million at
close) term loan B (TLB) which will mature in December 2027.
The TSA execution allows Casa to continue pursuing growth
opportunities and deliver on increased revenue and profitability
expectations for 2023, unencumbered by material near-term
maturities, although the agreement introduces higher pricing and
more restrictive covenant protections.
In addition to extending maturity of Casa's debt, the TSA provides
enhanced protection and pricing for consenting lenders. As part of
the TSA, consenting lenders will receive better collateral
coverage, higher interest rates, stronger covenant protections, and
penny warrants representing up to 19.99% of Casa's fully diluted
outstanding shares. Furthermore, participating lenders gain the
right to appoint an observer to Casa's board of directors. The
remaining 2% of nonparticipating lender's commitments on the
company's existing TLB (approximately $5 million) will be repaid at
its original maturity date in December 2023. As required by the
TSA, following the execution of the transaction, the company paid
down $40 million of its 2027 TLB at par, resulting in total debt
outstanding of $180 million at close.
S&P said, "The stable outlook reflects our view that a debt
restructuring, or distressed exchange is unlikely to occur within
the next 12 months. We believe, with its near-term maturity
addressed, Casa will be able to focus on driving growth and
positive FOCF over the next 12 months.
"We could lower our ratings if we believe Casa could execute a debt
restructuring or distressed exchange within the next 12 months.
This could be due to our belief that a greater-than-expected cash
burn would result in a further weakened liquidity position, putting
the company at risk of breaching its financial maintenance
covenant.
"We could raise our ratings on Casa if the company is able display
a track record of improved revenue growth, profitability, and FOCF
generation, as well a growing cash cushion under its liquidity
covenant."
ESG credit indicators: E-2, S-2, G-4
S&P said, "Governance factors are now a negative consideration in
our credit rating analysis of Casa. This change stems from
additional adverse governance-related developments, including its
failure to maintain effective internal controls, recent management
and board changes, and the disproportionate effect supply chain
disruptions had on its performance. Casa's auditors identified
pervasive material weaknesses in the company's internal control
processes, including areas such as the control environment, risk
assessment, communication, and monitoring components of the COSO
framework. These findings by its auditors stem from an
insufficiently staffed finance organization with the requisite
knowledge or skills and ability to focus on internal control over
financial reporting matters."
CENTER FOR ALTERNATIVE: Wins Cash Collateral Access Thru July 15
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado authorized
Center for Alternative Medicine, PLLC to use cash collateral on an
interim basis through the earlier of July 15, 2023, or entry of an
Order approving the Debtor's Stipulation with the Colorado
Department of Revenue for Use of Cash Collateral and Stipulation
with CAN Capital, Inc. for Use of Cash Collateral and Provide
Adequate Protection.
The Court said the Debtor may adequately protect the pre-petition
security interests of Colorado Department of Revenue and CAN
Capital, Inc. in the cash collateral by granting to CDOR and CAN
Capital a replacement lien against the Debtor's post-petition
depository accounts and accounts receivable with the same priority
and validity as their pre-petition security interest and only to
the extent that the Debtor's use of cash collateral diminishes the
value of the such creditor's cash collateral position existing on
the date of the Debtor's bankruptcy filing; and expending cash
funds constituting cash collateral only for the purpose of ordinary
business expenses and regular overhead costs in accordance with the
Interim Budget and the Budget Variance.
A copy of the order is available at https://urlcurt.com/u?l=iIZkwD
from PacerMonitor.com.
About Center for Alternative
Center for Alternative Medicine, PLLC specializes in the management
and treatment of disc lesions, overuse soft tissue injuries,
traumatic injuries, pain management, and peripheral neuropathies.
The company is based in Pueblo, Colo.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Colo. Case No. 23-12482) on June 7,
2023, with $500,000 to $1 million in assets and $1 million to $10
million in liabilities. Theodore Wilding Davis, managing member,
signed the petition.
Judge Joseph G. Rosania, Jr. oversees the case.
Joshua B. Sheade, Esq., at Sheade Law Office, LLC is the Debtor's
legal counsel.
CENTEX REI: Unsecureds to Get 100 Cents on Dollar in Plan
---------------------------------------------------------
CenTex REI LLC filed with the U.S. Bankruptcy Court for the Western
District of Texas a Plan of Reorganization.
Debtor operates a residential real estate business. Specifically,
the Debtor purchases residential real property and renovates the
same for resale.
The downturn in the real estate market and the spike in interest
rates has prevented Debtor from selling a few of the properties
that a ready for sale.
In April of 2023, a secured lender, Texas Quest, initiated
foreclosure on three of the Debtor was left with no choice other
than file for chapter 11 bankruptcy. The Debtor is optimistic that
the significant advantages available under Subchapter V provide a
better opportunity to address outstanding obligations debt and
finally resolve the same.
The Debtor is proposing a plan of reorganization that contemplates
the repayment of all secured and priority unsecured claims as well
as a 100% dividend payout to all general unsecured creditors.
This Plan of Reorganization proposes to pay creditors of the Debtor
from cash flow generated by the sale of real properties through the
operations of Debtor's business. The Debtor plans to pay 100% of
its existing general unsecured creditor liabilities. All allowed
administration expenses, secured claims and priority unsecured
claims will be paid in full.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately one hundred cents on the dollar.
Class 3 consists of Non-priority Unsecured Claims. Claims will be
paid in full as funds are available from the sale of real property.
Each claim shall be entitled to a pro-rata amount of any excess
sales proceeds available after the payment of secured creditors.
The Debtor will commence payment upon the closing of the sale of
the first real property.
A full-text copy of the Plan of Reorganization dated July 3, 2023
is available at https://urlcurt.com/u?l=839KHO from
PacerMonitor.com at no charge.
Attorney for Debtor:
Morris E. White III, Esq.
Villa & White, LLP
1100 NW Loop 410 #802
San Antonio, TX 78213
Phone: (210) 225-4500
Fax: (210) 212-4649
Email: treywhite@villawhite.com
About CenTex REI
Centex REI, LLC, operates a residential real estate business.
Centex REI filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-50371) on April 3,
2023, with $1 million to $10 million in both assets and
liabilities. Judge Michael M. Parker oversees the case. Morris E.
White III, Esq., at Villa & White, LLP, is the Debtor's legal
counsel.
CHIMICHURRI CHICKEN: Seeks Dec 6 Extension to File Ch. 11 Plan
--------------------------------------------------------------
Chimichurri Chicken Corp. asks the U.S. Bankruptcy Court for the
Eastern District of New York to extend its time to file a chapter
11 small business plan of reorganization and disclosure statement
to December 6, 2023.
The Debtor's 180 days period to file the plan of reorganization
and disclosure statement is currently set to expire on August 8,
2023.
The Debtor asserts that ample cause exists to grant the requested
extension as, inter alia:
(1) the Debtor needs more time to reach mutually agreeable
terms of settlement with the creditors in order to fully
resolve the filed claims, and allowing the Debtor to
approve said items by an order of the bankruptcy court
and confirm a plan of reorganization containing said
terms,
(2) there is no prejudice to the creditors, as, in fact,
allowing the Debtor time to reach and finalize mutual
terms of treatment of the creditors' claims,
respectively, will be in the best interest of all
creditors.
Chimichurri Chicken Corp. is represented by:
Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
2799 Coney Island Avenue, Suite 202
Brooklyn, NY 11235
Tel: (718) 513-3145
About Chimichurri Chicken Corp.
Chimichurri Chicken Corp. sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
23-40453) on Feb. 9, 2023, with $50,001 to $100,000 in both
assets and liabilities. Judge Nancy Hershey Lord oversees the
case.
The Debtor tapped Alla Kachan, Esq., at the Law Offices of Alla
Kachan P.C. as legal counsel and Wisdom Professional Services,
Inc. as accountant.
CHRISTMAS TREE SHOPS: Taps SSG Advisors as Investment Banker
------------------------------------------------------------
Christmas Tree Shops, LLC and its affiliates received approval from
the U.S. Bankruptcy Court for the District of Delaware to employ
SSG Advisors, LLC as investment banker.
The firm will provide the following services:
Financing Services:
a. prepare an information memorandum describing Christmas Tree
Shops and its historical performance and prospects, including
existing contracts, marketing and sales, labor force, management,
and financial projections;
b. assist the Debtors in compiling a data room of any necessary
and appropriate documents related to a financing transaction;
c. assist the Debtors in developing a list of suitable potential
lenders and investors who will be contacted on a discreet and
confidential basis after approval by the Debtors;
d. coordinate the execution of confidentiality agreements for
potential lenders and investors wishing to review the information
memorandum;
e. assist the Debtors in coordinating site visits for interested
lenders and investors and work with the management team to develop
appropriate presentations for such visits;
f. solicit competitive offers from potential lenders and
investors;
g. advise and assist the Debtors in structuring the financing
and negotiating the financing agreements; and
h. assist the Debtors and their bankruptcy professionals, as
necessary, through closing.
Restructuring Services:
a. assist the Debtors in negotiations with various stakeholders
regarding a possible restructuring of existing claims and equity.
Sale Services:
a. prepare an information memorandum describing the Debtors and
their historical performance, prospects and brands, including
existing contracts, marketing and sales, labor force, management,
and financial projections;
b. assist the Debtors in compiling a data room of any necessary
and appropriate documents related to the sale;
c. assist the Debtors in developing a list of suitable potential
buyers for each brand who will be contacted on a discreet and
confidential basis after approval by Christmas Tree Shops, and
update and review such list with Christmas Tree Shops on an
on-going basis;
d. coordinate the execution of confidentiality agreements for
potential buyers wishing to review the information memorandum;
e. assist the Debtors in coordinating physical and virtual site
visits for interested buyers and work with the management team to
develop appropriate presentations for such visits;
f. solicit competitive offers from potential buyers;
g. advise and assist the Debtors in structuring the sale and
negotiating the sale agreement; and
h. otherwise assist the Debtors and other bankruptcy
professionals, as necessary, through closing.
SSG will be compensated as follows:
i. An initial fee of $100,000.
ii. A monthly fee of $100,000 for the first month payable
beginning July 1, 2023, which will be due and payable upon court
approval of SSG's retention, and $50,000 per month on the first of
each month thereafter throughout the engagement term subject to
court approval. After receipt of the third monthly fee, one half
(50%) of the subsequent monthly fees will be credited against the
transaction fee.
iii. Financing Fee. Upon the closing of a financing to any party
other than existing stakeholders, SSG shall be entitled to a fee,
payable in cash, equal to (a) the greater of (i) $650,000 or (ii)
2.00% of any senior debt raised from any financing source, plus 4%
of any Tranche B, traditional subordinated debt or equity raised
regardless of whether the Debtors choose to draw down the full
amount of the financing.
iv. Restructuring Fee. Upon the Closing of a restructuring, SSG
shall be entitled to a fee, payable in cash, equal to $650,000.
v. Sale Fee. Upon the consummation of a sale to any party other
than the existing stakeholders, SSG shall be entitled to a fee,
payable in cash, equal to the greater of (a) $650,000 or (b) 3
percent of total consideration. In the event that the Debtors
determine to terminate the sale process and move to a liquidation
of the inventory and other assets, then SSG shall be entitled to an
alternative sale fee of $150,000.
However, in the event of a sale to one or more of the DIP secured
lenders or any of the existing stakeholders by way of a credit bid
or otherwise, without a competing third-party overbid, SSG shall be
entitled to a fixed sale fee of $450,000. If a competing
third-party overbid is received, the foregoing sale fee structure
would apply without discount.
Teresa Kohl, managing director at SSG, disclosed in a court filing
that she is a "disinterested person" pursuant to Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Teresa C. Kohl
SSG Advisors, LLC
300 Barr Harbor Drive, Suite 420
West Conshohocken, PA 19428
Tel: (610) 940-1094/(610) 940-9521
Fax: (610) 940-4719
Email: tkohl@ssgca.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.
The Office of the U.S. Trustee for Region 3 appointed an official
committee of unsecured creditors in these Chapter 11 cases. The
committee tapped Womble Bond Dickinson (US) LLP and Porzio,
Bromberg & Newman, PC as counsel and Rock Creek Advisors, LLC as
financial advisor.
CITY BREWING: $850M Bank Debt Trades at 35% Discount
----------------------------------------------------
Participations in a syndicated loan under which City Brewing Co LLC
is a borrower were trading in the secondary market around 65.4
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $850 million facility is a Term loan that is scheduled to
mature on April 5, 2028. The amount is fully drawn and
outstanding.
City Brewing Company, LLC operates as a brewery company. The
Company produces beverages by contract, including beer, malts,
teas, and energy drinks.
COBRA HOLDINGS: $560M Bank Debt Trades at 16% Discount
------------------------------------------------------
Participations in a syndicated loan under which Cobra Holdings Inc
is a borrower were trading in the secondary market around 84.2
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $560 million facility is a Term loan that is scheduled to
mature on September 30, 2028. The amount is fully drawn and
outstanding.
Cobra Holdings PLC is retail and wholesale insurance broking
group.
COLONY DONKEY: Files Emergency Bid to Use Cash Collateral
---------------------------------------------------------
Colony Donkey, LLC asks the U.S. Bankruptcy Court for the Eastern
District of Texas, Sherman Division, for authority to use cash
collateral to make payroll and to pay other immediate expenses to
keep its doors open.
Pearl Capital and Rewards Network may assert liens on the Debtor's
operations. The secured creditors assert liens on, among other
things, the inventory generated by the Debtor.
An emergency exists in that the entire chance of the Debtor's
reorganizing depends on the Debtor's ability to immediately obtain
use the alleged Collateral of the Secured creditors to continue
company operations while effectuating a plan of reorganization.
A copy of the Debtor's motion and budget is available at
https://urlcurt.com/u?l=fEj8lf from PacerMonitor.com.
The Debtor projects $100,000 in income and $94,951 in total
expenses for 30 days.
About Colony Donkey, LLC
Colony Donkey, LLC owns and operates a restaurant in The Colony,
Texas.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Tex. Case No. 23-41174) on July 3,
2023. In the petition signed by Jessica Putnam, managing member,
the Debtor disclosed up to $50,000 in assets and up to $500,000 in
liabilities.
Eric A. Liepins, Esq., represents the Debtor as legal counsel.
CONTEMPORARY MANAGEMENT: Wins Cash Collateral Access Thru Aug 3
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Contemporary Management Services, LLC and affiliates to
use cash collateral on an interim basis in accordance with the
budget, with a 10% variance, through August 3, 2023.
The Debtor requires the use of cash collateral to continue its
operations.
Prior to the Petition Date, around June 2020 and in response to the
COVID-19 Pandemic, the Debtors entered into various EIDL loans with
the U.S. Small Business Administration, whereby the SBA loaned the
principal sum of approximately $149,000 to CMS, DDG PC, and Total
Dental which obligation was secured pursuant to, inter alia,
various security agreements executed sometime around June 2020 as
well. The Debtors acknowledge on behalf of themselves that pursuant
to the Loan Documents, the SBA holds a first priority perfected
security interest in the Collateral to secure the Debtors'
indebtedness to it.
As adequate protection, the SBA is granted a valid, perfected and
enforceable post-petition replacement lien on and security interest
in all assets of the Debtors and the proceeds thereof in the
continuing order and priority that existed as of the Petition Date
and without a determination as to the nature, extent, and validity
of such liens, and subject to: (i) United States Trustee fees
pursuant to 28 U.S.C. Section 1930, together with interest, if any,
pursuant to 31 U.S.C. Section 3717 and any Clerk's filing fees;
(ii) the fees of Chapter 11 professionals to the extent allowed
pursuant to 11 U.S.C. Section 330 or 331; and (iii) the fees and
commissions of a hypothetical Chapter 7 trustee in an amount not to
exceed $10,000. The Replacement Liens will not attach to or be
enforceable against any avoidance powers, actions and any proceeds
thereof held by the Debtors or any trustee for the Debtors,
including those pursuant to the avoidance powers set forth in
sections 544, 547, 548, and 550.
Furthermore, Debtors CMS, Total Dental, and DDG PC will continue to
make their monthly payments due under their respective EIDL loans
with the SBA at $731 a month.
The Debtors' right to use the cash collateral will terminate
immediately upon the occurrence of any of these events:
a) The entry of a Court order converting or dismissing the
Chapter 11 cases;
b) The entry of a Court order confirming a plan of
reorganization in the Chapter 11 cases;
c) The Debtor's failure to perform any of their obligations
under the Order, and cure the Default within 10 business days after
the giving of written notice thereof to the Debtors, the SBA, and
the Other Secured Parties, the United States Trustee and any
official committee appointed in the Chapter 11 Cases by the SBA,
and the Other Secured Parties;
d) The amendment, supplementation, waiver or other
modification of all or part of the Order without, the SBA, and the
Other Secured Parties having been given at least 72 hours advance,
written notice, by overnight service upon them. However, in no
event will the Debtors seek emergency relief concerning the Order
from the Court without the SBA, and the Other Secured Parties
having been given at least 24 hours advance, actual notice (via
telephone or electronic mail); or
e) The termination of all or substantially all of the
operations of the Debtors, whether by voluntary act(s) or
omission(s) of the Debtors, or otherwise.
A final hearing on the matter is set for August 3 at 10 a.m.
A copy of the order is available at https://urlcurt.com/u?l=sneMnw
from PacerMonitor.com.
About Contemporary Management Services, LLC
Contemporary Management Services, LLC is a management company that
provides management services to certain affiliated entities, Dale
D. Goldschlag D.D.S. P.C. and various non-debtor entities,
including Manhattan Dental Implant Solutions P.C. CMS manages the
back-office, non-doctor staff, call centers, equipment and other
supplies, scheduling of patients, marketing and all of the
non-clinical work of the dental practices.
DDG PC, which operates under the trade name Contemporary Dental
Implant Centre, is a professional corporation through which a New
York based dental practice is operated.
Refined Dental Laboratory LLC fabricated the crowns used by the
professional corporations when servicing patients. It owns certain
inventory and finances certain equipment all presently housed at
the laboratory facility in Valley Stream, NY.
Total Dental Implant Solutions LLC, which did business as Genicore,
is a medical device company specializing in dental implants.
CDIC Holdings, LLC is a real estate entity and exists as the
counterparty to a majority of the leases from which each dental
office operates.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 23-22459) on June
15, 2023. In the petition signed by Dale Goldschlag, manager, the
Debtor disclosed $4,444 in assets and $781,268 in liabilities.
Judge Sean H. Lane oversees the case.
Robert L. Rattet, Esq., and Jonathan S. Pasternak, Esq., at
Davidoff Hutcher and Citron, LLP, represent the Debtors as legal
counsel.
CONTOUR PROPCO: Property Sale Proceeds to Fund Plan
---------------------------------------------------
Contour Propco 1735 S Mission LLC and Contour Opco 1735 S Mission
LLC filed with the U.S. Bankruptcy Court for the District of Nevada
a Disclosure Statement for the Joint Plan of Reorganization.
Debtors operate the Property more commonly known as Estancia Senior
Living. Estancia Senior Living is a two-story, newly developed
assisted living and memory care community located at 1735 S.
Mission Road in Fallbrook, California.
Propco holds title to the real property on which the Estancia
Senior Living Facility is located and operated. Opco operates the
Estancia Senior Living facility as a co-licensee with Cogir
pursuant that certain Management Agreement, dated August 3, 2022
(the "Management Agreement"). Under the Management Agreement, Cogir
is the onsite operator of the facility, while Opco is identified as
the operator.
The Debtors, together with Forbright, entered into the Scheduling
Stipulation pursuant to which the Bankruptcy Court issued the
Scheduling Order. Under the Scheduling Stipulation and Order,
Debtors are pursuing multiple tracks to identify the Restructuring
Transaction or series of Restructuring Transactions that will
maximize the value of Debtors' Estates.
In order to facilitate their efforts at maximizing the value of
their Estates, the Debtors are in the process of obtaining the
Bankruptcy Court's authorization to retain Force 10 Partners, LLC,
as its financial advisor and, currently, to provide Nicholas Rubin,
a Force 10 principal, to serve as Debtors' chief restructuring
officer. In addition, and after consultation with Forbright,
Debtors are in the process of retaining Senior Living Investment
Banking ("SLIB") to market the Property to potential purchasers who
wish to maintain the Property as a senior assisted living facility,
with Force 10 coordinating all other marketing and restructuring
efforts. The Debtors, through Force 10 and SLIB (as otherwise
agreed), continue to market the Property to interested parties.
The Debtors are negotiating with and identifying other
counterparties to a Restructuring Transaction or series of
Restructuring Transactions, including those that may ultimately
serve as the stalking horse bidder at the Auction.
The Debtors focused on developing and executing a reorganization
strategy to: (a) maximize the value of their Estates; (b) address
the factors that led to the bankruptcy filing; and (c) enable the
Debtors to proceed through a thoughtful sale process to sell their
Property for the highest and best value.
Class 4 consists of General Unsecured Claims Against Propco Only.
Except to the extent that a Holder of an Allowed Class 4 Claim has
been paid by the Debtors prior to the Effective Date or agrees to
alternate treatment, each Holder of an Allowed Class 4 Claim shall
be paid its Pro Rata share with Classes 5 and 6 of any proceeds
from the sale of the Property remaining after the satisfaction of
Allowed Administrative Claims (subject to the Professional Fees
Carve Out), Priority Tax Claims, Priority Non-Tax Claims, and
Allowed Claims in Classes 1, 2, and 3. This Class is impaired.
Class 5 consists of General Unsecured Claims Against Opco Only.
Except to the extent that a Holder of an Allowed Class 5 Claim has
been paid by the Debtors prior to the Effective Date or agrees to
alternate treatment, each Holder of an Allowed Class 5 Claim shall
be paid its Pro Rata share with Classes 4 and 6 of any proceeds
from the sale of the Property remaining after the satisfaction of
Allowed Administrative Claims (subject to the Professional Fees
Carve Out), Priority Tax Claims, Priority Non-Tax Claims, and
Allowed Claims in Classes 1, 2, and 3. This Class is impaired.
Class 6 consists of General Unsecured Claims Against Both Propco
and Opco. Except to the extent that a Holder of an Allowed Class 6
Claim has been paid by the Debtors prior to the Effective Date or
agrees to alternate treatment, each Holder of an Allowed Class 6
Claim shall be paid its Pro Rata share with Classes 4 and 5 of any
proceeds from the sale of the Property remaining after the
satisfaction of Allowed Administrative Claims (subject to the
Professional Fees Carve Out), Priority Tax Claims, Priority Non-Tax
Claims, and Allowed Claims in Classes 1, 2 and 3.
In these Chapter 11 Cases, the Debtors are each limited liability
companies whose ownership interests are classified in Class 7 and
8, respectively. Except to the extent that a Holder of an Allowed
Class 7 and/or 8 Equity Interest has been paid by the Debtors prior
to the Effective Date or agrees to alternate treatment, each Holder
of an Allowed Class 7 and/or 8 Equity Interest shall be paid its
Pro Rata share of any proceeds from the sale of the Property, if
any remaining after the satisfaction of Allowed Administrative
Claims (subject to the Professional Fees Carve-Out), Priority Tax
Claims, Priority Non-Tax Claims, and Allowed Claims in Classes 1,
2, 3, 4, 5 and 6. Upon the Effective Date, the Equity Interests in
Propco and Opco shall be extinguished.
Prior to, on, or after the Effective Date, and pursuant to the
Plan, the Debtors and the Reorganized Debtors shall enter into the
restructuring transactions (each, a "Restructuring Transaction"),
and shall take any actions as may be necessary or appropriate to
affect a restructuring of Debtors’ businesses or the overall
organizational structure of the Debtors and/or Reorganized Debtors.
The Restructuring Transactions may include one or more sales,
mergers, consolidations, restructurings, conversions, dissolutions,
transfers, or liquidations as may be determined by the Debtors or
the Reorganized Debtors to be necessary or appropriate.
Pursuant to the Plan, and as the Debtors' Restructuring
Transaction, the Debtors seek to sell their Property and related
Assets in conjunction with the Plan Confirmation process. The
Assets will be sold pursuant to an auction as set forth in those
certain Bidding Procedures.
A full-text copy of the Disclosure Statement dated July 6, 2023 is
available at https://urlcurt.com/u?l=pfdUqT from PacerMonitor.com
at no charge.
Proposed Counsel for Debtors:
Samuel A. Schwartz, Esq.
SCHWARTZ LAW, PLLC
601 East Bridger Avenue
Las Vegas, NV 89101
Tel: 702-385-5544
Fax: 702-201-1330
Email: saschwartz@nvfirm.com
About Contour Propco 1735 S Mission
Contour Opco 1735 S Mission, LLC and Contour Propco 1735 S Mission,
LLC filed their petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Nev. Case Nos. 23-12082 and 23-12083,
respectively) on May 23, 2023. In the petitions signed by their
chief executive officer, David Daneshforooz, the Debtors reported
$10 million to $50 million in both assets and liabilities.
Judge Mike K. Nakagawa oversees the cases.
Samuel A. Schwartz, Esq., at Schwartz Law, PLLC, is the Debtors'
counsel.
DAMON CAPITAL: Court Approves Disclosure Statement
--------------------------------------------------
Judge H. Christopher Mott has entered an order approving the
Disclosure Statement of Damon Capital, Ltd.
Aug. 14, 2023 at 1:00 p.m. (CT), in the U.S. Bankruptcy Court,
Courtroom No. 2, 903 San Jacinto Blvd., Austin, Texas, is fixed as
the time and place of the hearing on confirmation of the Plan and
any objections thereto.
Aug. 1, 2023 at 5:00 p.m. (CT) is fixed as the last day for
submitting ballots for acceptances or rejections of the Plan.
Aug. 1, 2023 at 5:00 p.m. (CT) is also fixed as the last day for
filing and serving written objections to confirmation of the Plan.
By Aug. 9, 2023, counsel for the Debtor must file with the Court
(a) a ballot summary in the form required by Local Bankruptcy Rule
3018(b) with a copy of the ballots; (b) a memorandum of legal
authorities addressing any unresolved objections filed to the Plan;
and (c) under notice coversheet, a proposed form of Order
confirming the Plan.
About Damon Capital Ltd.
Damon Capital, Ltd., is primarily engaged in renting and leasing
real estate properties.
Damon Capital sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-10063) on Feb. 6,
2023. In the petition signed by Chris Damon, president, the Debtor
disclosed between #1 million and $10 million in both assets and
liabilities.
The case is overseen by the Honorable Bankruptcy Judge H.
Christopher Mott.
Stephen W. Sather, Esq., at Barron & Newburger, P.C., represents
the Debtor.
DAWN ACQUISITIONS: $550M Bank Debt Trades at 38% Discount
---------------------------------------------------------
Participations in a syndicated loan under which Dawn Acquisitions
LLC is a borrower were trading in the secondary market around 61.6
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $550 million facility is a Term loan that is scheduled to
mature on December 31, 2025. The amount is fully drawn and
outstanding.
Dawn Acquisitions LLC, doing business as Evoque Data Center
Solutions, provides digital infrastructure and data center
solutions. The Company offers multi-generational infrastructure,
colocation, connectivity, build-to-suit, and cloud engineering
solutions.
DEYO ENTERPRISES: Taps Charles A. Higgs as Litigation Counsel
-------------------------------------------------------------
Deyo Enterprises, Inc., seeks approval from the U.S. Bankruptcy
Court for the Southern District of New York to hire the Law Office
of Charles A. Higgs as its special litigation counsel.
The Debtor requires a special litigation counsel to:
a. draft and file applications for examination and production
of documents under Bankruptcy Rule 2004, and conduct examinations
under Bankruptcy Rule 2004;
b. represent the Debtor in adversary proceedings; and
c. advise the Debtor on various litigation matters.
The hourly rates charged by the firm's attorneys and paralegals are
as follows:
Charles Higgs, Esq. $400 per hour
Paralegals $200 per hour
The firm received a pre-bankruptcy retainer of $4,000 in connection
with a litigation related to the Debtor's Chapter 11 case.
As disclosed in court filings, the Law Office of Charles A. Higgs
is a "disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached at:
Charles A. Higgs, Esq.
Law Office of Charles A. Higgs
44 S. Broadway, Suite 100
White Plains, NY 10601
Tel: 917-673-3768
Email: Legal@FreshStartEsq.com
About Deyo Enterprises
Deyo Enterprises, Inc., doing business as Supercuts, filed a
petition under Chapter 11, Subchapter V of the Bankruptcy Code
(Bankr. S.D.N.Y. Case No. 23-22323) on May 2, 2023, with as much as
$50,000 in assets and $500,001 to $1 million in liabilities.
Jolene Wee has been appointed as Subchapter V trustee.
Judge Sean H. Lane oversees the case.
The Debtor tapped The Law Office of James J. Rufo as bankruptcy
counsel and the Law Office of Charles A. Higgs as special
litigation counsel.
EARTHSTONE ENERGY: Fitch Rates New Unsec. Notes Due 2031 'B+'
-------------------------------------------------------------
Fitch Ratings has assigned a 'B+'/'RR4' rating to Earthstone Energy
Holdings, LLC's (Earthstone) proposed senior unsecured notes due
2031. The company intends to use the proceeds from the notes to
fund a portion of the $1.0 billion net purchase price for the
announced Novo Oil & Gas Holdings, LLC (Novo) acquisition and
potentially for reduction of outstanding reserve-based credit
facility (RBL) borrowings.
Fitch views the company proposed unsecured note issuance as
relatively credit-neutral as it will reduce the reliance on the
company's RBL facility and improve liquidity despite adding
permanent debt to the capital structure. Fitch believes the
proposed note sizing is adequate and the long-term capital
structure will be commensurate with peers of similar size and
scale.
Earthstone's ratings and Positive Outlook reflect the announced
Novo acquisition, which will be accretive to size, scale and FCF
generation. The ratings also reflect the company's adequate hedging
profile and the expectation that FCF will be applied toward
reduction of the RBL post-close, which should allow Earthstone to
maintain sub-1.5x leverage metrics and improve the liquidity
profile.
KEY RATING DRIVERS
Scale Enhancing, FCF Accretive Acquisition: Earthstone's announced
net $1.0 billion acquisition of Nova adds approximately 11,300 net
acres in the Delaware basin, increases production and proved
reserves by 33% and improves the company's inventory life from 10
to approximately 13 years through an additional 200 gross drilling
locations. The acreage will immediately compete for capital because
the drilling locations are within the top quartile of the company's
existing inventory, and the vast majority of locations have an
average breakeven oil price below $40/bbl.
Management intends to maintain its five-rig drilling program and
its current capex guidance. This should facilitate a meaningful
increase in FCF generation in 2023 and 2024 at current commodity
prices. Fitch views the transaction favorably in the medium to long
term despite the near-term increase in gross debt.
Cash and Debt-Funded Transaction: Fitch views the acquisition as
modestly leveraging in the near term and neutral in the medium
term, given Earthstone has adequate headroom under its 2.0x EBITDA
leverage sensitivity. The transaction is expected to be funded with
cash, the proposed note and borrowings under the company's RBL
facility, increasing absolute debt levels to approximately $1.9
billion post-close. Fitch expects management will allocate the vast
majority of FCF to reducing RBL borrowings over the next 12 to 18
months, which should improve leverage metrics and liquidity.
Sub-1.5x Leverage; FCF Generation: Fitch's base case forecasts pro
forma 2023 leverage of 1.3x and 2026 leverage (using our mid-cycle
$50/bbl WTI price and $2.75/mcf natural gas price) also at 1.3x.
This allows the company to maintain ample headroom under Fitch's
positive EBITDA leverage sensitivity of 2.0x. Fitch projects
approximately $400 million-$450 million of annual FCF generation in
2023 and 2024, which supports the reduction of RBL borrowings and
total gross debt below $1.5 billion over the next 12 to 18 months.
Earthstone's FCF benefits from it not paying a dividend and its
nearly zero organic growth capital spending, which is expected to
continue post-close. An inability to repay RBL borrowings in a
timely manner and/or a reduction in the forecast FCF profile could
result in a stabilization of the Outlook.
Adequate Hedging Profile: Additional FCF visibility is provided by
Earthstone's hedging program. On a pro forma basis, the program
includes approximately 40%-45% of oil volumes hedged through the
remainder of 2023 at an average price of $78 WTI. The company is
also hedging roughly 35% of natural gas production at an average
price of approximately $3.50. Fitch expects Earthstone to layer in
additional hedges for 2024 to protect cash flows, thereby
supporting gross debt reduction and the liquidity profile.
Acquisition Growth Strategy: Earthstone has closed six
acquisitions, including Chisholm, Bighorn and Titus, since 2021 for
approximately $2.5 billion. Fitch expects Earthstone to continue to
look for in-basin, bolt-on opportunities to support its growth.
Earthstone's reliance on M&A, particularly at its current pace,
increases execution risk. However, the company has reasonably
integrated its existing acquisitions, and future integration risks
are tempered by its Permian Basin focus.
Single Basin Focus: Earthstone has some asset diversification with
material footprints in both the Midland and Delaware Permian
sub-basins. However, its single basin strategy, although common for
companies of its size, provides relatively little diversification
benefits.
Parent Subsidiary Ratings Equalized: Fitch consolidates the ratings
of Earthstone Energy, Inc. and Earthstone Energy Holdings LLC, its
wholly owned subsidiary where debt is issued. Under Fitch's "Parent
and Subsidiary Linkage Criteria" this follows the
stronger-subsidiary/weaker-parent relationship. The ratings are
consolidated to reflect both open access and control and the
absence of legal ring fencing.
DERIVATION SUMMARY
Pro forma the Novo transaction, Earthstone is expected to produce
approximately 130 Mboepd. This is slightly larger than Permian peer
Callon Petroluem (B/Positive Watch; pro forma production of
approximately 120 Mboepd) but smaller than Matador Resources
Company (BB-/Stable; 140-145 Mboepd pro forma the Advanced Energy
Partners transaction) and SM Energy Company (BB-/Stable; 146
Mboepd).
Earthstone's 1Q23 Fitch-calculated unhedged cash netback of
$27.2/boe compares favorably across Fitch's aggregate E&P portfolio
as is consistent with its position in the highly economic Permian
Basin. Compared to similarly sized Permian peers Callon
($43.5/boe), Matador ($38.2/boe), and SM ($29.4/boe), Earthstone's
netback is towards the lower end of the group primarily given its
lower oil mix. Mid-cycle EBITDA leverage profiles among each of
these peers are relatively consistent at around 1.5x.
KEY ASSUMPTIONS
-- WTI (USD/bbl) of $75 in 2023, $70 in 2024, $65 in 2025, $60 in
2026 and $57 thereafter;
-- Henry Hub (USD/mcf) of $3.00 in 2023, $3.50 in 2024, $3.00 in
2025 and $2.75 thereafter;
-- Base interest rates applicable to the company's outstanding
variable rate debt obligations reflects current SOFR forward
curve;
-- Announced Novo transaction closes in 3Q23 under proposed terms;
-- Low organic production growth with capex modestly above
maintenance levels;
-- Oil weighting increases modestly through the forecast;
-- FCF applied to reduction of the RBL.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- FCF generation that results in a reduction of RBL borrowings,
improved liquidity and total gross debt at or below $1.5
billion;
-- Continued de-risking and operational momentum in the Permian
basin that results in material increase of PDP reserves,
inventory and oil weighting;
-- Organic and/or M&A growth increasing production approaching
125Mboped while maintaining unit costs;
-- Mid-cycle EBITDA Leverage sustained below 2.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A shift to negative FCF contributing to diminished liquidity or
utilization of revolver commitment sustained above 65%;
-- Failure to maintain a clear, conservative financial and
operational policy;
-- Mid-cycle EBITDA Leverage sustained above 2.5x.
LIQUIDITY AND DEBT STRUCTURE
Reduced Post-Close Liquidity: Fitch expects Earthstone's post-close
liquidity will be reduced as the $1.0 billion purchase price of
Novo is expected to be funded with the proposed notes and RBL
borrowings. Fitch believes the liquidity profile will improve
thereafter due to reduction of RBL borrowings via FCF generation.
The company has secured $250 million of incremental commitments
from its lenders, which will bring the total elected commitments
from $1.4 billion to $1.65 billion. At 1Q23, $452 million of
borrowings were outstanding under the facility, leaving
approximately $1.2 billion of available capacity to fund the
acquisition.
Earthstone's liquidity profile is further supported by positive
annual FCF through Fitch's forecast period, the company's financial
policy, which does not include dividends; and a lack of maturities
until 2027.
KEY RECOVERY RATING ASSUMPTIONS
The recovery analysis assumes that Earthstone would be reorganized
as a going concern (GC) in bankruptcy rather than liquidated. Fitch
has assumed a 10% administrative claim and an 80% draw on the RBL
facility. The 80% draw on the RBL facility reflects the increased
likelihood that a redetermination would negatively affect the
revolver's size level in a stress case environment.
Going-Concern Approach
Earthstone's GC EBITDA estimate of $550 million reflects Fitch's
view of a sustainable, post-reorganization EBITDA level upon which
the agency bases the enterprise valuation.
Earthstone's bankruptcy scenario considers a weakened oil and gas
environment resulting in reduced operational and financial
flexibility, in line with Fitch's stress case assumptions. Fitch
believes the lower price environment pressures liquidity and
consequently results in a lower capital program to maintain
production and manage negative FCF.
The GC assumption reflects Fitch's stressed case price deck, which
assumes WTI oil prices of $65 in 2023, $47 in 2024, $32 in 2025,
$42 in 2026 and $45 longer term.
An enterprise value (EV) multiple of 3.5x EBITDA is applied to the
GC EBITDA to calculate a post-reorganization EV. The choice of this
multiple considered the following factors:
-- The historical bankruptcy case study exit multiples for peer
companies ranged from 2.8x-7.0x, with an average of 5.2x and a
median of 5.4x;
-- The multiple is in line with Permian comparable Callon
Petroleum, and the multiple's used for SM resources and Matador
Petroleum when they were previously rated at the 'B+' rating
level.
Liquidation Approach
The liquidation estimate reflects Fitch's view of the value of
balance sheet assets that can be realized in a sale or liquidation
processes conducted during a bankruptcy or insolvency proceeding
and distributed to creditors.
In assigning the value for Earthstone's assets, Fitch considered
Earthstone's PV10 value adjusted for a lower-price environment and
comparable multiples for production per flowing barrel, value per
acre and value per drilling location within the Delaware and
Midland Basins.
Under the waterfall allocation, the first lien RBL has a 'RR1'
recovery and is notched up three levels to 'BB+'. The senior
unsecured notes are assigned a 'RR4' recovery rating and are
notched in line with the IDR at 'B+'.
ISSUER PROFILE
Earthstone Energy, Inc. is an independent oil and gas energy
exploration and production company with operations primarily in the
Midland Basin of west Texas and Delaware Basin in New Mexico.
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.
EAST MISSION 8: Seeks to Hire Chan & Chen as Accountant
-------------------------------------------------------
East Mission 8 Investment, Inc. seeks approval from the U.S.
Bankruptcy Court for the Central District of California to employ
Chan & Chen, LLP.
The Debtor requires an accountant to, among other things, prepare
monthly operating reports and financial statements, and provide tax
and bookkeeping services.
Chan & Chen will be compensated at $180 per hour.
The initial retainer is $1,000.
Curt Wang, a partner at Chan & Chen, 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:
Curt Wang
Chan & Chen, LLP
1103 S San Gabriel Blvd. #F
San Gabriel, CA 91776
Tel: (626) 572-8930
About East Mission 8 Investment
East Mission 8 Investment, Inc. filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. C.D. Calif. Case No.
23-12240) on April 13, 2023, with as much as $50,000 in assets and
$1 million to $10 million in liabilities. Mark M. Sharf has been
appointed as Subchapter V trustee.
Judge Deborah J. Saltzman presides over the case.
The Debtor tapped Michael Jay Berger, Esq., at the Law Offices of
Michael Jay Berger as legal counsel and Chan & Chen, LLP as
accountant.
EAST ROCKAWAY: Seeks to Hire Alla Kachan P.C. as Legal Counsel
--------------------------------------------------------------
East Rockaway Corp. seeks approval from the U.S. Bankruptcy Court
for the Eastern District of New York to employ Alla Kachan, P.C. as
its legal counsel.
The Debtor requires legal counsel to:
a. assist the Debtor in administering its Chapter 11 case;
b. making such motions or taking such actions as may be
appropriate or necessary under the Bankruptcy Code;
c. represent the Debtor in prosecuting adversary proceedings to
collect assets of the estate and such other actions as the Debtor
deems appropriate;
d. take such steps as may be necessary for the Debtor to marshal
and protect the estate's assets;
e. negotiate with creditors in formulating a plan of
reorganization for the Debtor;
f. draft and prosecute the confirmation of the Debtor's plan of
reorganization; and
g. render such additional services as Debtor may require in this
case.
The firm will be paid at these rates:
Attorney $475 per hour
Clerks/Paraprofessionals $250 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The retainer is $$18,000.
Alla Kachan, Esq., a partner at the Law Offices of AllaKachan,
P.C., 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:
Alla Kachan, Esq.
Law Offices of Alla Kachan, P.C.
2799 Coney Island Avenue, Suite 202
Brooklyn, NY 11235
Telephone: (718) 513-3145
Email: alla@kachanlaw.com
About East Rockaway Corp.
East Rockaway Corp., doing business as Bagel Boss, filed a Chapter
11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 23-41638) on May
11, 2023, with as much as $1 million in both assets and
liabilities. Judge Jil Mazer-Marino oversees the case.
The Debtor tapped the Law Offices of Alla Kachan, P.C. as legal
counsel and Wisdom Professional Services, Inc. as accountant.
EAST ROCKAWAY: Taps Wisdom Professional Services as Accountant
--------------------------------------------------------------
East Rockaway Corp. seeks approval from the U.S. Bankruptcy Court
for the Eastern District of New York to employ Wisdom Professional
Services, Inc.
The Debtor requires an accountant to prepare its monthly operating
reports during the pendency of its Chapter 11 case.
Wisdom Professional Services will be compensated at $275 per report
and reimbursed for out-of-pocket expenses incurred.
The firm received a retainer in the amount of $3,300.
Michael Shtarkman, Esq., a partner at Wisdom Professional Services,
disclosed in a court filing that his firm is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Michael Shtarkman, Esq.
Wisdom Professional Services, Inc.
626 Sheepshead Bay Road Suite 640,
Brooklyn, NY 11224
Tel: (718) 554-6672
Email: mshtarkmancpa@gmail.com
About East Rockaway Corp.
East Rockaway Corp., doing business as Bagel Boss, filed a Chapter
11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 23-41638) on May
11, 2023, with as much as $1 million in both assets and
liabilities. Judge Jil Mazer-Marino oversees the case.
The Debtor tapped the Law Offices of Alla Kachan, P.C. as legal
counsel and Wisdom Professional Services, Inc. as accountant.
ENDO PARENT: $156.3M Bank Debt Trades at 19% Discount
-----------------------------------------------------
Participations in a syndicated loan under which Endo Parent Inc is
a borrower were trading in the secondary market around 81.5
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $156.3 million facility is a Term loan that is scheduled to
mature on August 18, 2023. The amount is fully drawn and
outstanding.
Endo Parent, Inc. operates healthcare facilities.
ENTERCOM MEDIA: Calamos GDIF Marks $320,000 Loan at 39% Off
-----------------------------------------------------------
Calamos Global Dynamic Income Fund has marked its $320,000 loan
extended to Entercom Media Corp to market at $196,600 or 61% of the
outstanding amount, as of April 30, 2023, according to a disclosure
contained Calamos GDIF's Form N-CSR for the fiscal year ended April
30, 2023, filed with the Securities and Exchange Commission on June
28, 2023.
Calamos GDIF is a participant in a Bank Loan that accrues interest
at a rate of 7.525% per annum (1 mo. LIBOR + 2.50%) to Entercom
Media Corp. The loan is scheduled to mature on November 18, 2024.
Calamos Global Dynamic Income Fund was organized as a Delaware
statutory trust on April 10, 2007 and is registered under the
Investment Company Act of 1940 as a diversified, closed-end
management investment company. The Fund commenced operations on
June 27, 2007.
Entercom Media Corp is in the broadcasting industry.
ENVISION HEALTHCARE: $2.20B Bank Debt Trades at 50% Discount
------------------------------------------------------------
Participations in a syndicated loan under which Envision Healthcare
Corp is a borrower were trading in the secondary market around 49.9
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $2.20 billion facility is a Term loan that is scheduled to
mature on March 31, 2027. The amount is fully drawn and
outstanding.
Envision Healthcare Corporation provides health care services. The
Hospital offers surgery, pharmacy, medical imaging, emergency
care,
and other related health care services. Envision Healthcare serves
patients in the United States.
ENVISTACOM LLC: Committee Taps Scroggins & Williamson as Counsel
----------------------------------------------------------------
The official committee of unsecured creditors of Envistacom, LLC
seeks approval from the U.S. Bankruptcy Court for the Northern
District of Georgia to employ Scroggins & Williamson, P.C. as its
attorneys.
The firm will render these services:
a) prepare pleadings and applications;
b) conduct examinations;
c) advise the Committee of its rights, duties and
obligations;
d) consult with the Committee and represent the Committee with
respect to all matters in the Case, including cash collateral
issues and confirmation of a Chapter 11 plan and/or the liquidation
of the Debtor's assets;
e) negotiate with the Debtor, the Debtor's secured lender and
other parties in interest in the Case;
f) appear before the Court and any appellate courts to
represent the interests of the
Committee;
g) pursue litigation, when and if necessary;
h) analyse claims and object to claims as needed;
i) perform legal services incidental and necessary to the
above, including, but not limited to, institution and prosecution
of necessary legal proceedings, and general business and corporate
legal advice and assistance; and
j) take any and all other action incidental to the proper
preservation and administration of Debtor's estates.
Scroggins & Williamson's standard hourly rates are as follows:
Attorneys $525 to $595
Paralegals $195
However, for this matter, the firm has agreed that it will not
charge more than $535 per hour for any attorney rendering services
to the Committee for the rest of this calendar year.
Scroggins & Williamson will also be reimbursed for reasonable
out-of-pocket expenses incurred.
J. Robert Williamson, Esq., partner of Scroggins & Williamson,
assured the Court 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 through:
J. Robert Williamson, Esq.
Scroggins & Williamson, P.C.
4401 Northside Parkway, Suite 450
Atlanta, GA 30327
Phone: 404-893-3880
Fax: 404-893-3886
About Envistacom
A group of creditors including MAG DS Corp., Amentum Services Inc.,
SteelGate LLC, Momentum Decisive Solutions USA Inc., and L3
Technologies, Inc. filed a Chapter 7 petition against Envistacom,
LLC on March 21, 2023. The petitioning creditors are represented by
Matthew Levin, Esq.
On May 10, 2023, the Chapter 7 case was converted to one under
Chapter 11 (Bankr. N.D. Ga. Case No. 23-52696). Judge Jeffery W.
Cavender oversees the case.
McDermott Will & Emery, LLP serves as the Debtor's legal counsel.
The U.S. Trustee for Region 21 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee tapped Scroggins & Williamson, P.C. as legal counsel and
Katie S. Goodman, managing partner at GGG Partners, LLC, as chief
liquidation officer.
ENY LLC: Case Summary & One Unsecured Creditor
----------------------------------------------
Debtor: ENY, LLC
120 Beach 3rd
Far Rockaway, NY 11691
Business Description: ENY, LLC is a Single Asset Real Estate
(as defined in 11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: July 7, 2023
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 23-42404
Judge: Hon. Jil Mazer-Marino
Debtor's Counsel: Charles Wertman, Esq.
THE LAW OFFICES OF CHARLES WERTMAN
100 Merrick Road
Suite 304W
Rockville Centre, NY 11570
Tel: (516) 284-0900
Email: charles@cwertmanlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Eldad Cohen as manager.
The Debtor listed the Velusia County Bldg Code and Administration
as its sole unsecured creditor holding an unknown amount of claim.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/MUP566Q/ENY_LLC__nyebke-23-42404__0001.0.pdf?mcid=tGE4TAMA
EVANGELICAL RETIREMENT: Gets OK to Hire Dopkelaw as Legal Counsel
-----------------------------------------------------------------
Evangelical Retirement Homes of Greater Chicago, Incorporated
received approval from the U.S. Bankruptcy Court for the Northern
District of Illinois to employ Dopkelaw, LLC as counsel.
The Debtor requires legal counsel to:
a. give advice with respect to the Debtor's powers and duties
under the Bankruptcy Code;
b. give advice with respect to any disclosure statement and
bankruptcy plan filed in the Debtor's Chapter 11 case;
c. prepare legal documents;
d. negotiate with creditors and other parties involved in the
case and appear in court;
e. investigate the basis for possible avoidance actions; and
f. perform other necessary legal services.
Dopkelaw will be compensated at $465 per hour for its services.
This rate will be in effect through Sept. 30 and will increase to
$490 per hour on Oct. 1.
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received an advance payment retainer in the amount of
$30,000.
Bruce Dopke, Esq., a partner at Dopkelaw, 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:
Bruce Dopke, Esq.
Dopkelaw LLC
1535 W. Schaumburg Road, Suite 204
Schaumburg, IL 60194
Telephone: (847) 524-4811
Email: bd@dopkelaw.com
About Evangelical Retirement Homes
of Greater Chicago
Evangelical Retirement Homes of Greater Chicago, Incorporated
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. N.D. Ill. Case No. 23-07541) on June 9, 2023. In the
petition signed by its chief executive officer, Michael Flynn, the
Debtor disclosed $10 million to $50 million in assets and $100
million to $500 million in liabilities.
Judge Timothy A. Barnes oversees the case.
The Debtor tapped Bruce C. Dopke, Esq., at Dopkelaw, LLC and
Polsinelli, PC as legal counsels, and WYSE Advisors, LLC as
financial advisor.
The U.S. Trustee for Region 11 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee is represented by Crane, Simon, Clar & Goodman.
EVANGELICAL RETIREMENT: Gets OK to Hire WYSE as Financial Advisor
-----------------------------------------------------------------
Evangelical Retirement Homes of Greater Chicago, Incorporated
received approval from the U.S. Bankruptcy Court for the Northern
District of Illinois to employ WYSE Advisors, LLC as its financial
advisor.
The firm's services include:
a. assistance to the Debtor in the preparation of
financial-related disclosures required by the court, including but
not limited to, the Debtor's schedules of assets and liabilities,
statements of financial affairs and monthly operating reports;
b. assistance to the Debtor's management team and counsel
focused on the coordination of resources related to the liquidation
or reorganization efforts;
c. assistance in the preparation of financial information for
distribution to creditors and others;
d. attendance at meetings and assistance in discussions with
the United States Trustee and other parties involved in the
Debtor's Chapter 11 case;
e. assistance to management in connection with the Debtor's
development of forecasts as may be required in connection with the
Debtor's restructuring efforts;
f. assistance in the preparation of information and analysis
necessary for the confirmation of a Chapter 11 plan; and
g. other general business consulting services.
WYSE will be paid at these rates:
Michael Wyss $750 per hour
Michael Franciosa $400 per hour
Cole Celenza $300 per hour
The firm received a retainer in the amount of $10,000.
Michael Wyse, a partner at WYSE, disclosed in a court filing that
his firm is a "disinterested person" pursuant to Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Michael Wyse
Wyse Advisors, LLC
85 Broad Street, 29th Floor
New York, NY 10004
Phone: 917-553-5883/646-854-5318
Email: mwyse@wyseadvisorsllc.com
About Evangelical Retirement Homes
of Greater Chicago
Evangelical Retirement Homes of Greater Chicago, Incorporated
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. N.D. Ill. Case No. 23-07541) on June 9, 2023. In the
petition signed by its chief executive officer, Michael Flynn, the
Debtor disclosed $10 million to $50 million in assets and $100
million to $500 million in liabilities.
Judge Timothy A. Barnes oversees the case.
The Debtor tapped Bruce C. Dopke, Esq., at Dopkelaw, LLC and
Polsinelli, PC as legal counsels, and WYSE Advisors, LLC as
financial advisor.
The U.S. Trustee for Region 11 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee is represented by Crane, Simon, Clar & Goodman.
EVANGELICAL RETIREMENT: Seeks to Hire Grandbridge as Broker
-----------------------------------------------------------
Evangelical Retirement Homes of Greater Chicago, Incorporated seeks
approval from the U.S. Bankruptcy Court for the Northern District
of Illinois to employ Grandbridge Real Estate Capital, LLC.
The Debtor owns and operates a continuing care retirement community
known as Friendship Village of Schaumburg in Illinois. It requires
the services of a broker to market the property to potential buyers
and then, subject to the court's approval, conduct a public auction
of the property.
Grandbridge will be compensated as follows:
a. A fee of 1.5 percent of the total sale price; or
b. In the event that the winning bid proposes an "alternate
transaction," Grandbridge's compensation will be the sum of (i)
1.125 per cent of the par amount of any current-pay bonds issued or
assumed, plus (ii) 0.05 per cent of the par amount of any
deferred-pay and subordinate bonds issued or assumed, or if there
is no new contribution of cash by a plan sponsor or other funder
not affiliated with the owner, then the sum of (i) 0.90 percent of
the par amount of any current-pay bonds issued or assumed, plus
(ii) 0.05 per cent of the par amount of any deferred-pay and
subordinate bonds issued or assumed.
David Kliewer, vice president of Grandbridge, 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:
David Kliewer
Grandbridge Real Estate Capital LLC
401 East Jackson Street, 19th Floor
Tampa, FL 33602
Tel: (727) 641-6655
Email: David.Kliewer@Grandbridge.com
About Evangelical Retirement Homes
of Greater Chicago
Evangelical Retirement Homes of Greater Chicago, Incorporated
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. N.D. Ill. Case No. 23-07541) on June 9, 2023. In the
petition signed by its chief executive officer, Michael Flynn, the
Debtor disclosed $10 million to $50 million in assets and $100
million to $500 million in liabilities.
Judge Timothy A. Barnes oversees the case.
The Debtor tapped Bruce C. Dopke, Esq., at Dopkelaw, LLC and
Polsinelli, PC as legal counsels, and WYSE Advisors, LLC as
financial advisor.
The U.S. Trustee for Region 11 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee is represented by Crane, Simon, Clar & Goodman.
FOREST CITY: $1.24B Bank Debt Trades at 20% Discount
----------------------------------------------------
Participations in a syndicated loan under which Forest City
Enterprises LP is a borrower were trading in the secondary market
around 80.1 cents-on-the-dollar during the week ended Friday, July
7, 2023, according to Bloomberg's Evaluated Pricing service data.
The $1.24 billion facility is a Term loan that is scheduled to
mature on December 7, 2025. About $890 million of the loan is
withdrawn and outstanding.
Forest City Enterprises, L.P. provides real estate services. The
Company develops, owns, acquires, and manages real estate
properties. Forest City Enterprises serves regional malls, retail
centers, office buildings, campuses, multi-family properties, and
residential communities in the United States.
FREEDOM MORTGAGE: Fitch to Rate New Unsecured Debt 'B+(EXP)'
------------------------------------------------------------
Fitch Ratings expects to assign a 'B+(EXP)' rating to Freedom
Mortgage Corporation's proposed issuance of up to $509.5 million of
new 7.625% senior unsecured notes due 2026 and $540.2 million of
new 6.625% senior unsecured notes due 2027 (collectively, the new
senior notes).
The new notes are being issued as part of an exchange offer for its
existing 2026 and 2027 senior unsecured notes in connection with a
debt liability management transaction. Consenting noteholders will
agree to a par-for-par exchange, subject to the early tender date
in which Freedom can elect to extend, plus a consent fee paid in
cash. Fitch does not anticipate any impact to the company's funding
and leverage profile, as the terms and conditions, including the
covenants on the new senior notes will be substantially identical
to the existing 2026 and 2027 notes.
In addition, Fitch does not deem the exchange offer as a distressed
debt exchange, as there is no expected material reduction in terms
compared with the original contractual terms, and Freedom is not
conducting the exchange to avoid a traditional payment default,
bankruptcy, or similar insolvency proceedings.
KEY RATING DRIVERS
The expected rating is equalized with the ratings assigned to
Freedom's existing senior unsecured debt, as the new notes will
rank equally in the capital structure. The senior unsecured debt
rating is one-notch below Freedom's Long-Term Issuer Default Rating
(IDR), given the subordination to senior secured debt in the
capital structure, reflecting weaker recovery prospects in a stress
scenario.
Following a planned corporate reorganization to occur at a later
date, all of Freedom's equity interests will be transferred to a
new holding company, Freedom Mortgage Holdings LLC (Freedom
Holdings; not rated). Freedom Holdings will succeed Freedom as the
Issuer of the new senior notes and will benefit from an
unconditional guarantee provided by Freedom on an unsecured basis.
Freedom's ratings are supported by its historical track record
through various cycles, which enhanced its franchise within the
U.S. residential mortgage space, its dominant position within the
government lending channel, experienced senior management team and
a sufficiently robust and integrated technology platform. Fitch
views Freedom's multichannel approach favorably and believes its
servicing retained business model with high recapture rates may
serve as a natural hedge, although not a full offset, to the
cyclicality of the mortgage origination business.
Ratings are constrained by Freedom's elevated exposure to Ginnie
Mae loans with higher advancing needs and potentially higher
regulatory scrutiny, and elevated key person risk related to its
founder and Chief Executive Officer, Stanley Middleman, who sets
the tone, vision and strategy for the company.
The Negative Outlook reflects Fitch's expectation that corporate
leverage (corporate debt to tangible equity) will remain elevated
over the medium term, given expected earnings weakness, driven by
continued declines in mortgage origination volume, and the use of
corporate debt to fund acquisitions of mortgage servicing rights
(MSRs) associated with $8 billion of unpaid principal balances
(UPB) during 1Q23.
For more information on the key rating drivers and sensitivities
underpinning Freedom's ratings, please see the Rating Action
Commentary titled, "Fitch Affirms Freedom Mortgage Corp. at 'BB-';
Outlook Revised to Negative," dated Oct. 17, 2022.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Negative rating action could be driven by an inability to reduce
corporate debt to tangible equity leverage below 1.5x over the
Outlook horizon, an inability to refinance secured funding
facilities, insufficient liquidity to manage servicer advances or
to meet margin call requirements, lack of appropriate staffing and
resource levels relative to growth in the servicing portfolio, and
a sustained increase in gross debt to tangible equity above 5.0x.
Should regulatory scrutiny of the company or industry increase
meaningfully, or if Freedom incurred substantial fines that
negatively affect its franchise or operating performance, it could
also drive negative rating momentum.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Fitch believes the Negative Outlook could be revised to Stable if
Freedom successfully executes on its plan to improve profitability
through a right-sizing of the cost structure, which results in a
reduction in corporate debt to tangible equity below 1.5x.
Longer term, upward rating momentum could be driven by, a sustained
reduction in gross debt to tangible equity below 3.0x, growth of
the business that enhances the franchise and platform scale,
improved earnings consistency, an increase in longer-duration
secured and unsecured debt, an increase in the proportion of
committed funding, and a stronger liquidity profile, as evidenced
by a meaningful increase in the percentage of available liquidity
resources (cash and available borrowing capacity) to total debt.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
The expected unsecured debt rating is one-notch below Freedom's
Long-Term IDR, given the subordination to senior secured debt in
the capital structure, reflecting weaker recovery prospects in a
stress scenario.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The expected unsecured debt rating is primarily sensitive to
changes in Freedom's Long-Term IDR and would be expected to move in
tandem. However, a material increase in unsecured funding and the
size of the unencumbered asset pool could result in a narrowing of
the notching between the unsecured debt and the Long-Term IDR.
ADJUSTMENTS
The Standalone Credit Profile has been assigned in line with the
implied Standalone Credit Profile.
The Sector Risk Operating Environment has been assigned in line
with the implied score.
The Business Profile score has been assigned below the implied
score due to the following reason: Business model (negative).
The Asset Quality score has been assigned in line with the implied
score.
The Earnings & Profitability score has been assigned below the
implied score due to the following reason: Portfolio risk
(negative).
The Capitalization & Leverage score has been assigned below the
implied score due to the following reason: Risk profile and
business model (negative).
The Funding, Liquidity & Coverage score has been assigned below the
implied score due to the following reasons: Funding flexibility
(negative), Business model/funding market convention (negative).
FULTON FILMS: Unsecureds Owed $5K Unimpaired in PLan
----------------------------------------------------
Fulton Films, LLC submitted a Chapter 11 Plan and a Disclosure
Statement.
The Debtor is a New York limited liability company, which owns the
real property located at 1156 Fulton Street, Brooklyn, New York
("Property"). The managing member and sole member of the Debtor is
Florian Senfter ("Mr. Senfter"). On August 26, 2022, the Property
was purchased by the Debtor from the Estate of Vernon McCreath for
$45,000. The Deed for the Property was recorded on September 14,
2022.
The Debtor's only asset is the Property, which has been appraised
at $960,000 pursuant to an Appraisal obtained by the Debtor from
Leo & Scoblete Realty Advisors, LLC, valuing the Property as of
August 31, 2022.
Under the Plan, Class 7 consists of the Allowed Unsecured Claims,
estimated at less than $5,000, against the Debtor. Class 7 is
unimpaired.
Upon the Effective Date of the Plan, Mr. Senfter shall cause no
less than $985,000 to be deposited in escrow with Debtor's counsel
for distribution on the Effective Date of the Plan.
The source of funds are as follows: (a) $450,000 line of credit
obtained through Mr. Senfter's personal home equity loan, which has
been approved and is ready for funding; and (b) sale of unrelated
real property located at 1311 Myrtle Avenue, Brooklyn, New York
("Unrelated Property") on or before the Effective Date, which will
net approximately $500,000 from the sale of the Unrelated Property;
and (c) approximately $35,000 in cash as reasonably required to
fund confirmation.
Attorneys for Fulton Films:
Anthony Sodono, III, Esq.
Michele M. Dudas, Esq.
Sari B. Placona, Esq.
McMANIMON, SCOTLAND & BAUMANN, LLC
75 Livingston Avenue, Suite 201
Roseland, NJ 07068
Tel: (973) 622-1800
E-mail: asodono@msbnj.com
mdudas@msbnj.com
splacona@msbnj.com
A copy of the Disclosure Statement dated June 30, 2023, is
available at https://tinyurl.ph/rpcrg from PacerMonitor.com.
About Fulton Films
Fulton Films, LLC, is a Brooklyn-based company engaged in
activities related to real estate. It is the fee simple owner of a
real property located at 1156 Fulton St., Brooklyn, N.Y., with an
appraised value of $960,000.
Fulton Films filed its voluntary petition for Chapter 11 protection
(Bankr. E.D.N.Y. Case No. 23-40094) on Jan. 12, 2023, with $963,845
in assets and $12,991,779 in liabilities. Florian Senfter, sole
member of Fulton Films, signed the petition.
Judge Elizabeth S. Stong oversees the case.
Anthony Sodono, III, Esq., McManimon Scotland & Baumann, LLC,
serves as the Debtor's legal counsel.
FUSION PROMOTIONS: Chapter 11 Estate Fully Administered
-------------------------------------------------------
Fusion Promotions & Marketing LLC filed its Notice of Substantial
Consummation, Termination of Subchapter V Trustee's Services, Final
Report, and Application for Final Decree on May 25, 2023.
According to Judge Paul Baisier, based upon a review of the record
in the Chapter 11 case and the representations of counsel, it
appears that the estate has been fully administered.
Judge Paul accordingly entered an order, pursuant to Sec. 5.2 of
the Plan and 11 U.S.C. Sec. 1183(c)(1), that the services of Gary
Murphey as Subchapter V Trustee are terminated.
The Subchapter V Trustee must file any reports regarding the
administration of the case (including a report of no distribution)
within 30 days.
The provisions of the Plan bind the Debtor, any entity acquiring
property under the Plan, and all creditors of the Debtor, whether
or not the claim or interest of such creditor is impaired under the
Plan, and whether or not such creditor has accepted the Plan.
The Plan Confirmation Order is amended to remove the following
paragraph listed on page 6 of the Confirmation Order:
It is further ordered that all persons are permanently enjoined
from commencing or continuing any action, employing any process, or
acting to collect, offset, or recover any claim or cause of action
that such person may have had at the date of the filing of Debtor's
Chapter 11 petition against Debtor or its property except as
provided for in the Plan.
The Final Report is approved and the Application is granted.
About Fusion Promotions & Marketing
Fusion Promotions & Marketing, LLC, is a provider of brand
representation talents. The company is based in Alpharetta, Ga.
Fusion Promotions & Marketing sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-56872) on
Aug. 31, 2022, with up to $50,000 in assets and up to $10 million
in liabilities. Matthew Burns, chief executive officer, signed the
petition.
Judge Paul Baisier oversees the case.
Cameron M. McCord, Esq., at Jones & Walden, LLC is the Debtor's
counsel.
GALA SERVICE: Seeks 90-Day Extension to Confirm Plan
----------------------------------------------------
Gala Service, Corp., et al., filed a motion to extend the time to
confirm a Plan of Reorganization and Disclosure Statement pursuant
to 11 U.S.C. section 1121(e).
The Debtors request an extension of the time by which a Plan should
be confirmed for additional 90 days, through and including November
23, 2023.
This is the Debtors' second request, and this request is not made
for the purposes of delay.
The Debtors are taxi medallion corporations. The Debtors have been
waiting for the Taxi Medallion Relief Program to be finalized and
published, but afterwards it appeared that the Debtors did not meet
requirements to participate in the said program. Thus, this
requested extension of the time period for confirmation, is
necessary due to the fact, that the time to confirm a plan is set
to expire on August 25, 2023, and the Debtors need an addition time
to complete settlement negotiations with the main Creditor,
Pentagon Federal Credit Union, as successor merger to Progressive
Credit Union and thereafter to file an amended plan and disclosure
statement.
The Debtors need time to complete negotiation with the main
Creditor, to obtain the Court approval of the reached terms and to
file an amended Plan and Disclosure Statement and thereafter to
confirm a Plan of reorganization.
Attorney for the Debtor:
Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
2799 Coney Island Avenue, Suite 202
Brooklyn, NY 11235
Tel: (718) 513-3145
About Gala Service Corp.
Gala Service Corp. is a privately held company operating in the
taxi and limousine service industry. It is based in Sunnyside,
N.Y.
Gala Service filed a petition for Chapter 11 protection (Bankr.
E.D. N.Y. Case No. 21-43106) on Dec. 17, 2021, listing $448,092 in
assets and $1,380,414 in liabilities. Mitchell Cohen, president,
signed the petition.
Judge Elizabeth S. Stong oversees the case.
The Debtor tapped the Law Offices Of Alla Kachan P.C. as legal
counsel and Wisdom Professional Services Inc. as accountant.
GALILEO SCHOOL: Moody's Affirms Ba1 Rating on 2021A Revenue Bonds
-----------------------------------------------------------------
Moody's Investors Service has revised the outlook to stable from
positive on Galileo School for Gifted Learning, FL's Educational
Facilities Revenue Bonds (Galileo Schools for Gifted Learning
Project), Series 2021A and the Taxable Educational Facilities
Revenue Bonds (Galileo Schools for Gifted Learning Project), Series
2021B and affirmed the Ba1 rating. The school has approximately $29
million in revenue bonds outstanding.
RATINGS RATIONALE
The change in the outlook to stable from positive reflects a more
moderate improvement in Galileo's financial performance compared to
initial projections, and the stabilization of key credit metrics
well in-line with the school's current rating.
The affirmation of the Ba1 rating reflects the school's solid
competitive profile with sound enrollment trends and strong student
demand, balanced against the school's high leverage from debt
recently issued to open its second campus, Skyway. Galileo has
successfully opened Skyway and the campus was fully enrolled during
the recent school year. Academic performance has declined slightly
during the pandemic, but test scores are still competitive with the
local district. Debt service coverage and liquidity are currently
stable and satisfactory compared to similarly rated peers; fiscal
2023 is expected to end with roughly 75 days' cash on hand. Galileo
also remains in good standing with it authorizer, the Seminole
County School District.
RATING OUTLOOK
The stable outlook reflects the expectation that the school's
operating performance will remain sound to support a slight
increase in debt service over the next two fiscal years while
maintaining adequate liquidity. It also incorporates an expectation
of enrollment stability because of the school's strong student
demand.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
Significant reduction in leverage
Significant and sustained growth in liquidity and debt service
coverage
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
Any deterioration in the financial performance or debt service
coverage
Any event that threatens the charter contracts of either
school
LEGAL SECURITY
Proceeds of the Series 2021 bonds were loaned to the Galileo School
from Seminole County Industrial Development Authority. The Galileo
School's obligation to make payments under the loan agreement are
absolute and unconditional. Per the loan agreement, the Galileo
School is required to transfer an amount necessary to pay principal
and interest on the bonds from the gross revenues to the Trustee on
a monthly basis to pay the loan on or before the first business day
of each month.
State aid payments are the school's primary source of revenue and
are the principal and expected source of repayment of the bonds.
However, the bonds are secured by a gross revenue pledge that
includes all of the revenues, income, cash receipts and other money
received by the school, or received by the Trustee on behalf of the
school. The bonds are additionally secured by a mortgage on, and
security interest in, the school's facilities though the school
does not have a recent appraisal of either campus.
Bond covenants include a 45 days' cash on hand requirement and a
minimum of 1.1x annual debt service coverage. Bondholders
additionally benefit from a fully funded debt service reserve fund
at maximum annual debt service on the bonds. The Galileo School for
Gifted Learning does not plan on issuing any additional debt at
this time though the current bonds have an Additional Bonds Test of
at least 1.2x debt service coverage including the proposed debt and
the historical net revenue available for debt service in the most
recent audited fiscal year.
PROFILE
The Galileo School for Gifted Learning operates two schools that
serves students in grades Kindergarten to Eighth. Both schools are
located in Seminole County and authorized by the Seminole County
School District. Enrollment across both schools in 2022-23 was
1,354 students.
Galileo opened its first school (Riverbend) in 2011 and initially
served 133 students in Kindergarten through fifth grade. Riverbend
gradually added grades over the years and now serves students in
grades Kindergarten to Eighth grade. In the current school year,
Riverbend served 592 students, which is about the maximum capacity
at Galileo Riverbend.
The Galileo School opened a second school pursuant to a
high-performing charter school replication application in 2020.
Galileo's second school is known as Skyway and serves students in
grades Kindergarten to Eighth grade under the same policies,
procedures, programs, professional development, and course work
that are currently used at Riverbend. Galileo Skyway initially
serving about 588 students in grades K-6 from a temporary campus.
In the 2021-22 school year Galileo Skyway moved to a new campus and
added 7th grade. In the 2022-23 school year, Skyway added 8th grade
and served 767 student in grades PreK-8, which is close to the
maximum capacity of 776 students at the Skyway campus.
METHODOLOGY
The principal methodology used in these ratings was US Charter
Schools published in September 2016.
GENAPSYS INC: Paul Hastings Accused of Causing Demise
-----------------------------------------------------
Meghan Tribe of Bloomberg Law reports that Paul Hastings is facing
malpractice claims in a new lawsuit by a California biotechnology
company alleging the firm's lawyers botched the company board's
attempt to oust its founder.
Redwood Liquidating Co. lost $300 million in value and ultimately
went bankrupt because of the mistakes by Paul Hastings lawyers, it
said in a June 30 complaint filed in Los Angeles.
The company, formerly known as GenapSys, Inc., said it hired Paul
Hastings in early 2021 to implement corporate governance reforms to
"sideline" the company's founder, Hesaam Esfandyarpour, so it could
"continue commercialization" under new leadership.
That new leadership included appointment of a new CEO and three
independent directors to the board, pursuant to written consents
drafted by Paul Hastings, the complaint said.
The Delaware Chancery Court later ruled that the consents were
invalid, after Esfandyarpour sued. That meant the new directors
were "not been validly appointed."
Redwood said that litigation over the improper consents drained the
company's remaining cash, led to investor concern about the board,
and derailed its financing that resulted in it having to close its
doors and file for bankruptcy in July 2022 and liquidate its
assets.
Paul Hastings said via email that the suit is "without merit."
"Paul Hastings rejects Redwood's attempt to shift the blame for its
bankruptcy and GenapSys's failure as a company onto its former
counsel," the firm said. "The Firm looks forward to defending
itself in court."
Paul Hastings is also facing conflict of interest claims from
another client, The Coca-Cola Co., in a lawsuit in federal court in
Orlando, Florida. Coca-Cola is looking to disqualify the firm from
representing a beverage cooling company suing Coke for more than
$100 million over an alleged breach of contract.
California's Lesnick Prince & Pappas and Binder & Schwartz is
representing Redwood in the suit against Paul Hastings. The
company is being represented by Willkie Farr & Gallagher and
Richards, Layton & Finger in its ongoing bankruptcy proceedings in
Delaware.
The case is: Redwood Liquidating Co. vs Paul Hastings, Cal. Super.
Ct., No. 23ST-CV-15242, complaint filed 6/30/23.
About GenapSys Inc.
GenapSys Inc. -- https://genapsys.com/ -- is a biotechnology
company that transforms the human condition by building a scalable,
affordable genomic sequencing ecosystem that will support research
and diagnostics. It is based in Redwood City, Calif.
GenapSys sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del. Case No. 22-10621) on July 11, 2022. In the
petition filed by Britton Russell, chief financial officer and
treasurer, the Debtor listed assets between $10 million and $50
million and liabilities between $50 million and $100 million.
Judge Brendan Linehan Shannon oversees the case.
The Debtor tapped Richards, Layton & Finger, PA, as bankruptcy
counsel; Willkie Farr & Gallagher LLP as special litigation and
corporate counsel; and Lazard Freres & Co. LLC as investment
banker. Kroll Restructuring Administration LLC is the Debtor's
claims and noticing agent and administrative advisor.
* * *
The Debtor sold the business for $42 million (up to $10 million in
cash plus the assumption of liabilities) to Sequencing Health, a
purchaser entity affiliated with entities, funds and/or accounts
managed or advised, directly or indirectly, by, or under common
control with, two investors holding Series D Preferred Equity
Interests in the Debtor: Farallon and Soleus Private Equity Fund
II, LP. Following the sale, what's left of the debtor Debtor
renamed itself to Redwood Liquidating Co.
GIBSON BRANDS: $300M Bank Debt Trades at 16% Discount
-----------------------------------------------------
Participations in a syndicated loan under which Gibson Brands Inc
is a borrower were trading in the secondary market around 84
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $300 million facility is a Term loan that is scheduled to
mature on August 13, 2028. The amount is fully drawn and
outstanding.
Gibson Brands, Inc. is an American manufacturer of guitars, other
musical instruments, and professional audio equipment from
Kalamazoo, Michigan, and now based in Nashville, Tennessee.
GLOBAL FOOD: EUR245M Bank Debt Trades at 16% Discount
-----------------------------------------------------
Participations in a syndicated loan under which Global Food
Solutions Sarl is a borrower were trading in the secondary market
around 83.9 cents-on-the-dollar during the week ended Friday, July
7, 2023, according to Bloomberg's Evaluated Pricing service data.
The EUR245 million facility is a Term loan that is scheduled to
mature on February 11, 2028.
Global Food Solutions is a progressive food service partner,
uniquely positioned to create affordable and inspired foods.
GOPHER RESOURCE: $510M Bank Debt Trades at 16% Discount
-------------------------------------------------------
Participations in a syndicated loan under which Gopher Resource LLC
is a borrower were trading in the secondary market around 83.8
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $510 million facility is a Term loan that is scheduled to
mature on March 6, 2025. About $466.3 million of the loan is
withdrawn and outstanding.
Gopher Resource, LLC offers lead, plastic, and household waste
recycling services. Gopher Resource serves customers in North
America.
GUNTHER CHARTERS: Aug. 30 Hearing on Disclosure Statement
---------------------------------------------------------
Judge Michelle M. Harner has entered an order that the hearing to
consider the approval of the Disclosure Statement of Gunther
Charters Inc. will be held on August 30, 2023, at 1:00 p.m. in
Courtroom 9-C, U.S. Courthouse, 101 West Lombard Street, Baltimore,
Maryland 21201.
August 9, 2023, is fixed as the last day for filing and serving in
accordance with Federal Bankruptcy Rule 3017(a) written objections
to the Disclosure Statement.
The Debtor filed a Chapter 11 Plan and a Disclosure Statement on
June 28, 2023. A copy of the Disclosure Statement is available
at:
https://www.pacermonitor.com/case/47526925/Gunther_Charters_Inc/124
Attorney for the Debtor:
Brett Weiss, Esq.
THE WEISS LAW GROUP, LLC
8843 Greenbelt Road, Suite 299
Greenbelt, MD 20770
About Gunther Charters
Since 1985, Gunther Charters, Inc. has been providing motor coach
transportation services, specializing in a variety of professional
transportation services. Based in Harmans, Md., Gunther Charters
provides corporate and business transportation, convention shuttle
service, airport transfers, military reunion tours, school groups,
group charters, and tour operator transportation services.
Gunther Charters filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 23-10416)
on Jan. 20, 2023, with $9,677,008 in assets and $13,495,288 in
liabilities. Martin Gunther, president of Gunther Charters, signed
the petition.
Judge Michelle M. Harner oversees the case.
Daniel Alan Staeven, Esq., at Frost & Associates, LLC and The Weiss
Law Group, LLC represent the Debtor as counsel.
H2O INVESTMENT: Unsecureds to Get Share of Income for 3 Years
-------------------------------------------------------------
H2O Investment Properties, LLC, filed with the U.S. Bankruptcy
Court for the Middle District of Florida a Plan of Reorganization
for Small Business under Subchapter V dated July 3, 2023.
The Debtor is a Florida limited liability company founded in 2023
by Ronald Glen Sapp and Michelle Baron. H2O is in the business of
purchasing, improving, and disposing of distressed property.
Currently, the Debtor owns certain real property and improvements
thereon located at 909 SW Schaeffer Road, West Linn, OR 97068 (the
"West Linn Property") and 30620 SW Rose Lane, Wilsonville, OR 97070
(the "Wilsonville Property" and together with the West Linn
Property, the "Properties"). Substantially all the Debtor's assets
are located at, in, or on the Properties. The Debtor maintains
operations at the Properties.
Facing judgments which would otherwise endanger Brilliant's
operations, it transferred the West Linn Property and Wilsonville
Property to the Debtor, which thereafter made significant
investments in the Properties with Mr. Sapp's and Ms. Barons' help.
In total, Mr. Sapp invested over $300,000 into the Properties,
targeting such investments towards repairs which would
substantially increase the Properties' value beyond Mr. Sapp's
capital inputs.
The Debtor initiated the Case in light of the foregoing, and in
recognition that a forced sale would expose secured creditors to an
uncomfortably high risk of not getting paid in full. Filing this
Case and this Plan ensures that creditors with valid liens against
the Properties would receive more than they would receive outside
of a Chapter 11 Case.
This Plan proposes to sell the West Linn Property which is
currently listed for sale on the open market in order to fund the
Plan. The Debtor submits that an orderly sale of the West Linn
Property will result in a better price than it could receive under
fire sale conditions. Once a buyer for the West Linn Property is
identified by the Debtor, a motion to permit the sale under this
Plan will be filed. Importantly, the Debtor will be seeking relief
under Section 1146 of the Bankruptcy Code in that the sale will be
made pursuant to the Plan.
The Debtor believes it will have the West Linn Property sold by the
first-year anniversary of the effective date of the Plan
("Effective Date"), which will fully repay all secured liens on the
West Linn Property and provide sufficient working capital to
rebuild the Wilsonville Property which would then begin generating
income and, thus, contribute to the ongoing business of the
Company. The Debtor also anticipates purchasing additional
properties to rehabilitate and either lease or sell to generate
additional income for the Debtor. To the extent that more funding
is needed to continue business operations, Brilliant has agreed to
provide financing in the form of loans ensuring sufficient working
capital to fund the Plan.
Class 17 consists of the General Unsecured Creditors. Holders of
allowed Class 17 claims shall receive a pro rata quarterly
distribution collectively totaling the Debtor's Disposable Income,
commencing at the beginning of the 1st Quarter of Year 2 of the
Plan. Holders of allowed Class 17 claims shall be paid until their
allowed claim is paid in full, or the 3rd year anniversary of the
Effective Date, whichever is earlier. Class 17 is deemed impaired.
Class 18 consists of the Equity Security Holders. All holders of
Class 18 claims and interests shall retain their interest in the
Debtor. While all holders of Class 18 claims and interests shall
retain their interest in the Debtor, all claims which holders of
Class 18 claims and interests may assert against the Debtor shall
be disallowed in their entirety. Class 18 is deemed impaired.
Payments required under the Plan will be funded from (i) funds
derived from the sale of the West Linn Property; (ii) revenues
generated by continued operations; and (iii) as needed and subject
to Court Approval, Brilliant will provide loans sufficient to meet
Plan payments.
A full-text copy of the Plan of Reorganization dated July 3, 2023
is available at https://urlcurt.com/u?l=Ir2Vg5 from
PacerMonitor.com at no charge.
Counsel for the Debtor:
Michael R. Dal Lago, Esq.
Christian Garrett Haman, Esq.
Jennifer M. Duffy, Esq.
DAL LAGO LAW
999 Vanderbilt Beach Road
Suite 200
Naples, FL 34108
Telephone: (239) 571-6877
Email: mike@dallagolaw.com
Email: chaman@dallagolaw.com
Email: jduffy@dallagolaw.com
About H2O Investment Properties
H2O Investment Properties LLC is in the business of purchasing,
improving, and disposing of distressed property. H2O Investment
filed a petition for relief under Subchapter V of Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00373) on April 3,
2023.
In the petition filed by Ronald G. Sapp, manager, the Debtor
reported assets and liabilities between $1 million and $10 million.
The petition states that funds will be available to unsecured
creditors. Michael C. Markham has been appointed as Subchapter V
trustee.
Judge Caryl E. Delano oversees the case.
Michael R. Dal Lago, Esq., at Dal Lago Law, serves as the Debtor's
counsel.
HORNBLOWER SUB: $349.4M Bank Debt Trades at 53% Discount
--------------------------------------------------------
Participations in a syndicated loan under which Hornblower Sub LLC
is a borrower were trading in the secondary market around 47.3
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $349.4 million facility is a payment-in-kind Term loan that is
scheduled to mature on April 27, 2025. The amount is fully drawn
and outstanding.
Hornblower Sub, LLC is a charter yacht and public dining cruise
operator.
IGNITION MIDCO: EUR325M Bank Debt Trades at 45% Discount
--------------------------------------------------------
Participations in a syndicated loan under which Ignition Midco BV
is a borrower were trading in the secondary market around 55.3
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The EUR325 million facility is a Term loan that is scheduled to
mature on July 4, 2025. The amount is fully drawn and
outstanding.
Ignition Midco B.V. operates as a special purpose entity. The
Company was formed for the purpose of issuing debt securities to
repay existing credit facilities, refinance indebtedness, and for
acquisition purposes. The Company's country of domicile is the
Netherlands.
INDEPENDENT ENERGY: Financial Difficulties Cue CCAA Filing
----------------------------------------------------------
Independent Energy Corp. ("IEC") sought and obtained protection
under the Companies' Creditors Arrangement Act pursuant to an
initial order from the Court of Queen's Bench of Alberta in Canada.
As part of the Initial Order, Ernst & Young Inc. was appointed as
Monitor of IEC.
The Initial Order authorizes IEC to begin a court-supervised
restructuring process and grants IEC various relief, including but
not limited to an initial stay of proceedings against IEC and its
Property, appointing Ernst and Young as Monitor, and providing IEC
the opportunity to prepare and file a plan of arrangement under the
CCAA for the consideration of its creditors and other stakeholders.
Pursuant to the Initial Order, IEC is obligated to continue to
carry on business in a manner consistent with the preservation of
their business and Property.
According to court documents, IEC meets the statutory requirements
to be eligible for relief under the CCAA. It is insolvent and has
obligations exceeding $5,000,000 to its creditors. As of June 12,
2023, IEC had total aggregate liabilities of $241,000,000 to its
creditors, including but not limited to:
a) secured debt owing to its senior secured creditor, Cortland,
in an amount exceeding $153,430,000;
b) secured debt owing to Independent Group of Companies Inc. in
the principal amount of $15,000,000, which is subordinate to
Cortland's secured debt pursuant to a Subordination, Postponement
and Standstill Agreement;
c) builders' liens registered against the Facility exceeding
$13,000,000;
d) unpaid employee remittances of approximately $431,000;
e) provincial sales tax amounts owing to the Province of
Saskatchewan in the approximate amount of $6,000,000; and
f) unsecured liabilities including accounts payable, accrued
liabilities, lease obligations and obligations owing under
unsecured notes totalling approximately $80,700,000.
Although IEC estimates its assets have a value that are roughly
equivalent to its aggregate liabilities, the majority of that value
relates to the property, plant and equipment associated with the
Facility, which is illiquid. IEC is currently experiencing a
severe liquidity crisis, and is unable to meet its obligations
owing to its creditors.
IEC's liquidity crisis originates from construction delays that
arose during the COVID-19 pandemic. Supply chain disruptions and
labour shortages delayed the completion of the construction of the
Facility by approximately 18 months, and increased the cost to
complete construction by 45% over the original budgeted amount.
The Company authorized and empowered to obtain and borrow under a
credit facility from the Interim Lender, Cortland Credit Lending
Corporation, in order to finance the Company's working capital
requirements and other general corporate purposes and capital
expenditures, provided that borrowings under such credit facility
shall not exceed $27,000,000 unless permitted by further order of
this Court.
A copy of the Initial Order is available on the Monitor's Web site
which is located at: https://www.ey.com/ca/IEC
Further materials, orders of the Court, creditor listings,
Monitor's reports and other information relating to IEC's CCAA
proceedings will be posted on the Monitor's Web site.
The Monitor can be reached at:
Ernst & Young Inc.
Attn: Philippe Mendelson
Suite 2200, 215 - 2nd Street SW
Calgary, Alberta T2P 1M4
Tel: (604) 891-8491
Fax: (403) 206-5075
Email: Philippe.mendelson@parthenon.ey.com
Counsel to the Debtor:
Fasken Martineau DuMoulin LLP
Attn: Robyn Gurofsky
Jessica Cameron
Anthony Mersich
350 7th Avenue SW, Suite 3400
Calgary, Alberta T2P 3N9
Tel: (403) 261-9469 / 9468
(587) 233-4124
Email: rgurofsky@fasken.com
jcameron@fasken.com
amersich@fasken.com
Counsel to the Monitor:
Norton Rose Fulbright Canada LLP
Attn: Howard Gorman K.C.
Aaron Stephenson
3700, 400 - 3rd Avenue SW
Calgary, Alberta T2P 4H2
Tel: (403) 267-8144
(403) 267-8290
Email: howard.gorman@nortonrosefulbright.com
aaron.stephenson@nortonrosefulbright.com
Counsel to Cortland Credit Lending Corporation:
Cassels LLP
Attn: Jeffrey Oliver
Joseph Bellissimo
Bankers Hall West
Suite 3810, 888 3 Street SW
Calgary, Alberta T2P 5C5
Email: joliver@cassels.com
jbellissimo@cassels.com
Independent Energy Corp. owns a refinery located near Kerrobert,
Saskatchewan.
INDEPENDENT PET: Court Confirms Committee-Backed Plan
-----------------------------------------------------
Judge Laurie Selber Silverstein has entered an order approving the
adequacy of Disclosures on a final basis and confirming the
Combined Disclosure Statement and Chapter 11 Plan of Liquidation of
Independent Pet Partners Holdings, LLC, et al. and the Official
Committee of Unsecured Creditors.
Class 1 (Other Secured Claims) and Class 2 (Priority Non-Tax
Claims) are Unimpaired and are conclusively presumed to accept the
Combined Disclosure Statement and Plan pursuant to Section 1126(f)
of the Bankruptcy Code.
As provided in Section 8.5 of the Combined Disclosure Statement and
Plan, Class 4 (Subordinated Claims) and Class 5 (Interests) are
Impaired under the Combined Disclosure Statement and Plan and are
deemed to have rejected the Combined Disclosure Statement and
Plan.
Class 3 (General Unsecured Claims) has voted to accept the Combined
Disclosure Statement and Plan in accordance with section 1126(c) of
the Bankruptcy Code.
Section 1129(a)(8) of the Bankruptcy Code has not been satisfied
because Classes 4 (Subordinated Claims) and 5 (Interests) are
deemed to reject the Combined Disclosure Statement and Plan
pursuant to Section 1126(g) of the Bankruptcy Code. Nevertheless,
the Combined Disclosure Statement and Plan is confirmable because
it satisfies the nonconsensual confirmation requirements pursuant
to Section 1129(b) of the Bankruptcy Code.
Liquidating Plan
Independent Pet Partners Holdings, LLC, et al. and the Official
Committee of Unsecured Creditors submitted a Combined Disclosure
Statement and Chapter 11 Plan of Liquidation.
The Combined Disclosure Statement and Plan is a liquidating chapter
11 plan. The Plan is premised upon maximizing the liquidation value
of the Assets to benefit creditors. Specifically, the Combined
Disclosure Statement and Plan provides for the creation of the
trust for the benefit of creditors (i.e., the Trust), which will be
funded with the Wind-Down Amount. On the Effective Date, as further
described herein, the Trust will also receive a 40% recovery of the
amount of any employee tax credit (the "Tax Credit") to which the
Estates are entitled, net of reasonable and documented fees and
expenses necessary to monetize the Tax Credit ("Net Recovery"),
with the remaining 60% of the Net Recovery to be provided to the
Lender Group in accordance with the Settlement Agreement. The
Trustee for the Trust will be selected by the Committee and will be
fully responsible for the process of reconciling Claims and the
Distributions to be made under the Combined Disclosure Statement
and Plan.
By the Sale Motion, the Debtors, sought, among other things,
approval of the Sale of substantially all of the Assets to the
Stalking Horse Purchaser pursuant to the Stalking Horse Agreement
or a purchaser with a higher or otherwise better bid, free and
clear of all Encumbrances other than Assumed Liabilities and
Permitted Liens.
On February 24, 2023, the Bankruptcy Court entered an order
approving the Bidding Procedures. The Debtors did not receive any
timely qualifying bids other than the Stalking Horse Agreement. On
April 4, 2023, the Bankruptcy Court entered the Sale Order, by
which the Bankruptcy Court, among other things, approved the Sale
of substantially all of the Debtors' Assets to the Stalking Horse
Purchaser, free and clear of all Encumbrances other than Assumed
Liabilities and Permitted Liens pursuant to the Stalking Horse
Purchase Agreement. On April 7, 2023, the Debtors and the Stalking
Horse Purchaser closed the sale.
During the Committee's investigation, the Settlement Parties
initiated negotiations regarding a global settlement agreement to
resolve all claims and disputes amongst the Settlement Parties.
After the Committee concluded its review, it determined that the
benefits of the Settlement Agreement outweighed the risks and
uncertainties associated with any potential challenge regarding (a)
the scope of the Prepetition Lender Group's liens and the credit
bid and (b) any claims against TPG or any of the directors or
officers of the Debtors.
As a result of intense negotiations between the Settlement Parties
and as a reflection of the Settlement Parties' collective business
judgment, on March 17, 2023, the Settlement Parties entered into
the Settlement Agreement, which provided for, among other things:
(a) the global resolution all claims and disputes among the
Settlement Parties; (b) the waiver and extinguishment of unsecured
claims of the Lender Group and TPG, including the Deficiency Claim,
under a chapter 11 plan consistent with the Settlement Agreement
(solely for distribution purposes), thereby increasing
distributions to the remaining general unsecured creditors; (c) the
termination of the Challenge Period as contemplated by and defined
in the Final DIP Order with the Committee's consent; (d) the filing
of this Combined Disclosure Statement and Plan, which will provide
for the creation of a liquidating trust charged with the orderly
wind-down of the Debtors' estates, payment of Allowed
Administrative Claims, Priority Non-Tax Claims, and Priority Tax
Claims, and Pro Rata Distributions to Holders of General Unsecured
Claims; (e) the Committee's support of the Sale, including the sale
of claims against TPG, to the Stalking Horse Purchaser, and the
Combined Disclosure Statement and Plan with the releases described
herein; and (f) following the closing of the Sale, the Debtors'
payment of Allowed unpaid Claims under section 503(b)(9) of the
Bankruptcy Code in the amount of up to $612,000 and Allowed unpaid
Secured Claims or Priority Tax Claims in the amount of up to
$110,000.
The Settlement Agreement was approved by the Bankruptcy Court on an
interim basis on March 24, 2023, and on a final basis on April 4,
2023, pursuant to the Settlement Agreement Order.
Under the Plan, Class 3 General Unsecured Claims total $10,663,000.
Each holder of an Allowed General Unsecured Claim will receive, in
full satisfaction and in exchange for such Allowed General
Unsecured Claim, a Trust Interest, which shall entitle each Holder
thereof to its Pro Rata share of Trust Assets after satisfaction in
full of Allowed Administrative Claims, Allowed Other Secured
Claims, Allowed Priority Tax Claims, Allowed Priority Non-Tax
Claims, and payment of, or provision for, all Trust Expenses.
Holders of Secured Credit Facilities will not receive any
Distributions from Allowed General Unsecured Claims on account of
the Deficiency Claims or on account of such Secured Credit
Facilities. Upon the Effective Date, TPG will waive all amounts of
its General Unsecured Claim against the Estates under its
management services agreement. Creditors will recover 11.4% of
their claims. Class 3 is impaired.
"Trust Assets" means all Assets of the Debtors on the Effective
Date, including (a) Cash (but not the Carve-Out), (b) Retained
Causes of Action, (c) proceeds of the liquidation of the Debtors'
Assets from any source, and (d) the Wind-Down Amount.
Counsel to the Debtors:
Andrew L. Magaziner, Esq.
S. Alexander Faris, Esq.
Kristin L. McElroy, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
1000 North King Street
Wilmington, DE 19801
Telephone: (302) 571-6600
E-mail: amagaziner@ycst.com
afaris@ycst.com
kmcelroy@ycst.com
- and -
David A. Agay, Esq.
Marc Carmel, Esq.
Joshua Gadharf, Esq.
Maria G. Carr, Esq.
Ashley Jericho, Esq.
MCDONALD HOPKINS LLC
300 North LaSalle Street, Suite 1400
Chicago, IL 60654
Telephone: (312) 280-0111
E-mail: dagay@mcdonaldhopkins.com
mcarmel@mcdonaldhopkins.com
jgadharf@mcdonadlhopkins.com
mcarr@mcdonaldhopkins.com
ajericho@mcdonaldhopkins.com
Counsel for the Official Committee of Unsecured Creditors:
Christopher M. Samis, Esq.
Aaron H. Stulman, Esq.
Elizabeth R. Schlecker, Esq.
POTTER ANDERSON & CORROON LLP
1313 North Market Street, 6th Floor
Wilmington, DE 19801
Telephone: (302) 984-6000
E-mail: csasmis@potteranderson.com
astulman@potteranderson.com
eschlecker@potteranderson.com
- and -
James S. Carr, Esq.
Maeghan J. McLoughlin, Esq.
Ravi Vohra, Esq.
KELLEY DRYE & WARREN LLP
3 World Trade Center, 175 Greenwich Street
New York, NY 10007
Telephone: (212) 808-7800
E-mail: jcarr@kelleydrye.com
mmcloughlin@kelleydrye.com
rvohra@kelleydrye.com
A copy of the Order dated June 30, 2023, is available at
https://tinyurl.ph/dUDaO from Omniagentsolutions, the claims
agent.
About Independent Pet Partners Holdings
Independent Pet Partners Holdings, LLC and various affiliated
entities sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del. Lead Case No. 23-10153) on February 5, 2023.
In the petition signed by Stephen Coulombe, co-chief restructuring
officer, the Debtor disclosed up to $500 million in both assets and
liabilities.
Independent Pet Partners offers a one-stop pet experience with
healthy, high-quality food products and treats and a range of pet
services, including grooming, self-wash, pet parent education, and
veterinary services. The Debtors also sell goods through their
e-commerce platform with each of the Debtors' banners having its
own standalone website. As of the Petition Date, the Debtors
operated under four unique regional banners: Chuck and Don's,
Kriser's Natural Pet, Loyal Companion, and Natural Pawz.
Judge Laurie Selber Silverstein oversees the case.
The Debtors tapped McDonald Hopkins, LLC as general counsel, Young
Conaway Stargatt and Taylor, LLP as co-counsel, Berkeley Research
Group, LLC as co-chief restructuring officer, Houlihan Lokey
Capital, Inc. as financial advisor and investment banker, and Omni
Agent Solutions as notice, claims, and balloting agent.
CION Investment Corporation; Main Street Capital Corporation; MCS
Income Fund, Inc.; Newstone Capital Partners III, L.P; Newstone
Capital Partners III-A, L.P.; and Newstone Capital Partners III-B,
L.P., as DIP Lenders and Prepetition Lenders, are represented by
Dechert LLP.
Co-counsel to the DIP Lenders and Prepetition Lenders is Richards,
Layton & Finger, P.A.
Acquiom Agency Services, LLC, as administrative and collateral
agent under the DIP facility and as Prepetition ABL Agent, and
Prepetition Priming Agent, is represented by Paul Hastings, LLP.
Wilmington Trust, National Association, as Prepetition DDTL Agent,
is represented by Arnold & Porter Kaye Scholer LLP.
INDRA HOLDINGS: $50M Bank Debt Trades at 50% Discount
-----------------------------------------------------
Participations in a syndicated loan under which Indra Holdings Corp
is a borrower were trading in the secondary market around 50.5
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $50 million facility is a Term loan that is scheduled to mature
on December 23, 2024. The amount is fully drawn and outstanding.
Indra Holdings Corp was founded in 2014. The company's line of
business includes holding or owning securities of companies other
than banks.
INNERLINE ENGINEERING: Cash Collateral Access OK'd Thru Oct 31
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Riverside Division, authorized Innerline Engineering, Inc. to use
cash collateral on an interim basis in accordance with the budget,
with a 15% variance, through October 31, 2023.
As previously reported by the Troubled Company Reporter, the Debtor
requires the use of cash collateral to pay ordinary and necessary
operating expenses.
The creditors with liens on the cash collateral are HOP Capital,
Danny Song, Dig Vac, LLC, APS Environmental Inc., the U.S. Small
Business Administration, and the Internal Revenue Service.
The Debtor is directed to provide adequate protection by making
monthly payments through October 31, 2023, as follows:
a. HOP Capital: $3,000
b. Danny Song: $1,000
c. U.S. Small Business Administration: $731
d. Internal Revenue Service: $5,207
Secured creditors holding valid, prepetition liens secured by the
cash collateral used by the debtor postpetition are granted
replacement liens on all postpetition revenues of the debtor to the
same extent, priority and validity (if any) that their liens
attached to the cash collateral. The amounts of the replacement
liens are limited to the amounts (if any) that cash collateral
diminishes postpetition as a result of the post-petition use of
cash collateral by the debtor.
A copy of the order is available at https://urlcurt.com/u?l=Z7HNhA
from PacerMonitor.com.
About Innerline Engineering
Corona, Cal.-based Innerline Engineering, Inc. --
http://www.innerlineengineering.com/-- offers a variety of
services to municipalities, utility owners, industrial facilities
and commercial property owners for the maintenance of their
underground utilities.
Innerline Engineering filed a petition for Chapter 11 protection
(Bankr. C.D. Cal. Case No. 21-14305) on Aug. 9, 2021, listing as
much as $10 million in both assets and liabilities. Thomas J.C.
Yeh, chief financial officer, signed the petition.
Judge Wayne E. Johnson oversees the case.
Resnik Hayes Moradi LLP serves as the Debtor's bankruptcy counsel.
JEFFERSON CAPITAL: Fitch Affirms BB- LongTerm IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) and senior unsecured debt ratings of Jefferson Capital
Holdings, LLC (Jefferson) at 'BB-'. The Rating Outlook remains
Stable.
KEY RATING DRIVERS
The rating affirmation reflects Jefferson's growing franchise
within the debt purchasing sector, where it benefits from a
recognized market position in the U.S., a leading franchise in
Canada and a growing presence in the U.K. and Latin America; its
diversification across secured and unsecured asset classes; and
consistent through-the-cycle operating history via predecessor
entities. The ratings also reflect Jefferson's conservative
leverage profile and limited near-term refinancing risk.
Ratings are constrained by its limited scale relative to top-tier
peers, monoline business model primarily servicing charged-off
debt, and a history of business acquisitions, which presents
execution risks. Additional constraints include potential
regulatory scrutiny associated with the consumer collections
businesses, the company's reliance on internal modelling for
portfolio valuations and associated metrics such as estimated
remaining collections (ERCs) and its private equity ownership,
which can yield uncertainty around strategic and financial
targets.
In 1Q23, Jefferson reported cash collections of $108 million, which
was up 3% yoy. Cash collections declined 15% in 2022 as they
normalize from a record high level in 2021, reflecting the
wind-down of fiscal stimulus, the weakening economic backdrop and
consumer financial health. Portfolio purchases have been robust and
increased by over 200% in 1Q23 underpinned by strong deployment
opportunities as industry supply of non-performing loan portfolios
continues to improve. Portfolio diversification, with a reduced
reliance on credit card receivables, also helped Jefferson maintain
yoy growth in portfolio purchases since the latter half of 2021. As
a result of strong deployments, ERCs grew 29% yoy in 1Q23.
Adjusted EBITDA was $274 million for the trailing 12 months (TTM)
ended 1Q23, generally consistent with FY22, but down from a record
2021. The adjusted EBITDA margin (adjusted for portfolio
amortization) was 66.4% for the TTM ended 1Q23, compared with 67.9%
in 2022 and a four-year average of 68.2%. Fitch expects earnings
metrics to be pressured over the near term given continued
normalization of collections, but profitability is expected to
remain strong and consistent with the assigned rating category.
Jefferson's leverage (gross debt-to-adjusted EBITDA) was 2.0x for
the TTM ended 1Q23, which corresponds to Fitch's 'bbb' category
benchmark range of 1.5-2.5x. Leverage has increased in recent
quarters due to portfolio growth. Fitch expects leverage to
increase further but to remain at-or-below 2.5x, consistent with
company's stated leverage target of 2.0x-2.5x.
Fitch also considers gross debt-to-tangible equity as a
complementary leverage metric. On this basis, leverage was 3.0x at
end-1Q23, which provides meaningful headroom against Fitch's 5x
downgrade trigger. Tangible equity growth has been supported by
solid internal capital generation, but leverage is expected to rise
over the medium term with improved portfolio acquisition
opportunities.
Jefferson's funding profile is comprised of senior unsecured notes
and a secured revolving credit facility (RCF) totaling $537
million. The unsecured funding represented approximately 56% of
total debt at end-1Q23, which compares favorably with peers. Fitch
expects the unsecured funding mix to trend lower in the near term
as utilization of RCF increases to fund portfolio purchases.
Fitch believes Jefferson's liquidity profile is adequate. At
end-1Q23, the company had $23 million in cash and $146 million in
available capacity under its RCF (subject to borrowing base
calculations). The company has no material debt maturities until
2026. Additionally, debt purchasers have the option, over shorter
periods, to moderate their rate of portfolio purchases to conserve
liquidity.
The Stable Outlook reflects Fitch's view that the company's
conservative leverage, good profitability and discretionary nature
of portfolio purchases mitigate risks of potential slowdown in
debt-collection activities and/or changes to estimated recoveries.
The Stable Outlook also assumes that any possible changes to
Jefferson's collection practices arising from new regulatory rules
will have a minimal negative impact on the business model.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
-- A sustained increase in debt/adjusted EBITDA above 2.5x or
debt/tangible equity above 5x, resulting from EBITDA
contraction and/or an increase in debt-funded acquisitions;
-- Failure to maintain a diverse funding profile and/or a shift to
a largely secured balance sheet funding model;
-- A weakening in asset quality, as reflected in acquired debt
portfolios significantly underperforming anticipated returns or
repeated material write-downs in expected recoveries;
-- An adverse operational event or significant disruption in
business activities (for example arising from regulatory
intervention in key markets adversely impacting collection
activities), thereby undermining franchise strength and
business-model resilience.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
-- An enhancement of scale and franchise strength relative to
peers and demonstrated earning resilience through the current
economic cycle;
-- Further diversification of the funding profile and maintenance
of an unsecured debt funding mix at greater than 40% of total
debt on a sustained basis;
-- Leverage maintained consistently below 2x through the cycle on
a debt/adjusted EBITDA basis and below 4x on a debt/tangible
equity basis.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
Jefferson's senior unsecured debt rating is equalized with the
Long-Term IDR, reflecting Fitch's expectation of average recovery
prospects under a stressed scenario. The negative impact from an
increase in secured funding in a priority position is offset by
relatively low leverage.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
Jefferson's senior unsecured debt rating is primarily sensitive to
changes in the group's Long-Term IDR and secondarily to the funding
mix and recovery prospects on the unsecured debt. A material
increase in the proportion of secured debt, which weakens recovery
prospects for unsecured debtholders in a stressed scenario could
result in the unsecured debt rating being notched down below the
IDR.
ADJUSTMENTS
The Standalone Credit Profile has been assigned below the implied
Standalone Credit Profile due to the following adjustment reason:
Business Profile (negative).
The Business Profile score has been assigned in line with the
implied score. Business model was identified as a relevant negative
factor in the assessment.
The Earnings & Profitability score has been assigned below the
implied score due to the following adjustment reason: Revenue
diversification (negative).
The Capitalization & Leverage score has been assigned below the
implied score due to the following adjustment reason: Historical
and future metrics (negative).
The Funding, Liquidity & Coverage score has been assigned below the
implied score due to the following adjustment reason: Historical
and future metrics (negative).
ESG CONSIDERATIONS
Jefferson Capital Holdings LLC has an ESG Relevance Score of '4'
for Customer Welfare - Fair Messaging, Privacy & Data Security due
to the importance of fair collection practices and consumer
interactions and the regulatory focus on them, which has a negative
impact on the credit profile, and is relevant to the ratings in
conjunction with other factors.
Jefferson Capital Holdings LLC has an ESG Relevance Score of '4'
for Financial Transparency due to the significance of internal
modelling to portfolio valuations and associated metrics such as
estimated remaining collections, which has a negative impact on the
credit profile, and is relevant to the ratings in conjunction with
other factors. These are features of the debt purchasing sector as
a whole, and not specific to the company.
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.
KCW GROUP: Court OKs Cash Collateral Access Thru Aug 8
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized KCW Group, LLC to use cash collateral
on an interim basis in accordance with the budget, with a 10%
variance, through August 10, 2023.
The Debtor is indebted to Texas Capital pursuant to (a) the
Promissory Note, executed by the Debtor, dated July 19, 2018, in
the original principal amount of $1.750 million and (b) the
Promissory note, executed by the Debtor, dated February 20, 2020,
in the original principal amount of $225,000.
Both Note 1 and Note 2 were originally executed in favor of
Allegiance Bank, which assigned Note 1 and Note 2, and all
collateral for the Notes to Texas Capital pursuant to an Assignment
of Note and Liens, dated effective December 27, 2022. The
Assignment was properly recorded in the Real Property Records of
Harris County, Texas under Clerk's File No. RP-2023-7856.
Texas Capital holds a perfected security interest in the Debtor's
personal property and the Debtor's assignment of rents, income,
revenue and profits from the Properties, and all proceeds relating
thereto, which constitute the Collateral of Texas Capital as of the
filing date of March 22, 2023. All of the revenue from the Debtor's
business constitutes Texas Capital's cash collateral.
Texas Capital alleges that the amounts owed under the Notes by the
Debtor as of March 22, 2023, exceeds $1.890 million in principal,
accrued and unpaid interest and late charges.
As partial adequate protection for use by the Debtor of Texas
Capital's cash collateral for the interim period, the Debtor will
pay Texas Capital $4,000 by the fifth day of each month until
further Court order.
As partial adequate protection, Texas Capital is granted
replacement liens and security interests as of the petition date
for such cash collateral as is used by the Debtor.
The replacement liens and security interests granted are valid,
enforceable and fully perfected as of the petition date, and no
filing or recordation or other act in accordance with any
applicable local, state or federal law, rule or regulation is
necessary to create or perfect such liens and security interests.
In addition, the Debtor will maintain insurance on all of their
real and personal property, naming Texas Capital as loss
payees/additional insured, and in the amounts and types required by
the Debtor's loan documents and will provide proof of insurance to
Texas Capital, upon written request.
A final hearing on the matter is set for August 8 at 9:30 a.m.
A copy of the Court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=KBr8ju from PacerMonitor.com.
The Debtor projects $28,257 in total income and $16,950 in total
expenses for July 2023.
About KCW Group, LLC
KCW Group, LLC owns and operates a large facility for weddings,
quincineras and other events for residents in Houston and the
surrounding areas. The Debtor sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-30988) on
March 22, 2023. In the petition signed by Edward Schulenburg, Jr.,
the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge Jeffrey P. Norman oversees the case.
Julie M. Koenig, Esq., at Cooper & Scully, P.C., represents the
Debtor as legal counsel.
KINGS 828 TRUCKING: Court Confirms Amended Plan as Modified
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas has
entered an order confirming Kings 828 Trucking, LLC's Amended Plan
of Reorganization, as modified.
The modifications announced in open Court and contained are
approved:
* The interest rate provided to creditors in Classes 3 and 5 is
changed to 8.25% per annum.
* The Debtor's Amended Plan of Reorganization, is modified to
include the following:
The Comptroller's timely-filed claim for IFTA taxes is a
priority claim under section 507(a)(8)(C). The Debtor would show
that the claim is partially based upon a failure to file certain
returns, The Debtor believes upon the filing of the returns the
Comptroller claim will be reduced. In the event the Claim remains
it will be paid in full with interest at the rate of 8.50% within
60 months of the Petition Date.
Reorganization Plan
Kings 828 Trucking submitted an Amended Plan of Reorganization of
Kings 828 Trucking pursuant to Section 1190 of the Bankruptcy Code
dated June 27, 2023.
The Debtors will continue in business. The Debtors' Plan will
break the existing claims into 6 categories of Claimants. These
claimants will receive cash payments over a period of time
beginning on the Effective Date.
Under the Plan, Class 6 Claimants Allowed Unsecured Creditors are
impaired and will be satisfied as follows: All unsecured creditors
shall share pro rata in the unsecured creditors pool. The Debtor
will make monthly payments commencing 30 days after the Effective
Date of $1,000 into the unsecured creditors' pool. The amount
represents the Debtor's disposable income as that terms is defined
in 11 U.S.C. Section 1191(d). The Debtor shall make distributions
to the Class 6 creditors every 90 days commencing 90 days after the
first payment into the unsecured creditors pool. The Debtor shall
make payments into the unsecured creditors pool until all allowed
Class 6 Claimants have been paid in full. Class 6 is impaired.
Proposed Attorneys for the Debtor:
Eric A. Liepins, Esq.
ERIC A. LIEPINS, P.C.
12770 Coit Road, Suite 850
Dallas, TX 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
A copy of the Order dated June 30, 2023, is available at
https://tinyurl.ph/TTaCe from PacerMonitor.com.
About Kings 828 Trucking
Kings 828 Trucking, LLC, operates a trucking company. The Debtor
filed a Chapter 11 bankruptcy petition (Bankr. N.D. Tex. Case No.
23-41110) on April 19, 2023, with $100,001 to $500,000 in both
assets and liabilities. Judge Edward L. Morris oversees the case.
The Debtor is represented by Eric A. Liepins, PC.
KOTAI INVESTMENTS: Seeks to Hire Chan & Chen as Accountant
----------------------------------------------------------
Kotai Investments, Inc. seeks approval from the U.S. Bankruptcy
Court for the Central District of California to employ Chan & Chen,
LLP.
The Debtor requires an accountant to, among other things, prepare
monthly operating reports and financial statements, and provide tax
and bookkeeping services.
Chan & Chen will be compensated at $180 per hour.
The initial retainer is $1,000.
Curt Wang, a partner at Chan & Chen, 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:
Curt Wang
Chan & Chen LLP
1103 S San Gabriel Blvd. #F
San Gabriel, CA 91776
Tel: (626) 572-8930
About Kotai Investments
Kotai Investments, Inc., a company in San Gabriel, Calif., filed a
petition for relief under Subchapter V of Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-12242) on April 13,
2023, with $1 million to $10
million in both assets and liabilities. Mark M. Sharf has been
appointed as Subchapter V trustee.
Judge Deborah J. Saltzman oversees the case.
The Debtor tapped Michael Jay Berger, Esq., at the Law Offices of
Michael Jay Berger as legal counsel and Chan & Chen, LLP as
accountant.
LACKAWANNA ENERGY: Moody's Rates $730MM Secured Term Loan 'Ba3'
---------------------------------------------------------------
Moody's Investors Service has assigned a Ba3 rating to Lackawanna
Energy Center LLC's (LEC) $730 million six-year senior secured term
loan B facility that includes a $350 million fixed rate tranche and
a $380 million floating rate tranche, in addition to LEC's $95
million six-year term loan C facility and $120 million five-year
senior secured revolving credit facility. The outlook is stable.
The financing represents the recapitalization of Lackawanna Energy
Center (Lackawanna), a 1,483 MW natural gas-fired combined cycle
gas turbine. Debt proceeds are expected to repay existing senior
secured debt, holding company debt, fund reserves, and pay
transaction expenses. The revolving credit facility will be used to
refinance outstanding credit facility balances and provide general
liquidity. The term loan C facility will separately back a 6-month
debt service reserve.
Assignments:
Issuer: Lackawanna Energy Center LLC
Senior Secured 1st Lien Term Loan B-1, Assigned Ba3
Senior Secured 1st Lien Term Loan B-2, Assigned Ba3
Senior Secured 1st Lien Term Loan C, Assigned Ba3
Senior Secured 1st Lien Revolving Credit Facility, Assigned Ba3
Outlook Actions:
Issuer: Lackawanna Energy Center LLC
Outlook, Assigned Stable
RATINGS RATIONALE
The Ba3 rating assignment reflects the project's the strong
competitive position in PJM, demonstrated by attractively priced
fuel from the Marcellus/Utica gas supply and its high efficiency as
a combined cycle plant using General Electric International, Inc.'s
(GE) new 7HA.02 technology with heat rates below 6,500 Btu/kWh.
Further supporting the project's credit profile is a long-term
service agreement (LTSA) with GE, highly experienced sponsors in
Invenergy Thermal Operating II and Global Energy & Power
Infrastructure Fund II, LP (a BlackRock infrastructure fund), and
an experienced operator in Invenergy Services Thermal US LLC. The
project also has typical project finance features that provide
lender protections.
The rating also considers the single asset operating risk,
refinancing risk, 'B' category financial metrics under the Moody's
Case, and exposure to volatile power markets. Merchant risk
represents the greatest risk driver to the project, especially
given the recent reduction in forward price curves from the higher
prices and forward curves seen throughout 2022. Prices are still
moderately elevated compared to 2019 and 2020 levels and strong
demand for electricity drive Moody's expectations for adequate
energy margins over the next couple of years.
The project's merchant risk is somewhat mitigated through the
project's Gas Netback Agreement with South Jersey Resource Group
("SJR"), which links the delivered natural gas prices to LEC's
Locational Marginal Price ("LMP"), through 2029. The Gas Netback
Agreement consists of a three-tiered price structure with tier one
gas priced at 9% of the LMP with a weighted average annual floor of
$2.50 MMBtu and a weighted average monthly ceiling price of $5.00
per MMBtu for the first 80,000 MMBtu/day. If natural gas prices
were to spike, the agreement provides the project with price
protection because the price for tier one gas would be capped at
$5.00 per MMBtu. However, the floor is more of a risk in a
low-priced environment because the project would be paying more for
gas than the market price in a low natural gas pricing environment,
and would be required to make a true-up payment at year-end. Given
the current natural gas price environment, it is possible that the
project may be required to make a true-up payment at the end of
this year, however, management does not expect that such payment
will be necessary. Tier two gas is also priced at 9% of the LMP for
the next 100,000 MMBtu/day, but does not have a floor. Essentially,
the Gas Netback Agreement secures 85% of physical gas supply
typically needed per day (210,000 MMBtu/day) at a fixed market heat
rate for the plant's full load operation.
LEC receives an incremental revenue stream owing to known capacity
revenue through May 2025. However, PJM auction prices have seen
decreases over the last two auction periods. As a result, gross
margins received through capacity revenue are expected to moderate
relative to energy margins, further increasing the project's
merchant risk. LEC is in the MAAC zone, where capacity pricing has
typically cleared at a premium relative to RTO but declined to
$49.49/MW-day in the 2023/2024 and 2024/2025 periods, compared to
$140/MW-day for the 2021/2022 period. There continues to be
uncertainty regarding how much auction prices will recover in
future auction periods. Moody's Base Case assumes flat auction
prices for the upcoming 2025/2026 auction with gradual increases
going forward.
Mid 'B' category financial metrics under conservative assumptions
Management's case assumes an average debt service coverage ratio
(DSCR) of around 2.11x, an average Project CFO to Debt around
15.0%, and Debt/EBITDA around 3.52x from 2024 to 2026, according to
Moody's calculations. Moody's case is more conservative and assumes
a reduced energy margin, reduced capacity auction price recovery,
and 10% higher O&M. Under this case, Moody's expect an average
(DSCR) of around 1.64x, an average Project CFO to Debt around 8.7%,
and Debt/EBITDA around 4.61x from 2024 to 2026, according to
Moody's calculations.
LIQUIDITY ANALYSIS
LEC's liquidity consist of a typical six-month debt service reserve
account (DSRA). LEC expects to fund the DSRA with a letter of
credit. The project also has the option to fund a $25 million
Liquidity Reserve Account in an amount to the lessor of (1) the
amount equal to a prudent liquidity reserve plus the aggregate
amount of major maintenance/capital expenditures reasonably
anticipated to be incurred over the next 12 months and (2) $25
million.
STRUCTURAL FEATURES
The project benefits from typical project finance protections
including a first lien security interests in all tangible and
intangible assets of the Issuer, limitations on incremental debt &
asset sales, and a 1.1x DSCR financial covenant. The project also
benefits from 1% mandatory amortization, an excess cash flow sweep
of 75%, and a sweep to a specified target debt balance, for the
term loan B facility as outlined in the debt documentation.
Following the completion of this transaction, approximately $100
million of holding company debt will remain outstanding. The
holding company loan currently sweeps 30% of excess cashflows of
the project after the cash of the project is used to satisfy
obligations at the operating company, including all payments
required under the operating company cash flow sweep mechanism. The
loan does have a soft maturity of December 31, 2024, which would
trigger an uptick of the sweep to 100%. If cash cannot be paid on
the holding company loan from quarterly distributions, there is a
payment-in-kind feature (PIK) and the loan would accrue interest
that would be added to the principal amount of the loan, reducing
the risk of a payment default. If the loan does default without a
default at the operating company, this event would not trigger a
default of the loan at the operating company. Lastly, holding
company lenders do not have any rights to the project company's
assets.
RATING OUTLOOK
The stable outlook assumes that the project will continue to
exhibit strong operating performance, as well as engage and
maintain solid energy margins, resulting in sustained DSCR levels
above 1.5x.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
FACTORS THAT LEAD TO AN UPGRADE
The rating is currently well-positioned and has limited prospects
for an upgrade. The rating could face upward pressure if LEC repays
substantially greater debt than expected if the project generates
stronger financials than anticipated that result in DSCRs
consistently above 2.0x, Project CFO to debt above 12%, and debt to
EBITDA below 4.0x.
FACTORS THAT COULD LEAD TO A DOWNGRADE
The rating could be downgraded if the project incurs major
operational problems, if debt reduction is materially less than
expected or if its financial metrics are below expectations leading
to DSCR levels below 1.5x, project cash flow to debt below 8%, and
debt to EBITDA above 6.0x on a sustained basis. Additionally, the
rating could be downgraded if the Borrower incurs substantial
payment requirements under the Gas Netback Agreement.
PROFILE
LEC owns the Lackawanna Energy Center, a 1,483 MW natural-fired
combined gas turbine facility located in Jessup, Pennsylvania. The
plant achieved commercial operation on January 15, 2019. LEC is
owned by a sponsor group of Invenergy Thermal Operating II (27.82%)
and Global Energy & Power Infrastructure Fund II, LP (72.18%), a
Blackrock Infrastructure fund.
METHODOLOGY
The principal methodology used in these ratings was Power
Generation Projects published in June 2023.
LACKAWANNA ENERGY: S&P Assigns Preliminary 'BB-' Rating on Loans
----------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'BB-' project finance
issue rating, and '2' recovery rating, to Lackawanna Energy Center
LLC's (LEC) proposed issuance of a $730 million term loan B (TLB),
a $95 million term loan C (TLC), and a $120 million revolving
credit facility (RCF).
Lackawanna is a 1,483 MW combined-cycle natural gas-fired power
plant located in Jessup, Pa, in the Mid-Atlantic Area (MAAC)
sub-region of PJM. The plant commenced operations in 2019 and
benefits from stable long-term energy margins underpinned by a gas
netback agreement. The project was developed by Invenergy and has a
partnership with Blackrock Global Infrastructure Funds.
Key strengths
With an annual average base load heat rate of 6,350 British thermal
units per kilowatt-hour (Btu/kWh)-6,450 Btu/kWh, LEC is among the
newest, most efficient, and most competitive combined cycle
generators that sit low on the Pennsylvania-New Jersey-Maryland
Interconnection (PJM) and MAAC dispatch curve. The net capacity
factor for LEC since its commissioning in 2019 has been robust at
about 78%.
The project has a netback agreement with Coterra. The agreement
locks in a market heat rate that provides some downside protection
when power prices are low, compared with a fully merchant plant.
The assets are strategically located in the Marcellus shale gas
region that provides direct access to the lowest cost and most
abundant natural gas supply in the Northeast; therefore, S&P
expects modern gas-fired power plants, like LEC will remain highly
competitive.
The project is in the MAAC region, which has historically benefited
from premium capacity prices compared with the PJM
Regional Transmission Organization.
Key risks
Like other projects financed with TLB structures, the project will
not have sufficient cash flow available for debt servicing (CFADS)
and cash on hand to repay debt outstanding at maturity and will
therefore be exposed to refinancing risk at that time.
The asset is exposed to commodity price risks since it sells its
power produced on a merchant basis. However, the GNA moderates this
type of risk, if structured properly.
This is a single-asset, stand-alone plant that lacks scale and
geographic diversity.
The project's highly efficient turbines put it at the bottom of the
dispatch stack, which leads to very high-capacity factors. LEC is a
newly built 1,483-megawatt (MW) natural gas fired combined cycle
gas turbine (CCGT) in Jessup, Pa., that includes three General
Electric (GE) 7HA.02 air-cooled, combustion turbines; three heat
recovery steam generators with integrated duct burners; and a steam
turbine. It is a highly efficient baseload asset with the latest
technology (GE 7HA.02) and one of the lowest heat rates in the PJM.
Since becoming operational, the plant has achieved an average net
heat rate of approximately 6,400 Btu/kWh. This efficient heat rate
allows the plant to dispatch under most market conditions, which
makes it a highly competitive generation resource compared with
other thermal plants. At the same time, these units are expected to
provide better operational flexibility that allows the facility to
respond rapidly to variations in energy demand, complementing the
continued growth of intermittent renewable resources in the PJM.
GNA provides better energy margin stability compared with a fully
merchant facility. The project has a GNA with Coterra for 85% of
its capacity. S&P views this agreement positively, as it provides a
layer of downside protection when power prices weaken, compared
with a merchant plant with no hedging structures. Under the
structure, LEC's cost of fuel (that is, natural gas) is linked to
the price of power, effectively locking in a fixed percentage
margin per megawatt-hour (MWh) of energy produced. Although margins
are expected to remain intact because of the GNA, the absolute
dollar profitability of the plant's generation is still subject to
fluctuation (depending on power prices). In other words, there is
no minimum (floor) on revenues (unlike revenue put) for a
predefined number of years. At the same time, since the cost of
fuel under the agreement is based on LEC's nodal power price, there
is no basis risk. In contrast, under the heat rate call option
(HRCO), the generators are paid at the generation node, but hedge
at a trading hub. Therefore, there is always some basis risk unless
the generator sells at the generation node. Also, in HRCO, the
project gives up the potential upside that it would otherwise
realize from widening spark spreads, while the GNA allows it to
retain some upside.
The project is still exposed to market forces in the PJM, and the
broader merchant power space. The project does not benefit from any
long-term contractual sales, which essentially exposes its
profitability and cash generation to market-related forces. Power
prices exhibit volatility from period to period due to demand and
supply dynamics, weather conditions, secular industry changes and
trends, capacity additions and retirements, and applicable
regulations--adding uncertainty to cash flows and forecasts.
However, S&P notes that the GNA moderates this type of risk to some
extent. At the same time, the project will receive capacity
payments (25%-30% of forecast revenues). This, combined with GNA,
will provide some cash flow visibility and certainty through the
capacity cleared periods as well as the hedge tenure (until 2029).
Efficient CCGTs should remain profitable owing to sizable share of
coal capacity in the MAAC region, which will continue to struggle
economically. Higher prices were seen through much of 2022, spurred
by resurgent demand due to the pandemic. Conversely, daily on-peak
prices in several major PJM power hubs hovered in the mid-$30 per
MWh area recently. S&P said, "We continue to expect power prices in
the second half of 2023 and 2024 will fluctuate but ultimately
decrease from recent highs, as much of the price pressure observed
last year has abated after a relatively mild winter and declining
natural gas prices in TETCO M3, TGP Z4 300 Leg, and so forth.
Consequently, we forecast LEC will realize spark spread in the
low-teen area over the next few years--much lower than the $21/MWh
realized in 2022."
However, LEC can offset the low spark spreads through higher
generation. Like other efficient operators--depending on the
economics--LEC can run at baseload around the clock with a marginal
decrease on dispatch overnight, resulting in higher capacity
factors and energy margins. The only time when most coal-based
generators could be competitive is when natural gas prices surge to
a degree that makes gas-to-coal switching more economical. With the
recent mild winter, and moderating power demand, relatively higher
variable-cost and inefficient coal-based generators are at the
highest risk based on their inability to compete with low-cost and
efficient CCGTs, such as LEC.
S&P said, "The level of deleveraging over time is also one of our
key credit considerations because the project will be exposed to
refinancing risk toward the end of its debt term. Similar to other
projects financed with TLB structures, the project will not have
sufficient CFADS and cash on hand to repay debt outstanding at
maturity and will therefore be exposed to refinancing risk and
market conditions at that time. We understand that the amount of
additional debt paydown through excess cash can vary because of the
need to allocate cash for other uses such as working capital and
reserve funding. However, given the merchant nature of the asset,
the debt paydown via sweep is subject to financial performance,
which in turn is dictated by market fundamentals. We project TLB
debt outstanding at maturity of about $460 million (60% of issuance
amount). We assume LEC will fully repay its debt by 2043 and
forecast a minimum DSCR of 1.39x, with median DSCRs of about 1.75x.
For the post-refinancing period, we model a fully amortizing TLB
due 2043, although the sponsor could choose different refinancing
alternatives.
"The stable outlook reflects our expectation that LEC would
generate at least a minimum DSCR of 1.39x through the project's
life, which includes the post-refinancing period (2028-2043). Based
on our view of the current market environment, we project the total
TLB balance of about $460 million at maturity in 2029.
"We would lower the rating if LEC is unable to maintain a minimum
DSCR of 1.35x on a sustained basis. This could result from
lower-than-expected capacity factors, weaker energy margins,
continued declines in capacity prices, and operational challenges
such as forced outages and lower plant availability. We could also
consider a negative rating action if the project's cash flow sweeps
were materially lower than our forecast, which would ultimately
lead to higher-than-expected debt balance at maturity, and
consequently a weaker minimum DSCR, absent any other mitigating
factors.
"Although unlikely during our outlook period, we would consider an
upgrade if we believed LEC could achieve a minimum DSCR of at least
1.8x including the post-refinancing period. This outcome would
largely be a function of highly favorable business conditions,
which would lead to widening spark spreads, or higher-than-expected
capacity pricing."
LARRY BARBER: Amends IRS Secured Claims Pay Details
---------------------------------------------------
Larry Barber Enterprises, Inc., submitted a Second Amended Plan of
Reorganization for Small Business under Subchapter V dated July 6,
2023.
The Debtor's financial projections show that the Debtor will be
able to distribute projected disposable income to the holders of
allowed administrative, priority tax, secured, and unsecured
creditors.
The Debtor anticipates that the Plan will be confirmed in July
2023, and distributions to administrative and secured creditors
will begin on August 1, 2023. The Debtor anticipates that payments
to unsecured creditors will commence on January 1, 2025, with the
last payment being made on December 1, 2029. The Debtor projects
that total distributions to unsecured creditors will be
approximately $75,000, including distributions on account of the
Internal Revenue Services unsecured claim.
The distributions under the Plan will be derived from (i) existing
cash on hand on the Effective Date, and (ii) revenues generated by
continued business operations.
Class 2 consists of the Secured Claim of the Internal Revenue
Service. The IRS filed Claim No. 9.3 in the amount of
$2,340,871.09, $2,009,092.88 of which is secured by secured by
federal tax liens on the Debtor's assets. The IRS's secured claim
shall be paid over a period of 10 years. The Debtor projects that
it will pay $1,504,500 of the secured claim within the ten-year
period, leaving an unpaid secured claim in the amount of
$504,592.88.
The remaining $211,709.81 of the IRS's claim is a general unsecured
claim and will be paid pro rata with other unsecured claims. The
Debtor projects that it will make 5 annual payments of $15,000 (in
the aggregate) to creditors with allowed general unsecured claims.
The Debtor projects that the IRS will receive 5 payments of
$4,568.74 or a total of $22,843.70 on account of its unsecured
Claim.
All payments made by the Debtor to the Internal Revenue Service
under the Plan shall be allocated first to the NON-trust fund
portion of its obligations. Post-confirmation, the Debtor shall
remain current with filing and paying its federal tax obligations
during the term of its Plan to the Internal Revenue Service.
Like in the prior iteration of the Plan, each holder of a
non-priority unsecured claim against the Debtor shall receive its
pro rata share of the Debtor's projected disposable income, after
payment of administrative, priority tax, and secured claims.
Payments shall be made monthly commencing in or about January 2025.
The Debtor projects that total distributions to unsecured creditors
will be approximately $75,000.00.
Payments required under the Plan will be funded from (i) existing
cash on hand on the Effective Date and (ii) revenues generated by
continued operations.
A full-text copy of the Second Amended Plan dated July 6, 2023 is
available at https://urlcurt.com/u?l=8Qirze from PacerMonitor.com
at no charge.
The Debtor is represented by:
Kathleen L. DiSanto, Esq.
Bush Ross PA
Post Office Box 3913
Tampa, FL 33601
Telephone: (813) 224-9255
Facsimile: (813) 223-9620
Email: kdisanto@bushross.com
About Larry Barber Enterprises
Established by Larry Barber, Larry Barber Enterprises Inc. is a
full-service provider of tower civil design, construction and
maintenance services across the United States, Puerto Rico, and the
U.S. Virgin Islands. On the Web:
http://www.larrybarberenterprises.com/
Larry Barber Enterprises sought bankruptcy protection under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla.
Case No. 22-02083) on May 24, 2022, listing up to $50,000 in assets
and up to $10 million in liabilities. Amy Denton Mayer has been
appointed as Subchapter V trustee.
Judge Caryl E. Delano oversees the case.
Jake C. Blanchard, Esq., at Blanchard Law, P.A., is the Debtor's
counsel.
LEHMAN BROTHERS: Assured Guaranty Wants to Recover $58M Trial Fees
------------------------------------------------------------------
Alexa Scherzinger of Law360 reports that in the aftermath of a
trial with decade-old roots, Assured Guaranty Ltd. moved to recover
$58 million in expenses it incurred during its battle with Lehman
Brothers over credit default swaps, which the insurer won in a
bench trial ruling this March 2023.
To recall, Assured Guaranty (Assured) successfully defeated claims
brought by Lehman Brothers International (Europe) (LBIE) in the
Commercial Division of the New York Supreme Court and prevailing on
Assured's counterclaim for breach of contract.
According to Assured's counsel, Cleary Gottlieb, the case concerned
the proper valuation of 28 terminated credit default swaps between
Assured and LBIE under the terms of the ISDA Master Agreement.
After Lehman's bankruptcy in 2009, Assured (the protection seller
on the swaps) exercised its right to terminate the transactions and
calculated a settlement amount of approximate $20 million that
Lehman owed Assured. Lehman disputed that amount, and initiated
litigation against Assured in 2011, asserting a number of claims
and seeking damages of approximately $1.4 billion.
A five-week bench trial was held from October 18, 2021, through
Nov. 19, 2021, before Justice Melissa A. Crane of the New York
Commercial Division. In a ruling on March 8, 2023, the court found
that Lehman had not proven its claim, that its "valuation was
commercially unreasonable under the circumstances," decision p. 33,
and rejected its request for $485 million in damages; the court
also found that Assured had proven its counterclaim by showing that
its calculation was commercially reasonable and done in good faith.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more than
150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers filed for Chapter 11 bankruptcy on Sept. 15, 2008
(Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition
disclosed US$639 billion in assets and US$613 billion in debts,
effectively making the firm's bankruptcy filing the largest in U.S.
history. Several other affiliates followed thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC
sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases are handled by Judge James M. Peck.
Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife,
Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil,
Gotshal & Manges, LLP, in New York, represent Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as
counsel to the Official Committee of Unsecured Creditors. Houlihan
Lokey Howard & Zukin Capital, Inc., is the Committee's investment
banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant to
the provisions of the Securities Investor Protection Act (Case No.
08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee
for the SIPA liquidation of the business of LBI.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. Lehman mad its first payment to creditors under its $65
billion payout plan in April 2012.
LEWISVILLE DONKEY: Files Emergency Bid to Use Cash Collateral
-------------------------------------------------------------
Lewisville Donkey, LLC asks the U.S. Bankruptcy Court for the
Eastern District of Texas, Sherman Division, for authority to use
cash collateral to make payroll and to pay other immediate expenses
to keep its doors open.
Pearl Capital and Rewards Network may assert liens on the Debtor's
operations. The secured creditors assert liens on, among other
things, the inventory generated by the Debtor.
An emergency exists in that the entire chance of the Debtor's
reorganizing depends on the Debtor's ability to immediately obtain
use the alleged Collateral of the Secured creditors to continue
company operations while effectuating a plan of reorganization.
A copy of the Debtor's motion and budget is available at
https://urlcurt.com/u?l=fEj8lf from PacerMonitor.com.
The Debtor projects $190,000 in income and $143,997 in total
expenses for 30 days.
About Lewisville Donkey, LLC
Lewisville Donkey, LLC owns and operates a restaurant in The
Colony, Texas.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Tex. Case No. 23-41176) on July 3,
2023. In the petition signed by Jessica Putnam, managing member,
the Debtor disclosed up to $50,000 in assets and up to $1 million
in liabilities.
Eric A. Liepins, Esq., represents the Debtor as legal counsel.
LONG & ASSOCIATE: Taps Perry G. Gruman as Legal Counsel
-------------------------------------------------------
Long & Associate of Tampa, LLC seeks approval from the U.S.
Bankruptcy Court for the Middle District of Florida to employ Perry
G. Gruman, P.A. as its legal counsel.
The firm's services include:
a. legal advice and analysis of the Debtor's financial
situation;
b. preparation and filing of bankruptcy schedules, statement of
affairs and Chapter 11 plan, which may be required;
c. representation of the Debtor at the initial interview,
meeting of creditors and confirmation hearing; and
d. negotiations with secured creditors and the filing of
necessary documents.
The firm will be paid at these rates:
Perry G. Gruman $425 per hour
Ross M. Mabery $32 per hour
Paralegal $75 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Perry Gruman, Esq., a partner at Perry G. Gruman, P.A., 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:
Perry G. Gruman, Esq.
Perry G. Gruman, P.A.
3400W. Kennedy Boulevard
Tampa, FL 33609
Telephone: (813) 870-1614
Email: ross@grumanlaw.com
About Long & Associate
Long & Associate of Tampa, LLC, a company in Lytle, Texas, filed a
petition under Chapter 11, Subchapter V of the Bankruptcy Code
(Bankr. M.D. Fla. Case No. 23-01781) on May 2, 2023, with as much
as $50,000 in both assets and liabilities. Michael Markham, Esq., a
practicing attorney in Tampa, Fla., has been appointed as
Subchapter V trustee.
Judge Catherine Peek Mcewen oversees the case.
The Debtor is represented by Perry G. Gruman, P.A.
LUMINOUS MOBILE: Taps Ian Bolton Law as Special Counsel
-------------------------------------------------------
Luminous Mobile, LLC seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Michigan to employ Ian Bolton Law, PLLC
as special counsel.
The Debtor needs the firm's legal assistance in connection with
state court eviction matters.
Ian Bolton Law will be compensated at $350 per hour for its
services.
The firm received a retainer in the amount of $4,500.
Ian Bolton, Esq., a partner at Ian Bolton Law, 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:
Ian Bolton, Esq.
Ian Bolton Law, PLLC
24361 Greenfield Rd., Ste. 201
Southfield, MI 48075
Telephone: (248) 595-0001
Email: ian@boltonlegalgroup.com
About Luminous Mobile
Luminous Mobile, LLC filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-43724) on
April 23, 2023, with $50,001 to $100,000 in assets and $100,001 to
$500,000 in liabilities. Kimberly Ross Clayson of Jaffe Raitt Heuer
& Weiss, P.C. has been appointed as Subchapter V trustee.
Judge Lisa S. Gretchko oversees the case.
The Debtor tapped Robert N. Bassel, Esq., as bankruptcy counseland
Ian Bolton Law, PLLC as special counsel.
MACEDON CONSULTING: Seeks Conditional Approval of Disc. Statement
-----------------------------------------------------------------
Macedon Consulting Inc. filed a motion seeking entry of an order
granting (i) conditional approval of the Debtor's Disclosure
Statement and (ii) approval of a joint hearing on the Disclosure
Statement and the First Amended Chapter 11 Plan of Reorganization
of Macedon Consulting Inc.
The Court has agreed to convene a hearing on shortened notice on
July 18, 2023, at 11:00 AM at Judge Kindred's Courtroom, 200 S.
Washington Street, 3rd Floor, Courtroom III, Alexandria, VA.
The Disclosure Statement for the Amended Plan contains adequate
information and satisfies the requirements of section 1125(a)(1).
The Disclosure Statement clearly identifies to which class of
claims or interests a particular creditor belongs. The Disclosure
Statement defines the classes of claims or interests in the Amended
Plan as follows: Class 1 (Allowed Secured Creditors), Class 2
(Allowed Lease Rejection Creditors), Class 3 (Allowed General
Unsecured Creditors), and Class 4 (Allowed Equity Interest).
The Debtor believes that the merits of its Amended Plan and
Disclosure Statement can be effectively considered in a joint
hearing because each class of creditors is deemed to consent to the
Amended Plan or is an insider of the Debtor that is entitled to
vote and supports the Amended Plan. Holding a joint hearing on the
Amended Plan and Disclosure Statement will allow the Debtor and the
Court to conserve valuable administrative resources while still
providing interested parties with a sufficient opportunity to
object to the adequacy of the Amended Plan and Disclosure
Statement.
Counsel to the Debtor:
Michael E. Hastings, Esq.
Timothy J. Lovett, Esq.
WOODS ROGERS VANDEVENTER BLACK PLC
10 S. Jefferson Street, Suite 1800
Roanoke, VA 24011
Tel: (540) 983-7600
Fax: (540) 983-7711
E-mail: michael.hastings@wrvblaw.com
timothy.lovett@wrvblaw.com
About Macedon Consulting
Macedon Consulting, Inc., doing business as Macedon Technologies,
is a computer software company that offers IT services and
solutions. It is based in Reston, Va.
Macedon Consulting filed Chapter 11 petition (Bankr. E.D. Va. Case
No. 23-10300) on Feb. 28, 2023, with $8,367,613 in assets and
$2,838,342 in liabilities. Austin Rosenfeld, chief executive
officer of Macedon Consulting, signed the petition.
Judge Klinette H. Kindred oversees the case.
Woods Rogers Vandeventer Black, PLC, is the Debtor's legal counsel.
MACEDON CONSULTING: Unsecureds Unimpaired in Amended Plan
---------------------------------------------------------
Macedon Consulting Inc. filed a First Amended Chapter 11 Plan of
Reorganization and a Disclosure Statement.
The Amended Plan provides for the continued operation of the
Debtor's business, the payment of 100% of the allowed claims of all
creditors on the Effective Date of the Amended Plan, resolution of
the allowance of claims and equity interests, and the distribution
to creditors as provided in the Amended Plan.
Under the Plan, holders of Class 3 Allowed General Unsecured Claims
will receive payment in full in Cash on the later of: (i) three
business days following the Effective Date; or (ii) three business
days after any such Claim becomes an Allowed Class 3 Claim. Class 3
is unimpaired.
The Amended Plan will be funded by the Debtor's cash reserves.
Counsel to the Debtor:
Michael E. Hastings, Esq.
Timothy J. Lovett, Esq.
WOODS ROGERS VANDEVENTER BLACK PLC
10 S. Jefferson Street, Suite 1800
Roanoke, VA 24011
Tel: (540) 983-7600
Fax: (540) 983-7711
E-mail: michael.hastings@wrvblaw.com
timothy.lovett@wrvblaw.com
A copy of the Disclosure Statement dated June 30, 2023, is
available at https://tinyurl.ph/bTdNE from PacerMonitor.com.
About Macedon Consulting
Macedon Consulting, Inc., doing business as Macedon Technologies,
is a computer software company that offers IT services and
solutions. It is based in Reston, Va.
Macedon Consulting filed Chapter 11 petition (Bankr. E.D. Va. Case
No. 23-10300) on Feb. 28, 2023, with $8,367,613 in assets and
$2,838,342 in liabilities. Austin Rosenfeld, chief executive
officer of Macedon Consulting, signed the petition.
Judge Klinette H. Kindred oversees the case.
Woods Rogers Vandeventer Black, PLC, is the Debtor's legal counsel.
MADERA COMMUNITY: Seeks to Extend Plan Exclusivity to October 6
---------------------------------------------------------------
Madera Community Hospital asks the U.S. Bankruptcy Court for the
Eastern District of California to extend the exclusivity periods
to file a plan of reorganization and solicit acceptances thereof
to October 6, 2023 and December 5, 2023, respectively.
The Debtor explained that the requested relief is needed in order
to facilitate the continued successful administration of its
Chapter 11 case and to allow it sufficient opportunity to
complete its analysis regarding the plan of reorganization.
Unless extended, the Debtor's exclusivity periods to file a plan
and solicit acceptances thereof expire on July 8, 2023 and
September 6, 2023, respectively.
Madera Community Hospital is represented by:
Riley C. Walter, Esq.
Danielle J. Bethel, Esq.
WANGER JONES HELSLEY
265 E. River Park Circle, Suite 310
Fresno, CA 93720
Tel: (559) 490-0949
Email: rwalter@wjhattorneys.com
dbethel@wjhattorneys.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.
MARINER HEALTH: Seeks to Extend Plan Exclusivity to September 30
----------------------------------------------------------------
Mariner Health Central, Inc. and its affiliates ask the U.S.
Bankruptcy Court for the Northern District of California to
extend their period of exclusivity for the filing a plan and for
obtaining acceptance thereof to September 30, 2023 and December
31, 2023, respectively.
The Debtors explained that the path to a confirmable plan has
been adversely impacted by the complexity and contentiousness of
their chapter 11 cases, which among other things led to
significant delays in the commencement of the Independent
Director investigation into potential estate claims, production
from the Debtors to the Committee, and even the commencement of
mediation and settlement discussions among key constituencies.
However, the Debtors also stated that since the beginning of
discussions with the Committee and other key parties, with
mediation on March 31, 2023 facilitated by Judge Barash, the
parties have continued to work in good faith and have made
significant progress towards a global resolution of these cases
that would have broad creditor support.
This is the Debtors' third request to extend exclusivity. Unless\
extended, the Debtors' exclusive periods for the filing of a plan
and for solicitation thereof ends on June 30, 2023 and August 31,
2023, respectively.
Mariner Health Central, Inc. and its affiliates are represented
by:
Maxim B. Litvak, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
One Sansome Street, Suite 3430
San Francisco, CA 94104
Tel: 415.263.7000
Email: mlitvak@pszjlaw.com
- and -
Hamid R. Rafatjoo, Esq.
RAINES FELDMAN LLP
1800 Avenue of the Stars, 12th Floor
Los Angeles, CA 90067
Tel: 310.440.4100
Email: hrafatjoo@raineslaw.com
- and -
Carollynn H.G. Callari, Esq.
David S. Forsh, Esq.
RAINES FELDMAN LLP
1350 Avenue of the Americas, 22nd Floor
New York, NY 10019
Tel: 917.790.7100
Email: ccallari@raineslaw.com
dforsh@raineslaw.com
About Mariner Health Central
Atlanta-based Mariner Health Central, Inc. provides
administrative, clinic and operational support services to
skilled nursing facilities, including the 121-bed facility
operated by Parkview Operating Company, LP.
Mariner and its affiliates, Parkview Operating Company and
Parkview Holding Company GP, LLC, sought Chapter 11 bankruptcy
protection (Bankr. D. Del. Lead Case No. 22-10877) on Sept. 19,
2022. The cases were transferred to the U.S. Bankruptcy Court for
the Northern District of California (Bankr. D. Del. Lead Case No.
22 41079) on Oct. 25, 2022.
The Debtors estimated assets of $1 million to $10 million and
liabilities of $10 million to $50 million as of the bankruptcy
filing.
Judge William J. Lafferty oversees the cases.
The Debtors tapped Raines Feldman, LLP as general bankruptcy
counsel; Pachulski Stang Ziehl & Jones, LLP as local Delaware
counsel; and SierraConstellation Partners, LLC as restructuring
advisor. Lawrence Perkins, chief executive officer of
SierraConstellation, serves as the Debtors' chief restructuring
officer. Kurtzman Carson Consultants, LLC is the claims and
noticing agent and administrative advisor.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
The committee is represented by Robinson & Cole, LLP.
Blanca E. Castro is the patient care ombudsman appointed in the
Debtors' bankruptcy case.
MEDHAWK POOLS: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: MedHawk Pools & Patio LLC
12110 County Road 132
Celina TX 75009
Business Description: MedHawk Pools is a custom pool builder in
Celina, TX, and surrounding North Dallas
areas, including Celina, Prosper, McKinney,
Frisco, and Gunter, TX. The Company
specializes in designing and constructing
custom pools and creating outdoor living
spaces.
Chapter 11 Petition Date: July 7, 2023
Court: United States Bankruptcy Court
Eastern District of Texas
Case No.: 23-41205
Debtor's Counsel: Robert C. Lane, Esq.
THE LANE LAW FIRM
6200 Savoy Dr Ste 1150
Houston TX 77036-3369
Tel: (713) 595-8200
Fax: (713) 595-8201
Email: notifications@lanelaw.com
Total Assets: $1,818,231
Total Liabilities: $3,086,584
The petition was signed by Mark Gilbaugh as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/BFKQ4NQ/MedHawk_Pools__Patio_LLC__txebke-23-41205__0001.0.pdf?mcid=tGE4TAMA
MIRACLE CENTER: Unsecured Claims to Be Paid in Installments
-----------------------------------------------------------
Miracle Center Church of Ventura County, Inc., submitted a Third
Amended Chapter 11 Plan of Reorganization.
The Debtor is a California religious corporation organized under
the California Nonprofit Religious Corporation Law exclusively for
religious purposes. The Debtor commenced its bankruptcy case by
filing a voluntary petition under subchapter V of Chapter 11 of 11
U.S.C. Sec. 101 et seq on August 29, 2022.
Under the Plan, Class 3 Unsecured, Non-Priority, Non-Claim Filing
Creditors are impaired. Chapter 11 Petition, Schedule F listed
Unsecured, Non-Priority Creditors, Dan Covarrubias and Toni Gooden,
each holders' of personal loans of the Debtor ($154,000 and $25,500
respectively) are both Non-Claim-Filing Creditors. These
Creditors' Debts are scheduled as Undisputed, Non-Contingent and
Liquidated by the Debtor. The Debtor has and remains committed to
paying these Creditors' debts directly, whereby these debts will
not be subject to discharge and any contractual terms will continue
to be in full force and effect including any accruing interest.
The Debtor will begin paying these Class 3 Claim Debts in the
amount equal to or greater than $3,500 per month, beginning in the
month following completion of all administrative claim payments due
under this Plan, and approved by the Court, until these Class 3
Claims are paid in full.
The Debtor will accommodate for and remain liable for the debts to
unsecured, Non-Priority, Non-Claim-Filing Creditors Dan Covarrubias
and Toni Gooden, as per each Creditors' personal loan contract
provisions, whereby these debts will not be subject to discharge,
and Debtor will pay these Debts.
Class 4 Convenience Class of De Minimis General Unsecured Creditor
Claim. Proof of Claim No.1 - Internal Revenue Service for portion
of the Claim that is General Unsecured. Creditor Internal Revenue
Service, filed Proof of Claim No.1 on September 22, 2022, that
subsequently filed as Amended on April 13, 2023, in the total
amount of $278.55, whereby $205.19 of the filed Claim is asserted
as, and to be paid in the Plan as an unsecured Priority Tax Debt
(see above IRS Priority Claim treatment as "Unclassified Priority
Tax Claim"). The remaining $73.36 of the IRS filed Claim is
asserted as, and to be paid in the Plan as, a general Unsecured
debt.
This full balance of the General Unsecured portion of the IRS Claim
is to be paid within 45 days of the effective date.
The de minimis amount of this General Unsecured portion of the IRS
Claim, shall be paid concurrent with the Unsecured Priority portion
of this claim, and prior to and before payment to the other and
remaining General Unsecured debts. This de minimis portion of this
General Unsecured debt that is to be paid, concurrent with the IRS
Claim for Priority debt, is an accommodation under 11 U.S.C.
1122(b), as a Convenience Class of De Minimis General Unsecured
Creditor Claim.
The Debtor will fund the Plan from the operation of its business
and the funds that it has/will have accumulated in its DIP bank
accounts.
Attorneys for the Debtor:
Randall V. Sutter, Esq.
John K. Rounds, Esq.
ROUNDS & SUTTER, LLP
674 County Square Drive, Suite 108
Ventura, CA 93003
Telephone: (805) 650-7100
Facsimile: (805) 832-6315
E-mail: jrounds@rslawllp.com
A copy of the Third Amended Chapter 11 Plan of Reorganization dated
June 30, 2023, is available at https://tinyurl.ph/SnFSe from
PacerMonitor.com.
About Miracle Center Church
Miracle Center Church of Ventura County, Inc., is a tax-exempt
religious organization. The Debtor sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-10664)
on August 29, 2022. In the petition signed by Alonzo McCowan, its
CEO and president, the Debtor disclosed $3,472,792 in assets and
$3,387,733 in liabilities.
Judge Ronald A. Clifford III oversees the case.
John K. Rounds, Esq., at Rounds & Sutter LLP, is the Debtor's
counsel.
MOUNTAINEER MERGER: $200M Bank Debt Trades at 19% Discount
----------------------------------------------------------
Participations in a syndicated loan under which Mountaineer Merger
Corp is a borrower were trading in the secondary market around 80.6
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $200 million facility is a Term loan that is scheduled to
mature on October 22, 2028. About $0 million of the loan is
withdrawn and outstanding.
Mountaineer Merger Corporation, dba Gabe's, owns and operates
departmental stores.
MUSE THREADS: Unsecureds Owed $253K to be Paid in Full in 5 Years
-----------------------------------------------------------------
Muse Threads, Inc., submitted a Second Amended Plan of
Reorganization for Small Business dated July 6, 2023.
Founded by Whitney Mirts and John Mark King on July 15, 2020, Muse
Threads is an online clothing retailer focused on genuine bamboo
garments with bright, eye catching patterns and designs.
The Debtor acquires its inventory from a wholesale manufacturer in
China, importing clothing, and related accessories, across the
Pacific Ocean and then storing them in a warehouse in the
Washington, D.C. suburbs. While most individual items are aimed at
a children's demographic, Muse Threads does sell certain items in
adult sizes and emphasizes its vibrant products as being palpably
family friendly in nature.
Inasmuch as this Plan pays all claims in full, and no creditor
could receive more than 100% of their respective claim in Chapter
7, no liquidation analysis is instantly necessary.
However, to the extent a liquidation analysis is required, the
Debtor submits that a Chapter 7 trustee could either (i) endeavor
to sell the Debtor's inventory to a third party; or (ii) operate
the Debtor for a brief period of time and hold a going out of
business sale (which may, or may not, conflict with applicable
state law). In the former event, a wholesale purchaser of the
Debtor's inventory would need to be located, and it is unclear the
degree to which a company would be interested in acquiring
materials specially made for Muse Threads and associated with Muse
Threads' brand. Such a sale would likely be at a steep discount.
Similarly, a going out of business sale would encounter marked
problems vis a vis the extent of market demand for inventory at any
given point in time. The movement of clothing would, again, demand
the application of a heavy discount, and it is not clear that even
such a discount would permit all inventory to be effectively
liquidated.
This Plan proposes to pay creditors of the Debtor from the general
cash flow of the Debtor.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 100 cents on the dollar. The Plan also provides
for the payment of administrative and priority claims.
Class 3 consists of Vox Funding, LLC. Per agreement with Vox
Funding, LLC, this claim will be paid in the amount of $37,750.00,
plus pre confirmation interest having accrued at the rate of 9% per
annum, with credit for any monies paid during the pendency of this
case. This claim shall be paid with postpetition simple interest
accruing at the rate of 5% per annum. The Debtor will pay this
claim within 24 months of the Effective Date.
Class 6 consists of Non-priority, unsecured claims. The Debtor
estimates a total of $252,822.07 in non-priority, unsecured claims.
This amount is computed in reliance on the Debtor objecting to at
least one such component claim (being found at entry #6-1 in the
Claims Register and belonging to 8fig, Inc.). All claims in this
class will be paid in full within 5 years of the Effective Date.
This Class is impaired.
Class 7 consists of the undisputed portion of the claim of 8fig,
Inc. While the Debtor disputes the claim of 8fig, Inc., the Debtor
does not dispute $30,000.00 of that claim, being monies that 8fig,
Inc. sent to the Debtor post-petition, and which the Debtor has
informally regarded as being the property of 8fig, Inc. at all
times since. This $30,000.00 portion of the claim of 8fig, Inc.
will be paid, in full, on the Effective Date (or as promptly
thereafter as may be pragmatically possible).
The primary means for implementing this Plan will be the Debtor's
continued operation of its online retail business, with emphasis
being placed on the strategic use of marketing to grow sales, to
continue to foster a strong relationship with extant customers, and
to reach new bands of customers. The Debtor's core metric, cost of
goods sold relative to the revenues realized thereupon, remain
strong and have never faltered, with the Debtor being adept at
crafting sales opportunities that attract heightened revenues while
preserving healthy margins.
Critical to the Plan's implementation is the Debtor's agreement
with Qingdao KDGarden Import & Export Co. Ltd., which provides for
the ongoing supply of existing – and new – clothing for sale in
the United States, while deferring payment of certain extant
obligations. Negotiations with Qingdao KDGarden Import & Export Co.
Ltd. have been a critical component of Muse Threads' efforts as a
Subchapter V debtor-in-possession, and final approval of the
relevant agreement will prove essential to the viability of this
Plan and the payments contemplated hereunder.
A full-text copy of the Second Amended Plan dated July 6, 2023 is
available at https://urlcurt.com/u?l=Cu8iXb from PacerMonitor.com
at no charge.
Counsel for the Debtor:
Maurice B. VerStandig, Esq.
THE BELMONT FIRM
1050 Connecticut Avenue, NW, Suite 500
Washington, DC 20036
Phone: (202) 991-1101
E-Mail: mac@dcbankruptcy.com
About Muse Threads
Muse Threads Inc. is an online clothing retailer focused on genuine
bamboo garments with bright, eye-catching patterns and designs. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Col. Case No. 22-00238) on Dec. 23, 2022. In the
petition signed by Whitney Mirts, majority shareholder, the Debtor
disclosed $1,639,487 in assets and $784,772 in liabilities.
Judge Elizabeth L. Gunn oversees the case.
Mahlon Mowrer, Esq., at The Belmont Firm, is the Debtor's legal
counsel.
NATIONAL MENTOR: $1.70B Bank Debt Trades at 22% Discount
--------------------------------------------------------
Participations in a syndicated loan under which National Mentor
Holdings Inc is a borrower were trading in the secondary market
around 78.3 cents-on-the-dollar during the week ended Friday, July
7, 2023, according to Bloomberg's Evaluated Pricing service data.
The $1.70 billion facility is a Term loan that is scheduled to
mature on March 2, 2028. The amount is fully drawn and
outstanding.
National Mentor Holdings, Inc. operates as a holding company. The
Company, through its subsidiaries, provides community-based
services for people with injuries and disabilities.
NEW AMI: $550M Bank Debt Trades at 16% Discount
-----------------------------------------------
Participations in a syndicated loan under which New AMI I LLC is a
borrower were trading in the secondary market around 84.4
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $550 million facility is a Term loan that is scheduled to
mature on March 8, 2029. The amount is fully drawn and
outstanding.
NEW AMI I LLC provides building products.
NICK'S CREATIVE: Court Approves Reorganization Plan
---------------------------------------------------
Judge Mindy A. Mora has entered an order approving Nick's Creative
Marine, Inc.'s Disclosure Statement on a final basis and confirming
the First Amended Plan of Reorganization including any amendments
via interlineations filed therewith.
The law firm of KELLEY, FULTON, KAPLAN & ELLER, P.L., is named as
disbursing agent.
The Court will conduct a post-confirmation status conference on
Sept. 13, 2023 at 1:30 p.m. in the U.S. Bankruptcy Court, 1515 N.
Flagler Drive, Courtroom A, West Palm Beach, Florida 33401.
The Plan and Disclosure Statement and all amendments filed in
connection therewith have been accepted in writing by the creditors
and equity holders whose acceptance is required by law and/or any
objections to the Plan have been overruled.
The provisions of Chapter 11 of the Code have been complied with
and the Plan has been proposed in good faith and not by any means
forbidden by law.
The confirmation of the Plan is not likely to be followed by the
liquidation, or the need for further financial reorganization, of
the Debtor or any successor to the Debtor under the Plan, unless
such liquidation or further reorganization is proposed in the Plan.
The Plan complies with U.S.C. Sec, 1129(b) in that it is fair and
equitable with respect to all impaired classes. The new value
contributions made by the principal of the Debtor during the
pendency of this case support the retention of equity.
About Nick's Creative Marine
Nick's Creative Marine, Inc., owns a marine supply store in Riviera
Beach, Florida.
Nick's Creative Marine sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-17170) on Sept.
16, 2022. In the petition signed by Nicholas Scafidi,
vice-president, the Debtor disclosed up to $50,000 in assets and up
to $10 million in liabilities.
Judge Erik P. Kimball oversees the case.
Craig I. Kelley, Esq., at Kelly, Fulton & Kaplan, P.L., is the
Debtor's counsel.
NIELSEN & BAINBRIDGE: Court Confirms Plan, Rejects Black Diamond
----------------------------------------------------------------
Judge David R. Jones has entered an order approving confirming the
Second Amended Joint Chapter 11 Plan of Reorganization of Nielsen &
Bainbridge, LLC, et al., over objections of Black Diamond Capital
Management, LLC.
Over the last several weeks, the Debtors have worked around the
clock to obtain the consensus necessary to proceed to confirmation.
On June 20, 2023, the Debtors filed their Second Amended Joint
Chapter 11 Plan, the culmination of extensive efforts by the
Debtors and key stakeholders to facilitate the Debtors' emergence
from chapter 11. Confirmation of the Amended Plan is the only path
available to preserve approximately 125 employees' jobs, satisfy
DIP Claims, provide full recoveries for Allowed Administrative
Claims, and provide a distribution to holders of Allowed General
Unsecured Claims. In addition, the Amended Plan includes the
following key terms:
* Reorganization of Quoizel and Wind Down of Remaining Debtors:
The reorganization of Quoizel and a wind down of the Debtors'
remaining business segments (the "Wind Down").
* Treatment of DIP Claims: Holders of DIP Claims will receive
their pro rata share of (a) equity interests in Reorganized
Quoizel, (b) a portion of the Exit Second Lien Term Loans, (c) an
unsecured promissory note at Reorganized Quoizel, and (d) proceeds
of the Wind Down, following certain other distributions.
* Treatment of Other Claims: Holders of ABL Claims (Class 3)
will receive their pro rata share of $12.5 million, Exit First Lien
Term Loans, and Wind Down proceeds. Holders of First Lien Term
Loan Claims (Class 4) and Second Lien Term Loan Claims (Class 5)
will receive their respective pro rata shares of the Wind Down
proceeds according to their respective priorities. Holders of
General Unsecured Claims (Class 6) will receive their pro rata
share of $300,000.
* Go-Forward Funding: Reorganized Quoizel will enter into a $15
million Exit First Lien Term Loan Facility and will have access to
up to $16.452 million in new money commitments under the Exit
Second Lien Term Loan Facility.
The Amended Plan maximizes value for all stakeholders under
difficult circumstances. The alternative -- a full wind down and
liquidation of all Debtors—benefits no party in these cases. It
would destroy value, eliminate jobs, and provide zero recovery to
every stakeholder except the ABL Lenders.
Black Diamond is the only party that objects. After its
unsuccessful attempt to serve as a DIP lender, Black Diamond
declined to participate in the sale process and instead became an
active litigant in these chapter 11 cases. Now, it seeks conversion
to chapter 7 and a full liquidation of the Debtors, regardless of
the consequences, and without articulating any actual benefit of
doing so. Indeed, Black Diamond's proposed liquidation would
destroy value and reduce recoveries for all stakeholders.
According to the Plan Confirmation Order, Black Diamond shall not
be a Releasing Party or Released Party pursuant to the Plan, and no
Claims or Causes of Action of Black Diamond shall be released
pursuant to the release, exculpation, or injunction provisions set
forth in Article X of the Plan.
"To the extent allowed, any 507(b) claim of the First Lien Lenders
would need to be paid in full like all other administrative claims
under the Plan. Black Diamond objects to the Plan to the extent the
Debtors seek to circumvent this confirmation requirement with
language in the Plan that excludes certain adequate protection
claims of the First Lien Lenders
from the definition of Administrative Claims and the treatment of
the First Lien Term Loan Claims," Black Diamond said in its
objection to the Plan.
"Further, Black Diamond objects to the broad release and
exculpation provisions under the Plan as they relate to the
Debtors' current and former directors and officers. The Debtors
have failed to provide crucial information regarding the broad
release with respect to, among other things, (a) the Debtors'
efforts to identify claims that may exist against any of the
Debtors' current or former directors and officers, (b) the Debtors'
analysis of the value of any such claims, and (c) the Debtors'
justification for releasing such claims. Moreover, the inclusion of
the independent directors or managers of any Debtor as Exculpated
Parties is impermissible under prevailing Fifth Circuit law."
As evidenced by the Voting Report, Classes 3 and 5 have voted to
accept the Plan, and Class 4 has voted to reject the Plan. Holders
of Claims and Interests in Classes 7 and 8 are either Unimpaired
and conclusively presumed to have accepted the Plan (to the extent
reinstated) or are Impaired and deemed to reject the Plan (to the
extent cancelled), and, in either event, are not entitled to vote
to accept or reject the Plan.
Chapter 11 Plan
On June 20, 2023, the Debtors filed the Second Amended Joint
Chapter 11 Plan to pursue a reorganization around the hardwired
lighting business of debtor Quoizel, LLC and a wind-down of the
remaining Debtors. A copy of the Order dated June 30, 2023, is
available at https://tinyurl.ph/ujjmb from PacerMonitor.com.
Co-Counsel to the Debtors:
Matthew D. Cavenaugh, Esq.
Jennifer F. Wertz, Esq.
J. Machir Stull, Esq.
Victoria Argeroplos, Esq.
JACKSON WALKER LLP
1401 McKinney Street, Suite 1900
Houston, TX 77010
Telephone: (713) 752-4200
Facsimile: (713) 752-4221
E-mail: mcavenaugh@jw.com
jwertz@jw.com
mstull@jw.com
vargeroplos@jw.com
- and -
Joshua A. Sussberg, P.C.
Steven N. Serajeddini, P.C.
Brian Schartz, P.C.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
New York, NY 10022
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
E-mail: joshua.sussberg@kirkland.com
steven.serajeddini@kirkland.com
bschartz@kirkland.com
Counsel to Black Diamond Capital Management, LLC:
WINSTON & STRAWN LLP
Katherine A. Preston
800 Capitol St., Suite 2400
Houston, Texas 77002
Telephone: (713) 651-2600
Facsimile: (713) 651-2700
Email: kpreston@winston.com
- and -
Daniel J. McGuire
Laura Krucks
35 W. Wacker Drive
Chicago, Illinois 60601-9703
Telephone: (312) 558-5600
Facsimile: (312) 558-5700
Email: dmcguire@winston.com;
lkrucks@winston.com
About Nielsen & Bainbridge
Nielsen & Bainbridge, LLC, is an end-to-end supplier of home decor
and hardwire lighting operating under the trade name NBG Home. NBG
Home serves a portfolio of prominent retail partners in the design,
development, and fulfillment of products such as lighting, accents,
furniture, soft home goods, wall decor, and frames sold under
various brand names. NBG Home operates eight business units
touching the brick-and-mortar and eCommerce spaces.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90071) on Feb.
8, 2023.
In the petition signed by Hope Margala, as authorized signatory,
the Debtors disclosed up to $500 million in assets and up to $1
billion in liabilities.
Judge David R. Jones oversees the case.
The Debtors tapped Jackson Walker LLP as local bankruptcy counsel,
Kirkland and Ellis LP and Kirkland and Ellis International LLP as
general bankruptcy counsel, Alvarez and Marsal North America, LLC
as financial advisor, Guggenheim Securities, LLC as investment
banker, Hilco Real Estate, LLC as exclusive sales agent, and Omni
Agent Solutions as claims, noticing, solicitation agent and
administrative advisor.
KKR Loan Administration Services, LLC, serves as administrative
agent and collateral agent under the DIP Facility. Counsel to the
DIP Lenders are Dennis F. Dunne, Esq. and Matthew L. Brod, Esq. at
Milbank LLP.
Wells Fargo Bank, National Association is the administrative agent
and collateral agent under the Prepetition ABL Facility. Attorneys
for Wells Fargo Bank are Julia Frost-Davies, Esq., and Christopher
L. Carter, Esq., at Morgan, Lewis & Bockius, LLP.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Chapter 11 case of Nielsen &
Bainbridge, LLC. The committee hires Lowenstein Sandler LLP as lead
counsel, Archer & Greiner, P.C. as its Texas bankruptcy counsel,
and Province, LLC as its financial advisor.
NORTHWOODS PETS: Has Deal on Cash Collateral Access
---------------------------------------------------
Northwoods Pets, LLC and its lender, Kapitus Servicing, Inc., a
Virginia corporation, advised the U.S. Bankruptcy Court for the
Western District of Wisconsin 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.
Kapitus asserts that as of May 17, 2023, the Debtor owed $179,285
under the parties' loan agreement. Kapitus' claim includes a
contract balance of $127,253, ACH fees of $1,375, contractual
default fees of $2,500, and interest of $15,374.92 (10%) from March
3, 2022, to the Petition Date.
Kapitus' security interest in the Debtor's assets was and remains
perfected through a UCC-1 Financing Statement filed with the
Wisconsin Department of Financial Institutions on July 9, 2021 as
Filing Number 20210709000537-0.
Kapitus asserts that its claim also includes attorneys' fees of
$32,782, which, as provided under Section 3.3(b)(ii) of the Loan
Agreement, is an amount equal to the greater of "25% of the total
balance due or the actual fees" incurred by Kapitus.
In settlement of the dispute between Kapitus and Debtor regarding
the enforceability of Section 3.3(b)(ii) of the Loan Agreement,
Kapitus and Debtor agree that, as of the Petition Date, the allowed
amount of Kapitus' claim is $161,301.
The Debtor has asserted that the value of the Pre-petition
Collateral as of the Petition Date is $191,106.
Kapitus consents to the Debtor's use of cash collateral only in the
amounts, and only for the purposes, specified in the budget, with a
5% variance.
The Debtor concedes that Kapitus is entitled to adequate protection
on account of Debtor's use of cash collateral from and after the
Petition Date and through the earlier of August 30, 2023 or the
confirmation of a Chapter 11 Reorganization Plan.
The Debtor will grant to the Kapitus replacement liens pursuant to
11 U.S.C. sections 552 and 363 in the Debtor's post-petition assets
of the same type and nature as is subject to the prepetition liens
of Kapitus to the extent of the Debtor's use of cash collateral
from and after the Petition Date. The replacement liens will have
the same validity, priority, dignity, and effect as Kapitus's liens
and security interests in the Pre-petition Collateral to secure the
allowed amount of Kapitus's secured claim.
As additional adequate protection, Kapitus will be granted a claim
in such amount, not to exceed the Debtor's cumulative use of cash
collateral under the Order if and to the extent the aforementioned
replacement liens are insufficient to provide adequate protection
against the diminution, if any, in the value of Kapitus's interest
in any Collateral resulting from the use of cash collateral.
The Debtor will maintain insurance coverage for the Collateral and
name Kapitus as loss payee.
A copy of the stipulation and the budget is available at
https://urlcurt.com/u?l=UpAZXI from PacerMonitor.com.
The Debtor projects $77,431 in total income and $63,550 in total
expenses.
About Northwoods Pets, LLC
Northwoods Pets, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Wisc. Case No. 1-23-10800) on May 1,
2023. In the petition signed by Jennifer L. Marshall, sole member,
the Debtor disclosed up to $500,000 in both assets and
liabilities.
Judge Thomas M. Lynch oversees the case.
John W. Menn, Esq., at Steinhilber Swanson LLP, represents the
Debtor as legal counsel.
OMNIA PARTNERS: Moody's Rates New $1.625BB 1st Lien Term Loan 'B2'
------------------------------------------------------------------
Moody's Investors Service affirmed OMNIA Partners, Inc.'s ("OMNIA")
B2 corporate family rating and B2-PD probability of default rating.
At the same time, Moody's also assigned B2 ratings to OMNIA
Partners, LLC's $1.625 billion senior secured first lien term loan
due in 2030, $155 million senior secured first lien delayed draw
term loan due in 2030 and $250 million senior secured first lien
revolving credit facility expiring in 2028. Moody's also assigned a
stable outlook at OMNIA Partners, LLC. The outlook at OMNIA
Partners, Inc. remains stable. Moody's will withdraw the instrument
ratings and outlook at National Intergovt Purchasing Alliance Co
when the debt is repaid.
On June 14, 2023, OMNIA announced that they had entered into a
definitive agreement with Premier, Inc. (unrated) to acquire
Premier, Inc.'s non-healthcare GPO operations ("Premier NHGO") for
about $800 million. The debt raise allows OMNIA to fund the
acquisition, refinance its existing credit facilities and extend
its debt maturity profile.
"Despite the leveraging acquisition, the affirmation reflects
Moody's expectation that OMNIA will deleverage to below 5.5x
(debt/EBITDA) by 2024 as a result of strong EBITDA growth" said
Mikhil Mahore, Moody's analyst.
Assignments:
Issuer: Omnia Partners, LLC
Backed Senior Secured Term Loan, Assigned B2
Backed Senior Secured Delayed Draw Term Loan, Assigned B2
Backed Senior Secured Revolving Credit Facility, Assigned B2
Affirmations:
Issuer: OMNIA Partners, Inc.
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Outlook Actions:
Issuer: OMNIA Partners, Inc.
Outlook, Remains Stable
Issuer: OMNIA Partners, LLC
Outlook, Assigned Stable
RATINGS RATIONALE
OMNIA's B2 CFR rating benefits from: (1) the ongoing transition of
public and private sector groups to group purchasing organizations
(GPOs) for savings; (2) healthy EBITDA margins, complemented by an
asset-light business model supporting free cash flow generation;
(3) long-term contracts and high retention rate of over 95%; and
(4) very good liquidity. The company's rating is constrained by:
(1) high leverage (expected at 5.9x in 2023 pro forma for the
acquisition and debt raise) and weaker interest coverage (around 2x
in 2023) driven by the increase in rates; (2) exposure to volume
fluctuations combined with small scale; and (3) a narrow focus on
providing procurement efficiencies primarily to the public sector
as a GPO.
OMNIA has very good liquidity. Sources total about $400 million,
consisting of cash on hand of around $44 million as of March 2023,
Moody's expectation of about $110 million in free cash flow in the
next twelve months through June 2024 (pro forma for the
acquisition) and full availability (at March 31, 2023) under the
company's new $250 million senior secured first lien revolving
credit facility expiring 2028.
Uses are limited to about $18 million in mandatory debt
amortizations, prior to consideration of the excess cash flow
sweep. The revolver has a springing maximum first lien net leverage
covenant when drawings exceed 40% of the total commitment with
which Moody's expect the company to remain in compliance over the
next 12 months. The company has limited sources of alternate
liquidity.
OMNIA Partners, LLC's senior secured first lien revolving credit
facility due in 2028, senior secured first lien term loan due in
2030 and senior secured first lien delayed draw term loan due in
2030 are rated B2, same as OMNIA Partners, Inc.'s CFR. The
facilities are guaranteed by OMNIA Partners, Inc. and its operating
subsidiaries and secured by substantially all of the company's
domestic assets.
The stable outlook reflects Moody's view that OMNIA will maintain
solid revenue growth and healthy profit margins, such that it will
bring financial leverage down to below 5.5x and interest coverage
above 2x by 2024.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company sustains Debt/EBITDA
below 4x, EBITDA/Interest above 3x, demonstrates a conservative
financial policy track record, and maintains a strong liquidity
profile.
The ratings could be downgraded if the company faces deterioration
in revenue, earnings or operating margins, debt/EBITDA is above
5.5x, EBITDA/interest is below 1.5x or liquidity becomes weak.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Headquartered in Franklin, TN, OMNIA Partners, Inc. is a leading
GPO serving state and local public agencies, educational
institutions and corporate clients in the US through its
subsidiaries (OMNIA Partners, Public Sector and OMNIA Partners,
Private Sector).
ORION ADVISOR: Fitch Lowers IDR to 'B-', Outlook Negative
---------------------------------------------------------
Fitch Ratings has downgraded Orion Advisor Solutions, Inc.'s
Long-Term Issuer Default Rating (IDR) to'B-' from 'B'. The
downgrade reflects Fitch's expectation that leverage will remain
very high at more than 8.0x over the next few years, and that free
cash flow will be approximately breakeven, neither of which is
consistent with a 'B' IDR. The Rating Outlook is Negative.
The Negative Outlook reflects Orion's limited cushion to absorb
potential headwinds such as an equity market downturn that impacts
fee-based earnings derived as a percentage of assets under
management (AUM) in its wealth management business line, or if
sales of Orion's technology platform slow. The Negative Outlook
also reflects Fitch's view that EBITDA interest coverage is weak
and that Orion's liquidity will tighten over the next few years
based on Fitch's expectation that the company will need to draw on
its revolver to fund scheduled principal repayments during this
time.
Fitch could revise the Outlook to Stable if it observes that EBITDA
interest coverage is improving towards 1.5x, which would support
free cash flow generation.
Fitch has also downgraded Orion's senior secured first-lien issue
rating to 'B+'/'RR2' from 'BB-'/'RR2'.
KEY RATING DRIVERS
Weak Credit Metrics and Cash Flow: Fitch expects Orion to have
EBITDA interest coverage of 1.1x in 2023, down substantially from
1.7x in 2022, due to rising interest rates. EBITDA leverage of more
than 10x at the end of 2022 is very high. Fitch expects Orion's
free cash flow to be approximately breakeven over the next few
years.
Fitch forecasts that Orion's interest coverage and EBITDA leverage
will improve to 1.3x and the 8x area in 2024. However, this is
contingent on generally stable equity markets that support wealth
management' earnings, as well as continued strong growth in the
volume and pricing of Orion's fee-paying technology client
accounts, neither of which is certain. Fitch believes Orion's free
cash flow generation will not materially improve until 2025 and
beyond.
Volatility from AUM-based Fees: Risks related to Orion's highly
leveraged capital structure are exacerbated by the company's
significant reliance on fee-based revenues derived from AUM in its
wealth management business line, which represented more half of
2022 revenues. While strong returns in financial markets served as
a tailwind to revenue growth in recent years up to 2022, Fitch
believes this fee structure creates inherent volatility that
significantly increases risks for a highly leveraged entity such as
Orion.
Any material draw-down in equity markets would lead to lower
fee-based revenues. In addition, more than 20% of Orion's AUM is in
'40 Act' funds that have faced headwinds over the last year due to
a shift towards ETFs that has resulted in withdrawals. Fitch
expects these funds to continue to face industry headwinds,
pressuring AUM.
Over time, Fitch expects volatility from AUM-based fees to subside
somewhat due to revenues from Orion's technology platform outpacing
growth in wealth management revenue, resulting in a mix shift
towards subscription revenue. Orion's technology platform is sold
as software as a service (SaaS) offering that generates recurring
revenues and is not subject to market volatility the way AUM-based
fees are. Fitch expects these revenues to represent more than half
of total revenue in 2023, and for the proportion to increase in
2024 and beyond.
Adequate Near-Term Liquidity: Fitch expects Orion to have adequate
near-term liquidity. As of March 31, 2023, Orion had $10.7 million
of unrestricted cash on its balance sheet and $55 million of
revolver availability to fund $9.3 million of scheduled debt
amortization payments annually. The revolver draw in 1Q23 partly
reflects a protective draw the company made due to concerns of a
potential banking crisis. Still, Fitch believes Orion will rely on
its revolver for liquidity needs through 2023 and 2024 based on the
agency's expectation that free cash flow will be approximately
breakeven.
Covenant headroom appears sufficient to permit full revolver draws
through 2023 and 2024. Orion's revolver matures in September 2025
while its first- and second-lien term loans mature in September
2027 and 2028, respectively.
Strong Market Position: Fitch believes Orion has a strong market
position in both the wealth management turnkey asset management
program (TAMP) space, with AUM of close to $62 billion at March 31,
2023, and as a provider of platform technology to the registered
investment advisor (RIA) industry. Orion is a leading provider of
technology to RIA firms and its solutions are critical to the role
of the RIAs that use it, making it difficult to displace. This is
evidenced by high gross and net retention rates for portfolio
accounting technology platform solutions of 96% and 107%,
respectively, as well as a renewal rate of 96% in 2022.
Fitch expects Orion to experience continued strong momentum in its
technology platform revenues driven by account and advisor growth
in the rapidly-expanding RIA space and the continued integration of
its 2022 acquisition of Redtail CRM.
Solid profitability: Orion has historically achieved solid
profitability with an EBITDA margin of more than 40% in 2020 (on a
pro forma basis) and 2021, based on EBITDA as a percentage of net
revenues (gross revenues less subadvisory and other asset
management fees). Although the company experienced EBITDA margin
compression in 2022, which is likely to persist in the near term,
Orion's EBITDA margin remains solid. However, Funds from Operations
and Free Cash Flow margins are less robust due to the impact of
rising interest rates.
Diversified Customer Base: Orion serves a diversified customer base
of approximately 2,600 advisory firms utilizing the company's
technology platform, and no meaningful customer concentration. This
is partly offset by product and geographic concentration given that
most customers operate in the U.S. RIA space.
DERIVATION SUMMARY
Orion's rating reflects its solid market position as a provider of
technology and wealth management solutions to the fast-growing RIA
space. The company benefits from a sizeable base of recurring
revenues associated with its SaaS subscription software business,
as well as fee-based revenues derived as a percentage of AUM.
Orion's EBITDA margins, leverage, EBITDA interest coverage, and
(CFO-Capex)/Debt figures are generally consistent with other
similarly or weaker rated peers in Fitch's software coverage
universe, and are weak for the 'B-' rating. Moreover, Fitch
believes the AUM-based fees the company generates in its wealth
management business line are potentially more volatile than
conventional SaaS businesses due to the inherent market risk
associated with market fluctuations. Like other private equity
owned issuers, Fitch believes that Orion's focus may be on equity
returns rather than debt reduction.
KEY ASSUMPTIONS
-- Total net revenue increases by low double digits in 2023 driven
primarily by growth in technology platform accounts combined
with higher billing per account due to a full year of Redtail
CRM and pricing/product initiatives, with revenue growth
forecast to continue in 2024 at a lower growth rate;
-- Wealth management revenues in 2023 and 2024 to remain
relatively flat with 2022 levels based on our assumption of
relatively modest changes in AUM and flat fee levels;
-- Orion's EBITDA margin compresses modestly in 2023 before
rebounding in 2024 due to growth in technology platform revenue
creating meaningful positive operating leverage;
-- Assumed LIBOR of 5.00% in 2023 and 4.75% in 2024 applicable to
the revolver, unhedged portion of first-lien term loan, and the
second-lien term loan;
-- Fixed rate of 4.23% plus applicable margin on $325 million of
hedged first-lien term loan commencing April 30, 2023 and
increasing to $450 million of notional first-lien debt hedged
from July 31, 2023 with an additional $115 million hedged at
4.02% commencing July 31,2023;
-- Cash taxes assumed at a minimal level throughout the forecast
period;
-- Capex intensity of 5% of revenues through forecast period;
-- Debt reduced by scheduled principal repayments offset by
revolver draws necessary to fund principal repayments.
KEY RECOVERY RATING ASSUMPTIONS
The recovery analysis assumes that Orion would be reorganized as a
going-concern rather than liquidated.
Fitch has assumed a 10% administrative claim and a 2% concession
payment from first-lien lenders to second-lien lenders.
Going-Concern (GC) Approach
The GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which it bases the enterprise
valuation. Fitch contemplates a scenario in which a sustained
decline in financial markets leads to a material reduction in
fee-based revenue, which combined with recent interest rates
increases, impairs Orion's debt-servicing ability.
Fitch assumes that Orion's sustainable GC EBITDA at restructuring
exit is $137 million. This figure exceeds the company's 2022
Fitch-adjusted EBITDA of approximately $122 million, reflecting
Fitch's view that fee-based and subscription revenues would improve
through the restructuring process and that cost cutting efforts
would support improved profitability.
Fitch applies an EV multiple of 6.5x to the GC EBITDA to calculate
a post-reorganization enterprise value. The choice of this multiple
considered the following factors:
Comparable Reorganizations: In Fitch's 2022 "Telecomm Media and
Technology Bankruptcy Enterprise Values and Creditor Recoveries"
case study, the agency notes 11 past reorganizations in the
Technology sector, where the median recovery multiple was 5.3x. Of
these companies, four were in the Software subsector: Allen Systems
Group, Inc., Aspect Software Parent, Inc., Riverbed Technology
Software, and Sungard Availability Services Capital, Inc.
Riverbed and Allen received recovery multiples of 8.3x and 8.4x,
respectively, while Aspect and Sungard received multiples of 5.5x
and 4.6x. Fitch believes previous recoveries support the 6.5x
multiple assumed for Orion, given the mission critical nature of
its offerings and its highly recurring subscription revenues.
M&A Multiples: Fitch has reviewed prior transactions in the TAMP
industry, including the acquisitions of OBS Financial Services and
Global Financial Private Capital (GFPC), that were completed at
transaction multiples of 6.0x and 6.9x, respectively. M&A multiples
in the SaaS space have historically been completed at significantly
higher multiples.
Comparable Recovery Assumptions: The 6.5x EV/EBITDA multiple is
largely consistent with multiples used in determining recoveries
for Orion's peer group, which generally range from 6.5x-7.0x. Fitch
believes that Orion's rating would be in the low end of the range
due to the meaningful amount of revenue derived from AUM-based fees
and related wealth management services, which introduces potential
revenue volatility and a somewhat higher degree of complexity
relative to conventional SaaS businesses.
Trading Multiples: Fitch's analysis of recent trading multiples for
public peers, including AssetMark Financial Holdings, Inc., SEI
Investments Company, Envestnet, Inc., and SS&C Technologies
Holdings, Inc. determined an average multiple of 11.9x. The peer
comparison is supportive of the assumed 6.5x multiple for Orion
given the likelihood that potentially stressed operations in a
recovery scenario would result in a discounted multiple relative to
publicly traded peers.
The recovery model implies a 'B+' and 'RR2' Recovery Rating for the
company's first-lien senior secured facilities, reflecting Fitch's
belief that 71%-90% expected recovery is reasonable.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to a
revision of the Outlook to Stable:
-- Free Cash Flow generation exceeding $10 million annually, which
would enable Orion to pay its scheduled debt amortization
payments without drawing on its revolver;
-- EBITDA interest coverage expected to be 1.5x or higher;
-- EBITDA leverage sustained below 8.0x;
-- (CFO-Capex)/Total Debt sustained above 2.5%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- EBITDA interest coverage below 1.3x;
-- EBITDA leverage sustained above 8.5x;
-- Increased revenue, margin, and/or liquidity pressures;
-- Indications that Orion will struggle to extend the maturity of
its revolving credit facility
LIQUIDITY AND DEBT STRUCTURE
Adequate Near-Term Liquidity: Fitch expects Orion to have adequate
near-term liquidity. As of March 31, 2023, Orion had $10.7 million
of unrestricted cash on its balance sheet and $55 million of
revolver availability to fund $9.3 million of scheduled debt
principal repayments annually. The revolver draw in 1Q23 partly
reflects a protective draw the company made due to concerns of a
potential banking crisis. Still, Fitch believes Orion will rely on
its revolver for liquidity needs through 2023 and 2024 based on the
agency's expectation that free cash flow will be approximately
breakeven.
Covenant headroom appears sufficient to permit full revolver draws
through 2023 and 2024. The revolver matures in September 2025 while
the first- and second-lien term loans mature in September 2027 and
2028, respectively.
ISSUER PROFILE
Orion is a leading provider of cloud-based software as a service
(SaaS) solutions and TAMP solutions to support registered
independent financial advisers (RIAs) and related firms.
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.
PALACE CAFE: Gets OK to Hire Keller as Real Estate Broker
---------------------------------------------------------
Palace Cafe, Inc. received approval from the U.S. Bankruptcy Court
for the Western District of Louisiana to employ Keller Williams
Realty Acadiana Commercial.
The Debtor requires a real estate broker to market and sell its
office building located at 133 West Landry St., Opelousas, La.
Keller will get a 6 percent commission of the sales price.
As disclosed in court filings, Keller is a "disinterested person"
pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Monica Deculus
Michelle Mouton
Keller Williams Realty Acadiana Commercial
100 Asma Blvd Suite 100
Lafayette, LA 70508
Tel: (337) 735-9300
Fax: (337) 735-9331
About Palace Cafe
Palace Cafe, Inc. owned and operated a popular restaurant in
Opelousas, La., under the Doucas family.
Palace Cafe sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. La. Case No. 22-50478) on July 25,
2022, with $100,001 to $500,000 in both assets and liabilities.
Judge John W. Kolwe oversees the case.
D. Patrick Keating, Esq., at the Keating Firm, APLC represents the
Debtor as counsel.
PATAGONIA HOLDCO: Calamos GDIF Marks $199,000 Loan at 18% Off
-------------------------------------------------------------
Calamos Global Dynamic Income Fund has marked its $199,000 loan
extended to Team Health Holdings, Inc to market at $162,848, or 82%
of the outstanding amount, as of April 30, 2023, according to a
disclosure contained Calamos GDIF's Form N-CSR for the fiscal year
ended April 30, 2023, filed with the Securities and Exchange
Commission on June 28, 2023.
Calamos GDIF is a participant in a Bank Loan that accrues interest
at a rate of 10.473% per annum (1 mo. SOFR + 5.75%) to Team Health
Holdings, Inc. The loan is scheduled to mature on August 1, 2029.
Calamos Global Dynamic Income Fund was organized as a Delaware
statutory trust on April 10, 2007 and is registered under the
Investment Company Act of 1940 as a diversified, closed-end
management investment company. The Fund commenced operations on
June 27, 2007.
Patagonia Holdco LLC is a holding company fully owned and
established by Stonepeak Partners LP, a private equity firm
specializing in infrastructure and real estate investments, to hold
the Latin American assets acquired from Lumen Technologies, Inc.
PBF HOLDING: Fitch Hikes LongTerm IDR to 'BB', Outlook Stable
-------------------------------------------------------------
Fitch Ratings has upgraded PBF Holding Company LLC's Long-Term
Issuer Default Rating (IDR) to 'BB' from 'BB-'. Fitch has also
upgraded PBF Holding's revolving credit facility to 'BBB-'/'RR1'
from 'BB+'/'RR1' and the senior unsecured notes to 'BB'/'RR4' from
'BB-'/'RR4'. The Rating Outlook is Stable.
In addition, Fitch has upgraded and then withdrawn the 'BB' IDR of
PBF Logistics. The issue-level IDR of the revolving credit facility
has been withdrawn.
The upgrade is driven by significant gross debt reduction and
capital structure simplification as well as PBF's manageable
strategy to reduce outstanding Renewable Identification Number
(RIN) liabilities. The ratings further reflect improved refining
sector conditions, adequate liquidity, and geographic
diversification. Offsetting factors include the impact of increased
regulatory obligations, minimal non-refining diversification,
uncertainty over the long-term impact of renewable fuels, and a
relatively higher cost structure to its peers.
The Stable Outlook reflects the expectation that refining
conditions will remain positive in the near term, effective
management of RINs liabilities, and positive FCF during midcycle
conditions.
The IDR of PBF Logistics has been withdrawn as the rating is no
longer considered to be relevant to the agency's coverage.
The issue-level IDR of the PBF Logistics revolving credit facility
has been withdrawn as the company's bonds were pre-refunded or
canceled.
KEY RATING DRIVERS
Materially Improved Capital Structure: PBF Holding's improved
capital structure results from significant gross debt reduction,
materially improved liquidity, and reduced refinancing risk. The
company reduced gross debt by ~$2.25 billion in FY22, including
repaying its $1.25 billion 9.25% first lien secured notes and $900
million revolver balance with cash on hand. The transaction results
in a permanent reduction in debt, frees up secured debt capacity,
and improves liquidity. Furthermore, prospects of refinancing the
2025 senior unsecured notes have materially improved while cost of
capital was reduced by over 50%. Management completed further gross
debt reductions in 2022 in the form of open market purchases of the
company's 2025 and 2028 unsecured notes totaling ~$30 million.
Relatively Strong Refining Margins: PBF Holding benefitted from
historically strong refining margins in 2022. Margins have declined
somewhat through 1Q23, though spreads remain well-above midcycle
levels. Resultant strong cash flows have been targeted at balance
sheet improvement including gross debt and RIN liability
reductions. Fitch believes supply shortages due to permanent
refinery closures and higher barriers to entry on the west coast
have the potential to maintain margins above historical midcycle
levels in the medium term. Refining remains one of the most
cyclical corporate sectors, with sharp swings in crack spreads over
the cycle. In addition to cyclical challenges, the sector is also
facing secular challenges with the growth of electric vehicles,
which could reduce demand for refined hydrocarbons.
Diversified, Higher Cost Refineries: Although PBF Holding's
refineries are well diversified across a number of regions with
meaningful operations across PADDs I, II, II, and V, it has a
higher cost structure relative to other refining peers. Fitch
believes this was a significant reason the company underperformed
its peers and incurred relatively larger FCF deficits during the
2020-2021 industry downturn. In particular, PBF's West Coast
refinery's high cost structure reflects a strict regulatory
environment while the East Coast refinery is exposed to European
imports, with some uncertainty in the medium term due to the
Russian invasion of Ukraine. Other factors such as record natural
gas prices pressured margins in 2022 though this was more than
offset by higher crack spreads through 1Q23.
Uncertain Impact of Regulatory Obligations: Fitch believes RINs and
California "cap and trade" obligations are manageable in the near
term. Historically, refiners have been able to pass along RIN
prices, although it has become more challenging when prices move
sharply higher, particularly when combined with reduced demand. PBF
continues to actively target reductions in its RINs liabilities,
with a long-term goal of a 2-4 months turnover cycle. PBF will
directly benefit from its' renewable diesel producing St. Bernard
JV, which allows the company to purchase RINs directly from that
entity. California's 'cap and trade' obligations are passed on to
the buyer. Offsetting factors in California include high barriers
to entry in the local market and declining supply as a number of
other refiners permanently closed operations in the state.
St. Bernard Refinery Renewable Project: PBF's investment in a
renewable diesel project at its Chalmette refinery is expected to
start production in late 2Q or early 3Q of 2023. In February 2023,
PBF announced a partnership with Eni to launch a 50-50 joint
venture (JV) with PBF receiving a pre-tax capital contribution of
$835 million. The transaction closed on June 27, 2023. The JV is
expected to produce ~500 million RINs at peak capacity, which PBF
will be able to purchase without going to the common market. While
Fitch views diversification away from PBF's traditional refining
business as positive, uncertainty remains with regards to renewable
diesels long-term profitability as the market develops. The JV will
also house a $400 million working capital ABL facility,
non-recourse and non-guaranteed by either PBF or Eni.
DERIVATION SUMMARY
PBF Holding has a nameplate throughput capacity of 1,023 mbbl/d,
which compares favorably to peers Delek U.S. Holdings (BB-/Stable)
with 302 mbbl/d and CVR Energy, Inc. (BB-/Stable) with 207 mbbl/d.
PBF refining operations are well-diversified with operations in
PADDs I, II, III, and V while lacking non-refining diversification,
although the company may receive distributions from PBFX and the
St. Bernard JV in the future. CVR's refining operation is
concentrated in the mid-continent, although this offset by niche
market exposure and diversification through its non-recourse
fertilizer business. Delek has higher non-refining diversification
with logistics and retails segments, but is limited by its smaller
size in more competitive refining markets. PBF has a higher cost
structure than both Delek and CVR. Relative to its peers, Delek's
leverage is elevated following recent acquisitions.
Investment-grade peers HF Sinclair (BBB-/Stable) with 678 mbbl/d,
Marathon Petroleum (BBB/Stable) with 2,900 mbbl/d, and Valero
Energy (BBB/Stable) with 2,600 mbbl/d all benefit from distinct
credit profile advantages relative to PBF. MPC and Valero both
operate at significantly larger scale with higher levels of
diversification relative to PBF. While HF Sinclair's size lags that
of PBF, it benefits from diversified non-refining businesses.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- West Texas Intermediate (WTI) oil price of $75 in 2023, $70 in
2024, $65 in 2025, and $60 in 2026, and $57 over the long term;
-- Gross refining margins at $14.56/bbl in 2023 declining to five-
year average levels;
-- Capex at ~$1.05 billion in 2023, $600 million in 2024, $650
million thereafter;
-- Share buybacks elevated in 2023; $200 million thereafter;
-- FCF negative in 2023 to reflect significant reduction in RINs
liability driving working capital outflow;
-- 2025 notes refinanced at a similar coupon;
-- 2025 revolving credit facility maturity extended.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Diversification through scale or non-refining businesses (i.e.,
retail, chemicals, etc.);
-- Materially improved refinery gross margins relative to peers;
-- Material reduction in RIN exposure;
-- Through-the-cycle EBITDA Leverage below 1.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Regulatory changes that increase costs, including RINs and
other federal and state regulations;
-- Material reduction in liquidity, including reduced bank
commitments or reduction in cash;
-- Through-the-cycle EBITDA Leverage above 2.0x.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity Profile: As of March 31, 2023, PBF Holding has
$1.595 billion in cash on hand. In May of 2023, the company's
revolver was downsized to $2.85 billion, which is undrawn. The
company also has an Inventory Intermediation Agreement with J. Aron
to assist in managing working capital. Fitch believes PBF's
liquidity profile is adequate for the company in short-to-medium
term.
Manageable Maturity Schedule: PBF's has senior unsecured notes that
mature in 2025 and 2028. The company's revolving credit facility
matures in 2025. Fitch expects PBF to have adequate capital market
access and/or cash on hand and FCF generation to address these
maturities in a timely manner.
ISSUER PROFILE
PBF Holding Company LLC owns and operates oil refineries and
related assets with a combined throughput capacity of 1,023,000
barrels per day. PBF Holding's refineries are geographically
diversified with refineries in PADD 1, PADD 2, PADD 3, and PADD 5.
ESG CONSIDERATIONS
PBF Holding Company LLC has an ESG Relevance Score of '4' for
Exposure to Environmental Impacts due to due to the potential of
operational disruptions from extreme weather events, including PBF
Holding's exposure to hurricanes on the Gulf Coast through its
Chalmette refinery, 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 Prior
----------- ------ -----
PBF Holding
Company LLC LT IDR BB Upgrade BB-
senior unsecured LT BB Upgrade RR4 BB-
senior secured LT BBB- Upgrade RR1 BB+
PBF Logistics LP LT IDR BB Upgrade BB-
LT IDR WD Withdrawn BB
senior secured LT WD Withdrawn BB+
PERFECTLY PRISCILLA: Seeks to Hire Stone & Baxter as Legal Counsel
------------------------------------------------------------------
Perfectly Priscilla, LLC seeks approval from the U.S. Bankruptcy
Court for the Middle District of Georgia to hire Stone & Baxter,
LLP as its counsel.
The firm will render these services:
a. give Debtor legal advice with respect to the powers and
duties of a Debtor-in-Possession in the continued operation of the
business and management of Debtor’s property;
b. prepare on behalf of Debtor, as a Debtor-in-Possession,
necessary applications, motions, answers, reports, and other legal
papers;
c. continue existing litigation, if any, to which
Debtor-in-Possession may be a party and to conduct examinations
incidental to the administration of its estate;
d. take any and all necessary action necessary to the proper
preservation and administration of Debtor’s estate;
e. assist Debtor-in-Possession with the preparation and filing
of its Statements of Financial Affairs and schedules and lists as
are appropriate;
f. take whatever action is necessary with reference to the use
by Debtor of its property pledged as collateral, including cash
collateral, to preserve the same for the benefit of Debtor and
secured creditors in accordance with the requirements of the
Bankruptcy Code;
g. assert, as directed by Debtor, all claims Debtor has
against others;
h. assist Debtor in connection with claims for taxes made by
governmental units;
i. assist Debtor in preparation of its Plan of Reorganization
and confirmation thereto; and
j. perform all other legal services for Debtor as
Debtor-in-Possession that may be necessary
Stone & Baxter received an initial deposit of $16,538.11, which
included $1,738 for the filing fee.
Gregory Daniel Taylor, Esq., a partner at Stone & Baxter, 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 through:
G. Daniel Taylor, Esq.
R. Braden Copeland, Esq.
STONE & BAXTER, LLP
577 Third Street
Macon, GA 31201
Phone: (478) 750-9898
Tel: (478) 750-9899
Email: dtaylor@stoneandbaxter.com
bcopeland@stoneandbaxter.com
About Perfectly Priscilla
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.
PLASTIQ INC: Asset Sale Proceeds to Fund Plan Payments
------------------------------------------------------
Plastiq Inc., and its Affiliated Debtors filed with the U.S.
Bankruptcy Court for the District of Delaware a Combined Disclosure
Statement and Chapter 11 Plan dated July 6, 2023.
The Debtors provide a leading software platform for business-to
business payment automation that powers all aspects of accounts
payables and accounts receivables operations for small and medium
businesses ("SMBs").
The Debtors' services solve two primary needs of SMBs: (i)
automation at an affordable price; and (ii) assisting with healthy
cash flow. In addition to the services aimed towards SMBs, the
Debtors facilitate one-time or recurring payments for individuals
for bills such as rent, mortgage, utilities, day care, homeowners
association fees, and other expenses. To that end, the Debtors
operate through five business lines: Plastiq Pay, Plastiq Accept,
Plastiq Connect, Plastiq Credit, and in 2023, the Debtors plan to
launch Plastiq SmartPay.
After carefully considering, among other things, the Debtors' cash
position, feedback received through the prepetition marketing
process and the LOI diligence, the increasing pressure from the
Debtors' vendor base, threatened litigation related to the
Colonnade Agreement, and the recommendation of the Special
Committee, the members of the Board determined that the only viable
path to preserving and maximizing the value of the Debtors' assets
was to commence these Chapter 11 Cases. Around the same time, the
Board determined that it was in the Debtors' best interest to sell
some or substantially all of their assets through a Court-approved
marketing and sale process (the "Sale Process").
On May 23, 2023, the Debtors and the Stalking Horse Bidder agreed
on the terms of a stalking horse bid, and executed the Stalking
Horse Agreement. The Stalking Horse Agreement provides that the
Stalking Horse Bidder will provide the following consideration to
acquire substantially all of Debtors' Assets, in addition to the
assumption by Stalking Horse Bidder of certain assumed
liabilities:
* a cash payment to the Debtors equal to $27.5 million;
* pay to Blue Torch the consideration as described in the
Exchange Agreement Terms attached to the Stalking Horse Agreement,
in accordance with the terms and conditions of the Exchange
Agreement; and
* pay to Colonnade the consideration as described in the
Letter Agreement Terms attached so the Stalking Horse Agreement, in
accordance with the terms and conditions of the Letter Agreement.
The Stalking Horse Agreement served as the baseline for all
prospective bidders to negotiate from and be subject to higher or
otherwise better bids for the Assets in accordance with the Bidding
Procedures. The Debtors' entry into the Stalking Horse Agreement,
together with the liquidity provided under the DIP Facility and
consensual use of cash collateral, permitted the Debtors to conduct
a value-maximizing Sale Process that was backstopped by the
Stalking Horse Bidder.
To date, Portage Point has contacted approximately 199 potentially
interested parties, including various parties that had been
contacted prior to the Petition Date, regarding the Assets and the
Sale. As of the filing of this Plan, Portage Point is continuing
its efforts to market the Assets pursuant to the Bidding Procedures
to ensure that the Debtors obtain the highest and best value for
the Assets.
Following the closing of the Sale, the Debtors will focus
principally on efficiently winding down their businesses,
preserving Cash held in the Estates, monetizing their remaining
Assets and pursuing confirmation of this Plan. The remaining Assets
are expected to consist of, among other things, the Litigation
Trust Assets. This combined Disclosure Statement and Plan provides
for the Assets, to the extent not already liquidated, to vest in
the Litigation Trust and to be liquidated over time and the
proceeds thereof to be distributed to Holders of Allowed Claims in
accordance with the terms of the Plan and the treatment of Allowed
Claims. The Litigation Trustee will effect such liquidation and
distributions. The Debtors will be dissolved as soon as practicable
after the Effective Date.
Class 4 consists of General Unsecured Claims. Unless the Holder
agrees to a different treatment, each Holder of a General Unsecured
Claim shall receive such Holder's pro rata share of the liquidated
value of the Litigation Trust Assets. This Class is impaired. The
allowed unsecured claims total $18,729,998.
On the Effective Date, all Interests shall be extinguished as of
the Effective Date, and owners thereof shall receive no
Distribution on account of such Interests.
The Plan will be implemented by, among other things, the
establishment of the Litigation Trust, the vesting in and transfer
to the Litigation Trust of the Litigation Trust Assets, and the
making of Distributions by the Litigation Trust in accordance with
the Plan, Litigation Trust Agreement, and the Litigation Trust
Budget.
A full-text copy of the Combined Disclosure Statement and Plan
dated July 6, 2023 is available at https://urlcurt.com/u?l=A97LnK
from Kurtzman Carson Consultants, LLC, claims agent.
Counsel for Debtors:
Michael R. Nestor, Esq.
Matthew B. Lunn, Esq.
Joseph M. Mulvihill, Esq.
Jared W. Kochenash, Esq.
Young Conaway Stargatt & Taylor, LLP
1000 North King Street
Rodney Square
Wilmington, DE 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
Email: mnestor@ycst.com
mlunn@ycst.com
jmulvihill@ycst.com
jkochenash@ycst.com
About Plastiq Inc.
Founded in 2012, Plastiq Inc. is a B2B payments company for SMBs.
It has helped tens of thousands of businesses improve cash flow
with instant access to working capital while automating and
enabling control over all aspects of accounts payable and
receivable. Plastiq provides growing finance teams with technology
and know-how once reserved for only large enterprises.
The flagship product, Plastiq Pay, pioneered a way for businesses
to pay suppliers by credit card regardless of acceptance as an
alternative to expensive, scarce bank loan options. Plastiq Accept
offers an alternative to expensive merchant services, enabling
businesses to accept credit cards with no merchant fees and get
paid across any customer touch point, including a website, invoice,
checkout process, and in person via QR code.
Plastiq Inc. and affiliates sought relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10671) on May 24,
2023. In the petition filed by its chief restructuring officer,
Vladimir Kasparov, Plastiq Inc. reported $50 million to $100
million in both assets and liabilities.
Judge Brendan Linehan Shannon oversees the cases.
The Debtors tapped Young, Conaway, Stargatt & Taylor, LLP as
counsel; and Portage Point Partners, LLC as restructuring advisor.
Vladimir Kasparov of Portage Point Partners serves as the Debtors'
chief restructuring officer. Kurtzman Carson Consultants, LLC is
the claims agent and administrative advisor.
PRA GROUP: Fitch Affirms BB+ LongTerm IDR, Outlook Still Negative
-----------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) and senior unsecured debt ratings of PRA Group Inc. (PRA) at
'BB+'. The Rating Outlook remains Negative.
KEY RATING DRIVERS
The rating affirmation reflects PRA's leading global franchise
within the debt purchasing sector, with a dominant market position
in the U.S. and a strong presence across 18 countries in Europe,
the Americas and APAC.
The ratings are constrained by PRA's monoline business model,
primarily purchasing and collecting charged-off consumer debt,
continued lack of meaningful portfolio growth opportunities, and
limited contingent liquidity resources. Additional constraints
include the company's reliance on internal modelling for portfolio
valuations and associated metrics such as estimated remaining
collections (ERCs), and the potential for heightened regulatory
scrutiny of the consumer collections businesses as evidenced by the
recent Consumer Financial Protection Bureau (CFPB) settlement.
The Negative Outlook reflects the increase in PRA's leverage (gross
debt-to-adjusted EBITDA) in 1Q23 above Fitch's downgrade trigger of
2.5x given slowing collection activities in a more challenging
operating environment. Failure to reduce leverage to 2.5x or below
within the Outlook horizon could result in a one-notch rating
downgrade.
In 1Q23, PRA reported cash collections of $411 million, which were
down 14% y/y on a consolidated basis as cash collections continued
to normalize from a resilient 2021 and the 2021 U.S. core vintage
underperformed management's expectation. Portfolio purchases of
$230 million were up 56% y/y in 1Q23 as supply of non-performing
loan portfolios continued to improve from the record lows observed
in 2021. Delinquency rates on consumer-related debt continue to
normalize, but remain below the pre-pandemic average quarterly
run-rate. ERCs were generally flat q/q in 1Q23 as soft collection
rates offset a modest improvement in portfolio purchases.
PRA reported a net operating loss of $34 million in 1Q23 compared
with net operating income of $72 million in 1Q22 driven mainly by a
write-down in expected future cash collections for select U.S.
portfolio vintages and to a lesser degree non-recurring cost items
(including severance expenses related to the recent change in the
CEO and other workforce reductions as well as certain case-specific
litigation expenses). The negative operating income resulted in a
breach of PRA's profitability covenant in its revolving credit
facilities, which was subsequently waived by its lenders. Fitch
views covenant breaches negatively as this could increase
uncertainty with respect to funding flexibility.
Adjusted EBITDA was $233 million in 1Q23, or $1.0 billion for the
trailing 12 months (TTM) ended 1Q23, down from record levels in
recent years. The EBITDA margin (adjusted for portfolio
amortization) was 59.7% for the TTM ended 1Q23, below the 63.2%
average from 2019-2022. Fitch anticipates earnings to remain under
pressure over the medium term as collection experience normalizes
against record levels seen in 2020 and 2021; however, profitability
metrics should remain consistent with the assigned rating
category.
PRA's gross leverage was 2.9x for the TTM ended 1Q23, up from 2.3x
at YE 2022. Proforma for the repayment of $345 million of
convertible notes maturing in June 2023, leverage would be 2.6x,
which is within Fitch's 'bb' category benchmark of 2.5x-3.5x, but
above Fitch's downgrade sensitivity of 2.5x for PRA. Fitch believes
leverage could remain above 2.5x near-term given continued pressure
on adjusted EBITDA amidst a challenging collection environment as
well as future spend on portfolio purchases. The pace of
deleveraging remains subject to an improvement in collections from
portfolio purchases made in recent quarters.
Fitch also considers gross debt-to-tangible equity as a
complementary leverage metric. On this basis, leverage was 3.5x at
end-1Q23 proforma for the planned debt paydown in June and below
Fitch's 5x downgrade trigger.
PRA's long-term funding consists of secured revolving credit
facilities, a term loan, and unsecured notes. The unsecured funding
mix was approximately 40% of total debt as of 1Q23. Fitch expects
the unsecured funding mix to trend incrementally lower in the near
term as PRA is expected to fund portfolio growth with available
capacity from secured credit facilities.
The liquidity profile is supported by cash of $116 million and
undrawn and available revolving credit capacity of $437 million at
end-1Q23. Fitch views PRA's liquidity position as adequate as the
company also has the flexibility to moderate the pace of portfolio
purchases vis-a-vis collections to conserve liquidity.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
-- Failure to sustainably reduce debt/adjusted EBITDA below 2.5x
due to a reduction in earnings and adjusted EBITDA and/or
outsized debt-funded portfolio acquisitions;
-- An increase in debt/tangible equity above 5x;
-- A shift to a largely secured funding model with the unsecured
mix decreasing to 20%;
-- Deterioration in asset quality, as evidenced by acquired debt
portfolios significantly underperforming anticipated returns or
repeated material write-downs in expected recoveries;
-- An adverse operational event or significant disruption in
business activities (for example arising from additional
regulatory intervention in key markets adversely impacting
collection activities), thereby undermining franchise strength
and business model resilience.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Factors that could, individually or collectively, lead to positive
rating action/upgrade, including a revision of the Outlook to
Stable would be driven by improved operating performance that
contributes to a sustained reduction in cash flow leverage below
2.5x over the next 12 to 18 months.
Beyond that, positive rating action could result from:
-- Unsecured debt greater than 40% of total debt on a sustained
basis;
-- Sustained leverage below 2.0x on a debt/adjusted EBITDA basis
and below 4.0x on a debt/tangible equity basis;
-- Demonstrated franchise strength and earnings resilience through
the current economic cycle.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
The unsecured debt rating is equalized with PRA's Long-Term IDR,
reflecting Fitch's expectation of average recovery prospects in a
stressed scenario as the negative impact from the presence of
significant secured funding in a priority position is offset by
lower total leverage.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
PRA's senior unsecured debt rating is primarily sensitive to
changes in the group's Long-Term IDR and secondarily to the funding
mix and recovery prospects on the unsecured debt. A material
increase in the proportion of secured debt, which weakens recovery
prospects for unsecured debtholders in a stressed scenario could
result in the unsecured debt rating being notched down below the
IDR.
ADJUSTMENTS
The Business Profile score has been assigned below the implied
score due to the following adjustment reason: Business model
(negative).
The Earnings & Profitability score has been assigned below the
implied score due to the following adjustment reason: Revenue
diversification (negative).
The Capitalization & Leverage score has been assigned in line with
the implied score. Historical and future metrics was identified as
a relevant negative factor in the assessment.
The Funding, Liquidity & Coverage score has been assigned below the
implied score due to the following adjustment reason: Historical
and future metrics (negative).
ESG CONSIDERATIONS
PRA Group, Inc. has an ESG Relevance Score of '4' for Customer
Welfare - Fair Messaging, Privacy & Data Security due to the
importance of fair collection practices and consumer interactions
and the regulatory focus on them, which has a negative impact on
the credit profile, and is relevant to the ratings in conjunction
with other factors.
PRA Group, Inc. has an ESG Relevance Score of '4' for Financial
Transparency due to the significance of internal modelling to
portfolio valuations and associated metrics such as estimated
remaining collections, which has a negative impact on the credit
profile, and is relevant to the ratings in conjunction with other
factors. These are features of the debt purchasing sector as a
whole and not specific to the company.
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.
PRO FIT 26: Taps Law Office of Mark S. Roher as Bankruptcy Counsel
------------------------------------------------------------------
Pro Fit 26, LLC seeks approval from the U.S. Bankruptcy Court for
the Southern District of Florida to employ the Law Office of Mark
S. Roher, P.A. as its counsel.
The Debtor requires legal counsel to:
a. give advice with respect to the powers and duties of the
Debtor in the continued management of its business operations;
b. advise the Debtor with respect to its responsibilities in
complying with the U.S. Trustee's Operating Guidelines and
Reporting Requirements and with the rules of the court;
c. prepare legal documents;
d. protect the interest of the Debtor in all matters pending
before the court; and
e. represent the Debtor in negotiation with its creditors in
the preparation of a Chapter 11 plan.
The firm will be paid based upon its normal and usual hourly
billing rates and will be reimbursed for out-of-pocket expenses
incurred.
Mark Roher, Esq., a partner at Law Office of Mark S. Roher, P.A.,
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:
Mark S. Roher, Esq.
Law Office of Mark S. Roher, P.A.
1806 N. Flamingo Road, Suite 300
Pembroke Pines, FL 33028
Telephone: (954) 353-2200
Email: mroher@markroherlaw.com
About Pro Fit 26
Pro Fit 26, LLC filed a Chapter 11 bankruptcy petition (Bankr. S.D.
Fla. Case No. 23-14630) on June 15, 2023, with as much as $1
million in both assets and liabilities. Judge Scott M. Grossman
oversees the case.
The Debtor is represented by the Law Office of Mark S. Roher, P.A.
PUG LLC: EUR452M Bank Debt Trades at 20% Discount
-------------------------------------------------
Participations in a syndicated loan under which Pug LLC is a
borrower were trading in the secondary market around 80.4
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The EUR452 million facility is a Term loan that is scheduled to
mature on February 13, 2027. The amount is fully drawn and
outstanding.
PUG LLC provides an online marketplace for secondary tickets along
with payment support, logistics, and customer service. It acquired
the StubHub business of eBay Inc.
QUALTEK SERVICES: Gets OK to Hire Kirkland & Ellis as Legal Counsel
-------------------------------------------------------------------
Qualtek Services Inc. and affiliates received approval from the
U.S. Bankruptcy Court for the Southern District of Texas to hire
Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP as
their legal counsel.
The firms' services include:
a. advising the Debtors with respect to their powers and
duties in the continued management and operation of their
businesses and properties;
b. advising and consulting on the conduct of the Debtors'
Chapter 11 cases, including all of the legal and administrative
requirements of operating in Chapter 11;
c. attending meetings and negotiating with representatives of
creditors and other parties involved in the cases;
d. taking all necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the Debtors'
behalf, defending any action commenced against the Debtors, and
representing the Debtors in negotiations concerning litigation in
which they are involved, including objections to claims filed
against the estates;
e. preparing pleadings;
f. representing the Debtors in connection with obtaining
authority to continue using cash collateral and post-petition
financing;
g. advising the Debtors in connection with any potential sale
of assets;
h. appearing before the bankruptcy court and any appellate
courts;
i. advising the Debtors regarding tax matters;
j. taking any necessary action to negotiate, prepare, and
obtain approval of a disclosure statement and confirmation of a
Chapter 11 plan and all documents related thereto; and
k. performing all other necessary legal services.
The firms will charge these hourly fees:
Partners $1,195 - $2,245
Of Counsel $820 - $2,125
Associates $685 - $1,395
Paraprofessionals $295 - $575
In addition, the firms will receive reimbursement for out-of-pocket
expenses incurred.
The firms received retainer fees in the amount of $250,000.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, the
firms disclosed the following:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Response: The firms' current hourly rates for services rendered
on behalf of the Debtors range as follows: partners, $1,195 to
$2,245; of counsel, $820 to $2,125; associates, $685 to $1,395; and
paraprofessionals, $295 to $575. The firms represented the Debtors
from May 1 to Dec. 31, 2022, using these hourly rates: partners,
$1,135 to $1,995; of counsel, $805 to $1,845; associates, $650 to
$1,245; and paraprofessionals, $265 to $495.
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: Yes. Pursuant to the DIP orders, professionals
proposed to be retained by the Debtors are required to provide
weekly estimates of fees and expenses incurred in these Chapter 11
cases.
As disclosed in court filings, the firms are "disinterested"
pursuant to Section 101(14) of the Bankruptcy Code.
The firms can be reached at:
Christopher T. Greco, Esq.
Christopher T. Greco, P.C.
Kirkland & Ellis, LLP
Kirkland & Ellis International, LLP
601 Lexington Avenue
New York, NY 10022
Tel: (212) 446-4800
Fax: (212) 446-4900
Email: christopher.greco@kirkland.com
About QualTek
Founded in 2012, QualTek OTCMKTS: QTEKQ --
https://www.qualtekservices.com/ -- is a technology-driven provider
of infrastructure services to the 5G wireless, telecom, power grid
modernization and renewable energy sectors across North America. It
has a national footprint with more than 65 operation centers across
the U.S. and a workforce of over 5,000 people. QualTek has
established a nationwide operating network to enable quick
responses to customer demands as well as proprietary technology
infrastructure for advanced reporting and invoicing. The Company
reports within two operating segments: Telecommunications, and
Renewables and Recovery and has already become a leader in
providing disaster recovery logistics and services for electric
utilities.
QualTek Services Inc. and its affiliates sought Chapter 11
protection (Bankr. S.D. Texas Lead Case No. 23-90584) on May 24,
2023. QualTex disclosed $688,927,000 in assets against
$789,647,000 in total debt as of Dec. 31, 2022.
The Hon. Christopher M. Lopez is the case judge.
The Debtors tapped Kirkland & Ellis, LLP, Kirkland & Ellis
International, LLP and Jackson Walker, LLP as legal counsels;
Jefferies, LLC as investment banker; C Street Advisory Group as
strategy and communications advisor; and Alvarez & Marsal North
America, LLC, as restructuring advisor. Cari Turner, managing
director at Alvarez & Marsal, is the Debtors' chief restructuring
officer. Epiq is the claims agent.
QUALTEK SERVICES: Seeks to Hire Jefferies LLC as Investment Banker
------------------------------------------------------------------
Qualtek Services Inc. and affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of Texas to hire
Jefferies, LLC as their investment banker.
The Debtors require the services of an investment banker in
connection with any restructuring and financing transaction.
Jefferies will be compensated as follows:
(a) A monthly fee of $150,000 until the termination of the
engagement agreement. After the payment of four full monthly fees
to Jefferies, 50 percent of all monthly fees actually paid to the
firm shall be credited once, without duplication, against any
restructuring fe subsequently payable to Jefferies.
(b) A fee of $5.5 million promptly upon the consummation of a
restructuring.
(c) A fee promptly upon the consummation of a financing equal
to an amount to be determined according to the following schedule:
i. 1.5 percent of any senior secured debt securities or
senior secured bank debt; plus
ii. 2.5 percent of any junior secured or unsecured debt
securities or junior secured or unsecured bank debt; plus
iii. 4.0 percent of the aggregate gross proceeds received or
to be received from the sale of equity securities, including,
without limitation, aggregate amounts committed by investors to
purchase equity securities.
Jeffrey Finger, a managing director at Jefferies, 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:
Jeffrey Finger
Jefferies LLC
520 Madison Avenue
New York, NY 10022
Tel: (212) 284-2300
About QualTek
Founded in 2012, QualTek OTCMKTS: QTEKQ --
https://www.qualtekservices.com/ -- is a technology-driven provider
of infrastructure services to the 5G wireless, telecom, power grid
modernization and renewable energy sectors across North America. It
has a national footprint with more than 65 operation centers across
the U.S. and a workforce of over 5,000 people. QualTek has
established a nationwide operating network to enable quick
responses to customer demands as well as proprietary technology
infrastructure for advanced reporting and invoicing. The Company
reports within two operating segments: Telecommunications, and
Renewables and Recovery and has already become a leader in
providing disaster recovery logistics and services for electric
utilities.
QualTek Services Inc. and its affiliates sought Chapter 11
protection (Bankr. S.D. Texas Lead Case No. 23-90584) on May 24,
2023. QualTex disclosed $688,927,000 in assets against
$789,647,000 in total debt as of Dec. 31, 2022.
The Hon. Christopher M. Lopez is the case judge.
The Debtors tapped Kirkland & Ellis, LLP, Kirkland & Ellis
International, LLP and Jackson Walker, LLP as legal counsels;
Jefferies, LLC as investment banker; C Street Advisory Group as
strategy and communications advisor; and Alvarez & Marsal North
America, LLC, as restructuring advisor. Cari Turner, managing
director at Alvarez & Marsal, is the Debtors' chief restructuring
officer. Epiq is the claims agent.
QUALTEK SERVICES: Taps Alvarez & Marsal as Restructuring Advisor
----------------------------------------------------------------
Qualtek Services, Inc. and affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of Texas to hire Alvarez
& Marsal North America, LLC, as their restructuring advisors and
designate Cari Turner as chief restructuring officer.
The firm's services include:
(a) performing a financial review of the Debtors to the extent
not already completed, including but not limited to, a review and
assessment of financial information that has been, and that will
be, provided by the Debtors to creditors;
(b) assisting in the identification of cost reduction and
operations improvement opportunities;
(c) assisting in budget reporting and reporting of the
Debtors' cash flow and disbursements;
(d) assisting the Debtors with vendor management, including
disbursement tracking and monitoring, negotiation of payment terms,
and communications;
(e) performing due diligence services, including but not
limited to, financial, tax, information technology and operational
services.
(f) serving as the principal contact with the Debtors' key
constituents and creditors with respect to financial and
operational matters; and
(g) performing other services restructuring advisory
services.
The firm will charge these hourly fees:
Managing Directors $1,025 - $1,375
Directors $775 - $975
Analysts/Associates $425 - $775
Alvarez & Marsal received $500,000 as a retainer.
Cari Turner, managing director at Alvarez & Marsal, 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 through:
Cari Turner
Alvarez & Marsal Holdings, LLC
755 W. Big Beaver Rd, Suite 650
Troy, MI 48084
Phone: +1 248 936 0814
Fax: +1 248 936 0801
Email: cmoore@alvarezandmarsal.com
About QualTek
Founded in 2012, QualTek OTCMKTS: QTEKQ --
https://www.qualtekservices.com/ -- is a technology-driven provider
of infrastructure services to the 5G wireless, telecom, power grid
modernization and renewable energy sectors across North America. It
has a national footprint with more than 65 operation centers across
the U.S. and a workforce of over 5,000 people. QualTek has
established a nationwide operating network to enable quick
responses to customer demands as well as proprietary technology
infrastructure for advanced reporting and invoicing. The Company
reports within two operating segments: Telecommunications, and
Renewables and Recovery and has already become a leader in
providing disaster recovery logistics and services for electric
utilities.
QualTek Services Inc. and its affiliates sought Chapter 11
protection (Bankr. S.D. Texas Lead Case No. 23-90584) on May 24,
2023. QualTex disclosed $688,927,000 in assets against
$789,647,000 in total debt as of Dec. 31, 2022.
The Hon. Christopher M. Lopez is the case judge.
The Debtors tapped Kirkland & Ellis, LLP, Kirkland & Ellis
International, LLP and Jackson Walker, LLP as legal counsels;
Jefferies, LLC as investment banker; C Street Advisory Group as
strategy and communications advisor; and Alvarez & Marsal North
America, LLC, as restructuring advisor. Cari Turner, managing
director at Alvarez & Marsal, is the Debtors' chief restructuring
officer. Epiq is the claims agent.
QUALTEK SERVICES: Taps Milbank as Counsel to Special Committee
--------------------------------------------------------------
Qualtek Services Inc. and affiliates received approval from the
U.S. Bankruptcy Court for the Southern District of Texas to hire
Milbank, LLP.
The firm will render independent legal services at the sole
direction of QualTek's special committee of independent directors
comprised of Alan Carr, Emanuel Pearlman, and John Kritzmacher.
Milbank will charge these hourly fees:
Partners $1,495 to $2,045
Other attorneys $575 to $1,625
Law clerks $300 to $450
Milbank provided the following in response to the request for
additional information set forth in Appendix B, Paragraph D.1 of
the U.S. Trustee Guidelines:
Question: Did you agree to any variations from, or
alternatives to, your standard or customary billing arrangements
for this engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: None of Milbank's professionals included in this
engagement have varied their rate based on the geographic location
of these cases.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Response: Milbank represented the Debtors in the 12 months
prior to the petition date. The billing rates and material
financial terms in connection with such representation have not
changed post-petition but will be subject to annual and customary
firm-wide adjustments to Milbank's hourly rates in the ordinary
course of the firm's business.
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: The Debtors have not approved a budget and staffing
plan for the firm.
Samir Vora, Esq., a partner of Milbank, neither represents nor
holds any interest adverse to the Debtors or the estate with
respect to this matter.
Milbank can be reached through:
Samir L. Vora, Esq.
Milbank LLP
1850 K Street, NW, Suite 1100
Washington, DC U.S. 20006
Telephone: 202 835 7544
Facsimile: 202 263 7544
Email: svora@milbank.com
About QualTek
Founded in 2012, QualTek OTCMKTS: QTEKQ --
https://www.qualtekservices.com/ -- is a technology-driven provider
of infrastructure services to the 5G wireless, telecom, power grid
modernization and renewable energy sectors across North America. It
has a national footprint with more than 65 operation centers across
the U.S. and a workforce of over 5,000 people. QualTek has
established a nationwide operating network to enable quick
responses to customer demands as well as proprietary technology
infrastructure for advanced reporting and invoicing. The Company
reports within two operating segments: Telecommunications, and
Renewables and Recovery and has already become a leader in
providing disaster recovery logistics and services for electric
utilities.
QualTek Services Inc. and its affiliates sought Chapter 11
protection (Bankr. S.D. Texas Lead Case No. 23-90584) on May 24,
2023. QualTex disclosed $688,927,000 in assets against
$789,647,000 in total debt as of Dec. 31, 2022.
The Hon. Christopher M. Lopez is the case judge.
The Debtors tapped Kirkland & Ellis, LLP, Kirkland & Ellis
International, LLP and Jackson Walker, LLP as legal counsels;
Jefferies, LLC as investment banker; C Street Advisory Group as
strategy and communications advisor; and Alvarez & Marsal North
America, LLC, as restructuring advisor. Cari Turner, managing
director at Alvarez & Marsal, is the Debtors' chief restructuring
officer. Epiq is the claims agent.
REAL VISION: Seeks to Hire ShemanoLaw as Bankruptcy Counsel
-----------------------------------------------------------
Real Vision Foods, LLC seeks approval from the U.S. Bankruptcy Code
for the Central District of California to hire ShemanoLaw as its
bankruptcy counsel.
The firm will render these legal services:
(a) advise the Debtor regarding matters of bankruptcy law;
(b) represent the Debtor regarding its legal rights and
responsibilities and assist the Debtor in the administration of its
bankruptcy estate;
(c) advise the Debtor with respect to the negotiation,
preparation and confirmation of a plan of reorganization;
(d) represent the Debtor in proceedings or hearings before the
bankruptcy court in matters involving bankruptcy law or in
litigation in the court;
(e) assist the Debtor in the preparation of reports, accounts,
applications and orders involving matters of bankruptcy law; and
(f) provide such other services as are typically rendered by
counsel in a Chapter 11 case.
David Shemano, Esq., the owner of ShemanoLaw, will be billed at his
hourly rate of $695.
The firm received $15,000 on May 16, 2023, and $9,000 on May 19,
2023, as a retainer.
Mr. Shemano disclosed in a court filing that the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
David B. Shemano, Esq.
ShemanoLaw
1801 Century Park East, Suite 2500
Los Angeles, CA 90067
Telephone: (310) 492-5033
Email: dshemano@shemanolaw.com
About Real Vision Foods
Real Vision Foods, LLC sought protection for relief under Chapter
11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-12105) on
May 18, 2023, listing under $1 million in both assets and
liabilities. David B Shemano, Esq. at ShemanoLaw represents the
Debtor as bankruptcy counsel.
SABRE GLBL: $625M Bank Debt Trades at 19% Discount
--------------------------------------------------
Participations in a syndicated loan under which Sabre GLBL Inc is a
borrower were trading in the secondary market around 80.6
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $625 million facility is a Term loan that is scheduled to
mature on June 30, 2028. About $617.2 million of the loan is
withdrawn and outstanding.
Sabre GLBL Inc. provides information technology services. The
Company offers technology solutions including data-driven business
intelligence, mobile, distribution, and Software as a Service
(SaaS) solutions. Sabre GLBL serves customers worldwide.
SAFFIRE VAPOR: Wins Interim Cash Collateral Access
--------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Tennessee,
Nashville Division, authorized Saffire Vapor Retail, LLC to use
cash collateral on an interim basis in accordance with the budget,
with a 10% variance.
The Debtors contend that they require immediate use of cash
collateral to continue business operations without interruption and
avoid immediate and irreparable harm to the estates pending a final
hearing on the Motion.
Truist Bank asserts a lien on the Debtors' cash collateral.
As adequate protection, Truist will receive a replacement security
interest under 11 U.S.C. sections 361(2) and 363(e), to the same
extent and priority as Truist's purported security interest in the
Debtors' prepetition property and the proceeds thereof.
The replacement liens and security interests granted will be deemed
perfected upon entry of the Order without the necessity of Truist
taking possession of any collateral or filing financing statements
or other documents.
The Debtors will keep their assets insured by reasonable and
sufficient insurance coverage as required by the terms of any loan
documents executed by the Debtors in favor of Truist, and will,
upon request and reasonable notice, provide Truist reasonable
information to allow them to determine the extent to which the
Debtors are complying with the Budget.
A further hearing on the matter is set for August 1, 2023 at 9:30
a.m.
About Saffire Vapor Retail
Saffire Vapor Retail, LLC and its affiliates filed petitions under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Tenn.
Lead Case No. 23-02264) on June 26, 2023. The affiliates are
Saffire Vapor Holdings, LLC, Saffire Vapor Distributions, LLC,
Parapoint, LLC, VTC Delivery, LLC and Emperor Augustus, LLC.
At the time of filing, Saffire Vapor Retail reported $100,001 to
$500,000 in assets and $1 million to $10 million in liabilities.
Judge Randal S. Mashburn oversees the case.
The Debtors are represented by Emergelaw, PLLC.
Truist Bank, as lender, is represented by:
Austin McMullen, Esq.
Bradley Arant Boult Cummings LLP
1600 Division St., Ste. 700
Nashville, TN 37203
Tel. No: (615) 252-2307
Email: AMcMullen@Bradley.com.
SAN JORGE CHILDREN'S: Taps Engineering Recovery as Consultant
-------------------------------------------------------------
San Jorge Children's Hospital, Inc. received approval from the U.S.
Bankruptcy Court for the District of Puerto Rico to employ
Engineering Recovery Consulting.
The Debtor requires a strategic planning consultant to:
a. assist in the procurement and granting of a special funds
award designated by the federal government under the INFRA-HEALTH
program of the CDBG-MIT;
b. provide direct guidance to the Debtor's consultants to comply
with the data request from the CDBG-MIT INFRA-HEALTH program
guidelines;
c. perform periodic progress meetings with the Debtor,
consultants and stakeholders to establish goals, milestones, roles,
responsibilities, and report on delays; and
d. assist the Debtor and its consultants in advancing project
deliverables by performing reviews of the work being produced and
giving feedback on best practices.
The firm will be paid at these rates:
PHASE I:
Task Unit Unit Price
1.0 Proposal PM Per project $18,250
2.0 Submit Proposal Per project $6,000
PHASE II:
Task Unit Unit Price
3.0 Pursuit Monthly per project $1,000
Management
PHASE III:
Task Unit Unit Price
4.0 Monitoring % construction 3.5% of LGA
& Compliance
The firm will also be paid as follows:
(a) Upon approval of its employment, the firm will receive an
initial retainer of $18,250 corresponding to Phase I 1.0 of the
project.
(b) After the completion of Phase I 2.0 of the project, the firm
will be paid $6,000. Phase I consists of Tasks 1.0 and 2.0 and have
fixed unit rates specified in the table above.
(c) Phase II consists of Task 3.0 and applies only if the
project is selected for further analysis by the administering
agency from the time the proposal is submitted to the moment of
LGA. The firm estimates that Phase II of the project will require
12 months of service for a total cost of $12,000.
As disclosed in court filings, Engineering Recovery Consulting is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
About San Jorge Children's Hospital
San Jorge Children's Hospital, Inc. operates a hospital in San
Juan, P.R., which specializes in pediatrics.
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
while RSM Puerto Rico serves as the committee's financial advisor.
SHUTTERFLY LLC: Moody's Affirms Caa2 CFR & Alters Outlook to Stable
-------------------------------------------------------------------
Moody's Investors Service affirmed Shutterfly, LLC's ("Shutterfly"
or the "company") Caa2 Corporate Family Rating. Moody's also
downgraded the Probability of Default Rating to D-PD from Caa3-PD
following the June 21st completion of a distressed debt exchange
which included all debt tranches in the capital structure and which
is considered a default under Moody's definition. In connection
with this rating action, Moody's assigned B2 ratings to the new
senior secured first-lien debts and Caa2 ratings to the new senior
secured second-lien debts issued by Shutterfly Finance, LLC
("Shutterfly Finance"), a new subsidiary of the company. As part of
the debt exchange, the new senior secured second-lien debts
(excluding the new $277.5 million second-lien Revolving Credit
Facility (RCF) due 2026) were converted from the original senior
secured first-lien debts in the old capital structure at an
exchange price of 87%-90%. Moody's also downgraded the senior
secured first-lien term loan ($6 million outstanding) and senior
secured first-lien notes ($3 million outstanding) to Caa3 from
Caa1, relics from the old capital structure that were not converted
and remain outstanding at Shutterfly, LLC. Moody's also withdrew
the Caa1 rating on the $300 Million Senior Secured First-Lien
Revolving Credit Facility due 2024 and Ca rating on the $300
million 11.0% Senior Unsecured Notes due 2027 since they are no
longer outstanding following the exchange. Shutterfly's outlook was
revised to stable from negative.
Governance risk considerations were a key driver of the rating
actions reflecting the aggressive financial strategy that has
resulted in a highly leveraged balance sheet, negative free cash
flows and the debt exchange transaction. In about three business
days, the PDR will be upgraded to Caa2-PD from D-PD. The distressed
debt exchange was designed to recapitalize the debt-heavy balance
sheet and reduce the cash interest expense burden via a new PIK
(payment-in-kind) debt structure, with creditors recognizing losses
relative to the original principal amounts. Further, the exchange
enabled creditors to convert their original debt into new
securities with a maturity date later than previously agreed to and
shift their collateral claims to a subordinate ranking in the debt
capital structure compared to the initial debt obligations' claims.
For more information on the structure of the exchange, please see
Moody's previous rating action dated June 1, 2023.
Following is a summary of the rating actions:
Assignments:
Shutterfly Finance, LLC
-- $96.2 Million Backed Senior Secured First-Lien Term Loan due
2027, Assigned B2
-- $103.8 Million 9.75% Backed Senior Secured First-Lien Notes due
2027, Assigned B2
-- $277.5 Million Backed Senior Secured Second-Lien Revolving
Credit Facility due 2026, Assigned Caa2
-- $968.9 Million Backed Senior Secured Second-Lien Term Loan due
2027, Assigned Caa2
-- $672.1 Million 8.50% Backed Senior Secured Second-Lien Cash/PIK
Notes due 2027, Assigned Caa2
Affirmations:
Issuer: Shutterfly, LLC
-- Corporate Family Rating, Affirmed at Caa2
Downgrades:
Issuer: Shutterfly, LLC
-- Probability of Default Rating, Downgraded to D-PD from Caa3-PD
-- $6.3 Million outstanding (originally $1,105 Million) Backed
Senior Secured First-Lien Term Loan B due 2026, Downgraded to Caa3
from Caa1
-- $2.8 Million outstanding (originally $785 Million) 8.5% Senior
Secured Notes due 2026, Downgraded to Caa3 from Caa1
Withdrawals:
Issuer: Shutterfly, LLC
-- $300 Million Backed Senior Secured First-Lien Revolving Credit
Facility due 2024, Withdrawn, previously rated Caa1
-- $300 Million 11.0% Senior Unsecured Notes due 2027, Withdrawn,
previously rated Ca
Outlook Actions:
Issuer: Shutterfly Finance, LLC
Outlook, Assigned Stable
Issuer: Shutterfly, LLC
Outlook, Changed To Stable From Negative
In addition to the above rated debts, the new capital structure
consists of approximately $351 million of outstanding unrated
senior unsecured notes due 2028 that were converted from $372
million of senior unsecured notes in the old capital structure.
RATINGS RATIONALE
Shutterfly's financial leverage is not expected to decline
materially following the distressed exchange given that pro forma
gross debt outstanding decreased by only 7%, or $168 million. This
is because the company issued $200 million of new first-lien debt,
which offsets the effect of converting $1.83 billion of the
existing senior secured first-lien debt (excluding the $300 million
first-lien RCF due 2024) to $1.64 billion new second-lien debt
(excluding the new $277.5 million second-lien RCF due 2026). More
importantly, since a good portion of the new capital structure is
expected to accrete at an estimated 5.7% blended rate, gross debt
will increase by roughly $113 million at the end of the first year
after closing and $121 million at the end of the second year (less
the $9.69 million annual amortization on the new second-lien term
loan), which collectively more than cancels the $168 million debt
reduction. Hence, Moody's continues to expect leverage will remain
in the 9x area over the next two years given the company's
profitability and liquidity challenges. At LTM March 31, 2023,
leverage was 9.6x (all leverage metrics are calculated and adjusted
by Moody's).
The Caa2 CFR reflects Moody's expectation that Shutterfly will
experience delayed deleveraging, weaker-than-expected earnings and
tight liquidity over the next 12-18 months, due to the new PIK debt
structure and Moody's current expectation that the US economy will
likely show slowing growth in the second half of 2023.
Macroeconomic pressures combined with high interest rates and
inflation will continue to lead to reduced customer spending on
discretionary products such as photo books, cards, wall art, home
décor, calendars and gifts offered by Shutterfly's consumer
business.
The $1.64 billion new second-lien debt (excluding the new $277.5
million second-lien RCF) is structured 50% cash pay/50% PIK,
enabling Shutterfly to avoid paying a portion of the interest on
these securities in cash through 2025, while the new $300 million
unrated unsecured notes is 100% PIK until the second-lien
obligations are fully repaid. Moody's estimates the PIK structure
cuts the company's annual cash interest expense in half by
approximately $113 million, providing a temporary lifeline. Despite
the reduced cash interest burden, Moody's projects Shutterfly will
continue to generate negative free cash flow (FCF) in fiscal 2023
due to weak customer demand in the consumer business and slow
recovery in the Lifetouch school photography segment.
Shutterfly's Caa2 rating is driven by the company's exposure to
cyclical consumer discretionary spend, a highly seasonal business
with idled capacity during non-peak selling periods and absence of
meaningful international diversification. Shutterfly is heavily
dependent on fourth quarter earnings to offset operating losses in
the first nine months of the year, which stem from a sizable fixed
cost base and large product discounting during the seasonally weak
January-to-September period to stimulate customer demand. Though
the consumer segment has transitioned from commoditized print-based
and other legacy consumer product categories to premium priced
items such as personalized photo-based products, home décor and
crafting goods (which have higher ASPs), consumers have pulled back
on spending at a time when inflation and interest rates remain high
relative to recent historical levels. This has also increased
competition in an already intensely competitive marketplace for
photo-based consumer products. Shutterfly's lack of pricing power
in certain categories is evidenced by its historically low
single-digit operating margins. The Lifetouch segment has
experienced revenue contraction and operating losses due to
pandemic-induced account losses, which will require several years
before revenue and profitability return to pre-pandemic levels.
The rating is supported by Shutterfly's strong brands, leadership
position and manufacturing scale as a retailer of personalized
photo products and services, broad range of customized goods and
seamless user experience that facilitate recurring customer usage
increasingly transacted via online engagement. The company benefits
from a vertically-integrated operation with relatively low customer
acquisition costs. To improve profitability, Shutterfly has
executed approximately $70 million of the $135 million planned
run-rate cost reductions, with the remaining $65 million to be
executed by year end 2024. Moody's expects additional cost measures
to be actioned. Business line diversification is provided by
Lifetouch, the US market leader in school photography, and
Snapfish, a global online retailer of digital photography and
personalized photo-based products in the value segment. The
addition of Spoonflower extends Shutterfly's home décor business
into the fast-growing direct-to-consumer personalization market and
creator economy as well as contributes to the company's
vertically-integrated production, workflow and fulfillment
strategy.
The stable outlook reflects Moody's expectation that Shutterfly
will continue to consume cash this year, resulting in weak
liquidity. Despite the reduction in cash interest expense, the
company will continue to rely on RCF borrowings due to muted
revenue growth and timing of savings from scheduled cost actions.
Over the next 12-18 months, Moody's expects Shutterfly will
maintain weak liquidity due to sluggish consumer demand and the
impact of higher interest rates. Shutterfly will continue to
produce the bulk of its positive FCF in the October-to-December
quarter to offset negative FCF produced during
January-to-September. However, FCF for the entire year will remain
negative. Following closing of the debt exchange, Moody's estimates
negative FCF over the next twelve months in the range of -$80
million to -$120 million. Moody's expects Shutterfly to maintain
minimum unrestricted cash balances of at least $50 million to $60
million. As of March 31, 2023, unrestricted cash totaled
approximately $143 million. The company typically draws down cash
balances in the March and June quarters to fund sizable working
capital requirements. Shutterfly also relies on RCF borrowings
during the first nine months of the year to offset negative
operating cash flows. The new $277.5 million RCF matures in October
2026, with an estimated $137 million drawn at closing. The company
is required to pay annual amortization of $9.69 million equal to 1%
of the original principal amounts on the new second-lien term loan,
which will be paid in the fourth calendar quarter when Shutterfly
generates positive FCF.
Shutterfly's ESG Credit Impact Score is CIS-5, chiefly driven by
governance risks. CIS-5 indicates that the rating is lower than it
would have been if ESG risk exposures did not exist and that the
negative impact is more pronounced than for issuers scores CIS-4.
Governance risks include the aggressive financial strategy that has
resulted in a highly leveraged balance sheet, negative free cash
flows and the debt exchange transaction, which Moody's views as a
distressed exchange. To the extent future EBITDA and cash flow
growth fail to materialize in line with Moody's baseline
projections, given the high reliance on fourth quarter earnings to
offset operating losses in the first nine months of the year, the
company's aggressive financial strategy and increased risk appetite
could lead to higher financial leverage and further deterioration
in the overall credit profile. Governance risks also embed the
concentrated ownership by Apollo, the private equity sponsor, that
has tolerated high leverage and favored high capital return
strategies. The company maintains an independent board, however
there is a concentration of controlling shareholders.
STRUCTURAL CONSIDERATIONS
The B2 ratings on the new $200 million senior secured first-lien
credit facilities and notes reflect the obligations' priority
position in Shutterfly's debt capital structure compared to the new
senior secured second-lien credit facilities and notes, which are
rated Caa2. The Caa2 ratings on the new $1.64 billion senior
secured second-lien debt obligations and $277.5 million RCF reflect
the below average anticipated recovery prospects given their junior
position relative to the first-lien debt ahead of them and the loss
of interest income to debtholders following closing of the debt
exchange.
Shutterfly transferred trademarks and customer data across certain
brands into Shutterfly Finance to collateralize the new secured
debt obligations, while residual assets remain at Shutterfly.
Shutterfly Finance's second-lien debtholders retain a first-lien
priority claim on non-transferred assets that remain at Shutterfly.
Debt obligations under the old capital structure that were not
converted in the exchange were stripped of certain covenants, and
any obligations that were previously secured to collateral that was
transferred to Shutterfly Finance will not have a claim against
Shutterfly Finance assets or benefit from a Shutterfly Finance
guarantee. Nonetheless, the old secured debt obligations will
retain a first-lien priority claim on non-transferred Shutterfly
assets. Shutterfly provides downstream guarantees on the new debt
obligations issued by Shutterfly Finance.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Shutterfly demonstrates organic
revenue growth and EBITDA margin expansion that lead to sustained
reduction in total debt to EBITDA approaching 7.5x and free cash
flow as a percentage of total debt in the -1% to +1% range (all
metrics as calculated and adjusted by Moody's). The company would
also need to exhibit enhanced liquidity and prudent financial
policies that translate into an improved credit profile to be
considered for an upgrade.
Ratings could be downgraded if: (i) revenue continues to remain
flat or declines while margins erode, free cash flow remains
negative on a sustained basis and/or liquidity deteriorates; (ii)
the company exhibits poor execution on reducing operating expenses
and achieving cost savings in a timely manner; or (iii) Moody's
expects total debt to EBITDA will increase above the 9.5x area (as
calculated and adjusted by Moody's).
Headquartered in San Jose, CA, Shutterfly, LLC is a leading online
manufacturer and retailer of personalized consumer photo products
and services (62% of fiscal 2022 revenue) through premium brands
such as Shutterfly (photo books, personalized holiday cards,
announcements, invitations, stationery and home décor products);
and Tiny Prints Boutique (online cards and stationery boutique
offering stylish announcements, invitations and personal
stationery). The Lifetouch unit (28%) is a leading provider of
school photography in the US serving over 51,000 schools, while the
SBS business unit (10%) provides customized direct marketing and
variable print-on-demand solutions to enterprise customers. Apollo
Global Management, Inc. purchased Shutterfly in September 2019 and
combined it with Snapfish, LLC (acquired in January 2020), for a
total purchase price of $3 billion (including balance sheet cash
and transaction fees and expenses). GAAP revenue totaled
approximately $2.2 billion for the twelve months ended March 31,
2023.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
SKINNY & CO: Plan Deadline Extended to September 5
--------------------------------------------------
Judge Jeffrey J. Graham of the U.S. Bankruptcy Court for the
Southern District of Indiana extended the deadline by which
Skinny & Co., Inc. must file its plan of reorganization to
September 5, 2023.
About Skinny & Co.
Skinny & Co. is a skincare company offering chemical-free
products for skin, hair, and body.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Ind. Case No. 23-01410) on April 7,
2023. In the petition signed by Luke Geddie, president, the
Debtor disclosed $390,275 in assets and $2.954 million in
liabilities.
Judge Jeffrey J. Graham oversees the case.
Wendy Brewer, Esq., at Fultz Maddox Dickens, PLC, represents the
Debtor as legal counsel.
SORRENTO THERAPEUTICS: Court OKs $20MM DIP Loan from Scilex
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Sorrento Therapeutics, Inc. and its
debtor-affiliates to use cash collateral and obtain postpetition
financing, on an interim basis.
The Debtors are permitted to obtain postpetition financing from
Scilex Holding Company on a superpriority junior secured in the
form of a multiple draw term in the form of a term loan facility in
an aggregate principal amount not to exceed the sum of (i) $20
million plus (ii) the amount of the Commitment Fee and the Funding
Fee, plus (iii) the amount of the Junior DIP Lender Holdback, all
of which will be available to the Debtors in a single draw upon
entry of the Interim Order.
On March 30, 2023, the Court entered a final order approving the
Debtors' senior secured postpetition financing facility with JMB
Capital Partners Lending, LLC.
The Debtors have an immediate and critical need to obtain the DIP
Facility and use cash collateral in order to, among other things,
(i) permit the orderly continuation and operation of their
businesses, (ii) maintain business relationships with customers,
vendors and suppliers, (iii) make payroll, (iv) make capital
expenditures, (v) pay the expenses of the Chapter 11 Cases, (vi)
satisfy working capital and operational needs of the Debtors, and
(v) for general corporate purposes, in each case, in accordance
with and subject to the terms and conditions of the Interim Order
and the DIP Loan Documents.
All DIP Obligations will be due and payable in full in cash -- or
such other form of consideration as the DIP Lender and the
Borrowers may mutually agree -- on the earliest of:
i. September 30, 2023;
ii. The effective date of any chapter 11 plan of reorganization
with respect to the Borrowers or any other Debtor;
iii. The consummation of any sale or other disposition of all or
substantially all of the Debtors' assets pursuant to section 363 of
the Bankruptcy Code;
iv. The date of the acceleration of the DIP Loans and the
termination of the DIP Commitments in accordance with the DIP
Documents;
v. Dismissal of the Chapter 11 Cases or conversion of the
Chapter 11 Cases into cases under chapter 7 of the Bankruptcy Code;
and
vi. July 31, 2023, unless the Final Order has been entered by
the Bankruptcy Court on or prior to such date.
The Events of Default include:
i. Payment, non-compliance with covenants set forth in the DIP
Documents, judgements in excess of specified amounts, impairment of
security interest in the DIP Collateral and other customary
defaults, including the loss of the chief restructuring officer ;
ii. The entry of the Final Order will have not occurred by July
31, 2023; and
iii. The dismissal of any of the Chapter 11 Cases or the
conversion of any of the Chapter 11 Cases to cases under chapter 7
of the Bankruptcy Code.
A final hearing on the matter is set for July 24, 2023 at 1 p.m.
A copy of the Court's order is available at
https://urlcurt.com/u?l=QJ4Ind from PacerMonitor.com.
About Sorrento Therapeutics
Sorrento Therapeutics, Inc. -- http://www.sorrentotherapeutics.com/
-- is a clinical and commercial stage biopharmaceutical company
developing new therapies to treat cancer, pain (non-opioid
treatments), autoimmune disease and COVID-19. Sorrento's
multimodal, multipronged approach to fighting cancer is made
possible by its extensive immuno-oncology platforms, including key
assets such as next-generation tyrosine kinase inhibitors ("TKIs"),
fully human antibodies ("G-MAB(TM) library"), immuno-cellular
therapies ("DAR-T(TM)"), antibody-drug conjugates ("ADCs"), and
oncolytic virus ("Seprehvec(TM)"). Sorrento is also developing
potential antiviral therapies and vaccines against coronaviruses,
including STI-1558, COVISHIELD(TM) and COVIDROPS(TM), COVI-MSCTM;
and diagnostic test solutions, including COVIMARK(TM).
Sorrento Therapeutics, Inc., and Scintilla Pharmaceuticals, Inc.,
sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No.
23-90085) on Feb. 13, 2023. Sorrento disclosed assets in excess of
$1 billion and liabilities of about $235 million as of Feb. 10,
2023.
Judge David R. Jones oversees the cases.
The Debtors tapped Latham & Watkins, LLP as bankruptcy counsel;
Jackson Walker, LLP as local counsel; Tran Singh, LLP as conflicts
counsel; and M3 Advisory Partners, LP as financial advisor. Mohsin
Y. Meghji, managing partner at M3, serves as the Debtors' chief
restructuring officer. Stretto Inc. is the claims, noticing and
solicitation agent.
Norton Rose Fulbright US, LLP and Milbank, LLP represent the
official committee of unsecured creditors appointed in the Debtors'
Chapter 11 cases.
On April 10, 2023, the U.S. Trustee for Region 7 appointed an
official committee to represent the Debtors' equity security
holders.
On April 10, 2023, the U.S. Trustee for Region 7 appointed an
official committee to represent the Debtors' equity security
holders. Glenn Agre Bergman & Fuentes, LLP and Greenberg Traurig,
LLP serve as the equity committee's bankruptcy counsels.
SP PF BUYER: $744.4M Bank Debt Trades at 27% Discount
-----------------------------------------------------
Participations in a syndicated loan under which SP PF Buyer LLC is
a borrower were trading in the secondary market around 73.1
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $744.4 million facility is a Term loan that is scheduled to
mature on December 21, 2025. About $744.4 million of the loan is
withdrawn and outstanding.
SP PF Buyer LLC does business as Pure Fishing, a Columbia, South
Carolina-based company that primarily designs, manufactures and
sells fishing equipment, including rods, reels, lures, artificial
bait, and related fishing tackle, across the globe.
SPIRIPLEX INC: Court OKs Cash Collateral Access Thru Aug 30
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized Spiriplex, Inc. to use cash collateral
on an interim basis in accordance with the budget, with a 10%
variance, through August 30, 2023.
The Court said the Debtor may only pay professionals after the
professional fees are approved by further Court order.
In return for the Debtor's continued interim use of cash
collateral, the Small Business Administration is granted the
following adequate protection for its purported secured interests
in cash collateral equivalents, including the Debtor's cash,
accounts receivable and inventory, among other collateral:
A. The Debtor will permit the SBA to inspect, upon reasonable
notice, and within reasonable business hours, the Debtor's books
and records;
B. The Debtor will maintain and pay premiums for insurance to
cover all of its assets from fire, theft and water damage;
C. The Debtor will, upon reasonable request, make available to
the SBA evidence of that which purportedly constitutes their
collateral or proceeds;
D. The Debtor will properly maintain the collateral and
properly manage the collateral; and
E. The Debtor will grant a replacement lien to the SBA to the
extent of its prepetition lien, and attaching to the same assets of
the Debtor in which the SBA asserted pre-petition liens.
A further hearing on the matter is set for August 22, 2023 at 1:30
p.m.
A copy of the Court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=sdTlHQ from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$67,090 for June 2023;
$78,215 for July 2023; and
$80,800 for August 2023.
About Spiriplex, Inc.
Spiriplex, Inc. specializes in micro-sample allergenic diagnostics,
providing clinical laboratory services throughout the U.S. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N.D. Ill. Case No. 23-02773) on March 1, 2023. In the
petition signed by David C. Fleisner, CEO, the Debtor disclosed up
to $500,000 in assets and up to $10 million in liabilities.
Judge Jacqueline Cox oversees the case.
Scott R. Clar, Esq., at Crane, Simon, Clar & Goodman, serves as
counsel to the Debtor.
ST. CHARLES MEMORY: Wins Interim Cash Collateral Access
-------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas, Fort
Worth Division, authorized St. Charles Memory Care, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 15% variance.
An immediate and critical need exists for the Debtor to use cash
collateral for the continued operation of its existing business.
BMO Harris Bank is the Debtor's secured creditor claiming liens on
the Debtor's personal property including rents.
As of the Petition Date, the Secured Lender claims the Debtor owes
approximately $7.506 million in principal with respect to loans
made by the Secured Lender to the Debtor pursuant to, and in
accordance with the pre-petition loan agreement.
As adequate protection, the Secured Lender is granted a
post-petition claim against the Debtor's estate. To secure the
Adequate Protection Claim, the Secured Lender is granted valid,
binding, enforceable, and perfected liens co-extensive with the
Secured Lender's pre-petition liens in the Debtor's assets.
The occurrence of any of the following will constitute a
Termination Event:
(a) The chapter 11 Case is either dismissed or converted to a
case under chapter 7 of the Bankruptcy Code;
(b) A trustee or an examiner with the expanded powers of a
trustee is appointed in the Case;
(c) Without the prior written consent of the Secured Lender,
(i) the Debtor takes any action or ceases operations of its present
businesses or takes any material action -- which is inconsistent
with the Budget -- for the purpose of effecting the foregoing, or
(ii) or there shall occur a dissolution or termination of the
existence of the Debtor or any subsidiary of the Debtor;
(d) Non-compliance or default by the Debtor with any of the
terms and provisions of this Order after a seven-day notice of
default and opportunity to cure the default;
(e) Any other super-priority claim or lien equal or superior
in priority to that granted pursuant to or permitted thereunder
will be granted except on motion filed with the Court for such
approval; or
(f) The automatic stay of 11 U.S.C. section 362 is lifted so
as to allow a Secured Lender or a third party to proceed against
any asset of the Debtor valued at $75,000 or more.
A final hearing on the matter is set for August 1 at 9:30 a.m.
A copy of the Court's order is available at
https://urlcurt.com/u?l=EJXj0P from PacerMonitor.com.
About St. Charles Memory Care, LLC
St. Charles Memory Care, LLC operates a continuing care retirement
community and assisted living facility for the elderly.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-40253) on January 27,
2023. In the petition signed by Tracy Bazzell, agent, the Debtor
disclosed up to $10 million in assets and up to $50 million in
liabilities.
Judge Mark X. Mullin oversees the case.
Joyce W. Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC,
represents the Debtor as legal counsel.
T. JONES TRUCKING: Court OKs Cash Collateral Access Thru Aug 22
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division, authorized T. Jones Trucking, LLC to use cash
collateral on an interim basis in accordance with the budget,
through August 22, 2023.
Blue Water Capital; CT Corporation System, as representative;
Mantis Funding; Corporation Service Company; Infusion Capital
Group; and First Corporate Solutions as representatives, assert a
lien or security interest in the Debtor's cash collateral.
The Debtor is permitted to use cash collateral to pay: (a) amounts
expressly authorized by the Court, including payments to the U.S.
Trustee for quarterly fees; (b) the current and necessary expenses
set forth in the budget; and (c) additional amounts as may be
expressly approved in writing by Secured Creditor.
The Court said Blue Water, CT Corporation, Mantis Funding,
Corporation Service, Infusion Capital, and First Corporate
Solutions will have a perfected post-petition lien against cash
collateral to the same extent and with the same validity and
priority as the pre-petition lien, without the need to file or
execute any documents as may otherwise be required under applicable
non-bankruptcy law.
The Debtor will maintain insurance coverage for its property in
accordance with the obligations under the loan and security
documents with Secured Creditor and the Inferior Interests.
A continued preliminary hearing on the matter is set for August 22
at 11 a.m.
A copy of the Court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=A31Ju0 from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$20,011 for July 2023;
$22,011 for August 2023;
$25,011 for September 2023; and
$25,011 for October 2023.
About T. Jones Trucking
T. Jones Trucking, LLC filed a Chapter 11 bankruptcy petition
(Bankr. M.D. Fla. Case No. 23-01392) on April 14, 2023, with as
much as $1 million in both assets and liabilities.
Judge Tiffany P. Geyer oversees the case.
The Debtor is represented by BransonLaw, PLLC.
TEAM HEALTH: Calamos GDIF Marks $637,818 Loan at 34% Off
--------------------------------------------------------
Calamos Global Dynamic Income Fund has marked its $637,818 loan
extended to Team Health Holdings, Inc to market at $419,046, or 66%
of the outstanding amount, as of April 30, 2023, according to a
disclosure contained Calamos GDIF's Form N-CSR for the fiscal year
ended April 30, 2023, filed with the Securities and Exchange
Commission on June 28, 2023.
Calamos GDIF is a participant in a Bank Loan that accrues interest
at a rate of 10.232% per annum (1 mo. SOFR + 5.25%) to Team Health
Holdings, Inc. The loan is scheduled to mature on March 2, 2027.
Calamos Global Dynamic Income Fund was organized as a Delaware
statutory trust on April 10, 2007 and is registered under the
Investment Company Act of 1940 as a diversified, closed-end
management investment company. The Fund commenced operations on
June 27, 2007.
Team Health Holdings, Inc. is a provider of physician staffing and
administrative services to hospitals and other healthcare providers
in the U.S.
TESSEMAE'S LLC: Seeks to Hire 'Ordinary Course' Professionals
-------------------------------------------------------------
Tessemae's, LLC seeks approval from the U.S. Bankruptcy Court for
the District of Maryland to employ professionals utilized in the
ordinary course of business.
The ordinary course professionals include Larry Strauss &
Associates, CPA, an accounting firm in Baltimore, Md. The firm's
services will include yearend accounting and the reparation of
K-1's and related annual tax documents.
The Debtor proposes that it be permitted to pay, without formal
application to the
court, 100% of the fees and disbursements to each "ordinary course"
professionals upon
submission of an invoice detailing the nature of the services
rendered after the petition date.
About Tessemae's LLC
Tessemae's, LLC is a flavor-forward food company that makes
clean-label, organic salad dressing. The company is based in
Baltimore, Md.
Tessemae's sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Md. Case No. 23-10675) on Feb. 1, 2023.
In the petition signed by its chief strategy officer, Demian Costa,
the Debtor disclosed up to $10 million in assets and up to $50
million in liabilities.
The Debtor tapped Gary H. Leibowitz, Esq., at Cole Schotz, PC as
legal counsel; Aurora Management Partners, Inc. as financial
advisor; and B. Riley Securities, Inc. as investment banker.
DIP lenders Tesse Fund I, LLC, MCDJR-Tesse, LLC and PMCDTESSE, LLC,
are represented by Richard L. Costella, Esq., at Tydings &
Rosenberg, LLP.
THRASIO LLC: $325M Bank Debt Trades at 24% Discount
---------------------------------------------------
Participations in a syndicated loan under which Thrasio LLC is a
borrower were trading in the secondary market around 76.4
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $325 million facility is a Delay-Draw Term loan that is
scheduled to mature on December 18, 2026.
Thrasio, LLC is an online retail company that sells pet odor
eliminator and pet stain removal products.
THRASIO LLC: $740M Bank Debt Trades at 15% Discount
---------------------------------------------------
Participations in a syndicated loan under which Thrasio LLC is a
borrower were trading in the secondary market around 84.6
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $740 million facility is a Term loan that is scheduled to
mature on December 18, 2026. The amount is fully drawn and
outstanding.
Thrasio, LLC is an online retail company that sells pet odor
eliminator and pet stain removal products.
TKEES INC: Court OKs Cash Collateral Access Thru Aug 31
-------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Broward Division, authorized TKEES, Inc. to use cash collateral on
a further interim basis in accordance with the budget, with a 10%
variance, through August 31, 2023. A further hearing on the matter
is set for August 24 at 1:30 p.m.
As previously reported by the Troubled Company Reporter, the Debtor
believes four creditors assert secured claims against the estate:
-- Hilldun Corporation asserts a secured claim in the
approximate amount of $300,000. Per UCC financing statements filed
by Hilldun, the claim is secured by security interests in the
Debtor's accounts, instruments, contract rights, chattel paper,
documents and general intangibles.
-- Shopify Capital, Inc. asserts a secured claim in the
approximate amount of $290,536. Upon information and belief a UCC
financing statement filed against the Debtor by Corporation Service
Company, as a representative, perfects the Shopify debt. Per the
financing statement, the debt is secured by all assets of the
Debtor.
-- Windsor Private Capital asserts a secured claim in the
approximate amount of $5.832 million. However, no UCC financing
statements appear to have been filed by Windsor against the Debtor.
As such, any security interest Windsor may allege is not perfected
and subject to avoidance in the case.
-- Power One Capital Corp. asserts a secured claim in the
approximate amount of $369,221. As with Windsor, however, Power One
does not appear to have filed a UCC financing statement against the
Debtor. Its security interest is therefore unperfected and subject
to avoidance.
As adequate protection, the creditors are granted a post-petition
security interest and lien in, on, to, and against any and all
assets of the Debtor, to the same extent, perfection and priority
that the Creditors held a properly perfected pre-petition security
interest in such assets.
A copy of the Court's order is available at
https://urlcurt.com/u?l=ITLKvZ from PacerMonitor.com.
About TKEES, Inc.
TKEES, Inc. is a manufacturer and seller of sandals and flip flops
for women. TKEES, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-12126) on March
20, 2023. In the petition signed by Jesse Burnett, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Scott M. Grossman oversees the case.
Bradley S. Shraiberg, Esq., at Shraiberg Page P.A., represents the
Debtor as legal counsel.
TRIMED HEALTHCARE: Taps Allen B. Dubroff as Legal Counsel
---------------------------------------------------------
Trimed Healthcare, LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Pennsylvania to employ Allen B.
Dubroff, Esquire & Associates, LLC to handle its Chapter 11 case.
The Law Firm of Allen B. Dubroff will be paid at hourly rates
ranging from $350 to $550 and will be reimbursed for out-of-pocket
expenses incurred.
The firm received from the Debtor a retainer of $29,218.
John Thomas, Jr., Esq., a partner at The Law Firm of Allen B.
Dubroff, Esquire & Associates, 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:
John F. Thomas, Jr., Esq.
Allen B. Dubroff, Esquire & Associates, LLC
1500 JFK Boulevard, Suite 1030
Philadelphia, PA 19102
Tel: (215) 568-2700
Email: allen@dubrofflawllc.com
About Trimed Healthcare
TriMED Healthcare, LLC -- https://www.trimedhealthcare.net --
provides an array of home care services for those who have
disabilities or simply require a companion. Its services include
personal care, respite care, friendly reassurance, and intermittent
chore assistance.
TriMED Healthcare filed a Chapter 11 petition (Bankr. E.D. Pa. Case
No. 23-11755)) on June 15, 2023, with $1 million and $10 million in
both assets and liabilities. Beverley George-Jordan, president,
signed the petition.
Judge Patricia M. Mayer oversees the case.
The Debtor is represented by John F. Thomas, Jr., Esq., at Allen B.
Dubroff, Esquire & Associates, LLC.
UC HOLDINGS: S&P Withdraws 'CCC+' Issuer Credit Rating
------------------------------------------------------
S&P Global Ratings withdrew its 'CCC+' issuer credit rating on UC
Holdings Inc. (doing business as Aludyne) because of a lack of
sufficient information to maintain the rating. At the time of the
withdrawal, S&P's outlook on the company was positive.
UPSTREAM NEWCO: $140M Bank Debt Trades at 21% Discount
------------------------------------------------------
Participations in a syndicated loan under which Upstream Newco Inc
is a borrower were trading in the secondary market around 79.5
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $140 million facility is a Term loan that is scheduled to
mature on November 20, 2027. The amount is fully drawn and
outstanding.
Upstream Newco, Inc., headquartered in Birmingham, Alabama, is a
provider of outpatient rehabilitation services -- primarily
physical therapy. Through its subsidiaries, Upstream operates about
1,150 clinics in 28 states, with a strong presence in the
Southeast.
UPSTREAM NEWCO: Moody's Rates $35MM Incremental Term Loan 'B3'
--------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Upstream Newco,
Inc.'s $35 million incremental senior secured first lien term loan
due November 2026. There are no changes to Upstream's existing
ratings, including the Caa1 Corporate Family Rating, the Caa1-PD
Probability of Default Rating, the B3 rating on the existing senior
secured first lien credit facilities, and Caa3 rating on the senior
secured second lien term loan. The outlook remains stable.
Upstream expects to use the proceeds from the incremental term loan
issuance to provide additional liquidity. This includes repayment
of the $15 million drawn on the $50 million revolver at March 31,
2023 and the remainder going to increase cash on the balance sheet.
Debt/EBITDA will rise slightly from 8.1x at March 31, 2023 to 8.2x
pro forma the debt issuance and subsequent revolver paydown.
Assignments:
Issuer: Upstream Newco, Inc.
Backed Senior Secured 1st Lien Term Loan, Assigned B3
RATINGS RATIONALE
Upstream's Caa1 Corporate Family Rating reflects its high financial
leverage at 8.2x for the twelve months ended March 31, 2023 pro
forma for the incremental term loan issuance, and liquidity
position. While the transaction improves Moody's overall liquidity
assessment in terms of increasing the company's cash balance,
Moody's expects a small amount of positive free cash flow in 2023
and 2024. In addition, the revolving credit facility, which Moody's
expects the company will continue to rely on, expires in November
2024. The rating also reflects the company's rapid expansion
strategy as it grows predominantly through new clinic openings. The
rating is constrained by the low barriers to entry in the physical
therapy business and the risk of market oversaturation given the
rapid expansion of Upstream and many of its competitors.
The rating is supported by Upstream's track record of same store
sales growth and management of new clinic expansions and
acquisitions. Moody's expects that the demand for physical therapy
will continue to grow given it is relatively low-cost and relative
advantage to more expensive treatments or opioid pain management.
The outlook is stable. Moody's expects Upstream's earnings and cash
flow will improve over the next 12 to 18 months but leverage will
remain above 7.0x.
Moody's expects Upstream will have adequate liquidity over the next
12-18 months. Moody's expects Upstream to generate a small amount
of positive free cash flow in 2023 and 2024. However, Moody's sees
increased uncertainty surrounding results due to recent quarterly
volatility. Upstream had $4 million of cash as of March 31, 2023
and approximately $20 million pro forma the incremental term loan
issuance. The company had $35 million of availability on its $50
million revolving credit facility at March 31, 2023, but will have
full availability after pay down using proceeds from the
incremental term loan issuance. The revolving credit facility,
which Moody's expects the company will continue to rely on, expires
in November 2024.
The first lien revolver and term loan are rated B3, one notch above
the Caa1 CFR. This reflects the first lien credit facility's
priority positions compared to the senior secured second lien term
loan (rated Caa3), which would absorb the first losses in a
default.
ESG CONSIDERATIONS
Upstream's CIS-5 indicates that the rating is lower than it would
have been if ESG risk exposures did not exist and that the negative
impact is more pronounced than for issuers scored CIS-4. Upstream
has exposure to both social risks (S-4) and governance
considerations (G-5). The social risk stems from the company's
skilled workforce and exposure to labor shortages and wage
inflation. Upstream's exposure to governance considerations
reflects its aggressive financial policy, including high financial
leverage and history of debt-funded new clinic openings and clinic
acquisitions under private equity ownership.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Ratings could be upgraded if operating performance and liquidity
improve demonstrated by sustained positive free cashflow
generation. Quantitatively, adjusted debt/EBITDA sustained below
7.5 times could support an upgrade. In addition, the rating could
be upgraded if Upstream demonstrates stable organic growth at the
same time it effectively executes on its expansion strategy.
Ratings could be downgraded if the company's liquidity or operating
performance weakens or if the company fails to effectively manage
its rapid growth or the company pursues more aggressive financial
policies. Ratings could be downgraded if Moody's sees the capital
structure becoming unsustainable which increases the likelihood of
a default.
Upstream Newco, Inc., headquartered in Birmingham, Alabama, is a
provider of outpatient rehabilitation services - primarily physical
therapy. Through its subsidiaries, Upstream Newco, Inc. operates
about 1,241 clinics in 28 states, with a strong presence in the
Southeast. Upstream Newco, Inc. is owned by Revelstoke Capital
Partners, LLC, a Denver-based private equity firm. The company's
revenue for the twelve months ended March 31, 2023 was
approximately $695 million.
The principal methodology used in this rating was Business and
Consumer Services published in November 2021.
US RENAL CARE: $225M Bank Debt Trades at 52% Discount
-----------------------------------------------------
Participations in a syndicated loan under which US Renal Care Inc
is a borrower were trading in the secondary market around 48.3
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $225 million facility is a Term loan that is scheduled to
mature on July 26, 2026. About $220.5 million of the loan is
withdrawn and outstanding.
U.S. Renal Care is a dialysis provider available for people living
with chronic and acute renal disease.
WALLACE CAREY: Seeks Restructuring Under CCAA
---------------------------------------------
Wallace & Carey Inc., Loudon Bros Limited, and Carey Management
Inc. sought and obtained from the Court of King's Bench of Alberta
an initial order granting them protection pursuant to the
Companies' Creditors Arrangement Act ("CCAA"). Pursuant to the
Initial Order, KSV Restructuring Inc. was appointed as monitor.
Pursuant to the Initial Order, the Court granted a stay of
proceedings until July 1, 2023. Pursuant to an Amended and
Restated Initial Order entered June 30, 2023, the stay of
proceedings was extended to Sept. 20, 2023.
The difficult decision to seek CCAA protection for the Companies
was the result of the many challenges over the past few years that
have adversely affected the Companies' business, including those
resulting from the Covid-19 pandemic, supply chain disruptions,
labour shortages, inflationary pressures, and most recently, rising
interest rates. Though the Companies have made significant
progress restructuring aspects of their businesses, the Companies'
management believes that the protection afforded by the CCAA will
provide the Companies with the stability they require to complete
their restructuring and return to long-term profitability.
A copy of the Initial Order is available on the Monitor's Web site
at https://www.ksvadvisory.com/experience/case/wallace-and-carey
The Monitor will also post on its Web site any orders issued at the
Comeback Application, as well as other materials filed with the
Court in these proceedings.
The Monitor can be reached at:
KSV Restructuring Inc.
220 Bay Street, 13th Floor, PO Box 20
Toronto, Ontario, M5J 2W4
Bobby Kofman
Tel: 416-932-6228
Email: bkofman@ksvadvisory.com
David Sieradzki
Tel: 416-932-6030
Email: dsieradzki@ksvadvisory.com
Jason Knight
Tel: 403-589-3225
Email: jknight@ksvadvisory.com
Counsel to the Companies:
Miller Thomson LLP
3000, 700 - 9th Avenue SW
Calgary, Alberta, T2P 3V4, Canada
James Reid
Tel: 403-298-2418
Email: jwreid@millerthomson.com
Larry Ellis
Tel: 416-595-8639
Email: lellis@millerthomson.com
David Ward
Tel: 416-595-8625
Email: dward@millerthomson.com
Sam Massie
Tel: 416-595-8641
Email: smassie@millerthomson.com
Anna Kosa
Tel: 403-206-6371
Email: akosa@millerthomson.com
Counsel to the Monitor:
Cassels Brock & Blackwell LLP
Suite 3810, Bankers Hall West 888 3rd Street SW
Calgary, AB T2P 5C5 Canada
Jeffrey Oliver
Tel: 403-351-2921
Email: joliver@cassels.com
Jane Dietrich
Tel: 416-860-5223
Email: jdietrich@cassels.com
Wallace & Carey -- https://www.wacl.com/ -- operates a distribution
and logistics company.
WE KICK BRASS: Seeks to Hire Brian K. McMahon as Legal Counsel
--------------------------------------------------------------
We Kick Brass, LLC seeks approval from the U.S. Bankruptcy Court
for the Southern District of Florida to hire Brian K. McMahon,
Esq., an attorney at Brian K. McMahon, PA to handle its Chapter 11
case.
The firm's services include:
(a) advising the Debtor with respect to its powers and
duties;
(b) advising the Debtor with respect to its responsibilities
in complying with the U.S. Trustee's Operating Guidelines and
Reporting Requirements and with the rules of the court;
(c) preparing legal papers;
(d) protecting the interest of the Debtor in all matters
pending before the court; and
(e) representing the Debtor in negotiation with its creditors
in the preparation of a Chapter 11 plan.
The Debtor has agreed to pay the firm the sum of $1,000 per month
as post-petition retainer.
Mr. McMahon disclosed in a court filing that he is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Brian K. McMahon, Esq.
Brian K. McMahon, PA
1401 Forum Way, 6th Floor
West Palm Beach, FL 33401
Telephone: (561) 478-2500
Facsimile: (561) 478-3111
Email: brian@bkmbankruptcy.com
About We Kick Brass
We Kick Brass, LLC sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-14789) on June
20, 2023, listing $100,001 to $500,000 on both assets and
liabilities. Judge Erik P Kimball oversees the case. Brian K.
McMahon, Esq. at the Law Firm of Brian K. McMahon, P.A. represents
the Debtor as counsel.
WEXFORD LABS: Court OKs Cash Collateral Access Thru July 11
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Illinois
authorized Wexford Labs, Inc. to use cash collateral on an interim
basis in accordance with the budget, through July 11, 2023.
The Debtor requires the use of cash collateral to continue its
business operations and pay their regular daily expenses.
The Debtor is indebted to Financial & Marketing Solutions, L.L.C.,
in the approximate amount of $403,765. The Debtor is also indebted
to Jeffrey L. Singer Revocable Trust in the approximate amount of
$1.6 million and to Mary Anne Auer in the approximate amount of
$608,592.
The Prepetition Indebtedness is secured by certain of the Debtor's
assets.
As adequate protection for use of the cash collateral, Financial
Solutions, Singer, and Auer will have first-priority replacement
liens in any prepetition assets of Debtor's estate which were
subject to their respective liens, whensoever acquired pursuant to
the provisions of 11 U.S.C. section 552, to the same extent,
validity, priority, perfection, and enforceability as their
interests in any assets of the Debtor's estate and to the extent of
any diminution in value. The security and priorities granted to
Financial Solutions, Singer, and Auer shall not affect or impair
the separate existing collateral of all other creditors. Any and
all causes of action under Chapter 5 of the Bankruptcy Code are
expressly excluded from the foregoing replacement liens.
The replacement liens granted will be subject only to the following
carve-out: (i) the allowed professional fees and expenses of the
Debtor's bankruptcy counsel not to exceed $25,000 to be paid as
ordered by the Bankruptcy Court and only to the extent so ordered,
and (ii) the allowed professional fees and expenses of the
Subchapter V Trustee.
A final hearing on the matter is set for July 11 at 9 a.m.
A copy of the order is available at https://urlcurt.com/u?l=W96eNM
from PacerMonitor.com.
About Wexford Labs, Inc.
Wexford Labs, Inc. formulates and manufactures broad-spectrum
antimicrobial solutions for healthcare facilities, dental offices,
hospitality and food service businesses, educational institutions
and public service agencies, pharmaceutical facilities,
agricultural businesses and more.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Ill. Case No. 23-30420) on June 20,
2023. In the petition signed by CEO Jeffrey Singer, the Debtor
disclosed $1,386,692 in assets and $4,782,608 in liabilities.
Judge Laura K. Grandy oversees the case.
Robert E. Eggmann, Esq., at Carmody MacDonald P.C., represents the
Debtor as legal counsel.
WHOLE EARTH: $375M Bank Debt Trades at 18% Discount
---------------------------------------------------
Participations in a syndicated loan under which Whole Earth Brands
Inc is a borrower were trading in the secondary market around 81.8
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $375 million facility is a Term loan that is scheduled to
mature on February 5, 2028. About $366.6 million of the loan is
withdrawn and outstanding.
Whole Earth Brands, Inc. (NASDAQ: FREE) based in Chicago, Illinois,
is a publicly traded global platform of branded products and
ingredients focused on the consumer transition towards healthier
lifestyles, such as free from sugar, natural solutions, plant-based
and clean label.
WOODHAVEN MEDICAL: Taps Richard S. Feinsilver as Legal Counsel
--------------------------------------------------------------
Woodhaven Medical Realty Group, Inc. seeks approval from the U.S.
Bankruptcy Court for the Eastern District of New York to employ the
Law Firm of Richard S. Feinsilver as its bankruptcy counsel.
The firm's services include:
a. the preparation and filing of bankruptcy schedules and
statements;
b. negotiations with creditors, as required;
c. attendance at Section 341 (a) meeting with creditors and
the United States Trustee;
d. preparation of a Chapter 11 plan;
e. attendance at hearings;
f. review of monthly financial statements; and
g. attendance at post confirmation conferences with the United
States Trustee and creditors, if required.
The firm will be compensated at $400 per hour and reimbursed for
out-of-pocket expenses incurred.
The retainer fee is $6,500.
Richard Feinsilver, Esq., a partner at the Law Firm of Richard S.
Feinsilver, 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 S. Feinsilver, Esq.
Law Firm of Richard S. Feinsilver
One Old Country Road Suite 347,
Carle Place, NY 11514
Telephone: (516) 873-6330
Facsimile: (516) 873-6183
Email: feinlawny@yahoo.com
About Woodhaven Medical Realty Group
Woodhaven Medical Realty Group, Inc. is a single asset real estate
(as defined in 11 U.S.C. Section 101(51B)). It owns a commercial
building located 164-01 Goethals Ave., Jamaica, N.Y., valued at
$975,000.
Woodhaven Medical Realty Group filed its voluntary petition for
Chapter 11 protection (Bankr. E.D.N.Y. Case No. 23-42041) on June
8, 2023, with $500,000 to $1 million in assets and $1 million to
$10 million in liabilities. Ajit Mansukhani, president, signed the
petition.
Judge Jil Mazer-Marino oversees the case.
Richard S Feinsilver, Esq., at the Law Firm of Richard S.
Feinsilver serves as the Debtor's legal counsel.
WW INTERNATIONAL: Calamos GDIF Marks $363,825 Loan at 31% Off
-------------------------------------------------------------
Calamos Global Dynamic Income Fund has marked its $363,825 loan
extended to WW International Inc to market at $249,675, or 69% of
the outstanding amount, as of April 30, 2023, according to a
disclosure contained Calamos GDIF's Form N-CSR for the fiscal year
ended April 30, 2023, filed with the Securities and Exchange
Commission on June 28, 2023.
Calamos GDIF is a participant in a Bank Loan that accrues interest
at a rate of 8.530% per annum (1 mo. LIBOR + 3.50%) to WW
International Inc. The loan is scheduled to mature on April 13,
2028.
Calamos Global Dynamic Income Fund was organized as a Delaware
statutory trust on April 10, 2007 and is registered under the
Investment Company Act of 1940 as a diversified, closed-end
management investment company. The Fund commenced operations on
June 27, 2007.
WW International Inc. formerly weight watchers international Inc.,
is a global company headquartered in the US that offers weight
loss.
YELLOW CORP: S&P Downgrades ICR to 'CCC-' on Looming Maturities
---------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating to 'CCC-' from
'CCC+' on less-than-truckload (LTL) transportation provider Yellow
Corp. S&P also lowered its issue-level rating on the company's
senior secured term loan to 'CCC-' from 'CCC+'. The '3' recovery
rating (rounded estimate: 60%) is unchanged.
The negative outlook reflects S&P's expectation that Yellow is
vulnerable to a payment default or distressed exchange over the
next 12 months.
S&P said, "We believe Yellow faces challenging conditions in
refinancing its upcoming debt maturities. Most of Yellow's capital
structure will be due in the next 12-14 months. Its $567 million
senior secured term loan matures in June 2024, while its $329
million and $400 million term loans from the U.S. treasury are due
in September 2024. Following successful implementation last year of
its new "One Yellow" operating strategy in its western network, we
expected Yellow would do so in the central and eastern U.S. this
year. However, the company has encountered resistance from its
primary labor union. Yellow's labor contract expires in March 2024,
and the company is looking to begin negotiations early to finish
implementing "One Yellow". The strategy involves integrating the
networks of its individual subsidiaries, eliminating duplicative
operations. We believe "One Yellow" is important to the company's
refinancing efforts because it would support profitability and
allow it to sell underutilized assets, with proceeds used for debt
repayment. Furthermore, we anticipate the uncertainty surrounding
labor negotiations introduces additional complexity to refinancing
efforts. Therefore, we lowered our ratings to reflect our view of
an increased likelihood that Yellow will enter into a distressed
exchange or default."
Demand for freight transportation will likely constrain Yellow's
operating performance in 2023. The company demonstrated pricing
discipline through the beginning of 2023, with LTL revenue per
hundredweight excluding a fuel surcharge rising 2.8% year over year
in the first quarter and 4% in the second quarter through the end
of May. However, Yellow's number of shipments per workday continues
to fall, down 13.3% in the first quarter and 14.6% year over year
through the end of May. S&P Global Ratings continues to expect the
U.S. economy will slow in 2023. The end markets to which Yellow is
exposed, such as retail and industrial, face weaker demand, which
will likely reduce demand for LTL transportation in the second
half. This could further constrain operating results and
liquidity.
S&P Said, "We continue to value Yellow on a going-concern basis in
our recovery analysis. We believe reorganization would maximize
value available to creditors in the event of a default. In
contrast, liquidation would likely accelerate its other
obligations, such as lease payments, pension obligations, and
undrawn letters of credit. Therefore, for the purposes of our
recovery analysis, we continue to assume the company would
reorganize.
"The negative outlook reflects our expectation that contentious
union negotiations and delayed implementation of Yellow's new
operating strategy will make it more difficult to refinance
upcoming maturities. We also believe liquidity could become further
constrained given the overall weaker demand environment for freight
transportation.
"We could lower our ratings over the next 12 months if we believe
Yellow will default or enter into a distressed exchange.
"We could raise our ratings over the next 12 months if the company
is able to reach a satisfactory resolution of its labor contract
and refinance or extend the maturity of its debt, without entering
into a distressed exchange."
ESG credit indicators: E-3; S-2; G-3
S&P said, "ESG factors have a moderately negative influence on our
credit rating analysis of Yellow. The trucking industry will likely
face long-term pressure to reduce its greenhouse gas emissions,
which could raise the company's costs and require additional capex.
Our assessment of its governance considers what we view as its
uneven record of tracking, controlling, and implementing an
operating strategy. We continue to monitor the implementation of
its "One Yellow" strategy, which supported increased profitability
in 2022, to see if it will enable the company to improve its
operating performance on a sustained basis."
ZAYO GROUP: EUR750M Bank Debt Trades at 21% Discount
----------------------------------------------------
Participations in a syndicated loan under which Zayo Group Holdings
Inc is a borrower were trading in the secondary market around 78.9
cents-on-the-dollar during the week ended Friday, July 7, 2023,
according to Bloomberg's Evaluated Pricing service data.
The EUR750 million 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.
[^] BOND PRICING: For the Week from July 3 to 7, 2023
-----------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
99 Escrow Issuer Inc NDN 7.500 39.000 1/15/2026
99 Escrow Issuer Inc NDN 7.500 38.391 1/15/2026
99 Escrow Issuer Inc NDN 7.500 38.391 1/15/2026
Acorda Therapeutics Inc ACOR 6.000 64.627 12/1/2024
Air Methods Corp AIRM 8.000 1.000 5/15/2025
Air Methods Corp AIRM 8.000 0.862 5/15/2025
Amyris Inc AMRS 1.500 19.938 11/15/2026
Audacy Capital Corp CBSR 6.750 1.987 3/31/2029
Audacy Capital Corp CBSR 6.500 2.138 5/1/2027
Audacy Capital Corp CBSR 6.750 2.169 3/31/2029
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Bed Bath & Beyond Inc BBBY 5.165 1.500 8/1/2044
Bed Bath & Beyond Inc BBBY 4.915 3.000 8/1/2034
Brixmor LLC BRX 6.900 9.875 2/15/2028
Citigroup Global
Markets Holdings
Inc/United States C 3.000 99.252 7/17/2023
Clovis Oncology Inc CLVS 1.250 12.120 5/1/2025
Clovis Oncology Inc CLVS 4.500 11.384 8/1/2024
Clovis Oncology Inc CLVS 4.500 10.581 8/1/2024
Curo Group Holdings Corp CURO 7.500 29.865 8/1/2028
Curo Group Holdings Corp CURO 7.500 22.407 8/1/2028
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 3.250 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 6.625 3.000 8/15/2027
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 3.750 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 3.170 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 6.625 2.500 8/15/2027
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 3.287 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 3.170 8/15/2026
Diebold Nixdorf Inc DBD 9.375 18.750 7/15/2025
Diebold Nixdorf Inc DBD 8.500 1.000 10/15/2026
Diebold Nixdorf Inc DBD 9.375 18.000 7/15/2025
Diebold Nixdorf Inc DBD 9.375 18.802 7/15/2025
Diebold Nixdorf Inc DBD 8.500 3.750 10/15/2026
Diebold Nixdorf Inc DBD 9.375 18.802 7/15/2025
Diebold Nixdorf Inc DBD 8.500 0.871 10/15/2026
Diebold Nixdorf Inc DBD 9.375 18.476 7/15/2025
Discover Bank DFS 4.682 90.709 8/9/2028
Endo Finance LLC /
Endo Finco Inc ENDP 5.375 5.001 1/15/2023
Endo Finance LLC /
Endo Finco Inc ENDP 5.375 5.001 1/15/2023
Energy Conversion
Devices Inc ENER 3.000 0.551 6/15/2013
Envision Healthcare Corp EVHC 8.750 2.500 10/15/2026
Envision Healthcare Corp EVHC 8.750 2.099 10/15/2026
Esperion Therapeutics Inc ESPR 4.000 50.250 11/15/2025
Exela Intermediate LLC /
Exela Finance Inc EXLINT 11.500 10.028 7/15/2026
Exela Intermediate LLC /
Exela Finance Inc EXLINT 11.500 9.858 7/15/2026
Federal Farm Credit
Banks Funding Corp FFCB 3.000 99.915 7/11/2023
Federal Home Loan Banks FHLB 3.250 99.371 7/14/2023
Federal Home Loan Banks FHLB 2.460 99.897 7/11/2023
Federal Home Loan Banks FHLB 3.125 99.383 7/12/2023
First Citizens
Bancshares Inc/TX FIRCTZ 6.000 89.950 9/1/2028
First Citizens
Bancshares Inc/TX FIRCTZ 6.000 89.950 9/1/2028
First Republic Bank/CA FRCB 4.375 0.431 8/1/2046
GNC Holdings Inc GNC 1.500 0.410 8/15/2020
Global Medical Response AIMEGR 6.500 54.493 10/1/2025
Global Medical Response AIMEGR 6.500 54.709 10/1/2025
Goodman Networks Inc GOODNT 8.000 1.000 5/31/2022
Gossamer Bio Inc GOSS 5.000 34.250 6/1/2027
Groupon Inc GRPN 1.125 38.250 3/15/2026
H-Food Holdings LLC /
Hearthside
Finance Co Inc HEFOSO 8.500 39.284 6/1/2026
H-Food Holdings LLC /
Hearthside
Finance Co Inc HEFOSO 8.500 39.667 6/1/2026
Hallmark Financial
Services Inc HALL 6.250 25.333 8/15/2029
HarborOne Bancorp Inc HONE 5.625 94.129 9/1/2028
Infor Inc LWSN 1.450 99.550 7/15/2023
Inseego Corp INSG 3.250 41.250 5/1/2025
Invacare Corp IVC 4.250 4.601 3/15/2026
JPMorgan Chase & Co JPM 2.000 85.700 8/20/2031
JPMorgan Chase Bank NA JPM 2.000 81.375 9/10/2031
Lannett Co Inc LCIN 7.750 5.500 4/15/2026
Lannett Co Inc LCIN 4.500 1.347 10/1/2026
Lannett Co Inc LCIN 7.750 5.402 4/15/2026
Lightning eMotors Inc ZEV 7.500 54.253 5/15/2024
MBIA Insurance Corp MBI 16.520 5.500 1/15/2033
MBIA Insurance Corp MBI 16.820 3.504 1/15/2033
Macquarie
Infrastructure
Holdings LLC MIC 2.000 97.499 10/1/2023
Macy's Retail Holdings M 7.875 95.354 3/1/2030
Macy's Retail Holdings M 7.875 95.354 3/1/2030
Mashantucket Western
Pequot Tribe MASHTU 7.350 41.250 7/1/2026
Morgan Stanley MS 6.985 99.833 7/11/2023
Morgan Stanley MS 1.800 70.808 8/27/2036
NBC Bancshares in
Pawhuska Inc NBCBNC 6.950 93.757 9/1/2028
NBC Bancshares in
Pawhuska Inc NBCBNC 6.950 93.757 9/1/2028
National CineMedia LLC NATCIN 5.750 4.000 8/15/2026
OMX Timber Finance
Investments II LLC OMX 5.540 0.850 1/29/2020
Party City Holdings Inc PRTY 8.750 13.050 2/15/2026
Party City Holdings Inc PRTY 8.750 13.050 2/15/2026
Party City Holdings Inc PRTY 10.130 12.538 7/15/2025
Party City Holdings Inc PRTY 6.625 0.899 8/1/2026
Party City Holdings Inc PRTY 10.130 12.538 7/15/2025
Party City Holdings Inc PRTY 6.625 0.899 8/1/2026
PeoplesBancorp MHC PEOPBC 5.375 89.908 11/15/2028
PeoplesBancorp MHC PEOPBC 5.375 89.908 11/15/2028
Radiology Partners Inc RADPAR 9.250 36.529 2/1/2028
Radiology Partners Inc RADPAR 9.250 36.626 2/1/2028
Redfin Corp RDFN 1.750 97.424 7/15/2023
Renco Metals Inc RENCO 11.500 24.875 7/1/2003
Rite Aid Corp RAD 7.500 57.817 7/1/2025
Rite Aid Corp RAD 7.700 27.420 2/15/2027
Rite Aid Corp RAD 7.500 57.827 7/1/2025
Rite Aid Corp RAD 6.875 25.000 12/15/2028
Rite Aid Corp RAD 6.875 25.000 12/15/2028
RumbleON Inc RMBL 6.750 42.734 1/1/2025
SBL Holdings Inc SECBEN 7.000 66.400 N/A
SBL Holdings Inc SECBEN 7.000 60.000 N/A
SVB Financial Group SIVB 4.000 7.000 N/A
SVB Financial Group SIVB 4.100 7.014 N/A
SVB Financial Group SIVB 4.700 7.000 N/A
SVB Financial Group SIVB 4.250 7.500 N/A
Shift Technologies Inc SFT 4.750 10.342 5/15/2026
Signature
Bank/New York NY SBNY 4.000 2.250 10/15/2030
Signature
Bank/New York NY SBNY 4.125 2.046 11/1/2029
Talen Energy Supply LLC TLN 6.500 30.352 6/1/2025
Talen Energy Supply LLC TLN 10.500 34.750 1/15/2026
Talen Energy Supply LLC TLN 6.500 27.375 9/15/2024
Talen Energy Supply LLC TLN 7.000 27.375 10/15/2027
Talen Energy Supply LLC TLN 9.500 24.474 7/15/2022
Talen Energy Supply LLC TLN 10.500 34.750 1/15/2026
Talen Energy Supply LLC TLN 9.500 24.474 7/15/2022
Talen Energy Supply LLC TLN 10.500 34.750 1/15/2026
Talen Energy Supply LLC TLN 6.500 27.375 9/15/2024
Team Health Holdings Inc TMH 6.375 53.132 2/1/2025
Team Health Holdings Inc TMH 6.375 53.280 2/1/2025
TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019
Tricida Inc TCDA 3.500 10.800 5/15/2027
US Renal Care Inc USRENA 10.625 27.105 7/15/2027
US Renal Care Inc USRENA 10.625 27.474 7/15/2027
UTB Financial Holding Co UTBFIN 6.500 94.955 9/1/2028
UTB Financial Holding Co UTBFIN 6.500 94.955 9/1/2028
UpHealth Inc UPH 6.250 30.639 6/15/2026
WeWork Cos Inc WEWORK 7.875 39.779 5/1/2025
WeWork Cos Inc WEWORK 7.875 40.996 5/1/2025
WeWork Cos LLC /
WW Co-Obligor Inc WEWORK 5.000 56.500 7/10/2025
WeWork Cos LLC /
WW Co-Obligor Inc WEWORK 5.000 56.625 7/10/2025
Wells Fargo & Co WFC 5.087 95.522 8/10/2046
Wesco Aircraft Holdings WAIR 9.000 9.500 11/15/2026
Wesco Aircraft Holdings WAIR 8.500 4.000 11/15/2024
Wesco Aircraft Holdings WAIR 13.125 7.750 11/15/2027
Wesco Aircraft Holdings WAIR 8.500 4.049 11/15/2024
Wesco Aircraft Holdings WAIR 9.000 4.520 11/15/2026
Wesco Aircraft Holdings WAIR 13.125 5.000 11/15/2027
Western Global Airlines WGALLC 10.375 0.417 8/15/2025
Western Global Airlines WGALLC 10.375 4.241 8/15/2025
Worthington Industries WOR 4.550 97.503 4/15/2026
Zions Bancorp NA ZION 7.200 84.000 N/A
*********
Monday's edition of the TCR delivers a list of indicative prices
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