/raid1/www/Hosts/bankrupt/TCR_Public/230714.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, July 14, 2023, Vol. 27, No. 194
Headlines
22 ELM RYE: Unsecureds Will Get 10% Dividend over 5 Years
2518 CLEBURNE: Seeks to Hire Tran Singh as Bankruptcy Counsel
5 CARMAN COURT: Seeks to Hire Macco Law Group as Bankruptcy Counsel
5280 AURARIA: Secured Creditor Cites Poor Stewardship of Case
824 NORTH DIXIE: Aug. 31 Plan Confirmation Hearing Set
A&V HOLDINGS: Moody's Assigns 'B3' CFR, Outlook Positive
ADT INC: Moody's Assigns 'B1' CFR, Outlook Remains Positive
AGEX THERAPEUTICS: Draws Down $500K Under Credit Facility
AHR INC: Judy Wolf Weiker Named Subchapter V Trustee
ALIXPARTNERS LLP: Moody's Affirms 'B1' CFR, Outlook Remains Stable
AMERICAN AIRLINES: S&P Rates 2013-1A Trust Certs Rating 'B-'
ARIEL LLC: Seeks to Hire Law Offices of Louis S. Robin as Counsel
ATLANTIC RADIO: Case Summary & 20 Largest Unsecured Creditors
AVENIR MEMORY: Susan Goodman Submits First PCO Report
AZALEA TOPCO: S&P Alters Outlook to Negative, Affirms 'B-' ICR
BASIC WATER: $8M Sale to Precision Castparts to Fund Plan
BISHOP OF OAKLAND: Committee Gets OK to Hire Lowenstein as Counsel
BROOKLYN STANDARD: Voluntary Chapter 11 Case Summary
BROW BAR: Judy Wolf Weiker Named Subchapter V Trustee
CAPTAIN CORPORATION: Gina Klump Named Subchapter V Trustee
CASA SYSTEMS: Moody's Rates New Sr. Superpriority Term Loan 'Caa1'
CENTRAL NEW YORK RACEWAY: Taps Gleichenhaus as Legal Counsel
CHALLENGER BRASS: Seeks to Hire Batista Law Group as Counsel
COATESVILLE AREA SD: Moody's Assigns Ba2 Rating on Underlying GOLT
COMPREHENSIVE PAIN: Taps Freedman & Goldberg as Accountant
COMPREHENSIVE PAIN: Taps Schafer and Weiner as Bankruptcy Counsel
CONTOUR PROPCO: Seeks to Hire Schwartz Law as Bankruptcy Counsel
DAILEY LAW FIRM: Seeks Cash Collateral Access
DIEBOLD HOLDING: Court to Confirm Second Amended Plan
ELIZABETH JANE: Unsecureds Will Get 15% of Claims in 60 Months
ELWOOD ENERGY: Moody's Lowers Rating on 8.1% Bond Due 2026 to B1
ERNIE'S AUTO: Updates Unsecured Claims Pay Details
ESJ TOWERS: Disclosure Statement Hearing Reset to Aug. 22
EVANGELICAL RETIREMENT: Committee Taps Crane Simon Clar as Counsel
EVERGREEN SITE: Seeks to Hire Coolidge Wall as Substitute Counsel
EXTREME CLEAN: Seeks to Hire Gambrell & Associates as Counsel
EYECARE PARTNERS: S&P Alters Outlook to Negative, Affirms 'B-' ICR
FARWELL VENTURES: Jerome Kerkman Named Subchapter V Trustee
FEDNAT HOLDING: FNHC Unsecureds Will Get 5.4% to 16.7% in Plan
GASPARILLA MOBILE: Unsecureds Unimpaired in Amended Plan
GOOD HANDS MEDICAL: Case Summary & Four Unsecured Creditors
GRAPE AND VINE: Seeks to Hire M. Denise Dotson as Legal Counsel
HAMMOND ENTERPRISES: Mark Sharf Named Subchapter V Trustee
HANDPICKED INC: Joseph Kershaw Spong Named Subchapter V Trustee
HELLO LIVINGSTON: Disclosure Statement Hearing on Aug. 10 Set
HELLO LIVINGSTON: Unsecureds Owed $3.1M to Get At Least 10% in Plan
HONX INC: Amends Plan to Resolve FCR, Alcoa & Lockheed Objections
HUDSON PACIFIC: Moody's Cuts Rating on Sr. Unsecured Debt to Ba1
ILARI AUTO: Michael Wheatley Named Subchapter V Trustee
IMEDIA BRANDS: U.S. Trustee Appoints Creditors' Committee
IRONMAN LOGGING: Case Summary & One Unsecured Creditor
JAGUAR HEALTH: Stockholders Approve All Proposals at Annual Meeting
JOANN INC: S&P Downgrades ICR to 'CCC', Outlook Negative
KING INTERPRETING: Court OKs Cash Collateral Access on Final Basis
KOSMOS ENERGY: Moody's Hikes CFR to B2 & Alters Outlook to Stable
LORDSTOWN MOTORS: Gets OK to Hire Kurtzman as Claims Agent
LORDSTOWN MOTORS: U.S. Trustee Appoints Creditors' Committee
LRSMB LLC: Mark Sharf Named Subchapter V Trustee
LRSMB LLC: Seeks to Hire Gale Angelo Johnson & Patrick as Counsel
LSF12 BADGER: Moody's Assigns First Time 'B2' Corp. Family Rating
MADISON CLINIC: Unsecureds Owed $511K to Get Share of Net Proceeds
MEDALLION MIDLAND: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
MEDALLION MIDLAND: Moody's Alters Outlook on 'B2' CFR to Positive
MIDWEST PHYSICIAN: Moody's Cuts CFR & Secured 1st Lien Debt to B3
MKS REAL ESTATE: Seeks Aug. 16 Hearing on Full-Payment Plan
MLCJR LLC: Opposes Bid to Appoint Lien Creditors' Committee
MODIVCARE INC: Moody's Cuts CFR to B2 & Sr. Unsecured Notes to B3
NEO ACCOUNTING: Seeks to Hire Anthony DeGirolamo as Legal Counsel
NOVABAY PHARMACEUTICALS: Dr. Jeff Kunin to Quit as Unit President
NXT ENERGY: Schedules Annual Meeting of Shareholders for August 2
ONTARIO GAMING: Fitch Assigns First Time 'B+' IDR, Outlook Positive
ONTARIO GAMING: S&P Assigns 'B' ICR, Outlook Stable
PEABODY ENERGY: S&P Withdraws 'B' Long-Term Issuer Credit Rating
PHASEBIO PHARMACEUTICALS: Hearing on Disc. Statement on July 31
PHASEBIO PHARMACEUTICALS: Unsecureds to Get 3.4% to 3.6% in Plan
PLX PHARMA: Hearing on Disclosure Statement on July 28
PLX PHARMA: Unsecureds Owed $11.9M to Get 49% in Plan
PROJECT ALPHA: S&P Downgrades ICR to 'B-', Outlook Stable
R.B. DWYER: Taps Hoegen & Associates as Bankruptcy Co-Counsel
RAINMAKER HEALTH: Jerrett McConnell Named Subchapter V Trustee
RAPID METALS: Case Summary & 20 Largest Unsecured Creditors
RDX TECHNOLOGIES: Unsecureds to Get Share of Net Distributable Cash
RELOADED GAMES: Seeks to Hire Foundation Law as Corporate Counsel
RELOADED GAMES: Taps Hinds Law Group as Bankruptcy Counsel
RUEL T. STOESSEL: Taps National Auction Company as Appraiser
SALE LLC: Unsecured Creditors Will Get 10% Dividend over 5 Years
SAM'S PLACE: Unsecureds Will Get 5% of Claims over 3 Years
SIGYN THERAPEUTICS: Signs Warrant Exchange Agreements
SOUTHERN DRILL: Jodi Daniel Dubose Named Subchapter V Trustee
SOUTHERN DRILL: Starts Subchapter V Bankruptcy Case
SPIRIT AEROSYSTEMS: S&P Affirms 'B' ICR, Alters Outlook to Neg.
SRAX INC: Chief Financial Officer Resigns
TAPESTRY CHARTER SCHOOL: S&P Affirms 'BB+' Rating on Revenue Bonds
TREES CORP: Agrees to Transfer and Assign Cannabis Licenses
UNIFORM FACTORY: Robert Altman Named Subchapter V Trustee
VISTAGEN THERAPEUTICS: Chief Financial Officer to Retire Next Month
WB MAINTENANCE: Unsecureds Owed $645K Unimpaired
WESCO AIRCRAFT: Moody's Cuts CFR to Ca Following Bankruptcy Filing
WEST NOTTINGHAM: Seeks Approval to Hire RDC Appraisals
WESTERN DIGITAL: S&P Lowers Unsecured Notes Rating to 'BB-'
[^] BOOK REVIEW: The Heroic Enterprise
*********
22 ELM RYE: Unsecureds Will Get 10% Dividend over 5 Years
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22 Elm Rye, Inc., a/k/a Meso Restaurant, filed with the U.S.
Bankruptcy Court for the Southern District of New York a Disclosure
Statement describing Plan of Reorganization dated July 10, 2023.
The Debtor was formed as a New York Corporation on July 21, 2020,
for the purpose of acquiring a lease and owning and operating the
Restaurant.
The Plan is designed as a mechanism for the reorganization of
Debtor. The Debtor offers Mediterranean cuisine for its customers
in its 5,100 square foot, upscale location in Rye, New York (the
"Restaurant"). The Debtor is affiliated with Meso Delray, LLC,
which operated a restaurant located at Delray Beach, Florida, that
has since been sold.
The Debtor and Meso Delray were jointly liable on a secured loan,
the proceeds of which were utilized solely by Meso Delray. That
loan was declared in default and has now been paid in full from the
sale proceeds of Meso Delray. The Debtor was behind on its payments
to its landlord; however, the lease has now been cured through a
stipulation with the Landlord approved by this Court on May 1,
2023.
The Debtor also has a large sales tax liability to New York State
which will be repaid in the Plan with statutory interest. If the
Plan is approved for confirmation the Debtor will emerge from
bankruptcy and continue to operate the Restaurant.
Class 3 consists of Unsecured Claims. Allowed Class 3 Claims shall
be paid at the dividend rate of 10% over a period of five years in
equal monthly payments without interest. Class 3 Claims shall be
broken into two classes, Class 3A and Class 3B. Class 3A are note
holders of the Debtor and Class 3B are vendors and other unsecured
creditors primarily for goods and services.
Class 3A unsecured claims total $551,286.06 (not disputed or
waived). Class 3B unsecured claims total $93,813.75. Class 3A and
3B-Unsecured Claims are Impaired and are entitled to vote.
Class 4 consists of the Equity Interest of the owners of Debtor, as
set forth in the Petition. On the Effective Date, all class 4
Equity Interests shall be cancelled without any distribution on
account of such Equity Interests, and New Equity Interests in the
Reorganized Debtor will be issued 100% to Lucid Hospitality Group
LLC, formed by Dane Asermely (Secretary and Treasurer of Debtor)
which will contribute $150,000 to the Debtor and manage the Debtor
post confirmation (hereinafter the "New Management Group"). Mr.
Asermely will be the Chief Executive Officer and President of the
Reorganized Debtor.
On the Effective Date (or as soon after as possible) the Debtor
will pay or reserve (1) Administrative Expense Claims (unless
otherwise agreed upon), Priority Tax Claims and U.S. Trustee Fees
(2) priority claims, other than priority tax claims, and (3)
secured claims. New Equity Interests will be issued in the
Reorganized Debtor ("New Equity") to the Management Company without
any further action necessary by the Debtor. The new board of
directors of the Debtor will consist of Dane Asermely and two
others to be chosen by him. Dane Asermely will be the President and
Chief Operating Officer of the Reorganized Debtor.
Payments to holders of Allowed Unsecured Claims under the Plan will
be made from ongoing revenues. The Debtor will pay a dividend of
10% of the Allowed Claims, payable over five years with
distributions made monthly or quarterly at the discretion of the
Reorganized Debtor.
A full-text copy of the Disclosure Statement dated July 10, 2023 is
available at https://urlcurt.com/u?l=Inoysa from PacerMonitor.com
at no charge.
Attorneys for Debtor:
H. Bruce Bronson, Esq.
Bronson Law Offices, P.C.
480 Mamaroneck Ave.
Harrison, NY 10528
Tel: (914) 269-2530
Fax: )888) 908-6906
Email: hbbronson@bronsonlaw.net
About 22 Elm Rye Inc.
22 Elm Rye Inc. is a restaurant operator specializing in
Mediterranean cuisine. The Debtor sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-22544)
on August 16, 2022. In the petition signed by Alan Schoening,
president, the Debtor disclosed $1,318,000 in total assets and
$2,938,497 in total liabilities.
Judge Sean H. Lane oversees the case.
H. Bruce Bronson, Esq., at Bronson Law Office, P.C. is the Debtor's
counsel.
2518 CLEBURNE: Seeks to Hire Tran Singh as Bankruptcy Counsel
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2518 Cleburne Housing, LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of Texas to hire Tran Singh, LLP as
its counsel.
The Debtor requires legal counsel to:
(a) analyze the financial situation and provide assistance to
the Debtor;
(b) advise the Debtor with respect to its rights, duties, and
powers in its Chapter 11 case;
(c) represent the Debtor at all hearings and other
proceedings;
(d) prepare and file legal papers;
(e) represent the Debtor at any meeting of creditors;
(f) represent the Debtor in all proceedings before the
bankruptcy court and in any other judicial or administrative
proceeding where the rights of the Debtor may be litigated or
otherwise affected;
(g) prepare and file a disclosure statement, if required, and
Subchapter V plan of reorganization;
(h) assist the Debtor in analyzing the claims of creditors and
in negotiating with such creditors; and
(i) assist the Debtor in any matters relating to or arising
out of the captioned case.
The hourly rates of the firm's attorneys are as follows:
Susan Tran Adams $475
Brendon Singh $500
Mayur Patel $425
In addition, the firm will seek reimbursement for expenses
incurred.
The firm received a pre-bankruptcy retainer in the amount of
$15,000 from the Debtor.
Brendon Singh, Esq., an attorney at Tran Singh, 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:
Brendon Singh, Esq.
Tran Singh, LLP
2502 La Branch Street
Houston TX 77004
Telephone: (832) 975-7300
Facsimile: (832) 975-7301
Email: bsingh@ts-llp.com
About 2518 Cleburne
2518 Cleburne Housing, LLC, a Houston-based company, filed a
petition under Chapter 11, Subchapter V of the Bankruptcy Code
(Bankr. S.D. Texas Case No. 23-32106) on June 5, 2023, with $1
million to $10 million in both assets and liabilities. Robert L.
Wiseman, managing member, signed the petition.
Judge Eduardo V. Rodriguez oversees the case.
Brendon Singh, Esq., at Tran Singh, LLP, is the Debtor's legal
counsel.
5 CARMAN COURT: Seeks to Hire Macco Law Group as Bankruptcy Counsel
-------------------------------------------------------------------
5 Carman Court, LLC seeks approval from the U.S. Bankruptcy Court
for the Eastern District of New York to employ Macco Law Group,
LLP.
The Debtor requires legal counsel to:
(a) advise the Debtor with respect to its rights and duties;
(b) negotiate with creditors to propose a Chapter 11 plan of
reorganization;
(c) prepare, file and serve all necessary court pleadings;
(d) protect the interest of the Debtor before the court and
the Office of the U.S. Trustee; and
(e) perform other legal services to the Debtor in connection
with its Chapter 11 case.
The firm's hourly rates are as follows:
Michael Macco $550
Peter Corey $525
Cooper Macco $500
Paralegals $150
The firm will receive from the Debtor the sum of $10,000 as an
initial retainer.
Cooper Macco, Esq., an associate at Macco Law, disclosed in court
filings that the firm and its partners and employees are
"disinterested persons" pursuant to Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Cooper J Macco, Esq.
MACCO LAW GROUP, LLP
2950 Express Drive South, Suite 109
Islandia, NY 11749
Telephone: (631) 549-7900
Email: cmacco@maccolaw.com
About 5 Carman Court
5 Carman Court, LLC filed a Chapter 11 bankruptcy petition (Bankr.
E.D.N.Y. Case No. 23-71955) on May 31, 2023, with $1 million to $10
million in both assets and liabilities. Judge Louis A. Scarcella
oversees the case.
Bruce H. Kaplan, P.C. is the Debtor's bankruptcy counsel.
5280 AURARIA: Secured Creditor Cites Poor Stewardship of Case
-------------------------------------------------------------
Secured creditor Auraria Stub LLC submits this joinder to the
objection of DB Auraria LLC to Disclosure Statement with respect to
5280 Auraria, LLC's Second Amended Plan, and Request for an
Adjournment of the Disclosure Statement Hearing filed by DB Auraria
LLC on July 7, 2023. In support, Auraria Stub respectfully states
as follows:
In its Motion to Appoint a Trustee, DB Auraria provides a fulsome
description of the Debtor's poor stewardship of the bankruptcy
case. Auraria Stub fully supports DB Auraria's request to appoint
a trustee to conduct an organized sale of the Debtor's real
property this year. DB Auraria's Objection similarly provides a
thorough explanation of how the Debtor's Disclosure Statement is
woefully lacking, how the Debtor's Second Amended Plan cannot be
confirmed, and how the most efficient use of the Court's and the
parties' resources would be to defer the Disclosure Statement
hearing until after the Court has ruled on the Motion to Appoint a
Trustee.
Auraria Stub fully supports and joins DB Auraria's Objection.
Counsel for Auraria Stub LLC:
Kyle R. Hosmer, Esq.
FAEGRE DRINKER BIDDLE & REATH LLP
1144 15th Street, Suite 3400
Denver, CO 80202
Tel: (303) 607-3500
E-mail: kyle.hosmer@faegredrinker.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.
824 NORTH DIXIE: Aug. 31 Plan Confirmation Hearing Set
------------------------------------------------------
Judge Scott M. Grossman has entered an order conditionally
approving Disclosure Statement attached to the Plan of 824 North
Dixie Inc. and 826 North Dixie Inc.
The Bankruptcy Court will conduct the Plan confirmation hearing and
consider final approval of the Disclosure Statement and any
timely-filed fee applications on August 31, 2023 at 1:30 p.m. in
U.S. Courthouse, 299 E. Broward Blvd., Room 308, Fort Lauderdale,
FL 33301.
These deadlines apply with respect to the confirmation hearing and
hearing on fee applications:
* The deadline for serving this order, Disclosure Statement,
Plan, and Ballots will be on July 17, 2023.
* The deadline for objections to Claims will be on July 21,
2023.
* The deadline for filing and serving fee applications will be
on Aug. 7, 2023.
* The deadline for filing and serving notice summarizing all
fee applications will be on August 10, 2023.
* The deadline for filing ballots accepting or rejecting Plan
will be on Aug. 17, 2023.
* The deadline for filing objections to confirmation will be on
Aug. 17, 2023.
* The deadline for filing objections to final approval of the
Disclosure Statement will be on Aug. 17, 2023.
* The deadline to file motions under Fed. R. Civ. P. 43(a) will
be on Aug. 24, 2023.
* The deadline for filing proponent's report and confirmation
affidavit will be on Aug. 21, 2023.
* The deadline for filing local form 71 "Individual Debtor
Certificate for Confirmation Regarding Payment of Domestic Support
Obligations and Filing of Required Tax Returns" (individual cases
only) will be on Aug. 21, 2023.
* The deadline for filing exhibit register and uploading any
exhibits a party intends to introduce into evidence at the
confirmation hearing will be on Aug. 21, 2023.
About 824 North Dixie
824 North Dixie, Inc. and 826 North Dixie, Inc., filed Chapter 11
bankruptcy petitions (Bankr. S.D. Fla. Lead Case No. 23-12439) on
March 30, 2023. At the time of the filing, the Debtors reported as
much as $1 million in both assets and liabilities.
Judge Scott M. Grossman oversees the cases.
The Debtors are represented by the Law Offices of Scott Alan Orth,
P.A.
A&V HOLDINGS: Moody's Assigns 'B3' CFR, Outlook Positive
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Moody's Investors Service changed the outlook of A&V Holdings
Midco, LLC (dba "AVI-SPL"), a Tampa, Florida-based digital
workplace solutions providers, to positive from negative. The
company's senior secured first lien credit facility ratings,
including revolver and term loan were affirmed at B3. At the same
time, Moody's assigned a B3 corporate family rating and B3-PD
probability of default rating to A&V Holdings Holdco, LLC, and for
administrative purposes, withdrew the existing B3 CFR and B3-PD PDR
from A&V Holdings Midco, LLC. The ratings have been moved to A&V
Holdings Holdco, LLC, which is the ultimate parent entity of the
restricted group and the issuer of the audited financial
statements.
Moody's has revised AVI-SPL's outlook to positive from negative
based on expectations of gradual improvement in liquidity over the
next 12-15 months. This is due to solid bookings, easing of the
supply chain issues, and prudent cost management. Despite the
prevailing macroeconomic uncertainty, including elongated sales
cycles and an inflationary environment, AVI-SPL's project pipeline
remains robust. Management continues to prioritize cash collection
and actively negotiates with vendors to expedite project
completion. As of March 31, 2023 1Q23, AVI-SPL had $40 million in
balance sheet cash and $35 million in available revolver funds.
Moody's expects free cash flow to rebound from negative $6 million
in fiscal 2022 to over $50 million in fiscal 2023, driven by strong
business volumes and working capital improvements.
Moody's anticipates double-digit revenue and EBITDA growth for
AVI-SPL over the next 12-18 months, supported by the trend of
digital transformation in workspaces, solid contract pipeline, and
pricing actions to offset higher costs. Moody's expects AVI-SPL's
debt-to-EBITDA leverage (Moody's adjusted) to fall below 4.0 times
and the company to generate free cash flow to debt (Moody's
adjusted) in the high-single digit percentages by the end of fiscal
2024.
The following ratings/assessments are affected by the action:
Assignments:
Issuer: A&V Holdings Holdco, LLC
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Affirmations:
Issuer: A&V Holdings Midco, LLC
Backed Senior Secured 1st Lien Bank Credit Facility, Affirmed B3
Withdrawals:
Issuer: A&V Holdings Midco, LLC
Corporate Family Rating, Withdrawn, previously rated B3
Probability of Default Rating, Withdrawn, previously rated B3-PD
Outlook Actions:
Issuer: A&V Holdings Holdco, LLC
Outlook, Assigned Positive
Issuer: A&V Holdings Midco, LLC
Outlook, Changed To Positive From Negative
RATINGS RATIONALE
AVI-SPL's B3 CFR reflects the company's moderately high
debt-to-EBITDA leverage of around 4.5 times as of March 31, 2023,
which Moody's expects to decline below 4.0 times over the next
12-18 months. AVI-SPL's cash flow generation has been hindered by
supply chain constraints, inflationary costs pressures and high
debt service costs that have elevated business risk. The rating
also considers the company's concentrated business focus on the
fragmented and competitive global audio visual ("AV") and video
conferencing ("VC") solutions market with revenues that are largely
project-based and relationship-dependent, as well as inherently low
profit margins. The company is also exposed to event risks under
concentrated private equity ownership, including for debt-funded
acquisitions and shareholder distributions.
Nonetheless, AVI-SPL's rating is supported by the company's solid
presence within its target market with strong vendor affiliations
and technical AV and VC expertise. Historically high net promoter
scores from a diversified base on long-standing clients as well as
favorable long term trends toward outsourcing of digital workplace
solutions, which are driven by the growing technical complexity of
AV and VC solutions and evolving technology needs, also provide
credit support. Moody's also acknowledges management's track record
of integrating past acquisitions and realizing cost synergies.
Moody's expects AVI-SPL to have good liquidity over the next 12-15
months. Sources of liquidity consist of balance sheet cash of
approximately $40 million, Moody's expectation for annual free cash
flow of approximately $40-50 million over the next 12-15 months,
and projected full availability under a $50 million revolver
expiring in 2025. As of March 31, 2023, the company had $15 million
of revolver loans outstanding under its revolver, which Moody's
expects will be repaid by the end of fiscal 2023. These cash
resources provide good coverage for required annual term loan
amortization of approximately $22 million, paid quarterly. There
are no financial maintenance covenants under the term loan. The
revolving credit facility is subject to a springing maximum first
lien net leverage ratio covenant of 5.6x if the amount revolving
loans exceeds 35% ($17.5 million) of the revolving credit facility.
Moody's expect the company will maintain covenant compliance at all
times.
The positive outlook reflects Moody's expectations of gradual
improvement in the company's liquidity over the next 12-15 months,
driven by solid bookings, easing of the supply chain issues, and
prudent cost management. The outlook could be changed to stable if
operating performance or cash flow generation is weaker than
expected.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if AVI-SPL demonstrates sustained
organic revenue growth and profit margin expansion, while also
improving its liquidity profile. Quantitatively, free cash
flow-to-debt (Moody's adjusted) sustained above 5% and maintenance
of good liquidity would be supportive of an upgrade.
The ratings could be downgraded if the company's liquidity weakens,
including sustained negative free cash flow generation, increased
revolver usage, or if financial covenant compliance becomes less
certain.
AVI-SPL, headquartered in Tampa, FL and majority-owned by
affiliates of private equity sponsor Marlin Equity Partners, is a
digital workplace solutions provider whose services include design,
engineering, procurement, integration and installation of
audio-visual and video collaboration systems and managed services
for the operation and maintenance of AV and VC systems to global
enterprise, public sector and SMB clients. Moody's expects revenue
approaching $1.5 billion in fiscal 2023.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
ADT INC: Moody's Assigns 'B1' CFR, Outlook Remains Positive
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Moody's Investors Service assigned a B1 corporate family rating and
a B1-PD probability of default rating to ADT Inc. ("ADT", "the
company"). At the same time, Moody's affirmed the Ba3 ratings on
the first-lien senior secured credit facilities and first-lien
notes issued by Prime Security Services Borrower, LLC and The ADT
Security Corporation (both subsidiaries of ADT), as well as the B3
rating on the second-lien notes issued by Prime Security Services
Borrower, LLC. The speculative grade liquidity rating ("SGL") is
SGL-3. The outlook remains positive. Moody's also withdrew the B1
CFR and B1-PD rating from Prime Security Services Borrower, LLC.
ADT, headquartered in Boca Raton, FL, is the largest provider of
alarm monitoring services in the US.
The maintenance of the positive outlook reflects ADT's improving
operating and credit metrics, including revenue, attrition,
subscriber acquisition costs, FCF/debt and debt/recurring monthly
revenue (RMR). At the same time, refinancing risk remains elevated,
with roughly $4.0 billion of funded debt due in 2026. The
concentrated, albeit diminishing, ownership by Apollo Global
Management, Inc. ("Apollo"), a key governance consideration, also
weighs on the company's credit profile. As of March 31, 2023, the
private equity sponsor was still ADT's majority shareholder, which
prolongs the potential for more aggressive financial policies.
RATINGS RATIONALE
ADT's credit ratings reflect its leading position as the largest
residential alarm-monitoring and home automation services provider
in the fragmented US market. Improving operating and credit metrics
support the credit, including higher recurring monthly revenue
(RMR); lower gross attrition and subscriber acquisition costs; and
diminishing debt/RMR leverage (about 27x as of March 2023). Moody's
expects the company will continue to pursue financial policies that
reduce leverage and allocate free cash flow to pay down debt, but
the credit remains constrained by the potential for more aggressive
financial strategies given the concentrated ownership by private
equity sponsor Apollo, which remains the controlling shareholder.
The company generates over 70% of revenue from multi-year
monitoring services contracts that result in a predictable,
recurring revenue base. However, the industry is characterized by
prevalent customer churn and costly subscriber acquisition costs,
which result in high capital intensity and limit free cash flow
generation. Subscriber attrition, a key operating metric, is
typically correlated with home relocations, which creates exposure
to housing market cycles. Refinancing risk has increased as
interest rates are likely to remain elevated. ADT's maturities
remain heavily concentrated, with roughly $4.0 billion of funded
debt due in 2026.
Recent partnerships with high profile firms Google Inc. ("Google")
(subsidiary of Alphabet Inc., Aa2 stable) and State Farm Life
Insurance Company ("State Farm") (Aa1 stable), which have also
become minority shareholders, will benefit product development and
innovation. Moody's expects the relationships with these two firms
will support revenue growth and help reduce subscriber acquisition
costs and attrition, which are key for driving greater
profitability and cash flow. ADT continues to diversify its core
residential monitoring revenue base with new products, such as
Google's digital doorbells or video recording services, and expand
into new segments like commercial monitoring or solar installation.
The addition of new product lines contributes to positive revenue
diversification but the financial profile of some new businesses,
like the solar unit, can also be a drag on margins and increase
ADT's top line volatility.
The positive outlook reflects Moody's expectation that ADT's
operating and credit metrics will continue to improve over the next
12-18 months while the company adopts more balanced financial
strategies, including an emphasis upon financial leverage reduction
rather than shareholder returns or debt-financed acquisitions.
Moody's also anticipates that ownership concentration will continue
to decline. The positive outlook also reflects Moody's expectation
that refinancing risk will also diminish and ADT will be able to
materially reduce its 2026 maturity tower. Moody's expects low- to
mid-single-digit revenue growth over the next 12 months as growth
in the residential segment is offset by higher financing rates that
will continue to reduce solar installations. Moody's anticipates
debt/RMR and FCF/debt metrics will improve towards 25x and 2.5%,
respectively, as ADT continues to pay down debt over the next 12
months. The outlook could return to stable or changed to negative
if operating performance is worse than Moody's anticipates, or if
ADT's ownership concentration or refinancing risk do not diminish
materially.
The SGL-3 liquidity assessment reflects ADT's adequate liquidity,
supported by $186 million of balance sheet cash and an undrawn $575
million first-lien revolving credit facility as of March 31, 2023,
as well as Moody's expectation for over $180 million of free cash
flow in 2023 (Moody's adjusted net of dividends). Moody's expects
ADT will utilize its available liquidity to repay the remaining
$100 million 4.125% notes due June 2023, as well as the $750
million 5.25% notes due April 2024. The company indicated as a
subsequent event to the most recent March 2023 quarterly results
that it had redeemed $150 million of the 2024 notes and it intends
to repay the remaining $100 million of 2023 notes in June. As is
assumed for alarm monitors in general, liquidity is also supported
by Moody's expectation that ADT can both curtail its active
subscriber acquisition program and turn to the alarm monitoring
industry's robust market for trading alarm monitoring contracts, to
generate additional liquidity, if necessary. Moody's expects ADT
will remain in compliance with the 4.9x net first-lien leverage
covenant, which is only applicable to revolver borrowings when the
facility is drawn 30% or more.
ADT's capital structure includes first-lien and second-lien debt,
as well as a receivable securitization facility. The ratings for
the individual debt instruments incorporate ADT's overall
probability of default, reflected in the B1-PD PDR, and the Loss
Given Default assessments for the individual debt instruments. The
Ba3 ratings on ADT's $3.3 billion first-lien term loan, $575
million first-lien revolver, and $5.0 billion of first-lien notes
(held collectively at Prime Security Services Borrower, LLC and The
ADT Security Corporation) are weakly positioned given the heavy
preponderance of first-lien debt, relative to the $1.3 billion of
subordinated second-lien notes, which are rated B3. To support its
securitization facility, ADT contributes contracted receivables to
a wholly-owned, bankruptcy-remote special purpose entity (SPE) that
acts as a borrower.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if 1) ownership concentration
continues to diminish; 2) ADT can sustain good operating momentum,
maintaining debt/RMR leverage below 30x and FCF/debt approaching
2.5% or higher (Moody's adjusted, net of dividends) while
sustaining revenue growth; 3) ADT is able to lower refinancing risk
and materially diminish its 2026 maturity tower; and 4) Moody's
expects continued revenue growth on a diversifying platform, as
strategic partnerships with Google, State Farm or others help
broaden and deepen its products' and services' appeal to
customers.
The ratings could be downgraded if 1) revenue growth, attrition,
RMR, subscriber acquisition costs or other operating metrics weaken
materially, reflecting a diminished competitive profile; 2) the
company pursues more aggressive financial policies, such as
debt-funded shareholder distributions or acquisitions; 3) Moody's
expects debt/RMR to be sustained above 35x or FCF/debt to remain
below 1.0%; 4) liquidity deteriorates; or 5) refinancing risk
increases.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
ADT Inc. (NASDAQ: ADT), headquartered in Boca Raton, FL, is the
largest provider of security, interactive automation and alarm
monitoring services in the US, with about 6.7 million residential
(primarily) and business subscribers as of March 31, 2023, plus
independent security-alarm dealer customers on a wholesale basis.
The company was formed in 2016 as an Apollo-backed combination of
alarm monitors Protection 1 and The ADT Security Corporation. The
company generated $6.4 billion in revenue as of fiscal year 2022.
Assignments:
Issuer: ADT Inc.
Corporate Family Rating, Assigned B1
Probability of Default Rating, Assigned B1-PD
Speculative Grade Liquidity Rating, Assigned SGL-3
Withdrawals:
Issuer: Prime Security Services Borrower, LLC
Corporate Family Rating, Withdrawn, previously rated B1
Probability of Default Rating, Withdrawn, previously rated B1-PD
Speculative Grade Liquidity Rating, Withdrawn, previously rated
SGL-2
Affirmations:
Issuer: Prime Security Services Borrower, LLC
Senior Secured 1st Lien Bank Credit Facility, Affirmed Ba3
Senior Secured 1st Lien Regular Bond/Debenture, Affirmed Ba3
Backed Senior Secured 1st Lien Regular Bond/Debenture, Affirmed
Ba3
Senior Secured 2nd Lien Regular Bond/Debenture, Affirmed B3
Issuer: The ADT Security Corporation
Senior Secured 1st Lien Regular Bond/Debenture, Affirmed Ba3
Backed Senior Secured 1st Lien Regular Bond/Debenture, Affirmed
Ba3
Outlook Actions:
Issuer: ADT Inc.
Outlook, Changed To Positive From Rating Withdrawn
Issuer: Prime Security Services Borrower, LLC
Outlook, Remains Positive
Issuer: The ADT Security Corporation
Outlook, Remains Positive
AGEX THERAPEUTICS: Draws Down $500K Under Credit Facility
---------------------------------------------------------
AgeX Therapeutics, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that it drew $500,000 of its
credit available under the Allonge and Restated Convertible
Promissory Note as amended on June 2, 2023.
The Repayment Date on which the outstanding principal balance of
the Secured Note will become due and payable shall be Feb. 14,
2024.
About Agex Therapeutics
Headquartered in Alameda, California, AgeX Therapeutics, Inc. is a
biotechnology company focused on the development and
commercialization of novel therapeutics targeting human aging and
degenerative diseases.
Agex Therapeutics reported a net loss of $10.52 million in 2022, a
net loss of $8.68 million in 2021, a net loss of $10.97 million for
the year ended Dec. 31, 2020, and a net loss of $12.38 million for
the year ended Dec. 31, 2019.
San Francisco, California-based WithumSmith+Brown, PC, the
Company's auditor since 2017, issued a "going concern"
qualification in its report dated March 31, 2023, citing that the
Company has had recurring losses and negative operating cash flows
since inception, an accumulated deficit at Dec. 31, 2022, and
insufficient cash and cash equivalents and loan proceeds at Dec.
31, 2022 to fund operations for twelve months from the date of
issuance. All of these matters raise substantial doubt about the
Company's ability to continue as a going concern.
AHR INC: Judy Wolf Weiker Named Subchapter V Trustee
----------------------------------------------------
The U.S. Trustee for Region 10 appointed Judy Wolf Weiker of
Manewitz Weiker Associates, LLC as Subchapter V trustee for AHR
Inc.
Ms. Weiker will be paid an hourly fee of $375 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Weiker declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Judy Wolf Weiker
P.O. Box 40185
Indianapolis, IN 46240
Phone: 973-768-2735
Email: JWWtrustee@manewitzweiker.com
About AHR Inc.
AHR Inc. filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Ind. Case No. 23-02823) on June 30,
2023, with as much as $50,000 in assets and $50,001 to $100,000 in
liabilities.
Judge Robyn L. Moberly oversees the case.
Sarah L. Fowler, Esq., at Blackwell Burke and Ramsey, PC represents
the Debtor as counsel.
ALIXPARTNERS LLP: Moody's Affirms 'B1' CFR, Outlook Remains Stable
------------------------------------------------------------------
Moody's Investors Service affirmed AlixPartners, LLP B1 corporate
family rating and B1-PD probability of default rating ratings.
Moody's also affirmed the instrument ratings of the first lien
senior secured credit facilities of B1. The credit facilities
include an approximately $2,150 million USD term loan due 2028, a
$360 million EUR term loan due 2028 and a $170 million revolving
facility due 2026. The rating outlook remains stable. The company
is a global provider of business consulting services.
These ratings actions follow the issuance of $375 million of
incremental USD term loans, proceeds of which will be used to fund
a distribution to equity holders and fund acquisitions. Moody's
expects that the additional debt will increase debt-to-EBITDA
leverage to approximately 6.1x on a pro forma basis, from 5.2x as
of the end of March 2023. However, Moody's expects leverage to
decline to around 5.1x by the end of this year, driven by continued
strength in the turnaround and restructuring segment and growth in
the performance consulting and digital segments. Although free cash
flow will be limited this year, Moody's expects that AlixPartners
will be able to generate cash flow that will lead to free cash flow
to debt in the mid to high single digit range going forward.
Affirmations:
Issuer: AlixPartners, LLP
Corporate Family Rating, Affirmed B1
Probability of Default Rating, Affirmed B1-PD
Senior Secured 1st Lien Bank Credit Facility, Affirmed B1
Outlook Actios:
Issuer: AlixPartners, LLP
Outlook, Remains Stable
RATINGS RATIONALE
The ratings reflect AlixPartners': 1) established market position
within the US across its client base and track record in creating
revenue growth; 2) diversified and highly specialized business
practices that are well positioned for growth; 3) cash generative
model and ability to reduce leverage; 4) stable EBITDA margins
through the cycle supported by a balanced business profile that
includes a mix of cyclical, non-cyclical and counter-cyclical
businesses. Moody's assumes that the company will reduce
debt-to-EBITDA leverage to around 5.1x by year-end 2023.
The ratings also reflects the company's: 1) aggressive financial
policies as evidenced by frequent sizeable debt funded shareholder
distributions, 2) high leverage and low free cash flow to debt
expected for this year; 3) reliance on attraction and retention of
key staff; and 4) lack of recurring revenue with reliance on
winning repeat business with new and existing customers. Moody's
expects special distributions will continue on an opportunistic
basis and expects the company to be prudent with financial policy
during times of constrained revenue growth. The company has a
stated leverage ceiling and Moody's does not expect leverage to
rise above that level.
The stable outlook reflects Moody's expectation that the company
will maintain its solid market position with clients and continue
to achieve revenue growth and stable or improving margins. The
outlook also incorporates the view that the company will be able to
build upon successful engagements with clients that will help in
winning bids and cross selling expertise for future engagements
with new and existing clients. Moody's expects the strategic
initiatives undertaken by the company will result in increased
earnings and international expansion will diversify the business.
It also assumes that employee turnover rates will remain stable.
The stable outlook incorporates the view that AlixPartners' clients
generally will not need to pull back on spending for consulting
projects and will maintain their budgets for projects. The
restructuring advisory market is expected to remain strong over the
next 12-18 months given the interest rate environment and economic
uncertainty in the US and elsewhere. If interest rates decline
there may be less of a need for restructuring advisory, however
that is not Moody's current base case. Moreover, the outlook
assumes that the company will continue to reduce leverage as the
earnings base increases, with free cash flow to debt improving to
the mid to high single digit area over the next two years, both on
a Moody's-adjusted basis. In addition, the stable outlook assumes
that distributions may be made from time to time to retain senior
talent as part of compensation. Additional debt funded special
distributions such as the current one contemplated are not assumed
to happen in the next two years. Additionally, no debt funded M&A
activity beyond the current acquisitions identified are assumed in
Moody's outlook.
Moody's expects that AlixPartners will maintain good liquidity
supported by its cash balance of $104 million (which is largely
earmarked for accrued bonuses) as of the end of May 2023, access to
the $170 million revolving credit facility maturing in 2026 that
had no debt as of the end of May 2023 and free cash flow
generation. Free cash flow to debt is projected to be around 3% in
2023 as a result of the distribution contemplated and Moody's
expects free cash flow to be at least $300 million before
distributions. Moody's expects that the company will execute
strategic bolt-on acquisitions that would be funded primarily with
internally generated cash.
The ratings for the individual debt instruments incorporate
AlixPartners' overall probability of default, reflected in the
B1-PD, and the loss given default assessments for the individual
instruments. AlixPartners' approximately $2.5 billion (including
the incremental amount contemplated) first lien term loan due 2028
and $170 million first lien revolving credit facility expiring in
2026 are secured by substantially all domestic assets of the
borrower (AlixPartners, LLP) and its guarantors (represented by
holding companies and the company's domestic subsidiaries and 65%
of capital stock of foreign subsidiaries). The first lien term loan
will consist of a $2.150 billion USD term loan tranche and a USD
$360 million Euro term loan tranche both with the same maturity
dates. The B1 rating on the first lien credit facilities, at the
same level with the CFR, reflects the capital structure that is
entirely composed of this class of debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company demonstrates a
commitment to more conservative financial policies, sustains its
Moody's adjusted debt-to-EBITDA below 5.0x and EBITDA-less-capex to
interest above 2.5x.
The ratings could be downgraded if the company experiences
declining revenues and operating margins or high employee turnover
rates. Debt-financed dividends or acquisitions causing adjusted
debt-to-EBITDA to increase above 7.0x and EBITDA-less-capex to
interest to decline below 1.5x, or a material weakening in
liquidity could also pressure the ratings.
AlixPartners, LLP is a global provider of a broad range of
consulting services, including Performance Improvement, Risk,
Digital, and Turnaround & Restructuring. The company operates 24
offices located in the Americas, Europe, the Middle East and Asia.
Since January 2017, AlixPartners' owners include the company's
founder Jay Alix, a group of investors composed of CDPQ, PSP
Investments, and Investcorp, and its existing Managing Directors.
For the LTM period ended March 31, 2023, AlixPartners generated
revenues of approximately $1.7 billion.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
AMERICAN AIRLINES: S&P Rates 2013-1A Trust Certs Rating 'B-'
------------------------------------------------------------
S&P Global Ratings raised its issue-level ratings on several
American Airlines Group Inc. subsidiary American Airlines Inc.'s
(American) enhanced equipment trust certificates (EETC). S&P raised
its issue-level ratings on six of the company's EETCs due to
stronger-than-expected collateral coverage that followed updated
collateral appraisals, in tandem with scheduled debt amortization.
The resulting improvement in loan-to-values (LTVs) of these
instruments translated into higher collateral credit scores and
ratings. S&P affirmed the remaining American EETC issues that it
rate.
Table 1
American Airlines EETC Ratings Raised
COLLATERAL CREDIT ISSUE RATING
ISSUER ISSUE TO FROM TO FROM
American Airlines Inc. 2016-2A 2 1 BB+ BB
American Airlines Inc. 2016-3A 3 2 BBB- BB+
American Airlines Inc. 2016-3B 1 0 B+ B
American Airlines Inc. 2019-1AA 6 5 A A-
American (US Airways) 2012-2A 3 2 BB+ BB
American (US Airways) 2013-1A 4 2 BBB- BB
EETC--Enhanced equipment trust certificates.
Source: S&P Global Ratings.
Improvement in collateral coverage followed the stabilization of
the current market value of certain aircraft models. Narrow-body
aircraft--notably Boeing 737-800 and Airbus 321-200--account for
the largest share of collateral value for the EETC ratings that we
raised. However, certain wide-body aircraft--notably Boeing
787–8/9--were also significant contributors. S&P attributes the
stabilization in market values to the indisputable improvement in
aircraft supply/demand fundamentals. Domestic passenger traffic has
recovered to pre-pandemic levels and the mainline U.S. airlines
target material capacity expansion at least through this year. In
addition, S&P expects rebounding long-haul international traffic
will be a key source of growth for airlines globally this year and
strengthen demand for wide-body aircraft that were subject to
materially weaker valuations during the pandemic. Moreover, robust
demand has coincided with the well-documented delay of new aircraft
deliveries by Boeing and Airbus (mainly due to supply chain
disruptions). While airlines are intent on expanding their fleets
with more efficient and lower emission new aircraft, production
disruptions amid passenger traffic expansion appear to have
supported older aircraft valuations.
S&P said, "Our analysis of EETCs typically starts with our issuer
credit rating (ICR) on the airline that operates the aircraft. It
adds any applicable notches for the likelihood that an airline will
successfully reorganize in bankruptcy and continue to make payments
on the EETC (which we call "affirmation credit"). We may adjust--by
reducing those notches--for any adverse legal considerations that
may arise from the jurisdiction in which the airline operates. For
EETCs, we may also add notches for the likelihood that repossession
and sale of the aircraft collateral will be sufficient to repay
principal and accrued interest, avoiding a default, if the airline
does not reorganize or rejects the aircraft securing the
certificates (which we call "collateral credit"). Various other,
more specialized aspects, such as ratings of the liquidity provider
for an EETC, can also affect the rating outcome.
Table 2 shows the principal elements of S&P's analysis of the
EETCs. S&P said, "We did not change our affirmation credit for
American's EETCs, including those instruments that were subject to
a higher rating. The total number of notches of uplift above the
ICR is equal in all cases to the sum of the affirmation credit,
collateral credit, and, in one case, a comparable ratings analysis
adjustment. However, under our criteria, this is not always the
case because other factors can affect the rating outcome."
Table 2
American Airlines EETC Rating Elements
AFFIRMATION CRA TOTAL
CREDIT NOTCHING
ISSUER ISSUE COUPON AIRLINE COLLATERAL ISSUER
ICR CREDIT RATING
American
Airlines
Inc. 2013-1A 4 B- 0 0 -- 0 B-
American
Airlines
Inc. 2014-1A 3.7 B- 4 0 -- 4 BB
American
Airlines
Inc. 2015-1A 3.38 B- 4 0 +1 5 BB+
American
Airlines
Inc. 2015-2AA 3.6 B- 4 5 -- 9 A-
American
Airlines
Inc. 2015-2A 4 B- 3 1 -- 4 BB
American
Airlines
Inc. 2015-2B 4.4 B- 1 0 -- 1 B
American
Airlines
Inc. 2016-1AA 3.58 B- 4 5 -- 9 A-
American
Airlines
Inc. 2016-1A 4.1 B- 3 2 -- 5 BB+
American
Airlines
Inc. 2016-1B 5.25 B- 1 0 -- 1 B
American
Airlines
Inc. 2016-2AA 3.2 B- 4 5 -- 9 A-
American
Airlines
Inc. 2016-2A 3.65 B- 3 2 -- 5 BB+
American
Airlines
Inc. 2016-2B 4.38 B- 1 0 -- 1 B
American
Airlines
Inc. 2016-3AA 3 B- 4 6 -- 10 A
American
Airlines
Inc. 2016-3A 3.25 B- 3 3 -- 6 BBB-
American
Airlines
Inc. 2016-3B 3.75 B- 1 1 -- 2 B+
American
Airlines
Inc. 2019-1AA 3.15 B- 4 5 -- 9 A-
American
Airlines
Inc. 2019-1A 3.5 B- 3 2 -- 5 BB+
American
Airlines
Inc. 2019-1B 3.85 B- 1 0 -- 1 B
American
Airlines
Inc. 2021-1A 2.875 B- 4 5 -- 9 A-
American
Airlines
Inc. 2021-1B 3.95 B- 3 2 -- 5 BB+
American
(US
Airways) 2011-1A 7.13 B- 2 3 -- 5 BB+
American
(US
Airways) 2012-1A 5.9 B- 4 4 -- 8 BBB+
American
(US
Airways) 2012-2A 4.63 B- 2 3 -- 5 BB+
American
(US
Airways) 2013-1A 3.95 B- 2 4 -- 6 BBB-
EETC--Enhanced equipment trust certificates.
Source: S&P Global Ratings.
ARIEL LLC: Seeks to Hire Law Offices of Louis S. Robin as Counsel
-----------------------------------------------------------------
Ariel LLC seeks approval from the U.S. Bankruptcy Court for the
District of Massachusetts to hire the Law Offices of Louis S. Robin
to serve as legal counsel in its Chapter 11 case.
The firm's services include:
(a) drafting the Debtor's motions and orders concerning
necessary pleadings to continue its Chapter 11 case;
(b) assisting the Debtor in the resolution of its financial
problems and the implementation of a plan of reorganization;
(c) providing legal advice with respect to the powers and
duties of the Debtor in the continued operation of its business;
(d) assisting the Debtor in compliance with the requirements
of the Office of the U.S. Trustee;
(e) preparing legal documents; and
(f) performing other related legal services for the Debtor.
The Law Offices of Louis S. Robin will charge $300 per hour for its
services. The firm received $3,250 as a retainer.
As disclosed in court filings, the Law Offices of Louis S. Robin
does not represent any interest adverse to the Debtor or its
estate.
The firm can be reached through:
Louis S. Robin, Esq.
Law Offices of Louis S. Robbin
1200 Converse Street
Longmeadow, MA 01106
Tel: (413) 567-3131
Fax: (413) 565-3131
Email: lous.robin.bankruptcy@gmail.com
About Ariel LLC
Ariel LLC owns family rental and commercial rental properties in
Massachusetts having a total value of $2.2 million.
Ariel LLC filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Mass. Case No. 23-40509) on June
26, 2023, with $1,216,000 in assets and $1,940,000 in liabilities.
Miguel B. Aguilo, manager, signed the petition.
Judge Elizabeth D. Katz presides over the case.
Louis S. Robin, Esq., at the Law Offices of Louis S. Robin is the
Debtor's bankruptcy counsel.
ATLANTIC RADIO: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Atlantic Radio Telephone, Inc.
2495 NW 35th Avenue
Miami, FL 33142
Business Description: Atlantic Radio provides communication and
navigation solutions to individuals and
organizations who find themselves "off the
grid." With locations in Miami and Fort
Lauderdale, Florida, Atlantic Radio
provides sales, support, installation,
integration and repair services to customers
located around the world in industries
including: maritime, military, first
responders, utilities, aviation, education
and research, travel and tourism and more.
Chapter 11 Petition Date: July 13, 2023
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 23-15483
Judge: Hon. Laurel M. Isicoff
Debtor's Counsel: Michael D. Seese, Esq.
SEESE, P.A.
101 N.E. 3rd Avenue
Suite 1500
Fort Lauderdale, FL 33301
Tel: 954-745-5897
Email: mseese@seeselaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Conrad J. Webber, Jr., 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/CF6S34A/Atlantic_Radio_Telephone_Inc__flsbke-23-15483__0003.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/RNBFKWQ/Atlantic_Radio_Telephone_Inc__flsbke-23-15483__0001.0.pdf?mcid=tGE4TAMA
AVENIR MEMORY: Susan Goodman Submits First PCO Report
-----------------------------------------------------
Susan Goodman, the patient care ombudsman, filed with the U.S.
Bankruptcy Court for the District of Arizona her first report
regarding the quality of patient care provided at Avenir Memory
Care @ Fayetteville LP's assisted care living facility.
At the time of PCO's site visit, the facility census was 45 with 44
residents in house. Brighton Hall was full, Crystal had 17
residents, and Aspen had 10 residents.
Leadership staff who were in house at the time of the PCO's site
visit included the following roles: Executive Director/Business
Office, Nursing, Regional Nursing, Facilities, Activities, Kitchen,
and Sales/Marketing. In addition, direct care staff included: two
LPNs, three CNAs, and one PCA. Accordingly, the PCO did not note
staffing concerns.
The PCO met with the facilities manager to review documentation
associated with life safety (largely focused on minimizing fire
hazards and providing a system of safety in case of fire),
environment of care, and maintenance topics. There was a
post-petition gap in landscape maintenance services due to
pre-bankruptcy balances, otherwise vendor challenges were denied,
and maintenance documentation was current.
The PCO toured the kitchen and spent time interacting with the two
dietary team members (the manager and the cook). She noted
temperature logs associated with food preparation and storage. Menu
posting was noted in the eating areas. Ample dry stock,
refrigerated and frozen food supplies were noted.
Ms. Goodman did not observe negative bankruptcy impacts as
contemplated under Section 333(b) of the Bankruptcy Code during the
initial site visit. The recent resignations are concerning,
particularly relative to clinical leadership given the number of
weekend nursing shifts that were filled by the DHOS.
Further, while the Regional DHOS is engaged to assist the facility,
such assistance is additional to the other regional
responsibilities and may not include weekend shift coverage,
according to the ombudsman report.
A copy of the ombudsman report is available for free at
https://urlcurt.com/u?l=NFAKxy from PacerMonitor.com.
The ombudsman may be reached at:
Susan N. Goodman, RN JD
Pivot Health Law
P.O. Box 69734
Oro Valley, AZ 85737
Phone: (520) 744-7061
Fax: (520) 575-4075
Email: sgoodman@pivothealthaz.com
About Avenir Memory Care @ Fayetteville
Avenir Memory Care @ Fayetteville, LP operates a nursing care
facility in Scottsdale, Ariz.
Avenir Memory Care @ Fayetteville filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz.
Case No. 23-02640) on April 25, 2023, with $10 million to $50
million in both assets and liabilities. Judge Brenda Moody Whinery
presides over the case.
Philip R. Rudd, Esq., at Sacks Tierney, P.A. represents the Debtor
as counsel.
Susan N. Goodman is the patient care ombudsman appointed in the
Debtor's Chapter 11 case.
AZALEA TOPCO: S&P Alters Outlook to Negative, Affirms 'B-' ICR
--------------------------------------------------------------
S&P Global Ratings revised its rating outlook on U.S.-based Azalea
TopCo Inc.'s (d/b/a Press Ganey) to negative from stable and
affirmed its 'B-' issuer credit rating. At the same time, S&P
affirmed its 'B-' issue-level rating on its first-lien debt. The
'3' recovery rating is unchanged, indicating its expectation for
meaningful (50%-70%; rounded estimate: 50%) recovery in a payment
default.
The negative outlook reflects the possibility that FOCF could be
depressed over the next couple of years, leading S&P's to view the
capital structure as unsustainable.
U.S.-based Azalea TopCo Inc.'s (d/b/a Press Ganey) first-quarter
results were below our expectations due to faster realization of
integration costs and slower-than-expected ramp-up of its recently
acquired Forsta business.
S&P said, "The outlook revision reflects weaker than expected
operating performance in the first quarter of 2023, leading to our
expectation for negative FOCF this year. Press Ganey reported
weaker-than-expected margins during the first quarter of 2023 as it
integrated the lower-margin Forsta business and fast-tracked
associated integration expenses including reducing its workforce
and third-party vendor costs. At the same time, the company has yet
to fully realize potential growth from the acquired Forsta
business, especially in the non-health care segment. As a result,
we expect a lower S&P Global Ratings-adjusted EBITDA margin
(burdened by capitalized development costs) of 24%-27% in fiscal
2023, compared to our prior expectation of about 33%. While we
believe margins will improve in the latter half of 2023 as
integration costs roll off, we now expect a reported FOCF deficit
of about $15 million-$20 million in 2023, improving to about
break-even in 2024. This compares to our prior expectation for
minimal FOCF in 2023, improving to the $10 million-$20 million
range in 2024.
"While we expect results to improve in the back half of 2023, there
is limited cushion for underperformance. Press Ganey is focused on
integrating the Forsta acquisition, and is fast-tracking
integration costs to realize synergies earlier. The company expects
to realize about $50 million in annual run-rate synergies, with a
cost to achieve them of about $45 million. As integration-related
costs come down in the second half, we expect sequential earnings
improvement. Nevertheless, we believe execution risk associated
with the integration could keep FOCF negative for longer than we
expect. However, assuming a successful integration, we view the
acquisition favorably since it will help Press Ganey maintain its
market position by adding a software platform it can integrate with
its core legacy business, providing customers with better
accessibility to data and more actionable insights. Moreover, the
highly subscription-based and contractual nature of Press Ganey's
business offers good visibility into top-line performance. As such
we believe that solid booking trends in the back half of 2022 and
first quarter of 2023 should contribute to improved earnings as the
year progresses.
"Press Ganey's aggressive growth strategy amid an intensifying
competitive environment could put further pressure on credit
metrics. The company's platform strategy is focused on integrating
consumer, employee and health plan member experience, along with
quality and safety performance with its core patient experience
customers (currently accounting for about 45%-50% of total revenue
compared to about 80% in 2019). Over the last few years Press Ganey
has expanded its breadth of solutions through acquisitions, which
have provided additional opportunity to penetrate its existing
clients. In doing so, the company has grown its addressable market,
and in our view, has improved the stickiness of its customer base.
At the same time, the health care customer experience and analytics
market is becoming increasingly competitive because of the entrance
of lower-cost providers and large tech companies. As this trend
continues, we expect Press Ganey will invest heavily to expand its
platform strategy with continued spending on capitalized software
or mergers and acquisitions, such as the Forsta acquisition. While
the acquisitions should help diversify the business and improve its
cross-selling ability, they carry significant integration risks,
and the expected benefits may take time to accrue. Furthermore,
price concessions offered through the COVID-19 pandemic have come
down significantly. Therefore, to help support its market position,
it must ensure that the continued investments in M&A and
capitalized software add incremental value to its clients and help
drive actionable insights.
"Press Ganey's leading market position in its core health care
business, subscription nature of its business, long-standing client
relationships, and strong market share provides a solid base. Press
Ganey has been the largest player in the patient experience market
for many years, which highlights the importance of its real-time
measurement's actionable improvement opportunities. Its business
strength also reflects the main health care survey product's
above-average EBITDA margins, strong brand awareness, high client
retention rates (about 98%), good revenue visibility from multiyear
contracts, and a diverse customer base with no single client
accounting for more than 3% of total revenue. We believe Press
Ganey's main competitive advantage is its proprietary health care
provider survey data extending over 30 years. The extensive data
allows for deeper analysis over time to provide more actionable
insights than competitors. Over time, we believe competitors could
erode this advantage, highlighting the importance of Press Ganey's
diversification and cross-selling strategy.
"The negative outlook reflects the possibility that FOCF could be
depressed over the next couple of years, leading us to view the
capital structure as unsustainable. This incorporates our
expectation for continued performance in its core business and its
ability to maintain its leading position.
"We could lower our rating on Press Ganey if the company's FOCF
cannot cover fixed charges, including debt amortization on a
sustained basis. We believe this could occur due to an unexpected
setback in integrating its recent large acquisitions or an erosion
of the company's market share, resulting in materially weaker
performance than our current base case.
"We could revise the outlook to stable if the company successfully
integrates its recent acquisitions in line with our expectations
and improves profitability by generating sustained positive FOCF
sufficient to cover its fixed charges, including debt
amortization."
ESG credit indicators: E-2, S-2, G-3
BASIC WATER: $8M Sale to Precision Castparts to Fund Plan
---------------------------------------------------------
Basic Water Company and Basic Water Company SPE 1, LLC, filed with
the U.S. Bankruptcy Court for the District of Nevada a Disclosure
Statement for the Joint Plan of Reorganization dated July 10,
2023.
From the 1950s until shortly before the Petition Date, the Debtors
and their predecessors drew Colorado River water from Lake Mead and
transported it across approximately 16.6 miles of pipeline for
delivery t, the City of Henderson, Nevada and certain industrial
plants in what is now known as the Black Mountain Industrial
Complex in eastern Henderson, Nevada.
The industrial plants (the "Industries") currently consist of
Titanium Metals Corporation ("TIMET"), a subsidiary of the Buyer,
EMD Acquisition LLC dba Borman Specialty Materials ("Borman"),
Lhoist North America of Arizona, Inc. ("Lhoist"), and Pioneer
Americas LLC dba Olin Chlor Alkali Products ("Olin").
Due to the unique and complex nature of the Debtors' assets and the
contracts involved in the operation of the Water System and
delivery of water, the Debtors have long sought to complete a sale
of their assets to a party seeking a comprehensive solution to the
Industries' water delivery problem. When those efforts did not bear
fruit during the first months of the Chapter 11 Cases, the Debtors
filed their motion for approval of bidding procedures and an
auction process without a stalking horse bid on December 16, 2022.
The Debtors negotiated with Precision Castparts Corp. (the "Buyer")
for the purchase and sale of all of the Debtors' assets. On May 25,
2023, the Debtors entered into the following purchase agreements
(collectively, the "Purchase Agreements") with the Buyer: (i)
Purchase and Sale Agreement & Escrow Instructions for the sale of
real property assets (as may be amended, supplemented, or modified,
the "Real Estate Purchase Agreement"); and (ii) Purchase and Sale
Agreement & Escrow Instructions for the sale of non-real property
assets (as may be amended, supplemented, or modified, the "Water
System Purchase Agreement").
The Purchase Agreements proposed to sell all of the Debtors' Assets
to the Buyer, including the Real Property and the Water System,
free and clear of all liens, claims, encumbrances and interests,
for a total purchase price of: (i) $8 million in cash; and (ii) the
Debtors' receiving releases of claims from the Industries under the
Industry Water Delivery Contracts (collectively, the "Purchase
Price"). In turn, the Buyer will be entering into new water
delivery contracts with the Industries.
On June 16, 2023, the Debtors filed their Motion to Approve Sale of
Assets Free and Clear of Liens, Claims, Interests and Encumbrances
and Assumption and Assignment of Executory Contracts (the "Sale
Motion") to obtain Court approval of the Purchase Agreements and
the sale of Assets to the Buyer. The Sale Motion is currently set
for hearing on July 17, 2023.
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) allow the
Debtors to sell their Assets for the highest and best value in
order to maximize distributions to creditors and parties-in
interest. The Debtors believe the sale of the Assets to the Buyer
for the Purchase Price is the highest and best value, and will
distribute the resulting proceeds.
Class 3(a) consists of General Unsecured Claims Against BWC. On or
as soon as practicable following the Plan Effective Date, each
holder of an Allowed Class 3(a) General Unsecured Claim against BWC
shall receive its pro rata portion of the Net Sale Proceeds from
the Sale of the Debtors' Assets in full satisfaction of its Allowed
Class 3(a) General Unsecured Claim against BWC. The allowed
unsecured claims total $2,183,073.00. This Class is impaired.
Class 3(b) consists of General Unsecured Claims Against SPE. On or
as soon as practicable following the Plan Effective Date, each
holder of an Allowed Class 3(b) General Unsecured Claim against SPE
shall receive its pro rata portion of the Net Sale Proceeds from
the Sale of the Debtors' Assets in full satisfaction of its Allowed
Class 3(b) General Unsecured Claim against SPE The allowed
unsecured claims total $727,552.00. This Class is impaired.
All existing Equity Interests in BWC shall be retained and holders
of such Equity Interests in BWC shall receive their pro rata
portion of the New Equity Interests in the Reorganized BWC.
All existing Equity Interests in SPE shall be retained and holders
of such Equity Interests in SPE shall receive their pro rata
portion of the New Equity Interests in the Reorganized SPE.
As discussed in detail in Section III(E) of the Disclosure
Statement and as described in Article V, Section B pursuant to
sections 1123 and 1124 of the Bankruptcy Code and Bankruptcy Rule
9019, and in consideration for the classification, Distributions,
and other benefits provided under the Plan, and as a result of
arms' length negotiations among the Debtors and their creditors,
upon the Effective Date, the provisions of the Plan shall
constitute a good faith compromise and settlement of all Claims and
Equity Interests and controversies resolved pursuant to the Plan.
Solely to the extent otherwise necessary, Confirmation of the Plan
also cures defaults under all prepetition contracts paid or
maintained pursuant to this Plan, in accordance with section 1124
of the Bankruptcy Code.
A full-text copy of the Disclosure Statement dated July 10, 2023 is
available at https://urlcurt.com/u?l=QNPtrB from Stretto, Inc.,
claims agent.
Attorneys for the Debtors:
Samuel A. Schwartz, Esq.
Gabrielle A. Hamm, 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 Basic Water Company
Basic Water Company, a water utility company in Nevada, and
affiliate Basic Water Company SPE 1, LLC sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Nev. Lead Case
No. 22-13252) on Sept. 10, 2022. In their petitions, Basic Water
Company listed $10 million to $50 million in assets and $1 million
to $10 million in liabilities while SPE 1 listed as much as $50
million in both assets and liabilities. Stephanne A. Zimmerman,
president, signed the petitions.
Judge Mike K. Nakagawa oversees the cases.
The Debtors tapped Samuel A. Schwartz, Esq. at Schwartz Law, PLLC
as legal counsel, and Force 10 Partners, LLC as financial advisor.
Stretto, Inc. is the claims, noticing and solicitation agent.
BISHOP OF OAKLAND: Committee Gets OK to Hire Lowenstein as Counsel
------------------------------------------------------------------
The official committee of unsecured creditors of the Roman Catholic
Bishop of Oakland received approval from the U.S. Bankruptcy Court
for the Northern District of California to employ Lowenstein
Sandler, LLP as its lead counsel.
The committee requires legal counsel to:
(a) give advice with respect to the rights, duties and powers
of the committee in the Debtor's Chapter 11 case;
(b) assist and advise the committee in its consultations and
communications with the Debtor concerning administration of the
case;
(c) assist the committee in analyzing the claims of creditors,
including negotiating and mediating issues relating to the value
and payment of claims held by the committee's constituency;
(d) assist the committee in analyzing the Debtor's capital
structure;
(e) assist the committee in its investigation of the acts,
conduct, assets liabilities, and financial condition of the Debtor
and of the operation of the Debtor;
(f) assist the committee in its investigation of the liens and
claims of the holders of the Debtor's pre-bankruptcy debt and the
prosecution of any claims or causes of action revealed by such
investigation;
(g) assist the committee in its analysis of, and negotiations
with, the Debtor or any third party concerning matters related to,
among other things, the assumption or rejection of certain leases
of nonresidential real property and executory contracts, asset
dispositions, financing of other transactions and the terms of any
Chapter 11 plans for the Debtor and accompanying disclosure
statements and related plan documents;
(h) assist the committee in its analysis of insurance policies
procured by the Debtor and negotiations with insurers;
(i) assist and advise the committee as to its communications
to unsecured creditors regarding significant matters in the Chapter
11 case;
(j) represent the committee at hearings and other
proceedings;
(k) review and analyze applications, orders, statements of
operations, and schedules filed with the court and advise the
committee as to their propriety;
(l) assist the committee in preparing pleadings; and
(n) perform other necessary legal services.
Lowenstein's customary hourly rates are as follows:
Partners $690 - $1,835
Of Counsel $810 - $1,475
Senior Counsel and Counsel $630 - $1,410
Counsel $575 - $1,070
Associates $475 - $965
Paralegals and Assistants $240 - $425
The firm agreed to discount its partner rates by 10 percent.
In addition, the firm will seek reimbursement for expenses
incurred.
Jeffrey Prol, Esq., a partner at Lowenstein, disclosed in a court
filing that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
Lowenstein provided the following in response to the request for
additional information contained in paragraph D.1. of the U.S.
Trustee Guidelines:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: Yes. Lowenstein agreed to discount its partner rates by
10 percent.
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 period. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Response: Lowenstein did not represent the committee prior to the
petition date.
Question: Has your client approved your prospective budget and
staffing plan and, if so, for what budget period?
Response: The committee reviewed and approved Lowenstein's
proposed hourly billing rates, budget and staffing plan for the
first three months of the case.
As disclosed in court filings, Lowenstein is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Jeffrey D. Prol, Esq.
Lowenstein Sandler, LLP
One Lowenstein Drive
Roseland, NJ 07068
Tel: (973) 597-2500
Fax: (973) 597-2400
Email: jprol@lowenstein.com
About The Roman Catholic Bishop of Oakland
The Roman Catholic Bishop of Oakland, a tax-exempt religious
organization, sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Calif. Case No. 23-40523) on May 8,
2023. In the petition signed by Bishop Michael Charles Barber, the
Debtor disclosed $100 million to $500 million in both assets and
liabilities.
Judge William J. Lafferty oversees the case.
The Debtor tapped Foley & Lardner LLP as legal counsel and Alvarez
& Marsal North America, LLC as restructuring advisor. Kurtzman
Carson Consultants LLC is the Debtors' claims and noticing agent
and administrative advisor.
The U.S. Trustee for Region 17 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case. The
committee is represented by Lowenstein Sandler, LLP.
BROOKLYN STANDARD: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: The Brooklyn Standard IX LLC
26 Saint Felix St
Brooklyn, NY 11217-1206
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: July 12, 2023
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 23-42455
Judge: Hon. Jil Mazer-Marino
Debtor's Counsel: Kevin J. Nash, Esq.
GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP
125 Park Ave Fl 12
New York, NY 10017-5690
Tel: (212) 221-5700
Email: knash@gwfglaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Robert Cadoch as manager.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/YQ7TEHA/The_Brooklyn_Standard_IX_LLC__nyebke-23-42455__0001.0.pdf?mcid=tGE4TAMA
BROW BAR: Judy Wolf Weiker Named Subchapter V Trustee
-----------------------------------------------------
The U.S. Trustee for Region 10 appointed Judy Wolf Weiker of
Manewitz Weiker Associates, LLC as Subchapter V trustee for Brow
Bar Inc.
Ms. Weiker will be paid an hourly fee of $375 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Weiker declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Judy Wolf Weiker
P.O. Box 40185
Indianapolis, IN 46240
Phone: 973-768-2735
Email: JWWtrustee@manewitzweiker.com
About Brow Bar
Brow Bar, Inc. filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. S.D. Ind. Case No. 23-02821) on June
30, 2023, with as much as $50,000 in assets and $100,001 to
$500,000 in liabilities.
Judge Robyn L. Moberly oversees the case.
Sarah L. Fowler, Esq., at Blackwell Burke and Ramsey, PC represents
the Debtor as counsel.
CAPTAIN CORPORATION: Gina Klump Named Subchapter V Trustee
----------------------------------------------------------
The U.S. Trustee for Region 17 appointed Gina Klump, Esq., a
practicing attorney in Petaluma, Calif., as Subchapter V trustee
for Captain Corporation.
Ms. Klump will be paid an hourly fee of $480 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Klump declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Gina Klump
11 5th Street, Suite 102
Petaluma, CA 94952
Phone: (707) 778-0111
Email: gklump@klumplaw.net
About Captain Corporation
Captain Corporation is engaged in activities related to real
estate. It owns a property located at 30 Falkirk Lane,
Hillsborough, Calif., valued at $6 million.
Captain Corporation filed Chapter 11 petition (Bankr. N.D. Calif.
Case No. 23-30421) on June 28, 2023, with $6,000,016 in assets and
$5,218,557 in liabilities. Shirlin Wong, president, signed the
petition.
Judge Dennis Montali oversees the case.
Stephen D. Finestone, Esq., at Finestone Hayes, LLP represents the
Debtor as counsel.
CASA SYSTEMS: Moody's Rates New Sr. Superpriority Term Loan 'Caa1'
------------------------------------------------------------------
Moody's Investors Service rated Casa Systems, Inc.'s new senior
secured superpriority term loan due 2027 (Superpriority Term Loan)
at Caa1. Casa's other ratings and stable outlook are unchanged.
Assignments:
Issuer: Casa Systems, Inc.
Senior Secured Bank Credit Facility, Assigned Caa1
RATINGS RATIONALE
The Caa1 CFR reflects Casa's high financial leverage due to the
depressed revenues, which has resulted in negative EBITDA (Moody's
adjusted) for the twelve months ended March 31, 2023. Casa's small
revenue scale also negatively impacts the credit profile, since it
magnifies the impact of the cyclical infrastructure spending
pattern of Casa's large customers, causing revenue volatility
within segments. For the quarter ended March 31, 2023, Casa's
revenues declined 30% compared to the same quarter in the prior
year due to weak demand and delayed customer orders across
segments, with product revenue down 33% and service revenues down
15%. Due to the weak revenue, profitability has eroded, with
negative EBITDA and cash consumption during the quarter.
The closing of the debt exchange on June 15, 2023 included the use
of $40 million of balance sheet cash to pay down the Superpriority
Term Loan balance at closing. Although this reduced starting
balance on the Superpriority Term Loan reduces the interest
expense, the higher interest rate relative to the senior secured
term loan due December 2023 (Existing Term Loan) burdens cash flow.
Nevertheless, Moody's expects that Casa will progress to breakeven
free cash flow (FCF) later in 2023, reflecting increasing revenues
and the operating expense benefits of the reduction-in-force
actions taken in April 2023.
The stable outlook reflects Moody's expectation that Casa will
consume cash over the next quarter or two as Casa progresses to a
breakeven quarterly FCF later in 2023 due to a growing revenue base
and reduced operating expenses following April's
reduction-in-force. Although Moody's expects that Casa will consume
cash over the near term, the company has adequate liquidity given
the cash balance. Casa had cash of $112.5 million as of March 31,
2023 ($72.5 million proforma for the $40 million loan repayment
following closing of the debt exchange). With the improving cash
flow, the ratio of FCF to debt (Moody's adjusted) will increase
toward the low single digit percent level over the next 12 to 18
months.
The Caa1 rating on the Superpriority Term Loan reflects the
seniority of this debt instrument in the capital structure. The
rating also reflects the debt's seniority in the collateral package
relative to the Existing Term Loan and the loss absorption provided
by the unsecured liabilities. Collateral includes a first priority
interest in Casa's assets and those of certain of its subsidiaries,
and a stock pledge of certain other subsidiaries. The Caa3 rating
of the Existing Term Loan reflects this debt's contractual
subordination to the Superpriority Term Loan. The Superpriority
Term Loan holds a first priority interest in Casa's assets and
those of certain of its subsidiaries, and a stock pledge of certain
other subsidiaries.
Casa's Speculative Grade Liquidity (SGL) rating of SGL-3 reflects
the company's adequate liquidity. Casa had cash of $112.5 million
as of March 31, 2023 ($72.5 million proforma for the $40 million
loan repayment following closing of the debt exchange). For the
full year 2023, Moody's expects that Casa will consume cash of $10
million to $15 million due to weak demand and the impact of the
higher interest expense on the Superpriority Term Loan following
closing. This will be partially offset by the anticipated
improvement in operating expenses following the reduction-in-force
actions taken in April. Thus, Moody's anticipate that FCF will
improve to a breakeven run rate by the third quarter of 2023.
Casa does not have a revolving credit facility to provide an
alternative source of liquidity. The Superpriority Term Loan is
governed by a single financial maintenance covenant: minimum
liquidity. The financial maintenance covenant will be tested
monthly and on November 15, 2023 and December 10, 2023.
Casa's ESG Credit Impact Score is CIS-5. This reflects governance
risks as indicated by the G-5 governance score. Governance risks
include an aggressive financial policy that has resulted in the
high financial leverage and the recently closed debt exchange
transaction, which Moody's views as a distressed exchange.
Governance risks also include a concentrated ownership and risks
related to weaknesses in internal control over financial reporting
as noted in the 2022 Form 10K dated March 15, 2023. Environmental
risks as indicated by the E-3 environmental score, reflect the
longer-term environmental risks of Casa's manufacturing partners.
The S-3 social score reflect Casa's dependence on highly skilled
technical and engineering talent characteristic of the
Semiconductor & Technology Hardware sector broadly.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if:
-- Casa demonstrates consistent revenue growth and sustained free
cash flow
-- Free cash flow (FCF) to debt (Moody's adjusted) is maintained
above 5%
The ratings could be downgraded if:
-- Revenues continue to decline and FCF remains negative
-- Liquidity erodes with deteriorating cash to debt coverage
Casa Systems, Inc., based in Andover, Massachusetts, provides
networking products and services to the cable, wireless, and
telecommunications service provider industries. Products include
Converged Cable Access Platform (CCAP) equipment, distributed and
virtual networking solutions, and fixed wireless networking
equipment. Casa became a public company in December 2017 but
remains majority owned and controlled by including Summit Partners,
Jerry Guo (Founder and former Chief Executive Officer), and former
shareholders and insiders, who collectively own over 60% of the
shares as of September 30, 2022.
The principal methodology used in these ratings was Diversified
Technology published in February 2022.
CENTRAL NEW YORK RACEWAY: Taps Gleichenhaus as Legal Counsel
------------------------------------------------------------
Central New York Raceway Park, Inc. seeks approval from the U.S.
Bankruptcy Court for the Northern District of New York to hire
Gleichenhaus, Marchese & Weishaar, PC as its legal counsel.
The firm's services include:
a. advising the Debtor of its rights, powers, and duties in
the continued operation of its business and the management of its
property;
b. preparing legal papers and reviewing financial reports to
be filed in the Debtor's Chapter 11 case;
c. advising the Debtor concerning, and preparing responses to,
applications, motions, other pleadings, notices and other papers
that may be filed and served in the bankruptcy case;
d. advising the Debtor and assisting in the negotiation and
documentation of financing agreements, debt and cash collateral
orders and related transactions;
e. advising the Debtor with respect to any sales of assets and
negotiating and preparing the agreements, pleadings, and other
documents related thereto;
f. reviewing the nature and validity of any liens asserted
against the Debtor's property and advising the Debtor concerning
the enforceability of such liens;
g. advising the Debtor regarding its ability to initiate
actions to collect and recover property for the benefit of the
estate;
h. counseling the Debtor in connection with the formulation,
negotiation and drafting of an anticipated plan of reorganization
and related documents;
i. advising the Debtor concerning executory contracts and
unexpired lease assumptions, assignments, and rejections and lease
restructurings;
j. assisting the Debtor in reviewing, estimating, and
resolving claims asserted against the Debtor's estate;
k. commencing and conducting any and all litigation necessary
or appropriate to assert rights held by the Debtor, protect assets
of the Debtor's estate, or otherwise further the goals of
completing the Debtor's successful reorganization;
l. providing general litigation and other non-bankruptcy legal
services as requested by the Debtor;
m. appearing in court; and
n. other necessary legal services.
The firm will be paid at these rates:
Partners $325 to $425 per hour
Associates $195 to $295 per hour
Paralegals $140 to $175 per hour
As of the filing, the firm held a net retainer in the amount of
$30,000.
Scott Bogucki, Esq., a partner at Gleichenhaus, disclosed in court
filings that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Scott J. Bogucki, Esq.
Gleichenhaus, Marchese & Weishaar, PC
930 Convention Tower
43 Court Street
Buffalo, NY 14202
Telephone: (716) 845-6446
Email: sbogucki@gmlawyers.com
About Central New York
Central New York Raceway Park, Inc. is a privately-owned
corporation, with its principal place of business in Central
Squaret, N.Y., and its principal assets located in Oswego County.
Central New York Raceway Park filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. N.D.N.Y. Case No.
23-30367) on May 30, 2023, with $1 million to $10 million in assets
and $10 million to $50 million in liabilities. Glenn Donnelly,
president, signed the petition.
Judge Wendy A. Kinsella oversees the case.
Scott J. Bogucki, Esq., at Gleichenhaus, Marchese & Weishaar, P.C.
is the Debtor's legal counsel.
CHALLENGER BRASS: Seeks to Hire Batista Law Group as Counsel
------------------------------------------------------------
Challenger Brass & Copper Co Inc. seeks approval from the U.S.
Bankruptcy Court for the District of Puerto Rico to hire Batista
Law Group, P.S.C. to handle its Chapter 11 case.
The hourly rates of the firm's attorneys and staff are as follows:
Jesus E. Batista Sanchez, Esq. $300
Associates $250
Paralegals $110
Jesus Batista Sanchez, Esq., principal at The Batista Law Group,
disclosed in a court filing that his firm is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Jesus Enrique Batista Sanchez, Esq.
The Batista Law Group, P.S.C.
239 Ave Arterial Hostos Ste 206
San Juan PR 00918-1475
Tel: (787) 620-2856
Email: jeb@batistasanchez.com
About Challenger Brass & Copper Co Inc.
Challenger Brass & Copper Co Inc. is engaged in the manufacturing
and commercialization of copper, brass, bronze, stainless steels,
and aluminum. The company is based in Toa Baja, P.R.
Challenger Brass & Copper filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No.
23-01917) on June 23, 2023. The petition was signed by Abimael
Padilla Negron as authorized representative of the Debtor. At the
time of filing, the Debtor reported $1,031,500 in assets and
$2,540,722 in liabilities.
Judge Edward A. Godoy presides over the case.
Jesus Enrique Batista Sanchez, Esq. at The Batista Law Group, PSC
represents the Debtor as counsel.
COATESVILLE AREA SD: Moody's Assigns Ba2 Rating on Underlying GOLT
-------------------------------------------------------------------
Moody's Investors Service has assigned a Ba2 underlying general
obligation limited tax (GOLT) and A1 fiscal agent enhanced rating
Coatesville Area School District (Chester County), PA's
approximately $85.0 million General Obligation Bonds, Series of
2023. Moody's maintains the district's Ba2 issuer rating, general
obligation limited tax (GOLT) rating, and GOLT-backed
non-contingent lease ratings. The outlook is stable. Post-issuance,
the district will have approximately $251.0 million in net direct
debt outstanding.
RATINGS RATIONALE
The district's Ba2 issuer rating reflects its materially improved
reserve position following stronger-than-anticipated local revenue
growth, an influx of federal coronavirus aid, and reduced debt
service requirements due to a refunding of debt in 2020. The
district's reserve position turned positive in fiscal 2022 after
two consecutive years of negative available fund balance. Still,
notable structural issues including outsized competition from
charter schools and significant special education expenditures
continue to weigh on the district's operating flexibility.
The Ba2 issuer rating further reflects the district's above average
resident income, satisfactory resident wealth, and historical trend
of declining enrollment. Leverage, while manageable, is poised to
increase markedly over the next three years.
The lack of distinction between the district's issuer rating and
the Ba2 rating on the district's GOLT and GOLT-backed
non-contingent lease debt is based on the GOLT's general obligation
full faith and credit pledge. The GOLT rating also reflects
Pennsylvania school districts' ability to apply for exceptions to
the cap on property tax increases in order to cover debt service
and the Commonwealth's history of granting such exceptions.
The A1 enhanced rating reflects Moody's current assessment of the
Pennsylvania School District Intercept Program, which provides that
state aid will be allocated to bondholders in the event that the
school district cannot meet its scheduled debt service payments.
The A1 enhanced rating reflects the presence of language in the
bond documents that requires the paying agent to trigger the state
aid intercept prior to default. The Series of 2023 and Series A, B,
C, and D of 2020 issuances carry a direct-pay agreement, in which
the district has directed the treasurer of the commonwealth to
automatically appropriate its state aid to the fiscal agent for the
benefit of bondholders without any further notice required. As of
audited 2022 financial statements, Coatesville Area School
District's state aid revenue provides more than sum sufficient debt
service coverage.
RATING OUTLOOK
The stable outlook on the district's underlying ratings reflects
Moody's expectation that, while the district's reserve position
will further improve in fiscal 2023, pressures related to charter
schools and special education will continue to weigh on the
district's credit quality.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Continued improvement in reserves and liquidity
-- Significantly improved enrollment trend/reduced charter school
competition
-- Upgrade of the Pennsylvania School District Intercept Program
(enhanced)
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Sustained draws on reserves
-- Significant additional borrowing beyond current expectations
that leads to outsized leverage relative to revenue
-- Downgrade of the Pennsylvania School District Intercept Program
(enhanced)
LEGAL SECURITY
All of the district's rated debt is backed by its general
obligation limited tax (GOLT) pledge, which is subject to the
limitations of Pennsylvania's Act 1 index.
The district's debt is further enhanced by the Pennsylvania School
District Intercept Program. The intercept program is not a general
obligation guarantee of the Commonwealth, and in fact, there have
been times when the state has not distributed any aid to school
districts, as was the case during the 2016 state budget impasse.
However, with implementation of Act 85 in 2016, the state has
ensured that intercept payments, for the benefit of bond debt
service, will be made even in the absence of an appropriation
budget.
USE OF PROCEEDS
Proceeds from the sale of the Series of 2023 bonds will be used to
finance fund capital projects consisting of building renovations at
Reeceville Elementary School, Kings Highway Elementary School,
North Brandywine Middle School and Scott Middle School including
upgrades to the main building mechanical, electrical, and plumbing
infrastructure, a comprehensive renovation of the
classrooms/learning spaces and the complete design and construction
of a new elementary school, along with other various capital
projects.
PROFILE
Coatesville Area School District (Chester County) is located in
Chester County (Aaa stable) in southeastern Pennsylvania (Aa3
stable), approximately 35 miles west of Philadelphia (A1 stable).
In 2022, enrollment was 5,397.
METHODOLOGY
The principal methodology used in the underlying rating was US K-12
Public School Districts Methodology published in January 2021.
COMPREHENSIVE PAIN: Taps Freedman & Goldberg as Accountant
----------------------------------------------------------
Comprehensive Pain Solutions, PLLC seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Michigan to hire
Freedman & Goldberg CPA, PC as its accountant.
The firm will charge a flat fee of $3,500 for the preparation and
filing of the Debtor's 2022 federal and state income tax returns.
For accounting services rendered over and above the preparation of
its 2022 tax returns, the firm will charge these hourly fees:
Bookkeeper $115
Staff Accountant $155
Sr. Accountant $225
Partner $300
As disclosed in court filings, Freedman & Goldberg CPA and its
partners and employees are "disinterested persons" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Michael Goldberg, CPA
Freedman & Goldberg CPA
31150 Northwestern Hwy, Suite 200
Farmington Hills, MI 48334
Phone: 248-626-2400
Email: mike@freedmangoldberg.com
About Comprehensive Pain
Comprehensive Pain Solutions, PLLC, a company in Canton, Mich.,
filed a petition under Chapter 11, Subchapter V of the Bankruptcy
Code (Bankr. E.D. Mich. Case No. 23-45664) on June 26, 2023, with
$1 million to $10 million in both assets and liabilities. Mark
Shapiro of Steinberg, Shapiro & Clark has been appointed as
Subchapter V trustee.
Judge Maria L. Oxholm oversees the case.
The Debtor tapped Daniel J. Weiner, Esq., at Schafer and Weiner,
PLLC as legal counsel and Freedman & Goldberg CPA, PC as
accountant.
COMPREHENSIVE PAIN: Taps Schafer and Weiner as Bankruptcy Counsel
-----------------------------------------------------------------
Comprehensive Pain Solutions, PLLC seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Michigan to hire
Schafer and Weiner, PLLC to handle its Chapter 11 case.
The hourly rates of the firm's counsel and staff are as follows:
Daniel J. Weiner $590
Howard Borin $450
Joseph K. Grekin $450
Leon Mayer $330
Kim Hillary $385
John J. Stockdale, Jr. $430
Jeff Sattler $360
Brandi M. Dobbs $290
Legal Assistant $170
Michael E. Baum, Of Counsel $615
Daniel Weiner, Esq., an attorney at Schafer and Weiner, disclosed
in a court filing that his firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Daniel J. Weiner, Jr., Esq.
Schafer and Weiner, PLLC
40950 Woodward Ave., Suite 100
Bloomfield Hills, MI 48304
Telephone: (248)540-3340
Email: dweiner@schaferandweiner.com
About Comprehensive Pain
Comprehensive Pain Solutions, PLLC, a company in Canton, Mich.,
filed a petition under Chapter 11, Subchapter V of the Bankruptcy
Code (Bankr. E.D. Mich. Case No. 23-45664) on June 26, 2023, with
$1 million to $10 million in both assets and liabilities. Mark
Shapiro of Steinberg, Shapiro & Clark has been appointed as
Subchapter V trustee.
Judge Maria L. Oxholm oversees the case.
The Debtor tapped Daniel J. Weiner, Esq., at Schafer and Weiner,
PLLC as legal counsel and Freedman & Goldberg CPA, PC as
accountant.
CONTOUR PROPCO: Seeks to Hire Schwartz Law as Bankruptcy Counsel
----------------------------------------------------------------
Contour Propco 1735 S Mission, LLC and Contour Opco 1735 S Mission,
LLC seek approval from the U.S. Bankruptcy Court for the District
of Nevada to hire Schwartz Law, PLLC as their legal counsel.
The firm's services include:
(a) advising the Debtors with respect to their powers and
duties in the continued management and operation of their business
and property;
(b) attending meetings and negotiating with representatives of
creditors and other parties involved in the Debtors' Chapter 11
cases, and advising on the conduct of the bankruptcy cases,
including all of the legal and administrative requirements of
operating in Chapter 11;
(c) taking all necessary actions to protect and preserve the
Debtors' bankruptcy estate, including the prosecution of actions on
the Debtors' behalf, the defense of any actions commenced against
the estate, negotiations concerning all litigation in which the
Debtors may be involved, and objections to claims filed against the
estate;
(d) preparing reports and legal papers;
(e) negotiating and preparing a plan of reorganization,
disclosure statement and all related documents, and taking
necessary actions to obtain confirmation of such plan;
(f) advising the Debtors in connection with any sale of their
assets;
(g) appearing before the bankruptcy court, appellate courts
and the Office of the U.S. Trustee; and
(h) other necessary legal services.
The firm will be paid at these rates:
Attorneys $385 to $895 per hour
Paraprofessionals $145 to $280 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Samuel Schwartz, Esq., a principal at Schwartz Law, disclosed in
court filings that his firm is a "disinterested person" pursuant to
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Samuel A. Schwartz, Esq.
Gabrielle A. Hamm, Esq.
Schwartz Law, PLLC
601 East Bridger Avenue
Las Vegas, NV 89101
Telephone: (702) 385-5544/(702) 802-2207
Facsimile: (702) 385-2741
Email: legalinfo@nvfirm.com
About Contour Propco and Contour Opco
Contour Propco 1735 S Mission, LLC and Contour Opco 1735 S Mission,
LLC filed their petitions for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Nev. Lead Case No. 23-12081) on May 23,
2023, with $10 million to $50 million in both assets and
liabilities. David Daneshforooz, chief executive officer, signed
the petitions.
Judge Mike K. Nakagawa oversees the cases.
Schwartz Law, PLLC represents the Debtors as bankruptcy counsel.
DAILEY LAW FIRM: Seeks Cash Collateral Access
---------------------------------------------
Dailey Law Firm PC asks the U.S. Bankruptcy Court for the Eastern
District of Michigan, Southern Division, for authority to use cash
collateral and provide adequate protection.
The Debtor requires the use of cash collateral to pay operating
expenses in accordance with the budget, with a 10% variance.
During the first three months of the case, the Debtor projects that
it will need to spend $525,800 to avoid immediate and irreparable
harm.
The Debtor began experiencing financial difficulty during a period
of family issues and a cancer diagnosis. The effects of these
issues were compounded during the COVID-19 pandemic where the
Debtor suffered from liquidity issues.
Exacerbating these issues was, that one of the Debtor's employees
wrongfully diverted approximately $600,000 in settlement proceeds.
The employee attempted to delete approximately a terabyte of
digital information from the Debtor's server; however, most if not
all of the information has been recovered. The action is currently
pending in the Wayne County Circuit Court. The employee has denied
any and all allegations and filed a counter-complaint.
The Debtor is subject to an order to pay $600,000 into the Wayne
County Circuit Court as it relates to the a settlement from
approximately five years ago. The Debtor has contacted an appellate
attorney to seek relief from that order. Furthermore, the order
represents the full value of the settlement prior to deduction for
attorney fees that were paid (with the consent of the client). As a
result of the inability to pay the $600,000, a receiver was
appointed over the Debtor. The receiver filed his acceptance on
June 28, 2023.
The Debtor is indebted to these secured creditors:
A. Internal Revenue Service, which asserts a secured lien on
all of the Debtor's assets. The IRS has filed Multiple Notices of
Federal Tax Liens with the Michigan Department of State. The
approximate amount of the debt is $60,065;
B. Michigan Department of Treasury, which asserts a secured
lien on all of the Debtor's assets for unpaid withholding taxes in
amount of $5,068; and
C. On Deck Capital Inc., which asserts a secured lien on all
of the Debtor's assets in the amount of $189,269.
The Debtor makes no admission and takes no position at this time
regarding the validity, enforceability, priority, or perfection of
any of the obligations, security interests, and liens that may be
asserted.
The use of cash collateral will be subject to a carve-out for the
payment of unpaid professional fees, expenses, and disbursements in
amounts not to exceed the line items allocated to each professional
under the Budget.
As adequate protection, the Debtor proposes to grant to IRS, SOM,
and On Deck replacement liens and security interests on all further
accounts receivable, cash and deposit accounts in the same
priority, validity and extent that the Debtor's interest in the
cash collateral existed as of the Petition Date.
The replacement liens will be liens on the Debtor's assets which
are created, acquired, or arise after the Petition Date, but
limited to only those types and descriptions of collateral in which
IRS, SOM, and On Deck held a prepetition lien or security interest.
The replacement liens will have the same priority and validity as
IRS, SOM, and On Deck respective pre-petition security interests
and liens.
A copy of the Debtor's motion and budget is available at
https://urlcurt.com/u?l=NmvDvT from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$174,644 for July 2023;
$175,544 for August 2023; and
$176,344 for September 2023.
About Dailey Law Firm PC
Dailey Law Firm PC currently practices litigation in personal
injury, medical malpractice, social security, class action, mass
tort, and criminal defense.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-45970) on July 7,
2023. In the petition signed by Brian Dailey, president, the Debtor
disclosed $50,000 in assets and up to $1 million in liabilities.
Scott M. Kwiatkowski, Esq., at Goldstein Bershad & Fried PC,
represents the Debtor as legal counsel.
DIEBOLD HOLDING: Court to Confirm Second Amended Plan
-----------------------------------------------------
Following a hearing on July 12, 2023, Judge David R. Jones said he
will approve Diebold Holding Company, LLC, et al.'s Disclosure
Statement on a final basis and confirm the Debtors' Second Amended
Joint Prepackaged Chapter 11 Plan.
Parties are to submit a revised proposed order confirming the
Plan.
The Court also denied a motion by Richard Barchas, a purported
holder of 160 of Diebold's unsecured 2024 Senior Notes, to dismiss
the case. The Debtors explained that they filed the chapter 11
cases to reorganize their balance sheet -- and Barchas has offered
no evidence to the contrary -- demonstrating their filing of these
cases was in good faith. They added that the equity contemplated
by the management incentive plan is not being distributed on
account of any claims that management may hold -- it is a form of
future compensation for services management will provide to the
reorganized Debtors after emergence.
Diebold Holding Company, LLC, et al., submitted a Second Amended
Joint Prepackaged Chapter 11 Plan of Reorganization on July 11,
2023, further fine-tuning the prior version of the Plan.
The Prepackaged Plan is the result of prepetition arm's-length
negotiations among the Company Parties (including the Debtors) and
the Company's advisors (including FTI), on the one hand, and the
Initial Consenting Superpriority Term Loan Creditors, the Initial
Consenting First Lien Creditors and the Initial Consenting Second
Lien Notes Creditors (collectively, the "Ad Hoc Group") and Ad Hoc
Group's advisors, on the other hand. Those negotiations resulted
in Holders of in excess of 80% of the First Lien Claims and 60% of
the Second Lien Claims, after accounting for joinders, entering
into the Restructuring Support Agreement. The Restructuring Support
Agreement sets forth the framework for a consensual restructuring
that will significantly delever the Company's balance sheet,
provide adequate liquidity to support the Company's operations
through the Chapter 11 Cases and the Dutch Scheme Proceeding and
post-Effective Date and maximize recoveries to the Company's
creditors.
The Plan is a lynchpin component of the Company's balance sheet
restructuring contemplated by the Restructuring Support Agreement.
If confirmed, consummation of the U.S. Plan will result in, among
other things:
a. The conversion of the DIP Financing to a $1.25 billion exit
term loan facility;
b. The equitization of the First Lien Claims such that Holders
will receive their pro rata share of 98% of the New Common Stock,
subject to dilution for the Additional New Common Stock and the New
Management Incentive Plan;
c. The equitization of the Second Lien Claims such that Holders
will receive their pro rata share of 2% of the New Common Stock
subject to dilution for the New Management Incentive Plan and
Additional New Common Stock (but not subject to dilution on account
of the Participation Premium);
d. Holders of the 2024 Stub Unsecured Notes will receive cash in
an amount that will provide each Holder with the same percentage
recovery that the Holders of Second Lien Claims will receive based
on the midpoint equity value of the New Common Stock as set forth
in the Disclosure Statement;
e. Holders of Other Priority Claims and General Unsecured
Claims, will receive treatment that renders them Unimpaired under
the Bankruptcy Code; and
f. All of DNI's existing common stock and other equity interests
will be cancelled, released and extinguished
Proposed Counsel for the Debtors:
Matthew D. Cavenaugh, Esq.
Kristhy M. Peguero, 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
kpeguero@jw.com
vargeroplos@jw.com
- and -
Heather Lennox
Daniel Reynolds
JONES DAY
North Point, 901 Lakeside Avenue
Cleveland, OH 44114
Telephone: (216) 586-3939
Facsimile: (216) 579-0212
E-mail: hlennox@jonesday.com
tdreynolds@jonesday.com
- and -
Daniel T. Moss
Nicholas J. Morin
JONES DAY
250 Vesey Street
New York, NY 10281
Telephone: (212) 326-3939
Facsimile: (212) 755-7306
E-mail: dtmoss@jonesday.com
nmorin@jonesday.com
About Diebold Nixdorf
Diebold Nixdorf, Incorporated, automates, digitizes and transforms
the way people bank and shop. As a partner to the majority of the
world's top 100 financial institutions and top 25 global retailers,
its integrated solutions connect digital and physical channels
conveniently, securely and efficiently for millions of consumers
each day.
Diebold Nixdorf Inc. and several affiliated entities sought
protection under Chapter 11 of the U.S. Bankruptcy Code on June 1,
2023. The cases are jointly administered under the case of Diebold
Holding Company, Inc., Bankr. S.D. Tex. Lead Case No. 23-90602. In
the petition signed by Jonathan B. Leiken, president, Diebold
disclosed $3.09 billion in assets and $2.57 billion in
liabilities.
Diebold Nixdorf Dutch Holding B.V. commenced voluntary
reorganization proceedings pursuant to the Wet Homologatie
Onderhands Akkoord under Netherlands law in the District Court of
Amsterdam. Diebold Netherlands sought recognition of the Dutch
Proceeding under Chapter 15 of the Bankruptcy Code.
Judge David R. Jones oversees the Chapter 11 cases.
The Chapter 11 Debtors tapped Jones Day and Jackson Walker LLP as
legal counsel, Ducera Partners LLC as financial advisor, FTI
Consulting, Inc., as investment banker, Kroll Restructuring
Administration, LLC as claims and noticing agent.
ELIZABETH JANE: Unsecureds Will Get 15% of Claims in 60 Months
--------------------------------------------------------------
Elizabeth Jane, Inc., filed with the U.S. Bankruptcy Court for the
District of Maryland a Subchapter V Plan of Reorganization dated
July 9, 2023.
The Debtor is a Maryland corporation incorporated on February 8,
2011, and conducts business as Sweet Elizabeth Jane, a retail
boutique located in historic Ellicott City.
Though the Debtor is owned 100% by David Beideman, the operations
of the Debtor are managed by Tamara Beideman. Using their
retirement savings, Mr. and Mrs. Beideman opened the retail store
in 2011 in Ellicott City's historic district, where the Debtor
offers products ranging from clothing to home goods.
In March of 2020, the Debtor's operations suffered again
unprecedented challenges, impacted by protracted closures and the
lingering effects of the COVID-19 pandemic, including, among other
things, supply chain issues, increased costs, and a general lack of
liquidity to obtain and turn inventory. In order to purchase and
turn inventory at levels necessary to generate revenues sufficient
to fund operations, the Debtor required financing.
Ultimately, the Debtor obtained a series of high interest rate
loans, which it hoped would "right the ship." Despite diligent
efforts, the debt service of nearly $28,000 a month in repayment of
the loans proved insurmountable, causing the Debtor to file this
Chapter 11 Case.
Class 3 consists of Allowed General Unsecured Claims. In full and
complete satisfaction, discharge and release of Class 3 Claims, the
Debtor shall pay Holders of Allowed Class 3 Claims, without
interest, their pro-rata share of all projected disposable income
of the Debtor on November 15, 2023 and June 15, 2024, and on the
15th day of each January and June thereafter during the term of
this 60-month Plan. The sum of scheduled and filed Class 3
Unsecured Claims against the Debtor is approximately $839,243.00,
which includes the wholly under-secured secured claims of (i) M&T
Bank on account of the LOC Note in the amount of $25,538.24; (ii)
the Small Business Administration (EIDL loan) in the amount of
$150,000.00; (iii) Fresh Funding Solutions, Inc. in the amount of
$61,316.00; and (iv) Balboa Capital Corporation in the amount of
$98,001.00.
As set forth more fully in Appendices D-2 and Appendix D-4,
beginning on November 15, 2023 and June 15, 2024, and on the 15th
day of each January and June thereafter during the term of this
Plan, Holders of Class 3 General Unsecured Claims shall receive
distributions in the amount of approximately 15% of Allowed Class 3
Claims. Class 3 is Impaired and therefore Holders of a Class 3
Claims are entitled to vote to accept or reject the Plan.
Class 4 consists of Allowed Interests. David Beideman is the sole
Holder of the Equity Interests in the Debtor. On the Effective
Date, the legal, equitable and contractual rights of the Holder of
the Interests in the Debtor shall remain unaltered. Class 4 is
Unimpaired. As a result, pursuant to Section 1126(f) of the
Bankruptcy Code, the Holder of the Class 4 Interest is conclusively
deemed to have accepted the Plan and, therefore, is not entitled to
vote to accept or reject the Plan.
Distributions shall be funded from cash on hand and revenues from
operations. To the extent Avoidance Action exists, the Debtor as
well as any Creditors and/or parties-in-interest may pursue them,
with any recovery to be used to fund payments to Creditors under
the Plan, in accordance with the priority scheme of the Bankruptcy
Code.
A full-text copy of the Subchapter V Plan dated July 9, 2023 is
available at https://urlcurt.com/u?l=DnsOj8 from PacerMonitor.com
at no charge.
Counsel for Debtor:
Steven L. Goldberg, Esq.
McNamee Hosea, PA
6404 Ivy Lane, Suite 820
Greenbelt, MD 20770
Telephone: (301) 441-2420
Facsimile: (301) 982-9450
Email: goldberg@mhlawyers.com
About Elizabeth Jane
Elizabeth Jane, Inc., is a Maryland corporation formed in 2011. The
Debtor operates a retail store located in Ellicott City, Maryland.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Md. Case No. 23-12802) on April 24,
2023. In the petition signed by Tamara Beideman, president, the
Debtor disclosed up to $500,000 in assets and up to $1 million in
liabilities.
Judge David E. Rice oversees the case.
Steven L. Goldberg, Esq., at McNamee Hosea, P.A., is the Debtor's
legal counsel.
ELWOOD ENERGY: Moody's Lowers Rating on 8.1% Bond Due 2026 to B1
----------------------------------------------------------------
Moody's Investors Service downgraded the rating on Elwood Energy
LLC's 8.159% senior secured bond due 2026 to B1 from Ba2. The
outlook remains negative.
Downgrades:
Issuer: Elwood Energy LLC
Senior Secured Regular Bond/Debenture, Downgraded to B1 from Ba2
Outlook Actions:
Issuer: Elwood Energy LLC
Outlook, Remains Negative
RATINGS RATIONALE
The rating downgrade considers Elwood's strained liquidity profile
owing to the large $52.7 million capacity performance penalty
charge assessed by PJM Interconnection, LLC (PJM: Aa2 stable)
following Winter Storm Elliott in December 2022. The rating action
also incorporates a more uncertain revenue profile for the project
due to the unknown timing and outcome of the next several PJM
auctions, which provides Elwood with the vast majority of its
revenues and cash flow each year. The downgrade further considers
Moody's view that the Elwood plant is at particular risk of
incurring additional capacity penalties should future emergency
events occur in PJM because of its subordinated access to natural
gas relative to the local gas distribution company. Moody's
considers environmental risk to be a driver in the rating action
due to the linkage that extreme weather events had on Elwood's
earnings during 2022 and the cash flow impacts in 2023. Moody's
have also changed the Environmental Issuer Profile Score and the
Physical Climate Risk Category for Elwood to a high exposure from a
moderate exposure owing to the impact that physical climate risk
could have on this single site 1,350 MW natural gas fired plant,
and the fact that Elwood's access to natural gas continues to
subordinate to that of the local gas distribution company.
Mitigating these events are the actions taken by Elwood's sponsor
group to provide the project with adequate capital contributions to
cover timely payment of the remaining capacity performance
penalties as well as ongoing debt service for the remaining $33
million of amortizing senior secured bonds due 2026. In that
regard, Moody's understand that during first quarter 2023, the
sponsor group provided Elwood with a $10.5 million capital
contribution, and that the sponsor group intends to provide the
project with the needed capital each month for the project to
satisfy its near-term obligations including capacity performance
penalty payments to PJM and ongoing debt service requirements.
While the sponsor group has no legal obligation to provide
incremental capital to the project, Moody's rating outcome
acknowledges the high level of sponsor support that has occurred
throughout the project's history, and factors in Moody's belief
that such support will continue, owing to the economic value of the
plant to the sponsors.
Elwood's credit profile is supported by the project's extremely low
absolute debt levels, with $33 million of debt outstanding after
its July 2023 payment, its fully cash funded debt service reserve
accounts, and access to a undrawn $20 million working capital
facility provided to the project by the sponsor group. In addition
to the very low remaining debt balance relative to the project's
1,350 MW of generation capacity, Elwood's longer-term value
proposition includes its reliability importance as quick start
peaking assets in a market dominated by nuclear power along with
the plant's relative newness, having come on line in 1999. Elwood's
book value at March 31, 2023 stood at $329 million.
Elwood is owned by a 50%/50% joint venture between a subsidiary of
Electric Power Development Co., Ltd. (J-POWER, A2 negative), a
large, diversified Japanese power generation company, and a
subsidiary of John Hancock Life Insurance Company (A1 stable),
which Moody's evaluates on a consolidated basis with Manulife
Financial Corp. US Operations.
Outlook
The negative outlook reflects Moody's view that Elwood's DSCR will
fall below 1x and that it will rely upon external liquidity support
to meet obligations in 2023 and 2024. It also assumes that PJM
capacity auction prices will remain weak.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Factors that could lead to an Upgrade
-- Given the low future COMED capacity prices and penalty costs in
the near term, a rating increase is unlikely at this time. The
rating could be stabilized with the continued demonstration of
ongoing sponsor support and if capacity auction prices improve in
the next auction.
Factors that could lead to a Downgrade
-- If the sponsors fail to support Elwood's financial obligations,
including debt service
-- If capacity auction prices deteriorate further or if state
legislation further limits Elwood's operational flexibility
-- If Elwood is unable to produce power in a scarcity situation
for an extended period of time or experiences a major operational
disruption
Profile
Elwood Energy LLC owns a 9-unit gas-fired power plant located in
Elwood, Illinois. It competes in the COMED sub-region of PJM and
operates as a peaking facility with an average capacity utilization
factor around 2-5%.
Methodology
The principal methodology used in this rating was Power Generation
Projects published in June 2023.
ERNIE'S AUTO: Updates Unsecured Claims Pay Details
--------------------------------------------------
Ernie's Auto Detailing, Inc., submitted a Second Amended Small
Business Plan of Reorganization dated July 10, 2023.
The Debtor will make quarterly installments ranging from $7,500 to
$20,000 for a 5-year period for distributions to impaired unsecured
creditors. Distributions will total $60,000 annually and $300,000
over life of plan.
Buenaventura Decena (a/k/a "Ernie") will sell $100,000 of assets to
be contributed towards his $224,000 loan from the Debtor. Ernie
will also execute a promissory note in the amount of $124,000 to
reimburse the Debtor for his personal loan. In exchange for receipt
of distributions, creditors will release the reorganized debtor of
any further liability except for its obligations set forth in this
plan of reorganization.
Like in the prior iteration of the Plan, Debtor will pay all
Allowed General Unsecured Claims in Quarterly installments over a
5-year period commencing on the Effective Date as follows: (i)
$20,000 on September 30th (ii) $15,000 on December 31st; (iii)
$7,500 on March 30th; and $17,500 on June 30th. The figures will
increase at a rate of 5% per annum commencing September 30th,
2024.
The allowed unsecured claims total $18,696,517. Unsecured Creditors
will receive a distribution of .027% of their allowed claims.
The Debtor will collect the approximately $100,000 from Ernie
within 90 days of confirmation towards his $224,000 note. The
remainder of plan payments will come from revenues from the
Debtor's on going business operations.
On Confirmation of the Plan, all property of the Debtor will
revert, free and clear of all Claims except as provided in the
Plan, to the Debtor. The Debtor expects to have sufficient cash on
hand to make all administrative payments required in the Plan.
Priority claims will be paid first from Mr. Decena's contribution
with the remainder to be paid to unsecured creditors on a pro rata
basis.
If the Plan is confirmed under Section 1191(a) of the Bankruptcy
Code, payments to Creditors provided for in the Plan will be made
by the Trustee pursuant to Section 1194(a) of the Bankruptcy Code.
Once the Trustee's service is terminated under Section 1183(c) of
the Bankruptcy Code, the Debtor shall make Plan payments except as
otherwise provided in the Plan or in the order confirming the Plan.
If the Plan is confirmed under section 1191(b), except as otherwise
provided in the Plan or in the order confirming the Plan, the
Trustee shall make all Plan payments to creditors under the Plan.
A full-text copy of the Second Amended Plan dated July 10, 2023 is
available at https://urlcurt.com/u?l=yI3Nl9 from PacerMonitor.com
at no charge.
Counsel for Debtor:
Donald F. Campbell, Jr., Esq.
Giordano, Halleran & Ciesla, P.C.
125 Half Mile Road, Suite 300
Red Bank, NJ 07701
Tel: 732 741 3900
About Ernie's Auto
Ernie's Auto Detailing, Inc., provides auto detailing services for
automotive dealerships in New York and New Jersey. The Debtor filed
Chapter 11 Petition (Bankr. D.N.J. Case No. 21-19015) on November
22, 2021.
The Debtor is represented by Donald F. Campbell, Jr., Esq. Of
GIORDANO, HALLERAN & CIESLA, P.C.
ESJ TOWERS: Disclosure Statement Hearing Reset to Aug. 22
---------------------------------------------------------
Judge Enrique S. Lamoutte has entered an order granting the motion
filed by ESJ Towers Condominium Homeowners Association for an
extension of time of 34 days to file its objection to the
Disclosure Statement of ESJ Towers Inc. d/b/a Mare St. Clair Hotel
is granted.
Judge Enrique S. Lamoutte granted ESJ Towers's motion for a
continuance of the hearing scheduled for July 20, 2023.
The hearing on approval of the Disclosure Statement is rescheduled
to August 22, 2023 at 10:00 AM at the U.S. Bankruptcy Court, Jose
V. Toledo Post Office & Courthouse Bldg., Courtroom 2, Floor 2, 300
Recinto Sur, Old San Juan, Puerto Rico.
About ESJ Towers
ESJ Towers, Inc. owns the ESJ Towers in Carolina, P.R. The luxury
apartments and condo units at ESJ Towers have direct access to Isla
Verde Beach, widely considered one of the best in Puerto Rico.
ESJ sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D.P.R. Case No. 22-01676) on June 10, 2022, with as much as
50 million in both assets and liabilities. ESJ President Keith St.
Clair signed the petition.
Judge Enrique S. Lamoutte Inclan oversees the case.
The Debtor tapped Charles A. Cuprill, Esq., at Charles A. Cuprill,
PSC Law Offices as bankruptcy counsel; Ramon Luis Nieves, Esq., at
RL Legal Consulting Services, LLC and Luis Daniel Muniz, Esq., as
special counsels; Dage Consulting CPAS, PSC as financial advisor;
CPA Luis R. Carrasquillo & Co., P.S.C. as financial consultant; and
De Angel & Compania, PA, LLC as auditor.
The U.S. Trustee for Region 21 appointed an official committee of
unsecured creditors on Sept. 12, 2022. MRO Attorneys at Law, LLC
and Dage Consulting CPAS, PSC serve as the committee's legal
counsel and financial advisor, respectively.
EVANGELICAL RETIREMENT: Committee Taps Crane Simon Clar as Counsel
------------------------------------------------------------------
The official unsecured creditors' committee of Evangelical
Retirement Homes of Greater Chicago, Inc. seeks approval from the
U.S. Bankruptcy Court for the Northern District of Illinois to
employ Crane, Simon, Clar & Goodman as its counsel.
The firm's services include:
a. providing legal advice to the committee in connection with
motions filed by the Debtor including use of cash collateral;
b. providing legal advice to the committee with respect to the
potential sale of the Debtor's assets and any issues in connection
therewith;
c. investigating and providing an analysis of any potential
causes of action possessed by the Debtor, which might result in
distribution to the Debtor's estate; and
d. other necessary legal services.
The hourly billing rates for attorneys are as follows:
Arthur G. Simon $520
Scott R. Clar $520
Karen R. Goodman $520
John H. Redfield (of counsel) $400
Scott Clar, Esq., a partner at Crane, Simon, Clar & Goodman,
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:
Scott R. Clar, Esq.
Arthur G. Simon, Esq.
Karen R. Goodman, Esq.
Crane, Simon, Clar & Goodman
135 S. LaSalle Street, # 3950
Chicago, IL 60603
Phone: 312-641-6777
Email: sclar@cranesimon.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.
EVERGREEN SITE: Seeks to Hire Coolidge Wall as Substitute Counsel
-----------------------------------------------------------------
Evergreen Site Holdings, Inc. seeks approval from the U.S.
Bankruptcy Court for the Southern District of Ohio to employ
Coolidge Wall Co., LPA to substitute for the Law Offices of Ira H.
Thomsen.
The Debtor requires legal counsel to:
a. give advice with respect to the powers and duties of the
Debtor in the continued management and operation of its business;
b. attend meeting and negotiate with representatives of
creditors and other parties involved in the Debtor's Chapter 11
case;
c. take all necessary action to protect and preserve the
Debtor's estate, including the prosecution of actions on the
Debtor's behalf, the defense of any action commenced against the
Debtor, negotiations concerning all litigation in which the Debtor
is involved, and objections to claims filed against the estate;
d. prepare legal papers;
e. prepare a plan of reorganization, disclosure statement and
all related documents, and take any necessary action to obtain
confirmation of such plan;
f. advise the Debtor in connection with any potential sale of
its assets;
g. appear before the bankruptcy court, appellate courts and
the Office of the U.S. Trustee;
h. consult with the Debtor regarding tax matters; and
i. perform all other necessary legal services.
The firm will be paid at these rates:
Patricia J. Friesinger, Esq. $360 per hour
Attorney $225 to $525 per hour
Paralegal $160 to $250 per hour
In addition, the firm will seek reimbursement for expenses
incurred.
The firm received from the Debtor a retainer of $20,000.
Patricia Friesinger, Esq., an attorney at Coolidge Wall Co.,
disclosed in a court filing that her firm is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Patricia J. Friesinger, Esq.
Coolidge Wall Co., LPA
33 West First Street, Suite 600
Dayton, OH 45402
Tel: (937) 223-8177
Fax: (937) 223-6705
Email: friesinger@coollaw.com
About Evergreen Site Holdings
Evergreen Site Holdings, Inc. filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ohio
Case No. 22-52799) on Sept. 22, 2022, with $1 million and $10
million in both assets and liabilities. Matthew T. Schaeffer has
been appointed as Subchapter V trustee.
Judge C. Kathryn Preston oversees the case.
The Debtor tapped Coolidge Wall Co., LPA as bankruptcy counsel; the
Law Offices of Fisher, Skrobot, and Sheraw, LLC as special counsel;
and T. Michael Robb & Associates, Inc. as accountant.
EXTREME CLEAN: Seeks to Hire Gambrell & Associates as Counsel
-------------------------------------------------------------
Extreme Clean Janitorial, LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of Mississippi to employ
Gambrell & Associates as co-counsel with O'Brien Law Firm, LLC.
Robert Gambrell, Esq., the lead attorney, and his paralegals will
be compensated at $395 per hour and $95 per hour, respectively. In
addition, the attorney received a retainer of $6,717.
The Debtor paid O'Brien Law Firm $17,000, which includes $1,738 for
the filing fee and $15,262 for legal fees and expenses incurred in
the Debtor's Chapter 11 case. O'Brien Law Firm agreed to share
$3,000 of the legal fees received with Gambrell & Associates.
Mr. Gambrell disclosed in a court filing that his firm is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
Mr. Gambrell may be reached at:
Robert Gambrell, Esq.
Gambrell & Associates, PLLC
101 Ricky D. Britt Sr. Blvd.
Oxford, MS 38655
Tel: (662)281-8800
Fax: (662)202-1004
Email: rg@ms-bankruptcy.com
About Extreme Clean
Extreme Clean Janitorial, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. N.D. Miss. Case No.
23-11385) on May 5, 2023, with as much as $50,000 in assets and
$100,001 to $500,000 in liabilities. Craig Geno, Esq., at the Law
Offices of Craig M. Geno, PLLC has been appointed as Subchapter V
trustee.
Judge Jason D. Woodard oversees the case.
The Debtor is represented by Kevin F. O'Brien, Esq., at O'Brien Law
Firm, LLC and Robert Gambrell, Esq., at Gambrell & Associates,
PLLC.
EYECARE PARTNERS: S&P Alters Outlook to Negative, Affirms 'B-' ICR
------------------------------------------------------------------
EyeCare Partners LLC revised its rating outlook on EyeCare Partners
to negative from stable.
At the same time, S&P affirmed its 'B-' issuer credit rating on the
company and 'B-' issue-level rating on its first-lien debt and
'CCC' on its second-lien facilities. The recovery ratings on first-
and second-lien debt remain '3' and '6', respectively.
The negative outlook on EyeCare Partners reflects risks to S&P's
base case and the potential that positive cash flow generation may
take longer than expected to materialize, resulting in sustained
free cash flow deficits and elevated leverage.
S&P said, "Although we expect significant operational improvement
this year, the negative outlook reflects risks to our base-case
assumptions that cash flow deficits will narrow significantly this
year. During 2022, EyeCare Partners' EBITDA and free cash flow
generation were significantly weaker than our previous
expectations. Operating cash flow was negative, and S&P Global
Ratings-adjusted debt to EBITDA was significantly above 10x. Higher
operating expenses, growth spending, and nonrecurring payments
contributed to weaker margins and free cash flow deficits in 2022.
We expect volume growth from ramping new doctors, healthy demand,
contributions from de novo ambulatory surgery centers, the
company's merchandising initiative, and its tele-optometry
initiative, to support between 9% and 11% revenue growth in 2023.
However, we believe wage pressure, increasing interest expense, and
high growth spending will lead to reported discretionary cash flow
deficits of about $100 million in 2023. In addition, the company's
interest rate hedges that cover approximately 90% of its floating
rate debt expire in October 2023, which will be replaced with
hedges that cover about 25% of it floating rate debt, increasing
its interest burden as we expect rates to remain higher for longer.
We expect ongoing growth in 2024 and expect discretionary cash flow
to narrow, despite the hedge expirations, but still produce a
deficit of $20 million in 2024. We expect S&P Global
Ratings-adjusted debt to EBITDA of about 12x in 2023 and 10x in
2024. We continue to believe the company will utilize capital
spending for de novos of about $30 million to $40 million annually.
Even before this discretionary spending, we believe the company
will produce significant cash flow deficits in 2023 but may produce
close to breakeven cash flow before growth capital expenditures
(capex) in 2024. If the newly hired doctors take longer to ramp up,
wage pressure is more than we anticipate, cost savings take longer
to materialize than expected, or de novo expenses rise further,
discretionary cash flow deficits could be wider than we expect.
"We expect the company to pause acquisition spending and focus on
de novo spending over the next year or so. Financial policy remains
aggressive, and management stated that it continues to look for
acquisitions and will spend on growth capital, despite its high
interest burden. EyeCare Partners employs a growth strategy focused
on expanding capacity in current markets (via de novos) and
expanding into new regions and markets via accretive tuck-in
acquisitions. Since being acquired by financial sponsor Partners
Group in 2020, the company has grown rapidly both within its base
business and through acquisitions and has more than doubled its
revenue. Based on the company's growth strategy and the highly
fragmented nature of the optometry and ophthalmology markets, we
would expect the company to be highly acquisitive in the long run.
However, we anticipate the company to pause its acquisition
strategy for now due to rising interest rates and high valuations
for acquisition targets. We expect the company to prioritize
capital spending related to de novos of about $30 million to $40
million annually, focused on expanding capacity to meet current and
future demand within its current markets.
"We expect liquidity will remain adequate. The company had $40
million drawn on its revolver in the first quarter and would
anticipate the company to draw further on its revolver. We expect
liquidity to be tightest in the second or third quarter this year
but expect the company will have adequate headroom to draw on the
remainder of the revolver throughout the year.
"Our ratings continue to reflect the company's leading position in
the optometry and ophthalmology markets and our expectation of
organic and inorganic growth. EyeCare Partners is the largest
integrated eye care services provider in the U.S., with leading
positions in optometry and ophthalmology. We expect the company's
market position will keep strengthening over the next several
years, as it continues to build out its capacity in regional
markets and expands into new markets through targeted tuck-in
acquisitions, although we expect the company to pause its
acquisition strategy at least through 2023. Based on its integrated
service offering and increasing scale, we believe the company is
well positioned to benefit from favorable industry trends
supporting increased demand. Ophthalmology's growth was muted in
2022 as physician departures outpaced new hires in 2020 and 2021
and because it takes on average two years for new hires to ramp up.
In 2022, the number of new hires outpaced the total departures. We
expect the newly hired physicians over the past few years to
continue to ramp up and the number of new hires to outpace the
total departures. This underpins our expectation of high organic
single-digit growth this year. While the optometry business also
experienced physician departures over the past few years, the
business is more dependent on its product sales, including glasses,
contacts, and over-the-counter eye drops. We anticipate its
merchandising strategy as well as its new tele-health partnership
will help drive low single-double growth in 2023. We expect high
single-digit growth in ophthalmology and low double-digit growth in
optometry to deliver 9%-11% consolidated growth in 2023.
"The negative outlook on EyeCare Partners reflects the risk to our
base-case and the potential that positive cash flow generation may
take longer than expected to materialize, resulting in sustained
free cash flow deficits and elevated leverage.
"We could lower our rating on EyeCare Partners if cash flow
generation weakens such that it is insufficient to cover fixed
charges on a sustained basis, leading us to consider the capital
structure to be unsustainable. This could occur if the company
experiences operational headwinds or newer physicians take longer
than normal to ramp up resulting in weaker profitability and
sustained cash flow deficits (before growth spending).
"We could revise our outlook on EyeCare Partners to stable if we
think the company will generate sufficient cash flow to cover fixed
charges on a sustained basis."
ESG credit indicators: E-2, S-2, G-3
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis. Our assessment of the
company's financial risk profile as highly leveraged reflects
corporate decision-making that prioritizes the interests of the
controlling owners, in line with our view of most rated entities
owned by private-equity sponsors. Our assessment also reflects the
generally finite holding periods and a focus on maximizing
shareholder returns."
FARWELL VENTURES: Jerome Kerkman Named Subchapter V Trustee
-----------------------------------------------------------
The U.S. Trustee for Region 11 appointed Jerome Kerkman of Kerkman
& Dunn as Subchapter V trustee for Farwell Ventures, Inc.
Mr. Kerkman will be paid an hourly fee of $525 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Kerkman declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Jerome R. Kerkman
Kerkman & Dunn
839 N. Jefferson Street, #400A
Milwaukee, WI 53202-3744
Phone: 414-277-8200
Fax: 414-277-0100
Email: jkerkman@kerkmandunn.com
About Farwell Ventures
Farwell Ventures, Inc. is a golf simulator lounge where it provides
the gloves, the clubs, and the balls. Based in Madison, Wisc.,
Farwell Ventures conducts business under the names Hook & Fade and
SimGym.
Farwell Ventures filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. W.D. Wisc. Case No. 23-11125) on June
30, 2023, with $1 million to $10 million in assets and liabilities.
Hosung Shin, president, signed the petition.
Claire Ann Richman, Esq., at Steinhilber Swanson, LLP represents
the Debtor as counsel.
FEDNAT HOLDING: FNHC Unsecureds Will Get 5.4% to 16.7% in Plan
--------------------------------------------------------------
FedNat Holding Company, et al., and the Official Committee of
Unsecured Creditors filed with the U.S. Bankruptcy Court for the
Southern District of Florida a Combined Disclosure Statement and
Chapter 11 Plan of Liquidation dated July 9, 2023.
FNHC is a regional insurance holding company that controls
substantially all aspects of the insurance underwriting,
distribution and claims processes through subsidiaries and
contractual relationships with independent agents and general
agents.
Prior to the Petition Date, FNHC owned three insurance subsidiaries
which included: FNIC, Maison Insurance Company ("MIC"), and Monarch
National Insurance Company ("MNIC"). MNIC is a Florida Property
Insurance company licensed to write homeowners property and
casualty insurance in Florida.
Through FNHC's wholly-owned subsidiary, FNU, FNHC serves as
managing general agent for MNIC (and prior to entry of the
Receivership Order, FNIC). ClaimCor, a wholly-owned subsidiary, is
a claims solutions company that, prior to entry of the Receivership
Order, processed claims for FNIC. CRIS is a wholly-owned subsidiary
that provides services and reinsurance brokerage. In turn, CRIS
wholly owns Insure-Link, an insurance agency.
This Combined Disclosure Statement and Plan constitutes a chapter
11 plan for each of the Debtors, FedNat Holding Company, FedNat
Underwriters, Inc., ClaimCor, LLC, Century Risk Insurance Services,
Inc., and Insure-Link, Inc. Except for Administrative Claims and
Priority Tax Claims, all Claims against and Interests in each of
the Debtors are placed in Classes.
The Plan constitutes a liquidating chapter 11 plan for the Debtors
that contemplates the establishment of various liquidating Debtor
entities by and through which the Plan Administrator will marshal
the remaining assets of the Debtors' estates, review the Claims,
and make Distributions from the remaining assets of the estates to
Holders of Allowed Claims and Allowed Interests, as set forth
herein and consistent with the priority of claim provisions of the
Bankruptcy Code. Upon the conclusion of Distributions under the
Plan, the Plan Administrator shall wind down the Debtors' Estates,
seek approval to close the Chapter 11 Cases, and dissolve the
Debtors under applicable law.
Class 4 consists of all FNHC General Unsecured Claims. The Plan
Administrator shall distribute to each Holder of an Allowed FNHC
Unsecured Claim on the Initial Distribution Date and each Quarterly
Distribution Date thereafter a Pro Rata Distribution of Net Free
Cash as such Net Free Cash is available on such distribution date.
The distribution shall be in full satisfaction, settlement, release
and compromise of and in exchange for each FNHC General Unsecured
Claim against the Debtors' Estates. The allowed unsecured claims
total $128,261.366. This Class will receive a distribution of 5.4%
to 16.7% of their allowed claims. Class 4 is Impaired.
Class 3 consists of all FNU General Unsecured Claims. The Plan
Administrator shall distribute to each Holder of an Allowed FNU
Unsecured Claim on the Initial Distribution Date and each Quarterly
Distribution Date thereafter a Pro Rata Distribution of Net Free
Cash as such Net Free Cash is available on such distribution date.
The distribution shall be in full satisfaction, settlement, release
and compromise of and in exchange for each FNU General Unsecured
Claim against the Debtors' Estates. The allowed unsecured claims
total $14,258,051. This Class will receive a distribution of 16.4%
to 100% of their allowed claims. Class 3 is Impaired by the Plan.
Class 3 consists of all ClaimCor General Unsecured Claims. The Plan
Administrator shall distribute to each Holder of an Allowed
ClaimCor Unsecured Claim on the Initial Distribution Date and each
Quarterly Distribution Date thereafter a Pro Rata Distribution of
Net Free Cash as such Net Free Cash is available on such
distribution date. The distribution shall be in full satisfaction,
settlement, release and compromise of and in exchange for each
ClaimCor General Unsecured Claim against the Debtors' Estates. The
allowed unsecured claims total $2,397,458. This Class will receive
a distribution of 100% of their allowed claims. Class 3 is Impaired
by the Plan.
Class 3 consists of all CRIS General Unsecured Claims. The Plan
Administrator shall distribute to each Holder of an Allowed CRIS
General Unsecured Claim on the Initial Distribution Date and each
Quarterly Distribution Date thereafter a Pro Rata Distribution of
Net Free Cash as such Net Free Cash is available on such
distribution date. The distribution shall be in full satisfaction,
settlement, release and compromise of and in exchange for each CRIS
General Unsecured Claim against the Debtors' Estates. The allowed
unsecured claims total $2,811,750. This Class will receive a
distribution of 58.2% to 100% of their allowed claims. Class 3 is
Impaired.
Class 3 consists of all Insure-Link General Unsecured Claims. The
Plan Administrator shall distribute to each Holder of an Allowed
Insure-Link General Unsecured Claim on the Initial Distribution
Date and each Quarterly Distribution Date thereafter a Pro Rata
Distribution of Net Free Cash as such Net Free Cash is available on
such distribution date. The distribution shall be in full
satisfaction, settlement, release and compromise of and in exchange
for each Insure-Link General Unsecured Claim against the Debtors'
Estates. The allowed unsecured claims total $2,541,509. This Class
will receive a distribution of 79.3% to 100% of their allowed
claims. Class 3 is Impaired.
On the Effective Date, the Plan Administrator shall be appointed
without any further action. The duties, powers and obligations of
the Plan Administrator shall be set forth in the Plan Administrator
Agreement. Among other things, the Plan Administrator shall be
responsible for implementing the Plan, including, without
limitation, monetizing or abandoning all of Liquidating FedNat's
assets, pursuing or abandoning all Causes of Action, resolving all
Claims, and distributing Net Free Cash pursuant to the Plan.
After the Effective Date, Liquidating FedNat shall remain in
existence for the sole purpose of liquidation, distribution and
dissolution. On and after the Effective Date, the Plan
Administrator shall make Distributions under the Plan and shall
implement the dissolution of each of the entities comprising
Liquidating FedNat and monetization of any assets of Liquidating
FedNat pursuant to the Plan Administrator Agreement, any other
provision of the Plan and any applicable orders of the Bankruptcy
Court, and the Plan Administrator shall have the power and
authority to take any action necessary to wind down and dissolve
each of the entities comprising Liquidating FedNat.
A full-text copy of the Combined Disclosure Statement and Plan
dated July 9, 2023 is available at https://urlcurt.com/u?l=ei0Grt
from PacerMonitor.com at no charge.
Debtors' Counsel:
Shane G. Ramsey, Esq.
NELSON MULLINS RILEY & SCARBOROUGH LLP
150 Fourth Ave. North
Suite 1100
Nashville, TN 37219
Tel: 615-664-5355
Email: shane.ramsey@nelsonmullins.com
- and -
Frank B.B. Knowlton, Esq.
NELSON MULLINS RILEY & SCARBOROUGH LLP
1320 Main Street, 17th Floor
Columbia, SC 29201
Telephone: (803) 799-2000
Facsimile: (803) 256-7500
E-mail: Frank.knowlton@nelsonmullins.com
Counsel to the Official Committee of Unsecured Creditors:
Bradford J. Sandler, Esq.
Teddy M. Kapur, Esq.
Pachulski Stang Ziehl & Jones, LLP
919 North Market Street, 17th Floor
Wilmington, DE 19801
Tel: 302.778.6424
E-mail: bsandler@pszjlaw.com
-and-
Jeffrey P. Bast, Esq.
Bast Amron, LLP
1 SE 3rd Ave., Suite 2410
Miami, FL 33131
Tel: (305) 379-7904
E-mail: jbast@bastamron.com
About Fednat Holding Company
FedNat Holding Co. -- https://www.fednat.com -- is a regional
insurance holding company in Sunrise, Fla., which controls
substantially all aspects of the insurance underwriting,
distribution and claims processes through subsidiaries and
contractual relationships with independent and general agents. It
is not an insurance carrier and does not issue insurance policies.
Rather, FedNat provides agency, underwriting and policy holder
services to its insurance carrier clients. Its business is
comprised of two primary components: underwriting and claims
processing.
FedNat and its affiliates filed petitions for relief under
Chapter11 of the Bankruptcy Code (Bankr. S.D. Fla. Lead Case No.
22-19451) on Dec. 11, 2022. In the petition filed by its manager,
Mark Allen, FedNat reported assets between $10 million and $50
million and liabilities between $100 million and $500 million.
Judge Peter D. Russin oversees the cases.
The Debtors tapped Shane G. Ramsey, Esq., at Nelson Mullins Riley
&Scarborough, LLP as legal counsel and Aprio, LLP as tax preparer.
The U.S. Trustee for Region 21 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee tapped Pachulski Stang Ziehl & Jones, LLP as lead
bankruptcy counsel; Bast Amron, LLP as local counsel; and
AlixPartners, LLP as financial advisor.
GASPARILLA MOBILE: Unsecureds Unimpaired in Amended Plan
--------------------------------------------------------
Gasparilla Mobile Estates, Inc., submitted an Amended Plan of
Reorganization.
The Debtor's primary business consisted of providing rental lots in
a mobile home park containing approximately 31.981 acres, more or
less, located at 2001 Gasparilla Road, Placida, Charlotte County,
Florida 33946 (the "Real Property"). The Real Property has 179
individual rental lots for mobile homes, common areas and
recreational facilities, and a waste water pump station servicing
the property (the "Community").
The Debtor intends to change the use of the Real Property. An
offer to purchase the Real Property has been extended to the HOA.
Regardless of whether the HOA accepts that offer, Debtor intends to
either repurpose the Community, in which case there would not be a
sale, or, alternatively, sell the Community, either during the
pendency of this bankruptcy case or at a later date. In the event
of a sale, the sale will occur either at a public auction under the
supervision of the Court, or by private sale. In the event of an
auction, the Association and Placida Park Residents Club, LLC will
have the right to participate in the auction. In the event of a
private sale, which may occur at any time, the Association will
have the rights provided by Section 723.061(1)(d)(1)(b), Florida
Statutes. In the event of a public auction, which the Debtor can
seek to have set by way of a motion to the Court, the public
auction will be conducted generally in the following manner. The
public auction will occur on a date within 60 days of entry of an
Order by the Court. Insiders of Debtors reserve all rights to bid
at the auction. The Debtor will be authorized and required to make
commercially reasonable efforts to list and market the Real
Property for sale.
At either auction or private sale, the buyer will not be required
to maintain the Real Property as a mobile home park, but after
purchase may utilize the Real Property for any lawful use. All
proceeds of the sale, after administrative expenses, shall be paid
to Debtor. A portion of the sales proceeds in an amount not to
exceed $500,000 shall be held in escrow following the sale and
retained for purposes of paying any allowed claims and other
administrative expenses. The sale of the real property shall be
free and clear of all claims and interests under the Plan
incorporating such elements of 11 U.S.C. Section 363 as shall
appear proper to the Court.
The Debtor has received an offer to purchase the Real Property from
Placida Park Residents Club, LLC. The Debtor rejects this offer.
This Plan of Reorganization under Subchapter V, Chapter 11 of the
Bankruptcy Code proposes to pay creditors of the Debtor, from the
Debtor's future earnings, cash on hand, borrowed funds, and if
necessary, the sale of the Real Property.
Unsecured Creditors holding allowed claims will receive 100%
payment of those allowed claims. This Plan also provides for the
payment of administrative and priority claims under the terms to
the extent permitted by the Code or by agreement between the
Debtors and the claimant.
Under the Plan, Class 1 Allowed Unsecured Claims, #3-122, comprised
of Community residents, HOA, and Gasparilla Aquatics Club, Inc. are
unimpaired. The Debtor intends to object to Claims #3-122. These
Claims are disputed. To the extent that any of these claims are
allowed by the Court, including the application of any setoffs that
Debtor is entitled to, and including any appeals, the Debtor will
pay the allowed portions of these Claims in full no later than 15
days following entry of a final, non-appealable order overruling
Debtor's objections.
Attorneys for the Debtor:
Andrew J. McBride, Esq.
Henry C. Shelton, Esq.
ADAMS AND REESE LLP
100 North Tampa Street, 40th Floor
Tampa, FL 33602
Tel: (813) 227-5548
Primary: Andrew.McBride@arlaw.com
Secondary: grace.hirigoyen@arlaw.com
Primary: henry.shelton@arlaw.com
A copy of the Disclosure Statement dated July 7, 2023, is available
at https://tinyurl.ph/TmJpS from PacerMonitor.com.
About Gasparilla Mobile Estates
Gasparilla Mobile Estates, Inc., is primarily engaged in renting
and leasing real estate properties. The company is based in
Placida, Fla.
Gasparilla Mobile Estates filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla.
Case No. 22-01267) on Dec. 22, 2022, with $10 million to $50
million in assets and $1 million to $10 million in liabilities.
Michael C. Markham has been appointed as Subchapter V trustee.
Judge Caryl E. Delano oversees the case.
The Debtor is represented by Andrew J. McBride, Esq., at Adams and
Reese, LLP.
GOOD HANDS MEDICAL: Case Summary & Four Unsecured Creditors
-----------------------------------------------------------
Debtor: Good Hands Medical Transportation, LLC
8703 Beringer Drive
Richmond, TX 77469
Business Description: The Debtor provides non-emergency medical
transportation in Houston, Texas.
Chapter 11 Petition Date: July 13, 2023
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 23-32634
Judge: Hon. Eduardo V. Rodriguez
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: $166,380
Total Liabilities: $2,326,632
The petition was signed by Hazem Anwar Bataineh as owner/director.
A full-text copy of the petition containing, among other items, a
list of the Debtor's four unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/ZKHAVIA/GOOD_HANDS_MEDICAL_TRANSPORTATION__txsbke-23-32634__0001.0.pdf?mcid=tGE4TAMA
GRAPE AND VINE: Seeks to Hire M. Denise Dotson as Legal Counsel
---------------------------------------------------------------
Grape and Vine, LLC filed an amended application seeking approval
from the U.S. Bankruptcy Court for the Northern District of Georgia
to employ the law firm of M. Denise Dotson, LLC as its counsel.
The firm's services include:
a. preparing pleadings and applications;
b. conducting examination;
c. advising the Debtor of its rights, duties and obligations
under the Bankruptcy Code;
d. consulting and representing the Debtor with respect to a
Chapter 11 plan;
e. performing those legal services incidental and necessary to
the day-to-day operations of the Debtor's business, including,
institution and prosecution of necessary legal proceedings, and
general business and corporate legal advice and assistance;
f. take other actions incident to the proper preservation and
administration of the Debtor's estate and business.
The firm will charge these fees:
Attorneys $250 per hour
Legal Assistants $75 per hour
The firm requested a post-petition retainer in the amount of
$2,500.
M. Denise Dotson, Esq., disclosed in court filings that she and her
firm neither hold nor represent any interest adverse to the Debtor
and its bankruptcy estate.
The firm can be reached through:
M. Denise Dotson, Esq.
M. Denise Dotson, LLC
125 Clairemont Avenue, Suite 440
Decatur, GA 30030
Tel: 404-210-0166
Email: denise@mddotsonlaw.com
ddotsonlaw@me.com
About Grape and Vine
Grape and Vine, LLC, doing business as Cru Lounge Morrow, filed a
Chapter 11 petition (Bankr. N.D. Ga. Case No. 23-55562) on June 13,
2023, with as much as $50,000 in assets and $100,001 to $500,000 in
liabilities. Gary Murphey of Resurgence Financial Services, LLC has
been appointed as Subchapter V trustee.
Judge Barbara Ellis-Monro oversees the case.
M. Denise Dotson, LLC is the Debtor's bankruptcy counsel.
HAMMOND ENTERPRISES: Mark Sharf Named Subchapter V Trustee
----------------------------------------------------------
The U.S. Trustee for Region 17 appointed Mark Sharf, Esq., a
practicing attorney in Los Angeles, as Subchapter V trustee for
Hammond Enterprises, Inc.
Mr. Sharf will charge $600 per hour for his services as Subchapter
V trustee. He will also seek reimbursement for work-related
expenses incurred.
Mr. Sharf declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Mark. M. Sharf, Esq.
6080 Center Drive, 6th Floor
Los Angeles, CA 90045
Telephone: (323) 612-0202
Email: mark@sharflaw.com
About Hammond Enterprises
Founded in 1989, Hammond Enterprises, Inc. operates a machine shop
in Pittsburg, Calif.
Hammond Enterprises filed Chapter 11 petition (Bankr. N.D. Calif.
Case No. 23-40776) on June 29, 2023, with as much as $50,000 in
assets and $1 million to $10 million in liabilities. Melissa Kozar,
chief executive officer, signed the petition.
Judge William J Lafferty oversees the case.
Chris Kuhner, Esq., at Kornfield, Nyberg, Bendes, Kuhner & Little,
P.C. represents the Debtor as counsel.
HANDPICKED INC: Joseph Kershaw Spong Named Subchapter V Trustee
---------------------------------------------------------------
The Acting U.S. Trustee for Region 4 appointed Joseph Kershaw Spong
as Subchapter V trustee for HandPicked, Inc.
Mr. Spong will be paid an hourly fee of $350 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred. Melissa White, paralegal, and Rebecca
Faulkenberry, legal assistant, charge $150 per hour and $125 per
hour, respectively.
Mr. Spong declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Joseph Kershaw Spong
PO Box 11449
Columbia, SC 29211
Phone: 803.929.1400
Email: kspong@robinsongray.com
About HandPicked Inc.
HandPicked, Inc. filed Chapter 11 petition (Bankr. D. S.C. Case No.
23-01923) on June 30, 2023, with $500,001 to $1 million in assets
and $1 million to $10 million in liabilities. Judge Elisabetta
Gasparini oversees the case.
William Harrison Penn, Esq., at Penn Law Firm, LLC represents the
Debtor as counsel.
HELLO LIVINGSTON: Disclosure Statement Hearing on Aug. 10 Set
-------------------------------------------------------------
Hello Livingston Extended LLC filed a motion for entry of an order
approving the Disclosure Statement Pursuant to Section 1125 of the
Bankruptcy Code with Respect to the Debtor's Chapter 11 Plan of
Liquidation dated July 7, 2023 and granting relating relief with
respect to the Chapter 11 Plan of Liquidation dated July 7, 2023.
A hearing on the Motion is slated for Aug. 10, 2023, at 10:00 AM at
Videoconference (ZoomGov). Responses are due by Aug. 3, 2023.
The Debtor submits that the Disclosure Statement contains ample and
adequate information to allow parties in interest to make informed
judgments about and, to the extent appropriate, to vote on the
Plan. Importantly, the Disclosure Statement includes information
regarding (i) the Debtor and its assets and liabilities, (ii) the
circumstances surrounding the commencement of the Chapter 11 Case,
(iii) the classification and treatment of claims and interests
under the Plan, (iv) the source of funds for making distributions,
and (v) other material terms of the Plan and its implementation.
Accordingly, the Debtor respectfully submits that the Disclosure
Statement contains adequate information within the meaning of
section 1125 of the Bankruptcy Code and should be approved.
In conjunction with obtaining approval of the Disclosure Statement,
the Debtor also requests this Court's authorization to solicit
acceptances or rejections of the Plan from holders of claims in
Class 1 and Class 3. Class 1 and Class 3 are the only classes that
the Debtor believes are impaired by the Plan and entitled to vote.
The Debtor requests that the Plan confirmation hearing be scheduled
for August 10, 2023.
Attorneys for the Debtor:
Jonathan S. Pasternak, Esq.
Robert L. Rattet, Esq.
DAVIDOFF HUTCHER & CITRON LLP
120 Bloomingdale Road, Suite 100
White Plains, NY 10605
Tel: (914) 381-7400
About Hello Livingston Extended
Hello Livingston Extended, LLC, is the fee owner of a property
located at 291 Livingston St., Brooklyn, N.Y., valued at $29.5
million.
Hello Livingston Extended filed a petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-22422) on
June 2, 2023. In the petition filed by its chief restructuring
officer, David Goldwasser, the Debtor disclosed $29,500,000 in
total assets and $37,034,732 in liabilities.
Judge Sean H. Lane oversees the case.
The Debtor tapped Robert L. Rattet, Esq., and Jonathan S.
Pasternak, Esq., at Davidoff Hutcher & Citron, LLP, as bankruptcy
attorneys.
HELLO LIVINGSTON: Unsecureds Owed $3.1M to Get At Least 10% in Plan
-------------------------------------------------------------------
Hello Livingston Extended LLC submitted Chapter 11 Plan of
Liquidation and a Disclosure Statement.
The Debtor's Plan provides for the liquidation of the Debtor by
liquidating the real property and improvements thereon, commonly
known as and located at 291 Livingston Street, Brooklyn, New York
11217 (Block 161. Lot 61; the "Property"), and use the proceeds
from the sale and available cash to pay claims.
The Debtor has already engaged North Point Real Estate Group (the
"Broker") as their real estate advisor and it shall market and
auction the Property and the Property Causes of Action (the "Sale")
pursuant to 11 U.S.C. Sections 363, 1123(a)(5)(D), and 1123(b)(4)
to obtain the highest and best price, in accordance with the
applicable provisions of the Bankruptcy Code. The sale shall be
conducted following confirmation of the Plan, but subject to
certain conditions.
The Debtor intends to sell the Property (and the Property Causes of
Action) to obtain its highest and best price, in accordance with
applicable provisions of the Bankruptcy Code. The closing of the
Sale shall take place following the Auction in accordance with the
Bid Procedures. In summary, the Broker will market the Property
(and the Property Causes of Action) and conduct an Auction
following confirmation and the lifting of the moratorium at which
the Debtor will be entitled, within its discretion, to submit a
credit bid in the Allowed amount of the Acres Secured Claim. The
Closing shall take place after the Auction.
The winning bidder at the auction (the "Successful Bidder") shall
take title to the Property (and the Property Causes of Action) free
and clear of all liens, claims and encumbrances pursuant to
Sections 363(f) and 1123(a)(5) of the Bankruptcy Code, except that
at the Acres' discretion, the Successful Bidder may take the
Property subject to Acres' mortgage.
In the event that the available cash on the Effective Date is
insufficient to provide creditors of the Debtor's estate with the
distributions required to be made on the Effective Date, any
shortfall will be funded by the Debtor's principals.
Upon completion of the Sale, the CRO and/or Davidoff Hutcher &
Citron LLP, the Disbursing Agent, shall be authorized to execute
any and all documents necessary to effectuate the conveyance of the
Property (and the Property Causes of Action) in accordance with the
terms of the Plan, including without limitation, Bargain and Sale
Deeds with Covenants, a Bills of Sale and all required transfer tax
returns and ACRIS documents. Furthermore, on the Effective Date,
the Debtor will provide the Successful Bidder, or its nominee, with
an assignment and assumption of all unexpired leases or executory
contracts that are subject of an Assumption Notice at the
Property.
Under the Plan, Class 3 General Unsecured Claims total $3,100,000
(not incl. Acres Unsecured Claim). With the exception of the
holder of the Acres General Unsecured Claims who waives any
distribution under the Plan on account of their Class 3 Acres
General Unsecured Claims, each holder of an Allowed Class 3 General
Unsecured Claim will receive on account of such claim a pro rata
distribution of available cash after all payments to Class 1
Claims, the Class 2 Claim, Statutory Fees, Priority Tax Claims and
Administrative Claims and interest from the Petition Date onwards
at the contract rate as to Claims in Class 1, with principal as to
all such Classes being paid in full prior to any payments being
made on account of such interest; provided, however, that if either
(a) Acres (or its nominee, assignee or designee) is the Successful
Bidder based on a credit bid or (b) there are insufficient net Sale
proceeds to provide a 10% distribution to Class 3 General Unsecured
Claims other than Acres, the Debtor's principals will provide,
within 30 days after the Sale Closing Date, a distribution up to
10% to each holder of Claims in Class 3 other than the Acres
Unsecured Claim, with Acres agreeing to waive the right to receive
any distribution as a member of this Class, such that Class 3 Claim
holders (other than Acres) will each receive no less than 10% on
account of their Allowed Class 3 General Unsecured Claims under
this Plan. Creditors will recover a minimum 10% of their claims.
Class 3 is impaired.
The Plan will be funded by monies made available from the sale of
the Property (and the Property Causes of Action); however, the
Debtor's principals shall advance such funds as are necessary to
make payments required under the Plan if the Sale proceeds are
insufficient to fund all payments required under the Plan, as
provided in section 6.2 of the Plan.
Attorneys for the Debtor:
Jonathan S. Pasternak, Esq.
Robert L. Rattet, Esq.
DAVIDOFF HUTCHER & CITRON LLP
120 Bloomingdale Road, Suite 100
White Plains, NY 10605
Tel: (914) 381-7400
A copy of the Disclosure Statement dated July 7, 2023, is available
at https://tinyurl.ph/tDYRw from PacerMonitor.com.
About Hello Livingston Extended
Hello Livingston Extended, LLC, is the fee owner of a property
located at 291 Livingston St., Brooklyn, N.Y., valued at $29.5
million.
Hello Livingston Extended filed a petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-22422) on
June 2, 2023. In the petition filed by its chief restructuring
officer, David Goldwasser, the Debtor disclosed $29,500,000 in
total assets and $37,034,732 in liabilities.
Judge Sean H. Lane oversees the case.
The Debtor tapped Robert L. Rattet, Esq., and Jonathan S.
Pasternak, Esq., at Davidoff Hutcher & Citron, LLP, as bankruptcy
attorneys.
HONX INC: Amends Plan to Resolve FCR, Alcoa & Lockheed Objections
-----------------------------------------------------------------
Honx, Inc., submitted a Disclosure Statement relating to First
Amended Chapter 11 Plan of Reorganization dated July 9, 2023.
The Plan will result in a permanent resolution of all current and
future asbestos personal injury claims (the "Asbestos Claims")
against the Debtor and, to the maximum extent permitted under
section 524(g) of the Bankruptcy Code, Hess.
The centerpiece of the Plan is the establishment of a trust under
section 524(g) of the Bankruptcy Code (the "Asbestos Trust") to
process and pay Asbestos Claims pursuant to certain distribution
procedures adopted by the Asbestos Trust. In exchange for funding
the Asbestos Trust, HONX and Hess, as well as certain additional
parties (defined collectively in the Plan as the "Protected
Parties") will be protected by a permanent injunction (the
"Asbestos Permanent Channeling Injunction") that will prohibit any
party from asserting an Asbestos Claim against a Protected Party
and will channel all Asbestos Claims to the Asbestos Trust.
On June 15, 2023, the Future Claimants' Representative filed The
Future Claimants' Representative Objection to the (A) Disclosure
Statement Relating To The Chapter 11 Plan Of Reorganization Of
HONX, Inc., and (B) Motion for Entry of an Order (I) Approving the
Adequacy of the Disclosure Statement; (II) Approving the
Solicitation Procedures With Respect to Confirmation of the
Debtor's Proposed Chapter 11 Plan; (III) Approving the Forms of
Ballots and Notices in Connection Therewith; (IV) Approving Form,
Manner, and Scope of Confirmation Notices; (V) Establishing Certain
Deadlines in Connection With Approval of Disclosure Statement and
Confirmation of Plan; and (VI) Granting Related Relief (the "FCR
Objection"). In response to the FCR Objection, the Debtor revised
the Plan and incorporated additional disclosures throughout the
Disclosure Statement.
On July 5, 2023, Alcoa World Alumina LLC and Lockheed Martin
Corporation filed the Alcoa World Alumina LLC and Lockheed Martin
Corporation's Objection to Disclosure Statement Relating to the
Chapter 11 Plan of Reorganization of HONX, Inc. (the "Alcoa and
Lockheed Objection"). In response to the arguments made in the
Alcoa and Lockheed Objection, the Debtor asserts that pursuant to
Article V of the Plan, the Debtor will reject the Consent Order and
the Site Participation Agreement referenced in the Alcoa and
Lockheed Objection, and upon rejection, the Debtor will no longer
satisfy any financial obligations under such agreements. Under the
Plan, Holders of General Unsecured Claims will not provide any
release of Claims or Causes of Action against any non-Debtor third
parties.
The Future Claimants' Representative participated in the Mediation,
including numerous video conferences. However, during the
mediation, the joint mediators decided that the Debtor, Hess, the
Committee, and Burns Charest should focus on attempting to reach an
agreement between themselves before potentially including the
Future Claimants' Representative in direct negotiations.
Nevertheless, the Debtor and its advisors continued to share their
assumptions and analysis with the Future Claimants' Representative
and her advisors, and have held multiple virtual presentations with
the Future Claimants' Representative and her advisors since
February 2023, along with an in-person meeting in April 2023.
After the filing of the initial Plan, and prior to filing the First
Amended Plan filed subsequently herewith, the Future Claimants'
Representative provided the Plan Parties with a revised proposal
that the Plan Parties are currently considering. To be certain,
prior to the filing of the initial Plan (but not the First Amended
Plan filed subsequently herewith), the Future Claimants'
Representative had no input into the Plan, the structure of the
Asbestos Trust, the selection of a Trustee for the Asbestos Trust
(although, for the avoidance of doubt, no such selection has been
made), or the amount of funding for Future Demand Holders.
As of the date hereof, the Debtor has held one in-person meeting
with the Future Claimants' Representative in the five months since
the settlement with the Committee was reached—the only
substantive in-person meeting among the Debtor, Hess, the
Committee, and the Future Claimants' Representative during this
Chapter 11 Case. However, the Plan Parties and Future Claimant's
Representative have held several video conference meetings. The
Future Claimants' Representative remains available to engage in
good faith negotiations, and is willing to support confirmation of
a plan that she believes satisfies all legal requirements and
provides for the fair and equitable treatment of Future Demand
Holders.
However, absent a consensual resolution, the Future Claimants'
Representative has indicated that she is prepared to vigorously
object to confirmation of the Plan as currently proposed on behalf
of Future Demand Holders. The Debtor will in turn prosecute
confirmation of the Plan over the anticipated objection of the
Future Claimants' Representative.
Like in the prior iteration of the Plan, Class 4 General Unsecured
Claims will recover 0% of their claims.
On the Effective Date, the Asbestos Trust shall be established in
accordance with the Plan Documents, the Asbestos Trust Documents,
and section 524(g) of the Bankruptcy Code and managed pursuant to
the terms and conditions of the Asbestos Trust Documents. On the
Effective Date, the Asbestos Records Cooperation Agreement shall
become effective and the Debtor's Asbestos Records shall be treated
in accordance therewith. The Asbestos Trust will be funded as of
the Plan's Effective Date with assets worth $106,000,000 as a
result of the following Initial Trust Payment:
* On the Effective Date:
-- Hess will transfer $90,000,000 in Cash to the Asbestos
Trust on account of Allowed Current Asbestos Claims;
-- Hess will transfer $15,000,000 to the Asbestos Trust on
account of Allowed Asbestos Claims, if any, held by Future Demand
Holders;
-- Hess will also contribute $1,000,000 for administrative
expenses of Asbestos Claims submitted by Future Demand Holders.
* If the $15,000,000 of the Initial Trust Payment is exhausted
by payment of Allowed Asbestos Claims for Future Demand Holders
within the first seven year period after the establishment of the
Asbestos Trust and Allowed Asbestos Claims for Future Demand
Holders remain unpaid, the Future Demands Note issued on the
Effective Date will be paid to the Asbestos Trust.
* If, on the other hand, any amount of the $15,000,000 of the
Initial Trust Payment remains after the seven year period and there
are no other asserted Asbestos Claims for Future Demand under
review by the Asbestos Trustee pursuant to the Asbestos Trust
Agreement, the Future Demands Note issued on the Effective Date
will not be paid to the Asbestos Trust and the Future Demands Note,
along with the remainder of any $15,000,000 set aside for Allowed
Asbestos Claims of Future Demand Holders, will revert back to Hess;
provided that the Bankruptcy Court enters a Final Order that states
that there are no pending Asbestos Claims for Future Demand Holders
under review by the Asbestos Trustee pursuant to the Asbestos Trust
Agreement and that any amounts remaining in the Asbestos Trust can
revert to Hess.
* If at the end of the seven-year period there are asserted
Asbestos Claims for Future Demand Holders under review by the
Asbestos Trustee pursuant to the Asbestos Trust Agreement (the
"Pending Asbestos Claims"), and the $15,000,000 of the Initial
Trust Payment or the Future Demands Note have not been exhausted,
then the Asbestos Trust shall hold a reasonable reserve for the
Pending Asbestos Claims (the "Reserve"), and such Pending Asbestos
Claims shall only be paid to the extent Allowed after review is
complete by the Asbestos Trustee. In such case, at the end of the
seven-year period, Hess and the Asbestos Trustee shall request
entry of a Final Order (a) authorizing the Reserve and (b) stating
that subject to the pending review Asbestos Claims and the Reserve,
there are no further Pending Asbestos Claims for Future Demand
Holders under review by the Asbestos Trustee pursuant to the
Asbestos Trust Agreement and that (i) any amounts remaining in the
Asbestos Trust (aside from the Reserve) can revert back to Hess
immediately and (ii) any amounts remaining in the Reserve following
the completion of the Asbestos Trustee's review and payment, as
applicable and pursuant to the Asbestos Trust Agreement, of the
Pending Asbestos Claims can revert back to Hess.
* Hess will contribute all amounts reasonably necessary to the
Asbestos Trust to fund reasonable and documented diagnostic costs
associated with the Asbestos Claims, subject to the protocol
established under the Asbestos Trust Documents, submitted by Future
Demand Holders.
* Hess will fund the Initial Trust Payment and issue the Future
Demands Note on the Effective Date of the Plan.
* The Debtor will contribute 100 percent of the New Common
Equity of the Reorganized Debtor to the Asbestos Trust.
A copy of the Disclosure Statement dated July 9, 2023, is available
at https://urlcurt.com/u?l=8iGUfx from Stretto, the claims agent.
Co-Counsel to the Debtor:
Matthew D. Cavenaugh, Esq.
Jennifer F. Wertz, Esq.
Veronica A. Polnick, 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
vpolnick@jw.com
- and -
Christopher T. Greco, Esq.
Matthew C. Fagen, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, NY 10022
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
Email: christopher.greco@kirkland.com
matthew.fagen@kirkland.com
- and -
Whitney C. Fogelberg, Esq.
Jaimie Fedell, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North LaSalle
Chicago, IL 60654
Telephone: (312) 862-2000
Facsimile: (312) 862-2200
E-mail: whitney.fogelberg@kirkland.com
jaimie.fedell@kirkland.com
- and -
Michael F. Williams, Esq.
Daniel T. Donovan, Esq.
Alexandra I. Russell, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
1301 Pennsylvania Ave., N.W.
Washington, D.C. 20004
Telephone: (202) 389-5000
Facsimile: (202) 389-5200
E-mail: michael.williams@kirkland.com
daniel.donovan@kirkland.com
alexandra.russell@kirkland.com
About HONX Inc.
HONX Inc. is a subsidiary of Hess Corporation, a publicly-traded
global energy company. HONX is the corporate successor of Hess Oil
Virgin Islands Corporation, which owned and operated an oil
refinery in St. Croix, U.S. Virgin Islands from the beginning of
its construction in 1965 until a non-operating entity with minimal
assets consisting primarily of a 50% ownership in a joint venture
from 1998 to 2016, and post-2016 it has continued its corporate
existence solely to manage its alleged asbestos liabilities related
to the refinery.
HONX sought Chapter 11 bankruptcy protection (Bankr. S.D. Texas
Case No. 22-90035) on April 28, 2022. In the petition signed by
Todd R. Snyder, chief administrative officer, the Debtor disclosed
$10 million to $50 million in assets and $500 million to $1 billion
in liabilities.
Judge Marvin Isgur oversees the case.
The Debtor tapped Kirkland & Ellis and Jackson Walker, LLP as
bankruptcy counsels; Piper Sandler Companies/TRS Advisors, LLC as
investment banker and financial advisor; and Bates White, LLC as
asbestos consultant. Stretto, Inc. is the claims, noticing and
solicitation agent.
The Honorable Barbara J. Houser (Ret.) was appointed as the legal
representative for future asbestos claimants in this Chapter 11
case. Ms. Houser tapped Young Conaway Stargatt & Taylor, LLP as
bankruptcy counsel; O'ConnorWechsler, PLLC as local counsel; FTI
Consulting, Inc., as financial advisor; and NERA Economic
Consulting as consultant.
HUDSON PACIFIC: Moody's Cuts Rating on Sr. Unsecured Debt to Ba1
----------------------------------------------------------------
Moody's Investors Service has downgraded Hudson Pacific Properties,
L.P.'s ("Hudson Pacific" or "the REIT") senior unsecured debt
rating to Ba1 from Baa3. The downgrade reflects Moody's expectation
that the REIT's leverage and coverage metrics will deteriorate
meaningfully in 2023 due to weaker leasing conditions and the
ongoing screenwriters' strike, and they will remain weak in 2024,
even after a moderate recovery in earnings.
Moody's also downgraded the parent entity Hudson Pacific
Properties, Inc.'s ("HPP") preferred stock rating to Ba3 from Ba1
consistent with the notching guidelines for REIT issuers, and
assigned the company a Ba1 Corporate Family Rating and SGL-3
speculative grade liquidity rating. The rating actions conclude the
review for downgrade initiated on May 10, 2023. The rating outlook
is negative.
Social risk exposure is a key consideration in the rating action as
the expected deterioration in leverage and coverage metrics in 2023
can be attributed to the current weak leasing environment for
office buildings and the screenwriters' strike.
Assignments:
Issuer: Hudson Pacific Properties, Inc.
Corporate Family Rating, Assigned Ba1
Speculative Grade Liquidity Rating, Assigned SGL-3
Withdrawals:
Issuer: Hudson Pacific Properties, Inc.
Issuer Rating, Withdrawn, previously rated Baa3
Downgrades:
Issuer: Hudson Pacific Properties, Inc.
Pref. Stock, Downgraded to Ba3 from Ba1
Pref. Shelf, Downgraded to (P)Ba3 from (P)Ba1
Issuer: Hudson Pacific Properties, L.P.
Backed Senior Unsecured Shelf, Downgraded to (P)Ba1 from (P)Baa3
Backed Senior Unsecured Regular Bond/Debenture, Downgraded to Ba1
from Baa3
Outlook Actions:
Issuer: Hudson Pacific Properties, Inc.
Outlook, Changed To Negative From Rating Under Review
Issuer: Hudson Pacific Properties, L.P.
Outlook, Changed To Negative From Rating Under Review
RATINGS RATIONALE
HPP's Ba1 CFR reflects the quality of its properties, the
challenging leasing conditions for office landlords, high net debt
to EBITDA, and modest fixed charge coverage. The REIT's media
portfolio, which includes four properties in Hollywood, is
currently facing considerable headwinds due to the screenwriter's
strike that commenced in May 2023. Nevertheless, the longer-term
demand outlook for the well-located media properties, expected to
account for about 15-20% of the REIT's NOI on stabilized basis, is
healthy.
A challenging operating environment for office operators as tenants
reassess their real estate utilization needs amid the evolving
shift to hybrid work is creating pressure on occupancy and lease
rates, income and cash flow. The REIT's portfolio lease rate
declined to 88.7% at the end of Q1 2023 from 92.3% a year earlier.
However, it is still outperforming the broader market by a
significant margin, in large part due to its high-quality
properties. Moody's expects the lease rate to decline further given
the difficult leasing environment and Hudson Pacific's significant
lease expirations, 26.2% of revenue (annualized base rent) through
YE 2024. The portfolio mix primarily consists of properties in West
Coast markets with weak leasing conditions such as San Francisco,
Seattle, and Los Angeles.
The SGL-3 rating reflects Moody's expectation that HPP will have
adequate liquidity. Moody's does not project cash flow from
operations to be sufficient to meet Hudson Pacific's operating
expenses, leasing capital spending and upcoming debt maturities
over the next year. As a result, Hudson Pacific will have to rely
to asset sales and the revolver to cover the deficit. The REIT had
$163 million of cash and $665 million of available capacity on its
revolver at the end of March 2023. After quarter-end, the company
paid a 2023 mortgage maturity by drawing $150 million from its
revolver. Moody's estimates that the REIT's $1.0 billion revolver
would be close to 50% drawn through YE 2024 given the capital needs
for its ongoing development projects and dividend obligations.
Hudson Pacific's unencumbered assets are a valuable alternate
source of liquidity. However, terms for the secured financing would
be creditor friendly in the current financing environment.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The outlook is negative given the potential that challenging
leasing conditions for office properties will pressure the REIT's
portfolio performance and weaken operating cash flows while
persistently weak investor interest in office buildings could
constrain capital access. The negative outlook also reflects the
potential that leverage, and coverage metrics will remain weak due
to sustained pressure on office leasing in the REIT's target
markets.
The ratings are unlikely to be upgraded given the negative outlook
and would require net debt to EBITDA to be below 7.5x, fixed charge
coverage approaching 3x and adequate liquidity to meet near-term
capital needs. Healthy sustained operating metrics including a
portfolio lease rate approaching 90% and same-store NOI greater
than 2% for multiple quarters would also be necessary to consider
an upgrade.
The ratings could be downgraded if net debt to EBITDA is greater
than 9.0x and fixed charge coverage drops below 2.0x on a sustained
basis. Secured leverage above 30%, deterioration in liquidity, or
operating pressures such as deterioration in the portfolio lease
rate, declining occupancy, or a continuation of the screenwriters'
strike, could also precipitate a downgrade.
Hudson Pacific Properties, Inc. is a publicly-traded real estate
investment trust (REIT) focused on acquiring, repositioning,
developing, and operating high quality office and state-of-the-art
media and entertainment properties in select West Coast markets and
Western Canada. Revenue for the 12 months ended March 2023 was
approximately $1.0 billion.
The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in September 2022.
ILARI AUTO: Michael Wheatley Named Subchapter V Trustee
-------------------------------------------------------
The Acting U.S. Trustee for Region 8 appointed Michael Wheatley as
Subchapter V trustee for Ilari Auto Service, Inc.
Mr. Wheatley will be paid an hourly fee of $275 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Wheatley declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Michael E. Wheatley
P.O.Box 1072
Prospect, KY 40059
About Ilari Auto
Ilari Auto Service, Inc. filed Chapter 11 petition (Bankr. W.D. Ky.
Case No. 23-31541) on June 30, 2023, with $100,001 to $500,000 in
both assets and liabilities. Judge Joan Lloyd oversees the case.
Michael W. McClain, Esq., at Goldberg Simpson, LLC represents the
Debtor as counsel.
IMEDIA BRANDS: U.S. Trustee Appoints Creditors' Committee
---------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Chapter 11 cases
of iMedia Brands, Inc. and its affiliates.
The committee members are:
1. U.S. Bank Trust Company NA
MA-Global Corporate Trust, Boston
1 Federal Street
Boston, MA 02110
Attn: Laura L. Moran
Tel: 617-603-6429
Email: laura.moran@usbank.com
2. Exorigos, Ltd.
6 Beit Hilel
Tel Aviv, Israel
Attn: Doron Zulikan
Tel: 972-52-3668723
Email: doron.z@predicto.ai
3. Clarus Commerce LLC d/b/a ebbo
500 Enterprise Drive, Floor 2
Rocky Hill, CT 06067
Attn: Robert E. Bruenig, Jr.
Tel: 203-522-2183
Email: bbreunig@ebbo.com
4. Isomers Laboratories, Inc.
105 Tycos Dr., North York, ON M6B 1W3
Attn: Manuela Marcheggianni
Tel: 416-787-2465
Email: manuela@isomers.ca
5. Ocean Communications, Inc.
c/o Olympusat, LLC
477 S. Rosemary Ave., #306
West Palm Beach, FL 33401
Attn: Collen E. Glynn
Tel: 561-684-5657
Email: colleen@olympusat.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About iMedia Brands
iMedia Brands, Inc. is an interactive, global media company that
offers, manages, and markets merchandise, including men's and
women's accessories and apparel, under owned and third-party brands
through various entertainment, e-commerce, and digital service
platforms.
iMedia Brands and 11 of its affiliates filed for bankruptcy
protection on June 28, 2023 (Bankr. D. Del., Lead Case No.
23-10852). The petitions were signed by James Alt as chief
transformation officer.
The Debtors reported total assets of $272,596,462 and total
liabilities of $373,713,748 as of April 29, 2023.
Ropes & Gray LLP serves as the Debtor's general bankruptcy counsel
and Pachulski Stang Ziehl & Jones LLP serves as co-bankruptcy
counsel. Huron Consulting Services LLC acts as the Debtors'
financial advisor; Lincoln Partners Advisors LLC is the Debtors'
investment banker; and Stretto Inc. is the Debtors' notice and
claims agent.
IRONMAN LOGGING: Case Summary & One Unsecured Creditor
------------------------------------------------------
Debtor: Ironman Logging LLC
P.O. Box 315
Georgetown LA 71432
Chapter 11 Petition Date: July 12, 2023
Court: United States Bankruptcy Court
Western District of Louisiana
Case No.: 23-80389
Judge: Hon. Stephen D. Wheelis
Debtor's Counsel: Thomas R. Willson, Esq.
THOMAS R. WILLSON
1330 Jackson Street, Suite C
Alexandria LA 71301
Tel: (318) 442-8658
Email: rocky@rockywillsonlaw.com
Total Assets: $1,255,500
Total Liabilities: $554,248
The petition was signed by Edward B. Holmes, Jr. as managing
member.
The Debtor listed John Deere Finanical as its sole unsecured
creditor holding a claim of $404,248.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/CJHVDJY/Ironman_Logging_LLC__lawbke-23-80389__0001.0.pdf?mcid=tGE4TAMA
JAGUAR HEALTH: Stockholders Approve All Proposals at Annual Meeting
-------------------------------------------------------------------
Jaguar Health, Inc. held its 2023 Annual Meeting of Stockholders of
the Company at which the stockholders:
(1) elected John Micek III as Class II director to the Company's
board of directors to hold officer for a three-year term until the
annual meeting of stockholders in 2026 and until his successor is
elected and qualified;
(2) ratified the appointment of RBSM LLP as the Company's
independent registered public accounting firm for the fiscal year
ending Dec. 31, 2023;
(3) approved the issuance of shares of the Company's common
stock, par value $0.0001 per share, issuable upon exercise of
warrants and conversion of preferred stock issued and to be issued
to certain accredited investors in accordance with Nasdaq Listing
Rule 5635(d);
(4) approved an amendment and restatement of the Company's 2014
Stock Incentive Plan to increase the number of shares of Common
Stock authorized for issuance under the 2014 Plan by 2,700,000
shares and extend the remaining term of the 2014 Plan to 10 years;
and
(5) approved a proposal to grant discretionary authority to
adjourn the Annual Meeting, if necessary, to solicit additional
proxies in the event that there are not sufficient votes at the
time of the Annual Meeting to approve Proposal 3 or Proposal 4.
About Jaguar Health
Jaguar Health, Inc. -- http://www.jaguar.health-- is a commercial
stage pharmaceuticals company focused on developing novel,
sustainably derived gastrointestinal products on a global basis.
The Company's wholly owned subsidiary, Napo Pharmaceuticals, Inc.,
focuses on developing and commercializing proprietary human
gastrointestinal pharmaceuticals for the global marketplace from
plants used traditionally in rainforest areas. Its Mytesi
(crofelemer) product is approved by the U.S. FDA for the
symptomatic relief of noninfectious diarrhea in adults with
HIV/AIDS on antiretroviral therapy.
Jaguar Health reported a net loss of $48.39 million for the year
ended Dec. 31, 2022, compared to a net loss of $52.60 million for
the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had
$47.45 million in total assets, $48.81 million in total
liabilities, and a total stockholders' deficit of $1.35 million.
Larkspur, California-based RBSM, LLP, the Company's auditor since
2021, issued a "going concern" qualification in its report dated
March 24, 2023, citing that the Company has an accumulated deficit,
recurring losses, and expects continuing future losses. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
JOANN INC: S&P Downgrades ICR to 'CCC', Outlook Negative
--------------------------------------------------------
S&P Global Ratings lowered its ratings on U.S.-based creative
products retailer Joann Inc. to 'CCC' from 'CCC+'.
The outlook is negative, reflecting the risk S&P could lower its
rating on Joann if liquidity deteriorates or the company pursues a
debt transaction that S&P views as tantamount to default.
Weak operating performance and higher borrowing costs are straining
cash flow and liquidity. Same-store sales decreased 4% in the first
quarter, with lower sales volumes pressuring EBITDA generation
because of fixed cost deleveraging. Joann's operating performance
continues to be pressured by soft demand for its products,
particularly in craft technology, which represented a 150-basis
point headwind to comparable store sales during first quarter
fiscal 2024. S&P expects performance will remain challenged this
year as consumer spending in highly discretionary categories
remains constrained amid macroeconomic uncertainties. While supply
chain cost headwinds are easing, S&P expects declining revenue this
year will lead to sales deleveraging and constrained EBITDA
generation. Joann's adjusted EBITDA guidance of $85 million to $95
million for fiscal 2024 will fall short of covering its projected
interest expense of approximately $100 million this year.
S&P said, "Persistent cash burn and thinning cushion to absorb
unanticipated setbacks have led us to revise our liquidity
assessment to less than adequate from adequate. Although Joann's
cash flow deficit moderated year over year, it reported negative
free operating cash flow of $52 million in the first quarter, with
supply chain improvements offset by sales weakness and inflationary
cost pressures. We expect free operating cash flow (FOCF)
generation will remain negative this year and be about breakeven in
fiscal 2025 as more of the company's cost-savings initiatives are
realized.
"The company continues to rely heavily on its asset-based lending
(ABL) revolver to fund operations, with borrowings approaching 60%
of the committed amount during the first quarter of fiscal 2024.
Joann added a $100-million first-in, last-out (FILO) loan facility
to its capital structure during the first quarter to add liquidity.
Additionally, the company is pulling back on capital expenditures
and reducing receipts of seasonal merchandise to lower inventory.
We expect these changes to moderate seasonal working capital
requirements, but, in our view, it could also diminish the
company's competitive position and operating performance. In our
view, Joann has few levers left to pull to manage liquidity should
operating conditions deteriorate.
"Joann's capital structure is unsustainable in our view. In the
first quarter, S&P Global Ratings-adjusted EBITDA interest coverage
decreased to 1.6x from 3.2x year over year due to higher interest
expense and ongoing margin pressure. We forecast adjusted EBITDA
interest coverage of around 2x (less than 1x on a reported basis)
due to elevated interest expense from higher rates and debt
outstanding following the $100 million FILO placement this year. In
our view, Joann's weak operating results, high leverage, and thin
liquidity heighten the likelihood of an eventual debt
restructuring."
The negative outlook on Joann reflects the risk that operating
performance does not improve and its cash shortfall widens,
heightening the likelihood of default.
S&P said, "We could lower our rating on Joann if we believe a
payment default, distressed exchange, or restructuring appears
inevitable within the next six months.
"We could raise our rating on Joann if we believe the company can
achieve sustained improvements in operating results, leading to
meaningful positive free cash flow generation and improving
liquidity, which includes paying down outstanding amounts under its
revolver."
ESG credit indicators:E-2, S-2, G-2
KING INTERPRETING: Court OKs Cash Collateral Access on Final Basis
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division, authorized King Interpreting Services LLC to use
cash collateral on a final basis.
EBF Holding, LLC, d/b/a Everest Business Funding; Fox Capital
Group, Inc.; Image Capital Partners, LLC; Independent Funding
Group; WEBBANK; Knightsbridge Funding, LLC; Maison Capital Group,
Inc.; and PayPal, Inc. assert an interest in the Debtor's use of
cash collateral.
Subject to the provisions of the Court Order, the Debtor is
authorized to use cash collateral to pay: (a) amounts expressly
authorized by the Court, including payments to the United States
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 Creditor within 48 hours of the
Debtor's request. The Debtor will be entitled to prompt court
hearings on any disputed proposed expenditures.
As adequate protection, the Secured Creditors 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 Creditors.
A copy of the Court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=vXw2n1 from PacerMonitor.com.
The Debtor projects total operating expenses, on a monthly basis,
as follows:
$32,300 for July 2023;
$32,300 for August 2023; and
$32,300 for September 2023.
About King Interpreting Services
King Interpreting Services LLC provides interpreting service for
the deaf, blind-deaf /plus, and hard-of hearing community across
the United States.
King Interpreting Services LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-01273) on
April 6, 2023. In the petition signed by Janet King, its managing
member, the Debtor disclosed up to $500,000 in assets and up to $1
million in liabilities.
Judge Grace E. Robson oversees the case.
Jeffrey S. Ainsworth, Esq., at BransonLaw, PLLC, is the Debtor's
legal counsel.
KOSMOS ENERGY: Moody's Hikes CFR to B2 & Alters Outlook to Stable
-----------------------------------------------------------------
Moody's Investors Service upgraded Kosmos Energy Ltd.'s corporate
family rating to B2 from B3, probability of default rating to B2-PD
from B3-PD, and senior unsecured notes to B3 from Caa1. The
speculative grade liquidity rating was downgraded to SGL-3 from
SGL-2, reflecting adequate liquidity. The rating outlook was
revised to stable from negative.
The upgrade reflects the recent changes to the credit risk profile
of the country of Ghana, where the majority of the Kosmos Energy's
oil production resides. On June 9, 2023, Moody's upgraded the
Government of Ghana's local currency long-term issuer rating to
Caa3 from Ca, while concurrently raising Ghana's local currency
(LC) and foreign currency (FC) country ceilings by one notch, to B3
and Caa1, respectively.
Upgrades:
Issuer: Kosmos Energy Ltd.
Corporate Family Rating, Upgraded to B2 from B3
Probability of Default Rating, Upgraded to B2-PD from B3-PD
Senior Unsecured Regular Bond/Debenture, Upgraded to B3 from Caa1
Downgrades:
Issuer: Kosmos Energy Ltd.
Speculative Grade Liquidity Rating, Downgraded to SGL-3 from
SGL-2
Outlook Actions:
Issuer: Kosmos Energy Ltd.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
Kosmos Energy's ratings are restrained by the sovereign credit
risks posed by Ghana. But, owing to its substantial non-Ghana
assets and cash flow, improving geographic diversification and
solid leverage profile, Kosmos Energy is rated B2, one notch above
Ghana's B3 local currency ceiling. Although in the first quarter of
2023 the company derived 57% of its production from the Jubilee and
TEN fields in Ghana, where production will grow even more in the
near term, the country-level concentration will start to moderate
once the Tortue Phase 1 LNG project in Mauritania and Senegal is
completed in late-2023 adding meaningful non-Ghana production from
2024. The company is also actively drilling to sustain and grow
production in the US Gulf of Mexico and Equatorial Guinea. With
rising production and cash flow and a sharp drop in growth spending
in 2024, the company should have increased capacity to reduce debt
and pursue growth initiatives.
The B2 CFR is two notches above the Caa1 foreign currency ceiling
of Ghana reflecting low transfer and convertibility risk. Kosmos
Energy is incorporated in the US, receives its oil revenues in US
dollars, which is kept offshore and completely outside of the
Ghanaian banking system, and does not have debt or debt service
obligations in Ghana's local currency (Cedi). Therefore, the Ghana
government has very little ability to impose transfer restrictions
related to cross-border payments and foreign currency conversion.
Additionally, the company's petroleum agreement with Ghana has a
multifaceted system of contract stabilization, including choice of
law and customary stabilization protections used in the
international petroleum industry.
Kosmos Energy's B2 CFR incorporates its majority production in
offshore Ghana and related credit risks there, improving financial
leverage, substantial growth spending requirements involving the
phased Tortue LNG development project, significant debt
amortization obligations starting in 2025, and somewhat complex
corporate and capital structure. The rating also considers the
risks of the company's non-operating interest in key assets,
deepwater focus and the attendant physical and operational risks.
The credit profile is supported by Kosmos Energy's high-quality and
oil-focused producing assets that have low break-even costs and
relatively low base decline rates, geographic diversification
across several West African countries and the US Gulf of Mexico,
strong growth prospects involving the large natural gas and LNG
assets in Mauritania and Senegal, a solid track record of organic
and acquisition-driven growth and a visible pipeline of low-risk
development projects. Moody's expects financial leverage to decline
and free cash flow to increase in 2024 as the company benefits from
increased volumes, healthy oil and gas prices and the completion of
Tortue Phase 1 in late-2023.
Kosmos Energy's senior unsecured notes are rated B3, one notch
below the B2 CFR, given their unsecured claim to the company's
assets, and their structurally subordinated position to the secured
term loan and the secured RBL facility.
The SGL-3 rating reflects that the company will have adequate
liquidity through 2024. While Moody's expects a modest amount of
negative free cash flow in 2023, the company will produce free cash
flow in 2024 driven by higher production and materially lower
growth spending. Current cash and revolver availability should be
sufficient to meet near term funding needs. The company had $128
million of cash and $770 million in combined borrowing capacity
(pro forma for the post quarter end reduction in the RBL borrowing
base) under its $250 million committed corporate revolver and $1.15
billion RBL facility as of March 31, 2023. The company's
significantly hedged production should also provide downside
protection and help fund growth through 2024.The company does not
have any near term debt maturities.
The stable outlook reflects Kosmos Energy's increasing production,
cash flow and financial flexibility. The company's outlook is
consistent with Ghana's stable outlook reflecting the sovereign's
balanced upside and downside risks over the medium term.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The CFR could be upgraded if Kosmos Energy can materially reduce
its exposure to Ghana while generating increasing production and
cash flow elsewhere to support its debt service and reinvestment
needs. An upgrade would also be considered if Ghana's ratings were
upgraded, including its local currency country ceiling. Any
unexpected action by the Government of Ghana that severely impairs
asset value in Ghana or materially constrains Kosmos Energy's
liquidity, could trigger a ratings downgrade. Although Moody's
expects Kosmos Energy's operational and financial performance to
remain stable through 2024, the CFR could come under pressure if
the RCF/debt ratio falls below 20%, oil price drops materially or
capital spending increases unexpectedly.
Kosmos Energy Ltd. is a Dallas, Texas based publicly traded
exploration and production company with assets in offshore West
Africa and the US Gulf of Mexico.
The principal methodology used in these ratings was Independent
Exploration and Production published in December 2022.
LORDSTOWN MOTORS: Gets OK to Hire Kurtzman as Claims Agent
----------------------------------------------------------
Lordstown Motors Corp. and its affiliates received approval from
the U.S. Bankruptcy Court for the District of Delaware to hire
Kurtzman Carson Consultants LLC as their claims and noticing
agent.
The firm will oversee the distribution of notices and will assist
in the maintenance, processing and docketing of proofs of claim
filed in the Debtors' Chapter 11 cases.
Prior to the petition date, the Debtors provided the firm a
retainer in the amount of $35,000.
The firm will bill the Debtors monthly and the Debtors agreed to
pay out-of-pocket expenses incurred by the firm.
Evan Gershbein, executive vice president of Kurtzman's Corporate
Restructuring 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 through:
Evan Gershbein
Kurtzman Carson Consultants, LLC
222 N. Pacific Coast Highway, 3rd Floor
El Segundo, CA 90245
Telephone: (310) 751-1803
Facsimile: (310) 823-9133
Email: egershbein@kccllc.com
About Lordstown Motors
Lordstown Motors Corp. -- http://www.lordstownmotors.com/-- is an
electric vehicle OEM developing innovative light duty commercial
fleet vehicles, with the Endurance all electric pickup truck as its
first vehicle. It has engineering, research and development
facilities in Farmington Hills, Michigan and Irvine, Calif.
On June 27, 2023, Lordstown Motors Corp. and two affiliated debtors
filed voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10831). The cases
are pending before the Honorable Mary F. Walrath.
The Debtors tapped White & Case, LLP and Richards, Layton & Finger,
P.A. as legal counsels; Jefferies, LLC as investment banker; and
Silverman Consulting as restructuring advisor. Kurtzman Carson
Consultants, LLC is the Debtors claims and noticing agent and
administrative advisor.
LORDSTOWN MOTORS: U.S. Trustee Appoints Creditors' Committee
------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Chapter 11 cases
of Lordstown Motors Corp. and its affiliates.
The committee members are:
1. Barry L. Leonard & Co. Inc.
Attn: Kim Parsons
920 Brenner Street
Winston-Salem, NC 27101
Phone: (336) 971-9758
Email: kim@trans machine.com
2. Superior Cam Inc.
Attn: John M. Basso
31240 Stephenson Highway
Madison Heights, MI 48071
Phone: (248) 703-0357
Fax: (248) 588-1104
Email: jmbasso@diversifiedtoolinggroup.com
3. SA Automotive Ltd.
Attn: Katherine Diederich
1307 Highview Drive
Webberville, MI 48892
Phone: (920) 889-2133
Email: katherine.diederich@aesseinvltd.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Lordstown Motors
Lordstown Motors Corp. -- http://www.lordstownmotors.com/-- is an
electric vehicle OEM developing innovative light duty commercial
fleet vehicles, with the Endurance all electric pickup truck as its
first vehicle. It has engineering, research and development
facilities in Farmington Hills, Michigan and Irvine, Calif.
On June 27, 2023, Lordstown Motors Corp. and two affiliated debtors
filed voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10831). The cases
are pending before the Honorable Mary F. Walrath.
The Debtors tapped White & Case, LLP and Richards, Layton & Finger,
P.A. as legal counsels; Jefferies, LLC as investment banker; and
Silverman Consulting as restructuring advisor. Kurtzman Carson
Consultants, LLC is the Debtors' claims and noticing agent and
administrative advisor.
LRSMB LLC: Mark Sharf Named Subchapter V Trustee
------------------------------------------------
The U.S. Trustee for Region 17 appointed Mark Sharf, Esq., a
practicing attorney in Los Angeles, as Subchapter V trustee for
LRSMB LLC.
Mr. Sharf will charge $600 per hour for his services as Subchapter
V trustee. He will also seek reimbursement for work-related
expenses incurred.
Mr. Sharf declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Mark. M. Sharf, Esq.
6080 Center Drive, 6th Floor
Los Angeles, CA 90045
Telephone: (323) 612-0202
Email: mark@sharflaw.com
About LRSMB LLC
LRSMB LLC filed Chapter 11 petition (Bankr. N.D. Calif. Case No.
23-30414) on June 27, 2023, with $50,001 to $100,000 in both assets
and liabilities. Judge Dennis Montali oversees the case.
Joseph Angelo, Esq., at Gale, Angelo, Johnson & Patrick, P.C.
represents the Debtor as counsel.
LRSMB LLC: Seeks to Hire Gale Angelo Johnson & Patrick as Counsel
-----------------------------------------------------------------
LRSMB LLC seeks approval from the U.S. Bankruptcy Court for the
Northern District of California to hire Gale, Angelo, Johnson, &
Patrick, P.C. as its legal counsel.
The Debtor requires legal counsel to:
a. give advice with respect to the powers and duties of the
Debtor in the continued operation of its business and management of
the estate;
b. take necessary action to avoid liens against the estate, if
any, obtained by attachment by any creditors within 90 days before
the Debtor's Chapter 11 filing;
c. represent the Debtor in reclamation proceedings if
instituted in this court by creditors;
d. prepare legal papers; and
e. perform all other legal services.
The firm will charge these houlry fees:
Joe Angelo $485 per hour
Scott Johnson $485 per hour
Associate Attorneys $350 per hour
The firm received a retainer in the amount of $12,100.
Gale does not hold interest adverse to the Debtor and its estate in
the matters upon which it is to be engaged, according to court
filings.
The firm can be reached through:
Joe Angelo, Esq.
Gale, Angelo, Johnson, & Patrick, P.C.
1430 Blue Oaks Blvd., Ste. 250
Roseville, CA 95747
Tel: (916) 290-7778
Fax: (916) 721-2767
Email: jangelo@gajplaw.com
About LRSMB LLC
LRSMB LLC sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Calif. Case No. 23-30414) on June 27,
2023, with as much as $1 million in both assets and liabilities.
Judge Dennis Montali oversees the case.
Gale, Angelo, Johnson, & Patrick, P.C. represents the Debtor as
counsel.
LSF12 BADGER: Moody's Assigns First Time 'B2' Corp. Family Rating
-----------------------------------------------------------------
Moody's Investors Service assigned first-time ratings to LSF12
Badger Bidco, LLC (dba "CentroMotion") including a B2 corporate
family rating and a B2-PD probability of default rating.
Concurrently, Moody's assigned a B2 rating to the company's
proposed senior secured first lien bank credit facilities,
comprising a $100 million revolving credit facility and $450
million term loan B. The outlook is stable.
The sponsor, Lone Star Funds, is contributing $375 million of cash
equity, which along with term loan proceeds and $75 million of
rollover equity will be used to finance the purchase of
CentroMotion. Given the equity contribution, Moody's estimates the
pro forma adjusted debt/EBITDA to be 4.1x at the end of March
2023.
Assignments:
Issuer: LSF12 Badger Bidco, LLC
Corporate Family Rating, Assigned B2
Probability of Default Rating, Assigned B2-PD
Senior Secured 1st Lien Revolving Credit Facility, Assigned B2
Senior Secured 1st Lient Term Loan B, Assigned B2
Outlook Actions:
Issuer: LSF12 Badger Bidco, LLC
Outlook, Assigned Stable
RATINGS RATIONALE
CentroMotion's B2 CFR reflects the company's moderately high
leverage and inherent cyclicality in the end markets. Moody's
anticipates the adjusted debt/EBITDA to decline below 4.0x driven
by relatively steady demand and cost actions planned by the
sponsor. The ratings are constrained by the company's exposure to
volatile sectors such as agriculture, commercial vehicles, mining
and industrial markets. Customer concentration is also high with
the top ten clients accounting for 46% of revenue, however, these
are spread across multiple product platforms with no platform
representing more than 4% of revenue. Moody's also anticipates that
the sponsors' growth strategy and the risk of future debt-funded
dividends and acquisitions will hinder deleveraging over time, but
expects the management team and strategic initiatives to generally
remain intact.
The rating is supported by the mission-critical nature of the
company's products with high switching costs given the
qualification and certification requirements for OEM designs. The
company benefits from its diverse geographical footprint serving
blue chip customers with 88% of revenue specified in multiyear
programs and 78% being sole-sourced. The company also has good
competitive standing in the markets that it serves and has a
well-established long-term relationship with its customers.
The stable outlook reflects Moody's expectation of positive free
cash flow and debt-to-EBITDA below 4.0x over the next 12-18
months.
Liquidity is good supported by Moody's expectation of positive free
flow, expected cash balance of $20 million at transaction close and
availability under the $100 million revolving credit facility.
ESG considerations reflect the company's governance risk arising
from its private-equity ownership that reflects a shareholder
orientation and raises event risk including debt-financed
acquisitions and shareholder distributions.
As proposed, the new bank credit facilities are expected to provide
covenant flexibility that if utilized could negatively impact
creditors. Notable terms include the following:
Incremental debt capacity up to the greater of 100% of Closing Date
Consolidated EBITDA and 100% of LTM Consolidated EBITDA plus
unlimited amounts subject to Closing Date First Lien Net Leverage
Ratio. Amounts up to the greater of $73.5 million and 50% of
Consolidated EBITDA may be incurred with an earlier maturity date
than the initial term loan.
The credit agreement permits the transfer of assets to unrestricted
subsidiaries, up to the carve-out capacities, subject to "blocker"
provisions which: (i) prohibit the transfer of material
intellectual property to unrestricted subsidiaries; (ii) the
designation of any subsidiary that holds material intellectual
property as unrestricted and (iii) a limitation on any unrestricted
subsidiary owning material intellectual property at any time.
The expected terms also allow the release of guarantees when any
subsidiary ceases to be wholly owned, subject to certain conditions
and there are no asset-sale proceeds prepayment requirement has
leverage-based step-downs.
The proposed terms and the final terms of the credit agreement may
be materially different.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company continues to achieve
greater scale while adhering to conservative financial policies
such that adjusted debt/EBITDA is sustained below 4.0x. Good
liquidity that is supported by positive free cash flow will also be
a consideration for an upgrade.
The ratings could be downgraded if market disruption or competitive
pressures results in weaker earnings such that adjusted debt/EBITDA
approaches 6.0x. Weaker liquidity including free cash flow at low
to breakeven levels could prompt a ratings downgrade.
Headquartered in Waukesha, Wisconsin, CentroMotion designs and
manufactures high-engineered motion, actuation and control
solutions for commercial vehicles, agriculture, automotive and
industrials. Revenue for the last twelve months ended March 2023
was $971 million.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
MADISON CLINIC: Unsecureds Owed $511K to Get Share of Net Proceeds
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The Madison Clinic for Applied Behavior Analysis, LLC, submitted an
Amended Plan of Liquidation under Subchapter V of Chapter 11 of the
United States Bankruptcy Code.
Debtor sold the Acquired Assets of the company to Wellstone, Inc.
for $425,000. Wellstone credit bid $78,449 representing all
amounts due and owing by the Debtor under the postpetition loan to
the Debtor resulting in net cash proceeds of $346,551 being held in
Debtor's counsel's trust account. Of the net cash proceeds,
$75,533 will be paid to US Med to satisfy its secured claim to the
proceeds with the remaining $271,017 attributable to post-petition
Accounts Receivable to be distributed to Administrative, Priority
and Unsecured claims. The assets excluded from the sale, such as
the Employee Retention Credit estimated to be $60,000 and a
potential cause of action against US Med will factor in the
ultimate payout to creditors as well.
Under the Plan, Class 2 General Unsecured Claims are impaired. The
total of Misclassified Secured Claims and Unsecured Claims filed in
the case is $511,604. Each holder of Class 2 Allowed Claim shall
receive a cash payment equal to a pro-rata share from the balance
of net proceeds and any remaining cash assets, unless otherwise
provided for in this Plan. No interest accrued after the date of
filing of the Petition shall be allowed on any unsecured claim, and
interest unmatured as of that date shall be disallowed, as provided
for in 11 U.S.C. Section 502(b)(2). This payment shall be made
direct by the Debtor. Pursuant to 11 U.S.C. Section 1191, the
value of the property as of the Effective Date of the Plan to be
distributed under the Plan on account of each unsecured claim as
described above, equals or exceeds the amount that would be paid on
such claim in a liquidation under Chapter 7. Upon confirmation,
pursuant to 9-509(d) and 9-513(c) of the Code of Alabama, the
Debtor is authorized to file terminations of any and all UCC-1
Financing Statements for any holder of a Class 2 Claim as pertains
to the Debtor and/or Lindsay Chapman.
The Debtor will fund this Plan with the net proceeds it has
received from the sale of its assets as well as any cash it has
available from its Employee Retention Credit that has not been used
to pay the IRS. This Plan contemplates 100% disbursement to
administrative claims, priority claims, the secured claim of US
Med, and a pro rata distribution to allowed unsecured claims.
Attorney for the Debtor:
Steven D. Altmann, Esq.
THE NOMBERG LAW FIRM
3940 Montclair Road, Ste 401
Birmingham, AL 35213
Tel: (205) 930-6900
A copy of the Disclosure Statement dated July 7, 2023, is available
at https://tinyurl.ph/tQTut from PacerMonitor.com.
About the Madison Clinic for Applied Behavior
The Madison Clinic for Applied Behavior Analysis, LLC, sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
N.D. Ala. Case No. 23-80259-CRJ11) on Feb. 14, 2023. In the
petition signed by Lindsay Chapman, owner, the Debtor disclosed up
to $50,000 in assets and up to $1 million in liabilities.
Judge Clifton R. Jessup, Jr oversees the case.
Stuart M. Maples, Esq., at Maples Law Firm, PC, represents the
Debtor as legal counsel.
MEDALLION MIDLAND: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
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Fitch Ratings has affirmed Medallion Midland Acquisition, LP's
(Medallion) Long-Term Issuer Default Rating (IDR) at 'B+'. The
Rating Outlook is Stable. In addition, Fitch has affirmed
Medallion's senior secured term loan B at 'BB'/'RR2' including the
incremental term loan B due October 2028. Fitch has withdrawn the
IDR on Medallion Gathering & Processing, LLC. as it is no longer
considered relevant to Fitch's coverage as the entity is not
issuing debt.
Medallion will use the net proceeds from the incremental term loan
B, currently expected to be $100 million, to pay a distribution to
the equity holder. The incremental debt will modestly increase
leverage in FY 2023 beyond Fitch's previous forecast. Against this
higher leverage, the term loan affirmation is based on an increase
in Medallion's going-concern EBITDA assumption, which in turn
reflects, among other things, assumptions for better production
from wells completed before 2022 than Fitch had formerly assumed.
The ratings reflect Medallion's well positioned asset base,
sustained EBITDA growth and a leverage level that is strong for the
rating category. The rating also considers Medallion's volumetric
risk and limited size.
KEY RATING DRIVERS
Midland Asset Base: Medallion benefits from its strategic location
in the Midland Basin, where oil production has remained resilient
in different commodity price cycles. Medallion's crude oil
gathering and intra-basin transport system is well positioned in
the basin, and its dedicated acreage represents a sizeable portion
of the basin's production. With an estimated break-even oil price
of approximately $40/bbl for many of Medallion's producers, Fitch
anticipates continued volume growth in a softening oil price
environment.
Medallion's well-connected system also allows the company to
steadily increase the margin-based marketing revenue in recent
years. As of March 31, 2023, marketing business contributed to
slightly over 10% of Medallion's total revenues.
Add-on Term Loan Financing: Medallion is issuing a $100 million
add-on senior secured term loan, the proceeds from which will be
used to fund the distributions to its sponsor Global Infrastructure
Partners (GIP). Post transaction, Medallion will have $822 million
in term loan B debt outstanding and a leverage of approximately
4.5x based on estimated LTM EBITDA. The expectation of solid EBITDA
growth in the near term will lower the leverage to about 4.3x by
the end of 2023.
Management has a stated leverage target of 4.0x, which is
relatively low for the rating category. Fitch anticipates the
leverage to stay at approximately 4.0x during the forecast period
assuming debt financed growth opportunities or distributions when
leverage falls below 4.0x.
Limited Size and Single Basin Focus: With an EBITDA below $300
million, Medallion is relatively small in size, consistent with a
'B' category IDR. Fitch anticipates the company's adjusted EBITDA
to exceed $200 million by 2024 given its strong performance in 1H
2023. While Medallion's operational focus is within the highly
economic Midland Basin, it has limited diversification given it is
essentially a single-basin operator. The limited scale and lack of
diversification, in Fitch's view, subjects Medallion to outsized
event risk and capital market access risk should there be any
severe disruption in productions.
Volumetric Risk: Medallion's revenues are predominantly supported
by long-term fixed-fee contracts. Around 25%-35% of the volumes are
derived from private companies that have increased production at a
greater pace than their public peers. Fitch expects to see a larger
pull back from these private producers should commodity prices
decline significantly.
Medallion is subject to volumetric risk as its contracts contain
minimal volume protection. Medallion historical volume growth was
generally in line with the system growth in Midland and
demonstrated resilience during the short-term disruptions. The
volumetric risk is also partially mitigated by Medallion's strong
customer base with largely public and/or investment grade
producers.
Concentrated Counterparty Exposure: Over half of Medallion's
volumes are expected to be contributed by its top three investment
grade customers. The capital discipline or production delays from
these customers may have a sizable impact on the partnership's
volume growth. A mitigating factor is the increasing number of
customers in the portfolio that exhibit considerable variety in
pace and phasing of growth. The overall credit profile of the
customer base continues to improve as the customers consolidate and
grow in size.
Competitive Risks: Medallion is located in and around a significant
amount of existing gathering infrastructure, including the flexible
service of trucks, which could provide a significant amount of
competition with respect to Medallion adding dedicated acreage. The
gathering sub-sector has low barriers to entry, relative to most
other midstream sub-sectors. Medallion's dedicated acreage
increased by about 10% since early 2020 when the current
infrastructure was substantially completed. No material acreage
dedication contracts are set to expire in Fitch's forecast period.
Supportive Sponsor: The ratings recognize that Medallion benefits
from a supportive sponsor, Global Infrastructure Partners, which
has invested a significant amount of equity into Medallion. Fitch
anticipates GIP will continue to support accretive growth projects
and to maintain a long-term leverage target of 4.0x.
DERIVATION SUMMARY
Oryx: Medallion's closest peer is Oryx Midstream Services Permian
Basin LLC (Oryx; BB-/Stable). Oryx is a holdco owning a 35% stake
in a joint venture (JV) with Plains All American Pipeline L.P.
(BBB-/Stable). Oryx is slightly larger in size considering the
annual distribution (in lieu of EBITDA) from JV. Oryx has a much
larger asset base with its footprint in both Delaware and Midland
sub-basins. Its customers are more diversified and no single
customer accounts for over 16% of its volume. Medallion has a
higher counterparty concentration risk as over 50% of its volume
are from top three producers.
Oryx's leverage is currently at around 6.0x and Fitch expects the
leverage to decline to below 5.0x by 2024, compared with
Medallion's forecasted leverage of at or below 4.5x in the same
period. The JV structure also constrains Oryx' ability to exercise
unilateral control over JV's financial policy. Oryx's lower
business risk is partially offset by its slightly higher financial
risk.
M6: M6 ETX Holdings II MidCo LLC's (M6) (B+/Stable) provides
natural gas gathering, processing and transportation services in
the East Texas portion of the Haynesville Basin. 20%-25% of M6's
EBITDA comes from take-or-pay contracts, offering higher volume
protection. An offsetting factor is the stronger volume growth
experienced by Medallion in recent years given its footprint in
Midland Basin. Both companies have about 10%-15% exposure to
margin-based businesses, i.e., the relationships between two prices
for a commodity or commodities, and the spreads can relate to
location or time.
Fitch expects M6's leverage to decline below 3.5x vs Medallion's
4.0x in the forecast period. Both companies position strongly in
the rating category and leverage is not a distinguishing factor.
Blue Racer: Another peer is Blue Racer Midstream, LLC (B+/Stable).
Blue Racer is a single-basin natural gas gatherer and transporter
in Appalachian Basin. It is larger than Medallion in terms of
EBITDA. Both companies have high volumetric risk although
Medallion's Permian location may partially mitigate the volatility
in its volumes. Medallion has lower counterparty risk as the
majority of Blue Racer's customers are high-yield credit quality
producers. Both companies have identical business risks and
leverage.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within its Rating Case for the Issuer
Include:
-- Fitch's price deck of WTI price deck of $75/bbl in 2023,
$70/bbl in 2024, $65/bbl in 2025, $60/bbl in 2026, and $57/bbl
thereafter;
-- A double-digit growth in 2023 and declining growth rates in out
years;
-- 2023 capex forecasted to be $90 million;
-- Debt financed capex or distributions when leverage is at or
below 4.0x. Debt size does not increase leverage above 4.2x;
-- Interest expense reflects the Fitch Global Economic Outlook,
except that increases are tempered by the existence of a derivative
hedging part of the exposure;
-- No acquisition is assumed.
Recovery Rating Assumptions:
For the Recovery Rating, Fitch estimates the company's
going-concern value was greater than the liquidation value. The
going-concern multiple used was a 6.0x EBITDA multiple, which is in
the range of most multiples seen in recent reorganizations in the
energy sector. There have been a limited number of bankruptcies
within the midstream sector.
Two recent gathering and processing bankruptcies of companies
indicate an EBITDA multiple between 5.0x and 7.0x, by Fitch's best
estimates. In its recent Bankruptcy Case Study Report, "Energy,
Power and Commodities Bankruptcies Enterprise Value and Creditor
Recoveries", published in September 2021, the median enterprise
valuation exit multiple for the 51 energy cases with sufficient
data to estimate was 5.3x, with a wide range of multiples
observed.
Fitch assumed a mid-cycle going-concern EBITDA of approximately
$130 million, higher than the previous assumption of $120 million.
This is driven by the consistent trend of improving operating
profile as a result of resilient Permian productions. Fitch
calculated administrative claims to be 10%, and fully drew down the
revolving credit facility, which are the standard assumptions. The
outcome is an 'RR2,' which corresponds to a expected recovery in
the range of 71% to 90%.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- An upgrade is not expected in the near term given Medallion's
limited size and scale. However, a positive rating action / upgrade
can occur if Medallion's EBITDA sustains at approximately $300
million per annum in Fitch's forecast horizon;
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Actual or forecast leverage, total debt with equity
credit/adjusted EBITDA, is above 6.0x on a sustained basis;
-- A further leveraging event causing a spike above Fitch's
downgrade threshold in 2024 and beyond;
-- Significantly lower than expected volume growth;
-- A significant increase in capex, targeted towards higher
business risk projects.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch expects Medallion's liquidity to remain
adequate. Liquidity, as of March 31, 2023, consisted of full
availability under its $100 million super senior secured revolving
credit facility, which is effectively senior to its term loan, and
$13.7 million of cash. The credit facility matures in October
2026.
The term loan requires 1% per annum amortizations and requires the
company to maintain a debt service coverage ratio (DSCR), as
defined in the agreement, of above 1.1x. The DSCR was 3.20x at
March 31, 2023, well above the covenant. The revolving credit
facility contains restrictions on debt to capital, leverage, and
debt service coverage ratios. Medallion was in compliance with its
financial covenants as of March 31, 2023 and Fitch expects it to
remain so throughout the forecast period.
ISSUER PROFILE
Medallion Midstream is a Permian Basin focused midstream services
company, with assets located largely in the Midland basin. The
company provides crude oil gathering and intra-state transportation
services in Texas
SUMMARY OF FINANCIAL ADJUSTMENTS
Regarding unconsolidated affiliates, Fitch calculates midstream
energy companies' EBITDA by use of cash distributions from those
affiliates, rather than by use of equity in earnings. Non-cash
mark-to-market expenses of various types are added back to the base
profit figure to arrive at adjusted EBITDA.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
Medallion Midland Acquisition, L.P. has an ESG Relevance Score of
'4' for Governance Structure and Financial Transparency as
private-equity backed midstream entities typically have less
structural and financial disclosure transparency than publicly
traded issuers, which has a negative impact on the credit profile,
and is relevant to the rating[s] 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.
MEDALLION MIDLAND: Moody's Alters Outlook on 'B2' CFR to Positive
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Moody's Investors Service changed Medallion Midland Acquisition,
L.P.'s rating outlook to positive from stable. Concurrently,
Moody's affirmed Medallion's B2 Corporate Family Rating, B2-PD
Probability of Default Rating and B2 senior secured term loan
rating.
The company is seeking to raise a $100 million incremental term
loan, which should bring the term loan balance to around $824
million as of June 30, 2023 on a pro forma basis. The proceeds from
the incremental term loan will be used to fund a distribution to
its owner. The incremental term loan funding is subject to
obtaining lender commitments and obtaining the necessary approval
from existing credit facility lenders.
"The positive rating outlook reflects Medallion's improving scale
into 2024 while its credit metrics should remain solid despite the
incremental term loan issuance," commented Amol Joshi, Moody's Vice
President and Senior Credit Officer.
Affirmations:
Issuer: Medallion Midland Acquisition, L.P.
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Senior Secured 1st Lien Term Loan, Affirmed B2
Outlook Actions:
Issuer: Medallion Midland Acquisition, L.P.
Outlook, Changed To Positive From Stable
RATINGS RATIONALE
Medallion's positive rating outlook reflects the company's growing
scale supported by organic capital investment and increased volumes
through its Midland Basin system, with EBITDA expected to approach
$200 million into 2024. Moody's expects the company to maintain
solid leverage metrics despite increasing debt balances due to the
proposed term loan transaction, with proceeds being used to fund a
distribution to its owner.
Medallion's B2 CFR reflects its growing yet still relatively modest
scale, asset concentration and the volume risk involved in producer
customers utilizing its oil gathering system to transport
production volumes. Medallion's contracts are 100% fee-based
eliminating direct commodity price risk, although the absence of
material minimum volume commitment contracts highlight its volume
risk. The company's strategic system in the Permian's prolific
Midland Basin is supported by significant acreage dedications
spread over more than 1.1 million acres with over 30 customers and
a large equity investment by an experienced sponsor. The system is
comprised of roughly 1,200 miles of pipe with over 1.2 million
barrels per day (bbl/d) of crude oil throughput capacity as well as
over 1.5 million bbl of storage.
Medallion's leverage metrics have steadily improved from weak
levels in 2017-2020 as its earnings continued to steadily grow. Pro
forma for the proposed incremental term loan, Moody's expects that
Medallion will maintain its leverage below 4.5x in 2023, and is
well positioned to improve leverage as earnings should continue to
increase in 2024. The company's credit profile also benefits from
structural enhancements such as a mandatory cash flow sweep
provision in the term loan, which requires the company to direct a
portion of excess cash flow to debt reduction in the event that
leverage exceeds 4.5x.
Moody's expects Medallion will maintain good liquidity through
2024. The company should generate free cash flow during that time,
after fully funding its debt service obligations and capital
expenditures, assuming no significant distributions. Medallion had
$13.7 million in cash at March 31, 2023 with an undrawn $100
million revolver. The revolver matures in 2026 and has financial
covenants including a maximum super senior leverage ratio of 1x,
maximum total debt to capitalization ratio of 50% and minimum debt
service coverage ratio of 1.1x. The term loan has a minimum debt
service coverage ratio covenant of 1.1x, consistent with the
revolver. Moody's expects Medallion to maintain compliance with its
covenants through 2024.
The term loan matures in 2028 and is rated B2, consistent with
Medallion's CFR. The revolver (unrated) has a super priority
preference over the term loan; however, because of the small size
of the revolver compared to the term loan, the term loan is rated
the same as the CFR.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Medallion achieves meaningful
scale with growing volumes and earnings, while the company balances
shareholder distributions and debtholders' interests, debt to
EBITDA remains below 4.5x and it maintains at least adequate
liquidity. The ratings could be downgraded if Medallion's debt to
EBITDA exceeds 5.5x or there is a significant increase in
shareholder distributions that materially erodes the company's
liquidity or leverage metrics.
Medallion Midland Acquisition, L.P. is a privately owned crude oil
gathering and intra-basin pipeline transportation system in the
Midland Basin. In October 2017, Global Infrastructure Partners
(GIP) acquired Medallion for about $1.8 billion, plus an additional
cash consideration linked to GIP's realized profits at exit.
The principal methodology used in these ratings was Midstream
Energy published in February 2022.
MIDWEST PHYSICIAN: Moody's Cuts CFR & Secured 1st Lien Debt to B3
-----------------------------------------------------------------
Moody's Investors Service downgraded Midwest Physician Admin Svcs,
LLC's (a core operating company of DMG Practice Management
Solutions LLC, referred to herein as "Duly") Corporate Family
Rating to B3 from B2, and Probability of Default Rating to B3-PD
from B2-PD. At the same time, Moody's downgraded the Senior Secured
1st Lien credit facilities to B3 from B2. The outlook is stable.
The downgrade of Duly's ratings reflects Moody's expectation of
elevated financial leverage through 2024 over 6.0x. The company's
adjusted debt/EBITDA per Moody's calculations, rose to
approximately 8.3x at the end of March 31, 2023. The primary
drivers for the spike in financial leverage were a surge in
operating expenses including higher medical claims costs associated
with the capitated plans and elevated labor costs. Liquidity has
also deteriorated due to higher capital expenditures spent to
upgrade the business to support acquisitions and higher working
capital related to the mix shift to higher value based care
contracts. Moody's anticipates that Duly will maintain adequate
liquidity over the next 12-18 months, but will continue to burn
cash in 2023. Duly should be break-even in 2024 as the collections
on its value-based care contracts normalize but it will need to
repay or refinance its $100 million one year A/R securitization
facility, placed in March 2023, next year.
The outlook is stable. Moody's expects financial leverage to
decline with earnings growth. Additionally, Duly will benefit from
increasing average revenue per physician as new physicians are
on-boarded and their productivity improves. Duly will also benefit
from its re-negotiated contracts with payors. Further, Moody's
anticipates that inflation will continue to ease in the latter half
of 2023, and Duly will benefit from its profit improvement
initiatives.
Downgrades:
Issuer: Midwest Physician Admin Svcs, LLC
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Senior Secured 1st Lien Revolving Credit Facility, Downgraded to
B3 from B2
Senior Secured 1st Lien Term Loan, Downgraded to B3 from B2
Outlook Actions:
Issuer: Midwest Physician Admin Svcs, LLC
Outlook, Remains Stable.
RATINGS RATIONALE
Duly's B3 CFR reflects Moody's expectations that the company's
leverage will remain elevated over 6.0x for the next 12-18 months.
The company's adjusted debt/EBITDA per Moody's calculations, rose
to approximately 8.3x at the end of March 31, 2023. The primary
drivers for the spike in financial leverage were a surge in
operating expenses including higher medical claims costs associated
with capitated plans and elevated labor costs. Moody's expects
leverage will improve by the end of 2024 with mid-single digit
revenue growth as new physicians are on-boarded and their
productivity improves. Duly will also benefit from its
re-negotiated contracts with payors. Further, Moody's anticipates
that inflation will continue to ease in the latter half of 2023,
and Duly will benefit from its profit improvement initiatives.
The B3 rating also reflects the risks associated with the company's
high degree of geographic concentration given the operations are
primarily located in the greater Chicago, IL area. Duly benefits
from the company's multi-specialty business model which provides
patients with a broad range of primary and specialist care in an
integrated setting. The company has meaningful scale in its markets
and has successfully executed an organic and acquisition-led growth
strategy.
Moody's anticipates that Duly will maintain adequate liquidity over
the next 12-18 months. The company's liquidity is supported by cash
and equivalents of $26 million and $80 million of availability on
the $100 million revolving credit facility as of March 31, 2023.
Duly has some interest rate swaps in place, but they do not cover
all the floating rate debt. Duly has a new $100 million one year
A/R securitization facility that expires in March of 2024, which it
will need to repay or refinance at that time. Moody's expects Duly
will extend the facility. Moody's forecasts Duly will continue to
burn cash in 2023 but should be break-even in 2024 as the
collections on its value-based care contracts normalize.
The revolver contains a maximum 7.2x first lien net leverage ratio
covenant that is tested when borrowing exceeds 30% of the
commitment. The covenant is not currently being tested, but if it
were to be tested, Moody's believes the company will maintain
adequate headroom.
The first lien senior secured term loan and revolver are rated B3,
in line with the B3 Corporate Family Rating. This reflects the fact
that all of the debt in the capital structure are pari passu, and
is rated B3, the same as the Corporate Family Rating. The senior
secured first lien credit facilities have guarantees from all
wholly-owned material domestic restricted subsidiaries.
Midwest Physician Administrative Services, LLC's (d/b/a Duly Health
and Care, together with its affiliates, "Duly") CIS-4 indicates the
rating is lower than it would have been if ESG risk exposures did
not exist. This reflects Duly's exposure to social risk
considerations (S-4) and governance risk considerations (G-4). Duly
faces social risks related to demographic and societal trends such
as the rising concerns around the access and affordability of
healthcare services. Duly is mostly reliant on commercial
insurance, but still has exposure to government payors. As a
healthcare services provider, Duly has exposure to responsible
production risk, which considers the company's potential liability
related to patient care. Duly is also exposed to labor pressures
and human capital constraints as the company relies on highly
specialized labor to provide its services. Governance risk
considerations reflect Duly's exposure to aggressive financial
strategy to support the company's rapid expansion strategy as it
grows, through a combination of new clinic openings and
acquisitions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company substantially broadens
its geographic presence, exhibits less aggressive financial
policies, and improves free cash flow and liquidity.
Quantitatively, the ratings could be upgraded if adjusted
debt/EBITDA is sustained below 6.0x.
The ratings could be downgraded if financial policies become more
aggressive, including pursuing another shareholder dividend or a
large debt funded acquisition. The ratings could be downgraded if
any unexpected operating setback materially weakens Duly's earnings
or if liquidity deteriorates, including inability to address the
expiration of the A/R securitization facility.
Duly is a large, independent multi-specialty physician group with
over 1,000 physicians based in over 150 locations in Illinois,
Indiana, Iowa and Missouri. The company, through its clinical
entities, handles over 2 million patient encounters annually. The
company generated around $2.2 billion of revenue LTM March 31,
2023. The company is owned by affiliates of Ares Management L.P.,
management and physicians of the company.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
MKS REAL ESTATE: Seeks Aug. 16 Hearing on Full-Payment Plan
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MKS Real Estate, LLC, filed a motion to set a joint hearing on
approval of its Disclosure Statement, and confirmation of its Plan
of Reorganization.
The Plan proposes to pay all creditors in full on their allowed
claims and return significant equity to the Debtor's interest
holder. All creditors and parties in interest with appropriate
standing will be afforded adequate time to review the disclosure
statement and plan prior to the objection deadline.
The Debtor proposes a hearing on approval of the Disclosure
Statement and confirmation of the Plan for Aug. 16, 2023.
Bankruptcy counsel to MKS Real Estate, LLC:
M. Jermaine Watson, Esq.
CANTEY HANGER LLP
600 West 6th Street, Suite 300
Fort Worth, TX 76102
Tel: (817) 877-2800
Fax: (817) 877-2807
E-mail: jwatson@canteyhanger.com
About MKS Real Estate
MKS Real Estate, LLC, owns and operates an office building valued
at $14.4 million. It is based in Fort Worth, Texas.
MKS Real Estate filed a Chapter 11 petition (Bankr. N.D. Tex. Case
No. 21-40424) on March 1, 2021. On Oct. 28, 2021, the court
entered an agreed order dismissing the bankruptcy case for one year
or until such time that the claim was paid in full, or the property
is foreclosed, whichever was later. In consideration for the
Debtor being given one year to sell the real property, the court
ordered "that [Cadence (formerly known as BancorpSouth)] will have
the right to post the real property for non-judicial foreclosure
and proceed with the foreclosure on Nov. 1, 2022 in the event the
claim is not paid in full on or before Oct. 31, 2022."
MKS Real Estate again filed a Chapter 11 petition (Bankr. N.D. Tex.
Case No. 22-42618) on Oct. 31, 2022. In the petition filed by
Olufemi Ashadele as owner, the Debtor reported assets between $10
million and $50 million and liabilities between $1 million and $10
million.
Judge Edward L. Morris oversees the 2022 case.
The Debtor is represented by M. Jermaine Watson, Esq., at Cantey
Hanger, LLP.
MLCJR LLC: Opposes Bid to Appoint Lien Creditors' Committee
-----------------------------------------------------------
MLCJR, LLC asked the U.S. Bankruptcy Court for the Southern
District of Texas to deny the motion filed by lien creditors to
appoint an official committee that will represent statutory lien
creditors in the company's Chapter 11 case.
In their motion filed on June 26, lien creditors Cardinal Coil
Tubing, LLC and Cardinal Slickline, LLC argued the appointment is
necessary to ensure lien creditors are adequately represented
especially during a Chapter 11 plan process. Both expressed concern
that the interests of unsecured creditors will at times conflict
with the rights of lien creditors who are entitled to "higher
priority waterfall distributions" under any potential bankruptcy
plan.
The motion drew support from Gulf South Services, Inc. and other
lien holders.
Rebecca Blake Chaikin, Esq., one of the Jackson Walker attorneys
representing MLCJR, said the appointment is unnecessary since the
rights of lien creditors are already represented by the official
unsecured creditors' committee and protected by the court's June 13
order, which authorized MLCJR to obtain financing to get the
company through bankruptcy.
"Each lien holder's individual lien is either a permitted prior
lien that is protected by the June 13 order and the Bankruptcy
Code, or it is a general unsecured claim and is represented by the
[unsecured creditors' committee]," Ms. Chaikin said in court
papers.
The attorney also argued the appointment would likely result in
substantial costs to MLCJR's estate.
The official unsecured creditors' committee, EP Energy E&P Company,
LLC and Amarillo National Bank, the administrative agent for
debtor-in-possession lenders, echoed the arguments raised by
MLCJR's attorney.
"The proposed committee would create another layer of expenses for
the estate solely for the benefit of purported statutory
lienholders in their priority fight, one the estate cannot fund,"
said Louis Phillips, Esq., at Kelly Hart Pitre, the DIP agent's
legal counsel.
"A separate statutory committee comprising the same type of
creditors would be duplicative and merely shift the cost of
representation from the creditors onto the already financially
strained estates, which costs may be significant," said Charles
Koster, Esq., at White & Case, LLP, who represents the unsecured
creditors' committee.
About MLCJR LLC,
Cox Operating et al.
Cox Operating L.L.C. -- https://coxoperating.com/ -- and several
affiliated entities including Cox Oil Offshore, L.L.C., Energy XXI
GOM, LLC, Energy XXI Gulf Coast, LLC, EPL Oil & Gas, LLC, M21K,
LLC, and MLCJR, LLC, a group of affiliated companies whose business
involves the extraction of offshore oil and gas in the Gulf of
Mexico. They are privately held entities indirectly owned by Cox
Investment Partners, LP, through Phoenix Petro Services LLC.
On May 12, 2023, certain trade creditors filed an involuntary
petition under Chapter 7 of the Bankruptcy Code against Cox
Operating (Bankr. E.D. La. Case No. 23-10734). The petitioning
creditors -- Keystone Chemical, LLC, et al. -- are represented by
the Slyvester Law Firm.
Cox Operating and its affiliates sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90328) on
May 14, 2023. The cases are jointly administered under In re MLCJR
LLC (Bankr. S.D. Tex. Lead Case No. 23-90324).
In the petitions signed by Craig Sanders, authorized person, the
Debtors disclosed up to $500 million in estimated assets and in
liabilities.
Judge Christopher Lopez oversees the Debtors' cases.
Lawyers at Latham & Watkins, LLP and Jackson Walker LLP represent
the Debtors as legal counsel. Moelis & Debtor LLC, led by its
managing director Bassam J. Latif, is the Debtors' investment
banker while Ryan Omohundro, a partner at Alvarez & Marsal North
America, LLC, serves as the Debtors' chief restructuring officer.
Kroll Restructuring is the claims and noticing agent.
Kelly Hart & Pitre LLP and Underwood Law Firm, P.C., serve as
counsel to Amarillo National Bank as Prepetition Lender and
Prepetition Collateral Agent.
Haynes and Boone LLP serves as counsel to BP Energy Debtor as
Prepetition Swap Party, and Houlihan Lokey, Inc. as its financial
advisor, and Looper Goodwine P.C. as its regulatory counsel.
MODIVCARE INC: Moody's Cuts CFR to B2 & Sr. Unsecured Notes to B3
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Moody's Investors Service downgraded ModivCare Inc.'s ratings,
including the Corporate Family Rating to B2 from B1, the
Probability of Default Rating to B2-PD from B1-PD, and the ratings
on the senior unsecured notes to B3 from B2. At the same time,
Moody's downgraded ModivCare's Speculative Grade Liquidity Rating
to SGL-3 from SGL-2. The outlook remains stable.
The ratings downgrade reflects the company's weakened liquidity and
elevated leverage. Cash flows have been weak due to working capital
pressure tied to contract payables and receivables in the
Non-Emergency Medical Transportation (NEMT) business, but also
elevated transaction and restructuring costs. Ongoing margin
pressure in NEMT segment from higher transportation costs and, more
recently, labor pressure in the Home Care segment have also been
headwinds. Moody's expects ongoing, but more moderate, working
capital pressure over the next 12-18 months, and non-core expenses
to remain elevated through the end of 2023. As a result, Moody's
expects a small amount of positive free cash flow in 2023. Moody's
expects Debt to EBITDA, which was 4.8x at March 31, 2023, to
gradually improve over the next 12-18 months, but remain elevated
due to headwinds from Medicaid redeterminations and continued
margin pressure in the NEMT segment.
Governance risk considerations are material to the ratings action,
reflecting ModivCare's financial policy, including its growth
strategy through acquisitions, which has contributed to high
financial leverage and weakened liquidity.
Downgrades:
Issuer: ModivCare Inc.
Corporate Family Rating, Downgraded to B2 from B1
Probability of Default Rating, Downgraded to B2-PD from B1-PD
Speculative Grade Liquidity Rating, Downgraded to SGL-3 from
SGL-2
Senior Unsecured Notes, Downgraded to B3 from B2
Outlook Actions:
Issuer: ModivCare Inc.
Outlook, Remains Stable
RATINGS RATIONALE
ModivCare's B2 rating is constrained by the company's moderately
high leverage with debt/EBITDA of approximately 4.8x at March 31,
2023 (including Moody's adjustments), and adequate liquidity. The
rating is also constrained by the company's high reliance on
Medicaid funding, comprising more than 80% of total revenues, and
the risk that state or federal policy changes or budget constraints
will pressure demand or pricing. The NEMT business is subject to
margin variability based on utilization of services and
transportation rates. Vulnerability to wage pressures, high
employee turnover and a lack of meaningful barriers to entry for
the non-emergency transportation and personal care services also
constrain the credit profile.
The rating is supported by the company's good scale with revenues
of approximately $2.6 billion and leading market positions in both
NEMT and home services. Moody's expects the personal care segment
will benefit from favorable industry dynamics, including an aging
population and a general shift towards home-based care to gain cost
efficiencies and provide a better patient environment.
The outlook is stable. Moody's expects that leverage will decline
moderately over the next 12-18 months and liquidity will improve,
evidenced by a return to positive free cash flow as working capital
pressures ease and restructuring and transaction costs subside.
ModivCare's SGL-3 Speculative Grade Liquidity Rating reflects
Moody's view that liquidity will remain adequate over the next
12-18 months. As of March 31, 2023, the company's cash balance was
$13 million. Moody's expects free cash flow to be slightly positive
in 2023 before ramping higher in 2024, with both periods benefiting
from an easing of working capital pressure tied to accrued contract
payables and receivables in the NEMT segment. Moody's expects
significantly lower restructuring and transaction related costs to
be a tailwind heading into 2024.
The company has a $325 million revolving credit facility expiring
in 2027 (unrated), which has approximately $277 of availability
(reduced by $15 million of borrowings and the remainder utilization
for letters of credit). The company's secured revolver is subject
to maximum total net leverage and minimum interest coverage
covenants which will have moderate headroom following an amendment
to ease this covenant in June 2023.
Finally, the company has a 43.6% minority equity interest in Matrix
Medical Network. Moody's believes that ModivCare's stake in the
asset represents significant value, should the company decide to
monetize it.
The B3 rating assigned to the senior unsecured notes reflects their
structural subordination to the secured debt in the company's
capital structure, comprised of a $325 million (unrated) revolving
credit facility.
ESG CONSIDERATIONS
ModivCare's CIS-4 indicates the rating is lower than it would have
been if ESG risk exposure did not exist. ModivCare has exposure to
both social risks (S-5) and governance considerations (G-4,
previously G-3). The social risks stem from demographic and
societal trends, driven by the company's high reliance on
government payors that may be subject to longer-term budgetary
pressure. ModivCare's exposure to governance risks is primarily
driven by its financial policies, including the company's growth
strategy, which have contributed to the company's high leverage and
weakened liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company delivers sustained
revenue and earnings growth with increased stability in profit
margins. A commitment to conservative financial posture partially
evidenced by debt/EBITDA sustained below 4.5x, improved quality of
earnings, along with a record of strong positive free cash flows
could also support an upgrade.
The ratings could be downgraded if operational performance
deteriorates or the company experiences significant profit margin
pressure. ModivCare's ratings could be downgraded if liquidity
deteriorates, evidenced by sustained negative free cash flow or a
significant increase in revolver utilization. Quantitatively, if
debt/EBITDA is sustained above 5.5x the ratings could be
downgraded.
Headquartered in Denver, ModivCare Inc. is the nation's largest
manager of non-emergency medical transportation programs for state
governments and managed care organizations. Within its personal
care segment, the company is a leading provider of non-medical home
care services to Medicaid patient populations, including seniors
and disabled adults in need of care monitoring and assistance
performing activities of daily living. ModivCare Inc. also provides
emergency response systems, vitals monitoring and medication
management. ModivCare Inc. generated pro forma revenues of
approximately $2.6 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.
NEO ACCOUNTING: Seeks to Hire Anthony DeGirolamo as Legal Counsel
-----------------------------------------------------------------
NEO Accounting & Tax Services, LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of Ohio to hire Anthony
DeGirolamo, Esq., a practicing attorney in Canton, Ohio, to handle
its Chapter 11 case.
Mr. DeGirolamo will charge $375 per hour for his services and $215
per hour for paralegal services. In addition, the attorney will
seek reimbursement for expenses incurred.
As of the petition date, Mr. DeGirolamo holds a retainer in the
amount of $6,979.
Mr. DeGirolamo disclosed in a court filing that he is a
"disinterested person" pursuant to Section 101(14) of the
Bankruptcy Code.
The attorney can be reached at:
Anthony J. DeGirolamo, Esq.
3930 Fulton Dr., Ste. 100B
Canton, OH 44718
Telephone: (330) 305-9700
Facsimile: (330) 305-9713
Email: tony@ajdlaw7-11.com
About NEO Accounting & Tax Services
NEO Accounting & Tax Services, LLC sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. N.D. Ohio Lead Case No.
23-50868) on June 27, 2023, with $1,255,817 in total assets and
$4,188,118 in total liabilities. Brett J. Mangon, managing member,
signed the petition.
Judge Alan M. Koschik oversees the case.
Anthony J. DeGirolamo, Esq., represents the Debtor as bankruptcy
counsel.
NOVABAY PHARMACEUTICALS: Dr. Jeff Kunin to Quit as Unit President
-----------------------------------------------------------------
Dr. Jeff Kunin advised NovaBay Pharmaceuticals, Inc. of his
decision to retire and resign from his position as the president of
DERMAdoctor, LLC, the Company's wholly owned subsidiary, effective
as of Nov. 5, 2023, the natural expiration of his Executive
Employment Agreement, dated Nov. 5, 2021.
About Novabay
Headquartered in Emeryville, California, NovaBay Pharmaceuticals,
Inc. -- http://www.novabay.com-- develops and sells scientifically
created and clinically proven eyecare and skincare products.
NovaBay's leading product, Avenova Antimicrobial Lid & Lash
Solution, is often prescribed by eyecare professionals for
blepharitis and dry-eye disease and is also available directly to
eyecare consumers through online distribution channels such as
Amazon. DERMAdoctor offers more than 30 OTC dermatologist-developed
skincare products through the DERMAdoctor website, well-known
traditional and digital beauty retailers, and international
distributors. NovaBay also manufactures and sells effective, yet
gentle and non-irritating wound care products.
Novabay reported a net loss of $10.61 million for the year ended
Dec. 31, 2022, a net loss and comprehensive loss of $5.82 million
for the year ended Dec. 31, 2021, a net loss and comprehensive loss
of $11.04 million for the year ended Dec. 31, 2020, a net loss and
comprehensive loss of $9.66 million for the year ended Dec. 31,
2019, and a net loss and comprehensive loss of $6.54 million for
the year ended Dec. 31, 2018.
San Francisco California-based WithumSmith+Brown, PC, the Company's
auditor since 2010, issued a "going concern" qualification in its
report dated March 31, 2023, citing that the Company has a history
of recurring losses and negative cash flows from operations that
raise substantial doubt about its ability to continue as a going
concern.
NXT ENERGY: Schedules Annual Meeting of Shareholders for August 2
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NXT Energy Solutions Inc. notified its shareholders that an annual
and special meeting of holders of common shares of the Company will
be held as follows:
When: 10:00 am (Calgary time) on Wednesday, August 2, 2023
Where: Norton Rose Fulbright Canada LLP
400 3rd Avenue SW, Suite 3700
Calgary, Alberta T2P 4H2
Telephone: 403.267.8222
The purpose of the Meeting will be to consider the following items
of business:
1. to receive and consider the audited financial statements of the
Company for the year ended Dec. 31, 2022, the accompanying notes
thereto, and the auditor's report in respect thereof;
2. to elect six directors of the Company;
3. to appoint MNP LLP, Chartered Professional Accountants, as the
auditors of the Company for the ensuing year at a remuneration to
be determined by the Board of Directors of the Company;
4. to consider and approve the Employee Share Purchase Plan
Resolution (as defined in the accompanying management information
circular), the full text of which is reproduced as Schedule "A" to
the accompanying Information Circular;
5. to consider and approve the Unallocated Entitlements Resolution
(as defined in the accompanying management information circular),
the full text of which is reproduced as Schedule "B";
6. to consider and approve the Preferred Share Resolution (as
defined in the accompanying management information circular); and
7. to transact such other business as may be properly brought
before the Meeting.
About NXT Energy
NXT Energy Solutions Inc. is a Calgary-based technology company
whose proprietary SFD survey system utilizes quantum-scale sensors
to detect gravity field perturbations in an airborne survey method
which can be used both onshore and offshore to remotely identify
areas with exploration potential for traps and reservoirs. The SFD
survey system enables the Company's clients to focus their
hydrocarbon exploration decisions concerning land commitments, data
acquisition expenditures and prospect prioritization on areas with
the greatest potential. SFD is environmentally friendly and
unaffected by ground security issues or difficult terrain and is
the registered trademark of NXT Energy Solutions Inc. NXT Energy
Solutions provides its clients with an effective and reliable
method to reduce time, costs, and risks related to exploration.
NXT Energy a net loss and comprehensive loss of C$6.73 million in
2022, a net loss and comprehensive loss of C$3.12 million in 2021,
a net loss and comprehensive loss of $6.03 million in 2020.
Calgary, Canada-based KPMG LLP, the Company's auditor since 2006,
issued a "going concern" qualification in its report dated March
31, 2023, citing that the Company's current and forecasted cash and
cash equivalents and short-term investments position are not
expected to be sufficient to meet its obligations which raises
substantial doubt about its ability to continue as a going concern.
ONTARIO GAMING: Fitch Assigns First Time 'B+' IDR, Outlook Positive
-------------------------------------------------------------------
Fitch Ratings has assigned a first-time Long-Term Issuer Default
Rating (IDR) of 'B+' to Ontario Gaming GTA Limited Partnership
(OTG). Fitch has also assigned a 'BB+'/'RR1' rating to OTG's senior
secured debt. The Rating Outlook is Positive.
The ratings consider OTG's pro forma EBITDAR leverage of 5.4x for
the total twelve months ending March 2023, reducing to under 4.0x
by FY25E, healthy discretionary FCF generation, and a long-term
agreement with the provincial regulator in Canada's largest market,
the Greater Toronto Area (GTA). The company has invested
approximately CAD1.3 billion in property improvements, which should
drive EBITDA growth over the near term. The long-term leverage
profile remains uncertain given the potential for material dividend
repatriation to sponsors over the rating horizon.
KEY RATING DRIVERS
Modest Long-Term Leverage: OTG's EBITDAR leverage is forecast to
reduce significantly from 5.6x at YE23 to under 4.0x over the
ratings horizon. EBITDA growth will drive the lower leverage as the
company benefits from material investments in its properties and
equipment. Fitch has not assumed FCF will be directed toward debt
repayment other than for term loan amortization, and assumes
significant dividends to the sponsors over the course of its
projections.
Favorable Regulatory Environment: OTG was selected by the Ontario
Lottery and Gaming Commission (OLG) as the operator of gaming
facilities in the GTA (Greater Toronto Area). The long-term
agreement restricts OLG from making, for a prescribed period of
time, certain changes that may impact OTGs gaming operations,
including modifying gaming zone boundaries.
The OLG retains a substantial portion of gross gaming revenue. This
is partially countered by governmental support for certain gaming
operational costs. These high barriers to entry and minimal new
competitive supply are viewed positively and set OTG's operating
environment apart from its U.S. regional peers.
Improving FCF Generation: Fitch forecasts OTG to generate material
cash flow in FY25E once development capex spending winds down for
the completion of renovations/expansion at Toronto Casino Resort
and Pickering Casino Resort. The company has invested approximately
C$1.3 billion on the renovation and expansion of its assets. The
expanded Toronto Casino Resort opened on June 20, 2023. Fitch
expects FCF will be allocated to potentially other renovations and
expansions, as well as funding distributions to its sponsors.
Lack of Geographic Diversification: OTG operates four properties in
the GTA, including the completed casino floor at the Toronto Casino
Resort, and Pickering Casino. The new Toronto Casino Resort and the
Pickering Casino Resort are the only casino resorts in the GTA with
the nearest direct competitors approximately one to two hours away
in Niagara Falls (Fallsview Casino and Casino Niagara). Considering
the GTA is the third largest and fastest growing metropolis in
North America, and is relatively underpenetrated compared to other
large gaming markets.
The lack of geographic diversification is mitigated by the large
market size, capacity to materially grow gaming revenues through
development/expansions and operating improvement, and OTG's
long-term agreement with OLG. OTG benefits from its reliance on
local, drive-in customers and international tourism exposure.
Canadian Regional Gaming Recovery: Canada's casino industry
recovered at a slower pace than the U.S. given more conservative
public health policies related to the pandemic, including operating
restrictions. Gaming demand has returned to more normalized levels
given the lifting of restrictions in spring 2022 and ongoing
rollout of additional non-gaming amenities.
Fitch expects Canada to avoid a recession in 2023, compared to a
mild one in the U.S., according to its Global Economic Outlook
published June 2023. Canada's less intense macroeconomic headwinds
and more modest recovery in gaming revenues relative to the U.S.
should allow it to outperform in 2023. Fitch expects U.S. regional
gaming revenue to decline in the mid-single digits in 2023 and
Canadian regional gaming revenue to remain flat. Positively, OTG
benefits from its reliance on local, drive-in customers and limited
international tourism exposure.
Governance: OTG is a joint venture between Great Canadian
Entertainment (owned by Apollo) and Brookfield. The board is
composed of six members split equally between Great Canadian and
Brookfield. The JV management has indicated they intend to take a
measured approach to shareholder returns and prioritize maintaining
a lower leverage profile for the OTG JV. Great Canadian has entered
into management and development service agreements with the JV.
DERIVATION SUMMARY
OTG's 'B+' IDR reflects its modest leverage, strong discretionary
FCF generation and favorable regulatory environments, in which it
has a long-term agreement to operate in the Toronto region.
Management has indicated that it plans to delever the entity,
although there is still some uncertainty surrounding its long-term
financial policy. OTG's position in the greater Toronto area
compares similarly to Seminole Tribe of Florida (BBB/Stable;
exclusivity in deep Florida market), Crown Resorts Limited and Star
Entertainment, which enjoy exclusivity in certain Australian
markets.
Similarly, Las Vegas Sands Corp (BB+/Rating Outlook Negative) has
exposure to Singapore and Macau, two deep international
jurisdictions with only two and six operators, respectively. Fitch
has less tolerance for leverage at OTG relative to Las Vegas Sands,
as the latter has international diversification and a
well-articulated conservative financial policy. OTG's operating
environment is more favorable than most of its U.S. regional gaming
peers, due to the size of the Toronto population and the regulatory
environment, which reduces competition.
KEY ASSUMPTIONS
-- Completion of the casino floor at the Toronto Casino Resort in
June 2023 with hotel and theater expected to be completed by Sept.
30, 2023 and property ramp-up to run rate by Q1 2025.
-- 72% revenue growth in FY23E following impact of closure due to
COVID, followed by 32% and 17.4% rev growth in FY24E and FY25E
driven by 5% growth in table games, slots, and non-gaming revenues
at newly completed Toronto Casino Resort and Pickering Casino,
along with 2% growth in slot win, table win and F&B at Great Blue
Heron Casino & Hotel and Casino Ajax. 7.5% rev growth in FY25E, and
5.9% in FY26E thereafter as operations stabilize at group
properties.
-- Development capex of CAD224 million in FY24E and CAD81 million
in FY25E as renovations/expansion are completed at OTG properties.
Maintenance capex of CAD11 million, CAD13 million, and CAD14
million for FY24E to FY26E.
-- Labor, wages, and corporate expenses forecast to increase as a
percentage of revenues in 2024E due to inflationary pressures then
to gradually reduce for the remainder of the forecast horizon as
management right sizes the business and implements efficiencies.
-- Marketing and promotion expected to increase in FY24E as new
properties are completed and advertising spend to bring awareness
increases, before reducing to historical levels by the end of the
forecast horizon.
-- EBITDAR margins forecasted to dip in FY24E as new properties
come online and due to potential recessionary environment expected
in 23Q4/24Q1, before increasing incrementally to 61.6% by FY27E.
-- Base interest rates applicable to the company's outstanding
variable rate debt obligations reflects current SOFR forward
curve;
-- Fitch assumes a dividend of CAD100 million in FY24 and annual
dividends thereafter of CAD300 million.
The 'BB+'/'RR1' rating for OTG's senior secured debt are notched
from its 'B+' IDR based on a bespoke analysis. The recovery
analysis assumes the OTG would be reorganized as a going-concern in
bankruptcy rather than liquidated. Fitch estimates an enterprise
value (EV) on a going concern basis of CAD2.3 billion for OTG. The
EV assumption is based on post-reorganization EBITDA approximately
CAD330 million, a 7.0x multiple and a deduction of 10% for
administrative claims.
Fitch projects a post-restructuring sustainable cash flow, which
assumes both depletion of the current position to reflect the
distress that provoked a default, and a level of corrective action
Fitch assumes either would have occurred during restructuring, or
would be priced into a purchase price by potential bidders. The GC
EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which it bases the EV.
OTG's going concern EBITDA of about CAD330 million considers
recessionary/inflationary pressures coupled with the potential for
the company to take on unsustainable leverage to fund shareholder
dividends. This is approximately 11% below normalized EBITDA, but
reflects a forward view that a restructuring would alleviate
operating and leverage pressures, and that the business would
recover strongly post reorganization.
The 7.0x EV multiple assumption is aligned with most U.S. regional
peers and Great Canadian (7.0x) given OTG's strong competitive
position with operations in the economically strong GTA and the
high barriers to entry due to the long-term agreement with the OLG.
OTG also has low rent expense, which increases its financial
flexibility relative to some U.S. regional peers.
Fitch uses a range of 5.0x-7.0x recovery multiples for most U.S.
regional peers, dependent on market position, diversification and
materiality of rent expense. In applying the distributable
proceeds, Fitch assumes CAD1.8 billion of senior secured debt,
including a fully drawn CAD200 million revolving credit facility.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- EBITDAR leverage sustaining below 4.5x;
-- Greater transparency around the financial policy consistent
with maintaining a 'BB' category financial structure;
-- Proven ability to generate material FCF through returns on
recent capital projects and managing future capex;
-- Assuming high growth projects without materially increasing
leverage.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- EBITDAR leverage increasing above 5.5x;
-- FCF primarily funding shareholder returns, as opposed to gaming
and nongaming reinvestment;
-- Prolonged operating weakness in GCGC's primary markets,
including pandemic-related trends (i.e. property closures,
operating restrictions).
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
OTG's liquidity at March 31, 2023 consisted of CAD-equivalent 56
million of revolver availability and CAD313 million of cash on the
balance sheet. Discretionary FCF generation is expected to be
slightly negative in FY24E as the company completes
renovations/expansion at their GTA properties before becoming
positive in FY25E and beyond as construction completes and new
properties stabilize.
Development Capex spend is expected to continue through to FY 2024,
although the majority of the planned spending has mostly been
completed by FY23E. Absent any unannounced project, spend is
expected to reduce to maintenance capex levels by FY26E.
Distributions to cover the partners' attributable tax liabilities
will be made; however, Fitch estimates distributions beyond this
amount throughout the forecast horizon. OTG should have full
availability before letters of credit of the proposed CAD200
million revolving facility after assumed pay down in 2024 and total
liquidity is expected to be strong for the entirety of the forecast
horizon.
ISSUER PROFILE
One Toronto Gaming (OTG) is an equal interest partnership between
Great Canadian (Apollo) and Brookfield that operates gaming
facilities in the Greater Toronto Area. OTG owns and operates four
properties all located within the Toronto metropolitan region -
Toronto Casino Resort, Casino Ajax, Great Blue Heron Casino and
Pickering Casino Resort.
ONTARIO GAMING: S&P Assigns 'B' ICR, Outlook Stable
---------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating (ICR) to
Ontario-based regional gaming operator Ontario Gaming GTA L.P.
(OTG). S&P's stand-alone credit profile (SACP) for OTG of 'b' is
based on the company's weak business risk profile and highly
leveraged financial risk profile.
S&P assesses OTG's status in the GCGC group as strategically
important, reflecting the importance of OTG's assets to GCGC.
S&P said, "We also assigned our 'B' rating and '3' recovery rating
to the TLB and other secured debt. The '3' recovery rating
indicates our view that lenders can expect a meaningful recovery
(50%-70%; rounded estimate 65%) of principal in the event of
payment default.
"The stable outlook reflects our expectation that, despite the risk
from economic headwinds, OTG's EBITDA and credit measures will
improve significantly. However, the benefit from improved leverage
is offset by financial policy risk and execution risks as the
properties ramp up."
OTG's upgraded gaming properties, including non-gaming amenities,
and its new loyalty program should help spur growth. With the
recent opening of the Toronto Casino property (on June 20, 2023;
the expanded gaming floor, hotel, and theater will open by Sept.
30, 2023), OTG is close to finishing its C$1.5 billion development
project for the Greater Toronto Area (GTA) bundle. As part of the
bundle expansion, OTG will add about 4,100 slot machines, about 240
table games overall, and non-gaming amenities such as hotels and
entertainment venues at both its Toronto and Pickering casinos, as
well as multiple food and beverage (F&B) offerings. We believe this
investment significantly improves OTG's scale and bolsters its
competitive position because its new and upgraded gaming
properties, along with non-gaming amenities, will attract more
customers and help penetrate the Toronto gaming market, which
historically has shown lower propensity for gaming spend compared
with other, more developed locations such as Vancouver. In
addition, OTG's adoption of the GCGC branding and loyalty program
should further aid in its penetration of the Toronto market. The
programs will not only attract new customers but will also bring in
existing customers from GCGC's adjacent Ontario bundles to its
Toronto and Pickering locations, as the new hotels and
entertainment venues will offer affordable alternatives to a
destination-oriented customer.
S&P said, "We expect the ramp-up of new properties will lead to
modest deleveraging in the near term and FOCF generation in fiscal
2025. Pro forma the transaction, OTG will exit fiscal 2023 with
about 5.5x leverage. Ramp-up of the expanded Toronto property and
the new build Pickering property together with their respective
non-gaming amenities should take an additional 18-24 months to
reach full utilization, leading to incremental EBITDA of C$100
million-C$130 million. As a result, we forecast S&P Global Ratings'
adjusted debt to EBITDA will remain at 5.0x-5.5x in fiscal 2024,
but trend below 5.0x in the following year given the full-year
contributions from both the Pickering and Toronto casinos. In
addition, given our expectation for significant EBITDA growth, and
a material reduction in capital spending once the project is
completed in fiscal 2024 (ending March 31, 2024), we expect OTG
will begin generating healthy FOCF, providing further support to
its financial metrics and helping to enhance its liquidity
position. However, the risk remains that any unforeseen delays in
the ramping up of either of the properties, but more importantly
Toronto, could delay deleveraging."
Strong EBITDA margins might face temporary headwinds but are
expected to be sustained. The addition of the newly renovated
Toronto Casino resort and the Pickering Casino resort together with
their respective non-gaming amenities should add an incremental
C$100 million-C$130 million of annualized EBITDA from fiscal 2023
levels. S&P said, "However, as the casinos and hotels ramp up, we
expect modest margin pressure as they become fully operational over
the next 18-24 months. At the same time, OTG is engaging in
value-creation initiatives including the optimization of its gaming
mix, managing its F&B offerings (across all of GCGC), using updated
procurement and vendor management, and revamping its marketing
strategy, which we believe will help to offset some of the margin
compression during the ramp-up period of its newly renovated
casinos."
S&P said, "Our weak business risk assessment incorporates OTG's
solid market position but limited geographic and revenue diversity.
OTG operates four casinos in Ontario. All of the properties are
within the GTA, a market which shows a potential for favorable
growth reflecting the market's current underperformance (fewer
gaming positions and lower gaming revenue per adult compared with
other cities). Considering strong population growth in Canada,
especially Toronto, and with all four casinos reasonably close to
the city, we expect steady top-line growth for the casinos. In
addition, barriers to entry are high given the regulatory
environment: Ontario Lottery and Gaming Corp. (OLG) has a long-term
agreement with OTG that prevents OLG from making particular changes
that may affect OTG's gaming operations, including modifying gaming
zone boundaries for a certain period of time.
"Our assessment of OTG's business also incorporates its lack of
geographic diversity, given its concentration in the GTA and the
outsize contribution to its revenue and EBITDA from its Toronto and
Pickering operations (combined close to 90% once fully ramped up).
We believe this increases OTG's risk of being adversely affected by
region-specific events, including economic weakness, or unexpected
property-specific underperformance. In addition, the company's
revenue concentration, with about 85%-90% of revenue attributable
to gaming, increases the risk to revenues and EBITDA during
macroeconomic conditions where consumers could lower their gaming
spend.
"We view OTG as strategically important to GCGC. Our assessment of
OTG's status in the GCGC group is strategically important. However,
we view the degree of support and control by GCGC as limited by the
joint venture partnership between GCGC and Brookfield. We assess
that OTG is unlikely to be sold and is important to GCGC's
long-term strategy: OTG will generate about two-thirds of GCGC's
consolidated EBITDA (GCGC EBITDA including 100% OTG EBITDA) when
all the properties are fully operational, compared with less than
50% during the pre-development phase. GCGC manages the OTG
properties and is responsible for its operating performance, while
GCGC's loyalty program allows cross-marketing opportunities to all
OTG customers. Based on the strategically important assessment, the
ratings on GCGC will constrain that of OTG.
"The stable outlook reflects our expectation that, despite the
risks of some economic headwinds, OTG's EBITDA will improve
significantly. We expect the operating environment will continue to
normalize while the Toronto and Pickering properties ramp up and
become fully operational, thus improving leverage to 5.0x-5.5x in
the next 12 months. Our stable outlook also incorporates the view
that following the winding down of the development project over the
next 12 months, OTG will generate significant FCF that should
support liquidity."
S&P could lower its rating on OTG if it lowers its rating on GCGC.
S&P said, "In addition, we could revise downward our SACP and lower
our ratings on OTG if, due to operational missteps or macroeconomic
weakness, the debt-to-EBITDA ratio deteriorates above 7.0x. We
could also take a negative rating action if management pursues
additional significant debt-financed development or acquisitions or
returns cash to shareholders (excluding tax distributions), which
could indicate the adoption of a more aggressive financial policy.
"We could raise our rating on OTG only if we raise our rating on
parent GCGC and revise upward our SACP on OTG, considering that OTG
is strategically important in the group.
"We could revise upward our SACP on OTG to 'b+' in the next 12
months should the OTG properties outperform our expectations such
that leverage is sustained below 5.5x, while financial sponsors
maintain a conservative policy."
ESG credit indicators: E-2, S-3, G-3
S&P said, "Social factors are a moderately negative consideration
in our credit rating analysis. During the pandemic, the company had
most of its properties either closed or operating intermittently
(Ontario) at reduced capacities. Governance factors are a
moderately negative consideration, as is the case for most rated
entities owned by private-equity sponsors. We believe the company's
highly leveraged financial risk profile points to corporate
decision-making that prioritizes the interests of the controlling
owners. This also reflects generally finite holding periods and a
focus on maximizing shareholder returns."
PEABODY ENERGY: S&P Withdraws 'B' Long-Term Issuer Credit Rating
----------------------------------------------------------------
On July 12, 2023, S&P Global Ratings withdrew its 'B' long-term
issuer credit rating on Peabody Energy Corp. at the issuer's
request. At the time of the withdrawal, the outlook was positive.
The withdrawal followed the company's termination of its $324
million letter of credit facility and amendment of its surety
agreement.
PHASEBIO PHARMACEUTICALS: Hearing on Disc. Statement on July 31
---------------------------------------------------------------
PhaseBio Pharmaceuticals, Inc., filed a motion for entry of an
order granting conditional approval of the adequacy of the Debtor's
Combined Disclosure Statement and Chapter 11 Plan on an interim
basis and for solicitation purposes only and granting related
relief.
A hearing on the Motion is scheduled for July 31, 2023, at 2:00
p.m., at U.S. Bankruptcy Court, 824 Market St., 6th Fl., Courtroom
#2, Wilmington, Delaware. Objections are due by July 21, 2023.
The Debtor proposes these key dates in connection with the
solicitation of votes and confirmation of the Plan:
* The Voting Record Date will be on July 31, 2023.
* The Solicitation Mailing Date is within three business days
from entry of the conditional approval and procedures order, or as
soon as reasonably practicable thereafter (which is expected to be
Aug. 3, 2023).
* The claim objection deadline (for voting purposes only) will
be on Aug. 18, 2023.
* The Rule 3018 motion deadline will be on Aug. 30, 2023 at 4:00
p.m. (ET).
* The deadline to file a Plan Supplement will be on Aug. 30,
2023.
* The voting deadline will be on Sept. 6, 2023 at 4:00 p.m.
(ET).
* The Rule 3018 objection deadline will be on Sept. 6, 2023 at
4:00 p.m. (ET).
* The Plan confirmation objection deadline will be on Sept. 6,
2023 at 4:00 p.m. (ET).
* The deadline to file memoranda of law, replies to any
objections to the Combined Disclosure Statement and Plan, and/or
affidavits in support of confirmation of the Combined Disclosure
Statement and Plan, and the voting declaration will be on Sept. 14,
2023 at 4:00 p.m. (ET).
* The Plan confirmation hearing will be on Sept. 19, 2023 at
2:00 p.m. (ET).
Counsel for the Debtor:
Daniel J. DeFranceschi, Esq.
Michael J. Merchant, Esq.
Brendan J. Schlauch, Esq.
Sarah E. Silveira, Esq.
James F. McCauley, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square, 920 N. King Street
Wilmington, DE 19801
Telephone: (302) 651-7700
Facsimile: (302) 651-7701
E-mail: defranceschi@rlf.com
merchant@rlf.com
schlauch@rlf.com
silveira@rlf.com
mccauley@rlf.com
- and -
Cullen Drescher Speckhart, Esq.
Olya Antle, Esq.
COOLEY LLP
1299 Pennsylvania Avenue, NW, Suite 700
Washington, DC 20004
Telephone: (202) 842-7800
Facsimile: (202) 842-7899
E-mail: cspeckhart@cooley.com
oantle@cooley.com
- and -
Robert L. Eisenbach III, Esq.
COOLEY LLP
3 Embarcadero Center, 20th Floor
San Francisco, CA 94111
Telephone: (415) 693-2000
Facsimile: (415) 693-2222
E-mail: reisenbach@cooley.com
About Phasebio Pharmaceuticals
PhaseBio Pharmaceuticals, Inc. -- https://www.phasebio.com/ -- is
focused on the development and commercialization of novel therapies
to treat orphan diseases, with an initial focus on cardiopulmonary
indications. It is based in Malvern, Pa.
PhaseBio Pharmaceuticals filed a petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Case No. 22-10995) on
Oct. 24, 2022. In the petition filed by its chief executive
officer, Jonathan Mow, the Debtor reported $17,970,000 in assets
and $21,320,000 in debt as of Aug. 31, 2022.
Judge Laurie Selber Silverstein oversees the case.
The Debtor tapped Cooley LLP as lead bankruptcy counsel; Richards,
Layton & Finger, PA, as Delaware bankruptcy counsel;
SierraConstellation Partners, LLC as financial advisor; KPMG, LLP
as tax consultant; and Miller Buckfire & Co. as investment banker.
Omni Agent Solutions is the claims, noticing and administrative
agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors in the Debtor's case on Nov. 3, 2022.
McDermott Will & Emery, LLP and FTI Consulting, Inc., serve as the
Committee's legal counsel and financial advisor, respectively.
PHASEBIO PHARMACEUTICALS: Unsecureds to Get 3.4% to 3.6% in Plan
----------------------------------------------------------------
PhaseBio Pharmaceuticals, Inc., submitted a Combined Disclosure
Statement and Chapter 11 Plan.
The Combined Disclosure Statement and Plan constitutes a
liquidating chapter 11 plan for the Debtor. The Plan provides
that, upon the Effective Date, the Liquidation Trust Assets will be
transferred to the Liquidation Trust and the Debtor will be
dissolved. The Liquidation Trust Assets will be administered and
distributed as soon as practicable pursuant to the terms of the
Combined Disclosure Statement and Plan and the Liquidation Trust
Agreement.
Following the closing of the SFJ Settlement and Sale Transaction
and the NonBentracimab Asset Sales, the Debtor and the Committee
engaged in discussions regarding the Debtor's potential paths to
exit chapter 11. As a result of these discussions, the Debtor and
the Committee reached a settlement regarding the resolution of the
Chapter 11 Case (the "Global Settlement"). The Global Settlement
contemplates, among other things:
* the wind-down of the Debtor and its Estate pursuant to the
Combined Disclosure Statement and Plan;
* the agreement by the Released Directors & Officers to waive
their right to payment of all Board Fees and Expenses for service
on the Debtor's board from and after January 1, 2023;
* the agreement by the Transition Services Participants to waive
their right to recover their share of the Initial Bentracimab
Royalties Recovery under the terms of the Committee Settlement;
* in exchange for the consideration being provided pursuant to
the Global Settlement, the Released Parties and the Exculpated
Parties shall receive the releases and exculpation set forth in
Articles XIV.A–C of the Combined Disclosure Statement and Plan,
provided however, that any Released Claims or Causes of Action that
are or may be covered by the D&O Insurance Policies are released
solely to the extent that any recoveries on account of those
Released Claims or Causes of Action exceed the available limits of
the D&O Insurance Policies, and provided further that, for the
avoidance of doubt, nothing set forth in Articles XIV.B or XIV.C
below in any way limits the ability of any party in interest,
including the Liquidation Trust and/or Liquidating Trustee, as
applicable, to commence a Cause of Action or pursue any Claim
against the Released Directors & Officers that is or may be covered
by the D&O Insurance Policies, subject to the limitations of this
Global Settlement and limited to the available proceeds of the D&O
Insurance Policies; and
* each of the Debtor and the Committee agrees to support
confirmation of the Combined Disclosure Statement and Plan,
including the treatment provided to such parties therein.
The Global Settlement is an integral component of the Combined
Disclosure Statement and Plan and is necessary to achieve a
beneficial resolution of the Chapter 11 Case for all parties in
interest.
The Debtor believes that the Global Settlement represents a fair
and reasonable settlement of all issues relating to the Chapter 11
Case. In particular, the Global Settlement provides for the orderly
wind down of the Debtor and its Estate and enhances initial
recoveries to Holders of Allowed General Unsecured Claims. Absent
the Global Settlement and the agreement by the Released Directors &
Officers to, among other things, waive certain Board Fees and
Expenses and their right to recover their share of the Initial
Bentracimab Royalties Recovery under the terms of the Committee
Settlement, Holders of Allowed General Unsecured Claims would
recover less on account of their Claims. Accordingly, the Debtor
believes that the Global Settlement is fair, reasonable, in the
best interests of the Debtor's Estate and should be approved.
Under the Plan, Class 3 General Unsecured Claims total $26,919,721.
Each holder of an allowed general unsecured claim will receive one
or more distributions equal to its Pro Rata share of the Class 3
Distributable Assets as such distributions become available as is
reasonably practicable in the reasonable discretion of the
Liquidation Trustee. Creditors will recover 3.4% to 3.6% of their
claims. Class 3 is impaired.
"Class 3 Distributable Assets" means the remaining amount of
Liquidation Trust Assets following (i) the payment of all
Liquidation Trust Expenses and (ii) satisfaction in full of all
Allowed Administrative Expense Claims, Allowed Fee Claims, Allowed
Priority Tax Claims, Allowed Secured Claims and Allowed Priority
Non-Tax Claims.
Counsel to the Debtor:
Daniel J. DeFranceschi, Esq.
Michael J. Merchant, Esq.
Brendan J. Schlauch, Esq.
Sarah E. Silveira, Esq.
James F. McCauley, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square, 920 N. King Street
Wilmington, DE 19801
Telephone: (302) 651-7700
Facsimile: (302) 651-7701
E-mail: defranceschi@rlf.com
merchant@rlf.com
schlauch@rlf.com
silveira@rlf.com
mccauley@rlf.com
- and -
Cullen Drescher Speckhart, Esq.
Olya Antle, Esq.
COOLEY LLP
1299 Pennsylvania Avenue, NW, Suite 700
Washington, DC 20004
Telephone: (202) 842-7800
Facsimile: (202) 842-7899
E-mail: cspeckhart@cooley.com
oantle@cooley.com
- and -
Robert L. Eisenbach III, Esq.
COOLEY LLP
3 Embarcadero Center, 20th Floor
San Francisco, CA 94111
Telephone: (415) 693-2000
Facsimile: (415) 693-2222
E-mail: reisenbach@cooley.com
A copy of the Combined Disclosure Statement and Chapter 11 Plan
dated July 7, 2023, is available at https://tinyurl.ph/gsLUK from
Omniagentsolutions, the claims agent.
About Phasebio Pharmaceuticals
PhaseBio Pharmaceuticals, Inc. -- https://www.phasebio.com/ -- is
focused on the development and commercialization of novel therapies
to treat orphan diseases, with an initial focus on cardiopulmonary
indications. It is based in Malvern, Pa.
PhaseBio Pharmaceuticals filed a petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Case No. 22-10995) on
Oct. 24, 2022. In the petition filed by its chief executive
officer, Jonathan Mow, the Debtor reported $17,970,000 in assets
and $21,320,000 in debt as of Aug. 31, 2022.
Judge Laurie Selber Silverstein oversees the case.
The Debtor tapped Cooley LLP as lead bankruptcy counsel; Richards,
Layton & Finger, PA as Delaware bankruptcy counsel;
SierraConstellation Partners, LLC as financial advisor; KPMG, LLP
as tax consultant; and Miller Buckfire & Co. as investment banker.
Omni Agent Solutions is the claims, noticing and administrative
agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors in the Debtor's case on Nov. 3, 2022.
McDermott Will & Emery, LLP and FTI Consulting, Inc., serve as the
Committee's legal counsel and financial advisor, respectively.
PLX PHARMA: Hearing on Disclosure Statement on July 28
------------------------------------------------------
PLX Pharma Winddown Corp., et al., filed a motion for entry of an
order, approving the Debtors' Combined Disclosure Statement and
Joint Chapter 11 Plan of Liquidation, filed contemporaneously
herewith, on an interim basis for solicitation purposes only and
granting related relief.
A hearing on the Motion is scheduled for July 28, 2023, at 10:30 AM
at US Bankruptcy Court, 824 Market St., 5th Fl., Courtroom #4,
Wilmington, Delaware. Objections are due by July 21, 2023.
As set forth in the Declaration of Lawrence Perkins in Support of
Chapter 11 Petitions and First Day Motions, the Debtors commenced
the Chapter 11 Cases to conduct a sale process for substantially
all of their assets pursuant to Section 363 of the Bankruptcy Code.
To that end, on April 13, 2023, the Debtors filed a motion seeking
entry of an order, among other things, establishing certain bidding
and auction procedures in connection with the Sale Process.
On May 10, 2023, the Court entered an order approving the Bidding
Procedures Motion, solely as it pertained to establishment of the
bidding and auction procedures for the sale of the Debtors' assets.
On May 19, 2023, in accordance with the Bidding Procedures, the
Debtors filed a notice of cancellation of the auction and their
intent to seek approval of the Stalking Horse APA.
On May 25, 2023, following a hearing, the Court entered the Sale
Order, thereby approving the sale of the assets to the Stalking
Horse Bidder pursuant to the Stalking Horse APA. The sale closed
on May 26, 2023.
A summary of the key dates proposed to be established by the
Proposed Solicitation Procedures and Bar Date Order, subject to the
Court's availability, is set forth below:
* The Voting Record Date will be on July 28, 2023.
* The Service Date will be on August 4, 2023.
* The Deadline to Object to Confirmation and Final Approval of
Adequacy of Disclosures will be on Sept. 1, 2023 at 4:00 p.m.
(ET).
* The Initial Administrative Claim Bar Date will be on
September 1, 2023 at 4:00 p.m. (ET).
* The Voting Deadline will be on Sept. 1, 2023 at 4:00 p.m.
(ET).
* The Plan confirmation hearing date will be on Sept. 13, 2023,
at 2:00 p.m. (ET).
Any objections or proposed modifications to the interim approval of
the Combined Disclosure Statement and Plan shall be filed and
served , by no later than 4:00 p.m. (prevailing Eastern Time) on
July 21, 2023.
Counsel to the Debtors:
Robert S. Brady, Esq.
Robert F. Poppiti, Jr., Esq.
Shane M. Reil, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
1000 North King Street
Wilmington, DE 19801
Telephone: (302) 571-6600
Facsimile: (302) 571-1253
E-mail: rbrady@ycst.com
rpoppiti@ycst.com
sreil@ycst.com
- and -
Adam H. Friedman, Esq.
Jonathan T. Koevary, Esq.
OLSHAN FROME WOLOSKY LLP
1325 Avenue of the Americas
New York, NY 10019
Telephone: (212) 451-2300
E-mail: afriedman@olshanlaw.com
jkoevary@olshanlaw.com
About PLx Pharma
PLx Pharma Inc. and PLx Opco Inc. are a commercial-stage drug
delivery platform technology company, focused on improving how and
where active pharmaceutical ingredients are absorbed in the
gastrointestinal tract, via its clinically-validated and
patent-protected PLxGuard technology.
PLx Pharma Inc. and PLx Opco filed voluntary petitions for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10456) on April 13, 2023. The petitions were signed by
Lawrence Perkins as chief restructuring officer. The Hon. Mary F.
Walrath oversees the cases.
As of Dec. 31, 2022, the company had $21,750,000 in total assets
against $12,285,000 in total liabilities.
Lawyers at Olshan Frome Wolosky LLP and Young Conaway Stargatt &
Taylor LLP serve as counsel to the Debtors; SierraConstellation
Partners serves as CRO Provider; Donlin, Recano & Company serves as
notice, claims, solicitation & balloting agent.
PLX PHARMA: Unsecureds Owed $11.9M to Get 49% in Plan
-----------------------------------------------------
PLx Pharma Winddown Corp., f/k/a PLx Pharma Inc., and PLx Opco
Winddown Corp., f/k/a PLx Opco Inc., submitted a Combined
Disclosure Statement and Joint Chapter 11 Plan of Liquidation.
In the ordinary course of business, the Debtors incurred unsecured
indebtedness to various suppliers, trade vendors, their landlord,
utility providers, and service providers, among others. As of the
Petition Date, the Debtors' estimated consolidated outstanding
unsecured indebtedness, including raw materials purchases based on
the Debtors' forecast, manufacturing capacity reservation fees,
returns from retailers for expired and excess product at retail
stores, and trade payables, excluding the MPG Group's allowed
prepetition unsecured deficiency claim, is approximately $11.9
million, the bulk of which is due and owing to Patheon and its
affiliate, Patheon Manufacturing Services LLC.
On May 10, 2023, in accordance with the Bid Procedures Order, the
Debtors filed and served the Notice of Auction, Sale Hearing and
Certain Related Deadlines (the "Sale Notice"). The Sale Notice
identified certain deadlines, which were approved by the Bid
Procedures Order (the "Sale Deadlines"). Among others, the Sale
Deadlines included a May 19, 2023 bid deadline, a May 22, 2023
auction date (as necessary) and a May 25, 2023 sale hearing.
Notwithstanding the Debtors' robust pre- and postpetition sale
process, no parties except for the Stalking Horse Bidder provided a
bid and, in accordance with the Bid Procedures Order, the auction
was cancelled.
However, in consideration of comments made by the Bankruptcy Court
at the hearing to consider the Bid Procedures Order, the Debtors
and the Stalking Horse Bidder amended the Stalking Horse APA to,
among other things, provide clarity that certain assets would
remain with the Debtors, including an approximate $69,000 tax
refund due and owing from the State of Delaware and to allow for
the reconciliation of the MPG Claim. The amendment was filed with
the Bankruptcy Court on May 23, 2023. On May 25, 2023, the
Bankruptcy Court conducted a hearing to consider the Sale to the
Stalking Horse Bidder under the Stalking Horse APA, as amended, on
an uncontested basis. At the conclusion of the hearing, the
Bankruptcy Court entered the Sale Order, thereby approving the
Sale.
In addition to approving the Sale, among other things, the Sale
Order (i) fixed the Allowed General Unsecured Claim of the MPG
Group at $1.7 million (as described above); (iii) authorized the
Debtors to change their names upon consummation of the Sale as
required by the Stalking Horse APA; and (iii) provided for certain
releases between the Debtors and the Stalking Horse Bidder. Also,
Section 2.1 of the Stalking Horse APA provides the list of assets
purchased by the Stalking Horse Bidder (subject to the later filed
amendment) and includes the purchase of all "Acquired Claims,"
which are defined as: all causes of action, lawsuits, judgments,
Claims, refunds, rights of recovery, rights of setoff,
counterclaims, defenses, demands, remedies, warranty claims, rights
to indemnification, contribution, advancement of expenses or
reimbursement, or similar rights (whether choate or inchoate, known
or unknown, contingent or noncontingent) available to Sellers or
their estates as of the time of Closing against (a) Buyer or any of
its Affiliates (other than Claims pursuant to this Agreement or
arising out of the Transactions contemplated hereby), (b) any
person who at any time at or prior to Closing served or may serve
as a director, officer, manager, employee or advisor of any Seller
and any shareholder or Related Party of any Seller, (c) any
customer, supplier, manufacturer, distributor, broker, or vendor of
any Seller or any other Person with whom any Seller has an ordinary
course commercial relationship, and (d) any other third party.
In turn, the Stalking Horse Bidder released the Acquired Claims (as
defined in the Stalking Horse APA) as and to the extent provided
for in Paragraph 30 of the Sale Order, which provides: Effective
upon the Closing Date, the Stalking Horse Bidder shall forever and
irrevocably be deemed to have released, discharged, and acquitted
the Debtors and their estates and each of their former, current,
and future officers, employees, directors, agents, representatives,
owners, members, shareholders, partners, financial and other
advisors, investors and consultants, legal advisors, shareholders,
managers, consultants, accountants, attorneys, affiliates, and
predecessors and successors in interest from any and all claims,
demands, liabilities, responsibilities, disputes, remedies, causes
of action, indebtedness and obligations, rights, assertions,
allegations, actions, suits, controversies, proceedings, losses,
damages, injuries, reasonable attorneys' fees, costs, expenses, or
judgments of every type, whether known, unknown, asserted,
unasserted, suspected, unsuspected, accrued, unaccrued, fixed,
contingent, pending or threatened, including all legal and
equitable theories of recovery, arising under common law, statute
or regulation or by contract, of every nature and description;
provided, however, nothing herein shall release any rights, claims
and defenses of the Stalking Horse Bidder with respect to the
Remaining Stalking Horse Bidder Claim or any claims or causes of
action that the Stalking Horse Bidder may have to enforce the terms
of the Stalking Horse APA and this Sale Order.
As set forth in the Notice of Sale Closing, Change of Debtors'
Names, and Assumed and Assigned Agreements dated May 26, 2023, the
Sale closed on May 26, 2023.
Following the closing of the Sale, the Debtors have been focused
principally on efficiently winding down their businesses and
preserving Cash held in the Estates. That included eliminating
virtually all operating expenses, including terminating all
employees and closing the Debtors' office by June 30, 2023.
In addition, as part of those wind down efforts, the Debtors filed
a motion to reject certain executory contracts and unexpired leases
and abandon certain personal property of de minimis or no value to
their Estates. The Debtors expect to seek the rejection of other
contracts and leases.
This Combined Disclosure Statement and Plan provides for the assets
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 Plan
Administrator will effect such liquidation and Distributions. The
Debtors will be dissolved as soon as practicable after the
Effective Date.
Under the Plan, Class 3 General Unsecured Claims total $11,907,000.
Subject to the terms of this Combined Disclosure Statement and
Plan, each Holder of an Allowed Class 3 Claim, in full satisfaction
of such Allowed Class 3 Claim, will receive (i) its Pro Rata share
of the General Unsecured Claim Distribution, or (ii) such other
less favorable treatment as to which such Holder and the
Post-Effective Date Debtors will have agreed upon in writing.
Creditors will recover 49% of their claims. Class 3 is impaired.
The aggregate amount of cash or proceeds realized from the Assets
of the Estates, including, without limitation, the proceeds of any
Retained Causes of Action, available for Distribution Pro Rata to
Holders of Allowed General Unsecured Claims, after the payment, or
appropriate reserves have been established, in full satisfaction of
wind-down costs, including fees payable pursuant to section 1930 of
title 28 of the United States Code, Allowed Unclassified Claims,
Allowed Secured Claims and Allowed Priority Non-Tax Claims.
The Plan will be implemented by, among other things, the
appointment of the Plan Administrator and the making of
Distributions from the Assets, including, without limitation, all
Cash and the proceeds, if any, from the Retained Causes of Action,
by the Post-Effective Date Debtors in accordance with the Plan and
the Plan Administrator Agreement. Except as otherwise provided in
the Plan, on and after the Effective Date, all Assets of the
Estate, including all claims, rights, Retained Causes of Action and
any property acquired by the Debtors under or in connection with
the Plan, shall vest in the Post-Effective Date Debtors, free and
clear of all Claims, Liens, charges, other encumbrances and
Interests.
Co-Counsel to the Debtors:
Robert S. Brady, Esq.
Robert F. Poppiti, Jr., Esq.
Shane M. Reil, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
1000 North King Street
Wilmington, DE 19801
Telephone: (302) 571-6600
Facsimile: (302) 571-1253
E-mail: rbrady@ycst.com
rpoppiti@ycst.com
sreil@ycst.com
- and -
Adam H. Friedman, Esq.
Jonathan T. Koevary, Esq.
OLSHAN FROME WOLOSKY LLP
1325 Avenue of the Americas
New York, NY 10019
Telephone: (212) 451-2300
E-mail: afriedman@olshanlaw.com
jkoevary@olshanlaw.com
A copy of the Disclosure Statement dated July 7, 2023, is available
at https://tinyurl.ph/pSCnO from Donlinrecano, the claims agent.
About PLx Pharma
PLx Pharma Inc. and PLx Opco Inc. are a commercial-stage drug
delivery platform technology company, focused on improving how and
where active pharmaceutical ingredients are absorbed in the
gastrointestinal tract, via its clinically-validated and
patent-protected PLxGuard technology.
PLx Pharma Inc. and PLx Opco filed voluntary petitions for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10456) on April 13, 2023. The petitions were signed by
Lawrence Perkins as chief restructuring officer. The Hon. Mary F.
Walrath oversees the cases.
As of Dec. 31, 2022, the company had $21,750,000 in total assets
against $12,285,000 in total liabilities.
Lawyers at Olshan Frome Wolosky LLP and Young Conaway Stargatt &
Taylor LLP serve as counsel to the Debtors; SierraConstellation
Partners serves as CRO Provider; Donlin, Recano & Company serves as
notice, claims, solicitation & balloting agent.
PROJECT ALPHA: S&P Downgrades ICR to 'B-', Outlook Stable
---------------------------------------------------------
S&P Global Ratings downgraded Project Alpha Intermediate Holding
Inc. (doing business as Qlik) to 'B-' from 'B' and removed its
ratings from CreditWatch.
S&P sad, "We also lowered our issue-level rating on its secured
debt to 'B-' from 'B' and removed it from CreditWatch. The recovery
rating remains '3'.
"The stable outlook reflects our view that while funds from
operations (FFO) cash interest coverage will be lower due to a
higher interest rate environment and lower free operating cash flow
(FOCF) with a higher chance of business disruptions due to its
integration, we believe Qlik's experienced management team, above
average recurring revenue, positive FOCF generation and strong cash
position should sustain Project Alpha's capital structure over the
next 12 months assuming it addresses its April 2024 maturity as we
expect."
While Qlik and Talend will have separate credit agreements, S&P
Global Ratings rates the credit quality of the entire group due to
the combining operations and risk of negative intervention, even if
remote. The credit metrics for the entire group drive Project
Alpha's issuer credit rating (ICR) of 'B-', although its
stand-alone credit profile (SACP) remains 'b'. ICRs for
subsidiaries can be higher than the group credit profile (GCP) only
if we view them as insulated. S&P said, "We believe management's
strategy is to integrate the companies' operations which based on
our ratings methodology precludes us from taking any view of
insulation for Project Alpha, even though Qlik and Talend will
operate under the confines of their respective credit agreements,
with arms-length shared services agreements that govern the
remuneration for services provided between the parties – the
operating strategy trumps the current terms of the credit
agreements. We cap the ICRs for non-insulated subsidiaries at the
GCP, which reflects the potential for negative intervention to
support the rest of the group even if that possibility seems
remote, and even if there are protective terms in the credit
agreement because those terms can change through amendments or
refinancing."
S&P said, "Due to its worsening group credit metrics, we have
lowered our ICR on Project Alpha to 'B-'. While legacy-Qlik and
Talend will remain in separate legal structures under the Qlik
Parent holding company with separate credit agreements, the company
will begin integrating Qlik and Talend. We note that the Qlik
management team has done a good job in the past with the
acquisition and integration of Attunity."
While Qlik and Talend should see some EBITDA improvement over the
next couple of years, the group credit metrics will weaken after
the Talend acquisition. Financial sponsor Thoma Bravo acquired
Talend in March 2021 in a public to private leveraged buyout (LBO)
for approximately $2.4 billion. Due to the LBO, Talend has a
meaningful amount of debt. Also, Talend's EBITDA and FOCF are low
because it had been investing in growth. In 2020 as a public
company, Talend's EBITDA was around break even and FOCF was
negative $33 million. Increasing interest rates will also weigh on
cash flow. Adding Talend's weaker credit metrics to legacy-Qlik's
which are marginal for Project Alpha's SACP of 'b', result in a
'B-' GCP. The GCP is not lower than 'B-' because S&P expects
positive group cash flow and it believes Talend will sustain some
growth-related investments that could be cut during a period of
stress.
Legacy-Qlik should see improved financial performance in 2023 as
its transition to subscription revenue begins to stabilize. Qlik
saw headwinds to its financial performance in 2022 as its
transition to subscription revenue continued. Its topline decreased
in 2022 as the increase in its subscription revenue was being
offset by the decline in its perpetual license and maintenance
revenue. Qlik's EBITDA margins were also hampered by investments in
subscription and software as a service sales, marketing, and
technological capabilities in 2022. Qlik's low profitability and
large working capital use also limited its FOCF generation to about
$20 million in 2022. Due to these factors, Qlik saw its FFO cash
interest coverage drop to the high-1x area in 2022. These metrics
are marginal for Project Alpha's 'b' SACP given our prior downgrade
threshold of FFO cash interest coverage in the high-1x area and
FOCF of $75 million.
S&P said, "The stable outlook reflects our view that while FFO cash
interest coverage will be lower due to higher interest rate
environment and FOCF will be lower with a higher chance of business
disruptions, we believe its experienced management team, above
average recurring revenue, positive FOCF generation and strong cash
position should sustain Qlik's capital structure over the next 12
months, assuming it addresses its April 2024 maturity as we
expect.
"We could lower the rating if we believed Qlik had an unsustainable
capital structure. This could be due to a tougher macroeconomic
environment, a business disruption caused by integration problems,
a slower transition to subscription revenue, or competitive
pressures leading to persistent negative FOCF after debt service.
We could also lower the rating if the term loan reaches 6 months to
maturity and the company does not have a credible plan to address
it.
"We could look to raise our rating on Qlik if it were able to
sustain FFO cash interest coverage in the high-1x area and generate
more than $100 million in FOCF inclusive of one-time integration
and acquisition costs and debt-funded acquisitions or shareholder
returns. This could occur if the company returns legacy-Qlik EBITDA
margins to the mid-30% area and grows Talend's margins close to
legacy-Qlik levels."
ESG credit indicators: E-2, S-2, G-3
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis of the company, as is
the case for most rated entities owned by private-equity sponsors.
We believe Project Alpha Intermediate Holding Inc.'s highly
leveraged financial risk profile points to corporate
decision-making that prioritizes the interests of the controlling
owners. This also reflects the generally finite holding periods and
a focus on maximizing shareholder returns.
"We lowered our issue-level rating on Qlik's $75 million revolving
credit facility (reinstated today) and $1.4 billion first-lien term
loan to 'B-'. Our '3' recovery rating is the same. The '3' recovery
rating indicates our expectation of meaningful (50%-70%; rounded
estimate: 50%) recovery in the event of a default."
R.B. DWYER: Taps Hoegen & Associates as Bankruptcy Co-Counsel
-------------------------------------------------------------
R.B. Dwyer Co., Inc. seeks approval from the U.S. Bankruptcy Court
for the Middle District of Pennsylvania to employ Hoegen &
Associates, P.C. as bankruptcy co-counsel with Kurtzman | Steady,
LLC.
The firm's hourly rates are as follows:
Francis J. Hoegen $350
William L. Brye $300
The firm received a retainer in the amount of $60,000.
As disclosed in court filings, Hoegen & Associates and its partners
and employees are "disinterested persons" pursuant to Section
101(14) of the Bankruptcy Code.
The firm can be reached through:
Francis J. Hoegen, Esq.
Hoegen & Associates, P.C.
152 S Franklin St
Wilkes-Barre, PA 18701
Phone: 570-820-3332
Email: fhoegen@hoegenlaw.com
About R.B. Dwyer Co. Inc.
R.B. Dwyer Co. Inc. filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. M.D. Pa. Case No. 23-01420) on June 26,
2023. In the petition filed by James B. Dwyer, managing member,
R.B. Dwyer disclosed $1 million to $10 million in both assets and
liabilities.
Judge Mark J. Conway oversees the case.
Hoegen & Associates, P.C. and Kurtzman | Steady, LLC serve as the
Debtors' bankruptcy counsels.
RAINMAKER HEALTH: Jerrett McConnell Named Subchapter V Trustee
--------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Jerrett McConnell, Esq.,
at McConnell Law Group, P.A. as Subchapter V trustee for Rainmaker
Health Solutions Hamlin, Inc.
Mr. McConnell will be paid an hourly fee of $350 for his services
as Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. McConnell declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Jerrett M. McConnell, Esq.
McConnell Law Group, P.A.
6100 Greenland Rd., Unit 603
Jacksonville, FL 32258
Phone: (904) 570-9180
Email: trustee@mcconnelllawgroup.com
About Rainmaker Health
Rainmaker Health Solutions Hamlin, Inc. filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla.
Case No. 23-02602) on June 29, 2023, with as much as $50,000 in
assets and $100,001 to $500,000 in liabilities.
Judge Tiffany P. Geyer oversees the case.
Jeffrey S. Ainsworth, Esq., at Bransonlaw, PLLC represents the
Debtor as counsel.
RAPID METALS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Rapid Metals, LLC
7031 Orchard Lake Road
Suite 203
West Bloomfield, MI 48322
Case No.: 23-46098
Business Description: Rapid Metals is a full-service steel and
non-ferrous metals distributor based in West
Bloomfield, MI. The Company offers
slitting, leveling, blanking, pickling, cold
reduction, edge conditioning, temper passing
and various other high-tech forms of flat
roll steel processing for its customers.
Chapter 11 Petition Date: July 12, 2023
Court: United States Bankruptcy Court
Eastern District of Michigan
Judge: Hon. Maria L. Oxholm
Debtor's Counsel: Charles D. Bullock, Esq.
STEVENSON & BULLOCK, P.L.C.
26100 American Drive
Suite 500
Southfield, MI 48034
Tel: (248)354-7906 Ext. 2224
Email: cbullock@sbplclaw.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Daniel Butler as president.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/WUHJ5FI/Rapid_Metals_LLC__miebke-23-46098__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Algoma Steel Vendor $2,051,686
105 West Street
Sault Ste Marie,
Ontario, P6A 7B4
Shweta Raut
Email: shweta.raut@algoma.com
2. Alliance Steel Vendor $67,109
24342 Network Place
Chicago, IL 60673
Meagan Ahrens
Email: mahrens@alliancesteel.net
3. Axle Logistics, LLC Transportation $62,010
PO Box 631490 Services
Cincinnati, OH 45263
Joey Faragalli
Email: joey.faragalli@axlelogistics.com
4. Bailey Metal Processing $208,146
Processing LTD. Services
1211 Heritage Rd
Burlington, ON
L7L4Y1
Lyudmyla Myssechko
Email: lmyssechko@bmp-group.com
5. Blue Dolphin Logistics Transportation $177,500
Corporation Services
1610 Chestnut St
Portsmouth, VA 23704
Email: henry@bluedolphinlogistics.com
6. Blue Fin Steel Corp Vendor $107,156
372 Bay Street
Toronto, Ontario,
M5H 2W9
Arbi Aghazarian
Email: Arbi@bluefinsteel.com
7. Cleveland-Cliff Steel Corp Vendor $683,030
PO Box 735146
Chicago, IL 60673
Mary Jane Canary
Email: maryjane.canary@clevelandcliffs.com
8. Cleveland-Cliffs Inc. Vendor $1,399,001
25465 Network Place
Chicago, IL 60673
Mary Jane Canary
Email: maryjane.canary@clevelandcliffs.com
9. Davis Gate & Wire Vendor $58,902
PO Box 100
Dunnville, KY 42528
Ashley Davis
Email: Ashleyd@davisgates.com
10. Delaware Steel Company Vendor $207,761
311 Lindenwold Ave
Ambler, PA 19002
Lisa Goldenberg
Email: Lisa.goldenberg@delawaresteel.com
11. Heidtman Steel Products Vendor $207,000
21895 Network Place
Chicago, IL 60673
Betsy Hakeos
Email: betsy.hakeos@heidtman.com
12. International Steel & Counter Vendor $93,576
140 North West Ave
Youngstown, OH 44502
Jim Nackino
Email: jnackino@steelcounterweights.com
13. Milll Steel Vendor $210,972
2905 Lucerne Drive SE
Grand Rapids, MI 49546
Jonah Epema
Email: Jonah.Epema@millsteel.com
14. North Star Vendor $359,574
Bluescope Steel LLC
25544 Networdk Place
Chicago, IL 60673
Melissa Gibson
Email: Melissa.Gibson@nsbsl.com
15. Nucor Steel Vendor $700,000
4537 Nucor Road
Crawfordsville, IN 47933
Melissa Dees
Email: Melissa.dees@nucor.com
16. OPS Sales Comp Vendor $83,132
PO Box 189
Dewey, OK 74029
Ben Singh
Email: Bensingh@steel-traders.com
17. Steel Dynamics Vendor $841,106
36248 Treasury Center
Chicago, IL 60694
Tom Hartman
Email: Tom.hartman@steeldynamics.com
18. Taylor Steel Inc. Vendor $63,417
477 Arvin Avenue
Stoney Creek, ON
L8E 2N1
Email: credit@taylorsteel.com
19. Valor Steel, Inc. Vendor $92,211
4145 north Service Road
Burlington, ON L7L6A3
Darryl Waugh
Email: darryl.waugh@valorsteel.net
20. West Boca Metals Vendor $185,221
5735 NW 40th Way
Jupiter, FL 33477
Stuart Fox
Email: stu@westbocametals.com
RDX TECHNOLOGIES: Unsecureds to Get Share of Net Distributable Cash
-------------------------------------------------------------------
RDX Technologies Corporation filed with the U.S. Bankruptcy Court
for the District of Arizona a Disclosure Statement in support of
Plan of Reorganization dated July 10, 2023.
The Debtor is a foreign corporation domiciled in Canada since its
incorporation on or about July 30, 2003. The Debtor had operated an
environmental service business in Alberta and a waste water
treatment business for customers in the oil fracking industry.
After the commencement of Bankruptcy Case, the Debtor initially
focused on complying with the administrative requirements of the
Bankruptcy Code and the Office of the United States Trustee while
continuing to maintain its Property including, but not limited to,
the Debtor's counsel filing an application to be employed by the
estate. The Debtor successfully filed the Claims Bar Date Motion
and a motion to terminate exclusivity.
Since the Filing Date, the Debtor has been working with prospective
plan investors and prospective waste water treatment customers and
licensees to restart the waste water treatment business that will
likely include new licensing agreements.
RDX has an excellent opportunity to return to and exceed its former
revenue levels of greater than $20MM annually by methodically
cultivating its former and new client opportunities in the United
States and Canada. The projections for this plan are likely
conservative, with the goal of increasing revenues and profits.
As set forth in the Financial Projection, the Plan is feasible, and
more likely to succeed than fail, in light of the new capital
infusion, and anticipated revenues and costs. As set forth in the
Financial Projections, the Plan will pay non-priority unsecured
creditors at least the Guaranteed Minimum Annual Distribution,
which is a substantially greater amount than they would get if the
Plan was not confirmed and the Debtor was liquidated in a Chapter 7
bankruptcy.
Class 4 consists of all Allowed Claims of General Unsecured
Creditors. The Allowed Claims of the General Unsecured Creditors
shall receive their pro rata share of the Net Distributable Cash,
which shall not be less than the Guaranteed Minimum Distributions.
Class 5 consists of the interests of Equity Interest Holders of
RDX. The Equity Security Interests in the Debtor, including all
rights and options to acquire such interests, shall be cancelled in
their entirety upon the Effective Date.
The Debtor shall continue to maintain and manage its affairs and
meet its other obligations under the Plan. The Debtor shall do so
by executing the business plan described and depicted in the
Financial Projections.
A full-text copy of the Disclosure Statement dated July 10, 2023 is
available at https://urlcurt.com/u?l=cm3ziL from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Keith L. Hendricks, Esq.
Scott R. Goldberg, Esq.
MOYES SELLERS & HENDRICKS LTD
1850 North Central Avenue, Suite 1100
Phoenix, AZ 85004
Telephone: (602) 604-2141
Email: khendricks@law-msh.com
sgoldberg@law-msh.com
About RDX Technologies Corporation
RDX Technologies Corporation dba Ridgeline Energy Services (USA),
Inc. filed its voluntary petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. D. Ariz. Case No. 23-01373) on March 6,
2023. The petition was signed by Anthony Ker, director and CEO. At
the time of filing, the Debtor estimated $100,000 to $500,000 in
assets and $10 million to $50 million in liabilities.
Judge Madeleine C. Wanslee oversees the case.
Scott R. Goldberg, Esq. at MOYES SELLERS & HENDRICKS LTD. Serves as
the Debtor's counsel.
RELOADED GAMES: Seeks to Hire Foundation Law as Corporate Counsel
-----------------------------------------------------------------
Reloaded Games, Inc. seeks approval from the U.S. Bankruptcy Court
for the Central District of California to hire Foundation Law
Group, LLP as its general corporate counsel.
The firm's services include addressing the continuation of the
Debtor's revenue generating service agreement with Volvo; and
assisting in finding a buyer of certain assets of the Debtor for
sale.
The firm will bill these hourly fees:
Intellectual Property $595
Corporate $595
Tax $595
Labor and Employment $595
Litigation $600 - $795
Para-professionals $250 - $395
Terry Quan, Esq., a partner at Foundation Law Group, disclosed in a
court filing that the firm does not have interest materially
adverse to the interest of the Debtor's estate, creditors or equity
security holders.
The firm can be reached through:
Terry K. Quan, Esq.
Foundation Law Group, LLP
445 South Figueroa St, Suite 3100
Los Angeles, CA 90071-1635
About Reloaded Games
Reloaded Games, Inc. filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-11269) on
June 21, 2023, with $59,512 in assets and $2,366,660 in
liabilities. Robert Goe, Esq., a practicing attorney in Irvine,
Calif., has been appointed as Subchapter V trustee.
Judge Scott C. Clarkson oversees the case.
The Debtor tapped James Andrew Hinds, Jr., Esq., at The Hinds Law
Group, APC as bankruptcy counsel and Foundation Law Group, LLP as
general corporate counsel.
RELOADED GAMES: Taps Hinds Law Group as Bankruptcy Counsel
----------------------------------------------------------
Reloaded Games, Inc. seeks approval from the U.S. Bankruptcy Court
for the Central District of California to hire The Hinds Law Group,
APC as its bankruptcy counsel.
The Debtor requires legal counsel to:
(1) review financial information of the Debtor;
(2) advise the Debtor regarding the options for addressing the
filing of a Sub chapter V petition to deal with threatened
lawsuits;
(3) work with the Debtor to craft a strategy to a workable
plan to deal with all of its creditors;
(4) prepare schedules of assets and liabilities, statement of
financial affairs, schedules of income and expenses, list of equity
security holders, and master mailing matrix;
(9) appear at and assist the Debtor at the initial interview
meeting with the Subchapter V and U.S. trustees and to attend the
meeting of creditors under 11 U.S.C. Sec. 341(a);
(10) advise the Debtor regarding its rights and
responsibilities under the Bankruptcy Code, the Federal Rules of
Bankruptcy Procedure, and the requirements of the Office of the
U.S. Trustee;
(11) represent the Debtor before the court and before the
Subchapter V and U.S. trustees in all motions and litigation
matters outside of those issues which may require the employment of
special counsel involving tax matters, or those areas outside the
expertise of the firm; and
(12) file a Chapter 11 plan and disclosure statement to
reorganize the Debtor's finances.
The firm received pre-bankruptcy retainers of $50,000.
Hinds Law Group will charge these hourly fees:
Attorneys $200 - $695
Paraprofessionals $90 - $200
James Andrew Hinds, Jr., Esq., a partner at Hinds Law Group,
disclosed in court filings that his firm is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
Hinds Law Group can be reached at:
James Andrew Hinds, Jr., Esq.
The Hinds Law Group, APC
21257 Hawthorne Blvd., Second Floor
Torrance, CA 90503
Tel.: (310) 316-0500
Fax: (310) 792-5977
Email: jhinds@jhindslaw.com
About Reloaded Games
Reloaded Games, Inc. filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-11269) on
June 21, 2023, with $59,512 in assets and $2,366,660 in
liabilities. Robert Goe, Esq., a practicing attorney in Irvine,
Calif., has been appointed as Subchapter V trustee.
Judge Scott C. Clarkson oversees the case.
The Debtor tapped James Andrew Hinds, Jr., Esq., at The Hinds Law
Group, APC as bankruptcy counsel and Foundation Law Group, LLP as
general corporate counsel.
RUEL T. STOESSEL: Taps National Auction Company as Appraiser
------------------------------------------------------------
Ruel T. Stoessel, M.D., P.A. seeks approval from the U.S.
Bankruptcy Court for the Southern District of Florida to hire
National Auction Company as its appraiser.
The Debtor needs assistance in determining the liquidation value of
its assets including the value of certain assets encumbered by
purchase money liens prior to confirmation of a Chapter 11 plan in
order to allow creditors to evaluate the plan, as proposed or as
may be amended.
The appraiser will charge a flat fee of $2,250 for its services.
George Richards, president of National Auction Company, disclosed
in a court filing that his firm is disinterested as defined in the
Bankruptcy Code.
The firm can be reached through:
George Richards
National Auction Company
1900 SW 100 Avenue
Miramar, FL 33025
Office: 561-364-7004
Cell: 954-658-5033
About Ruel T. Stoessel M.D.
Ruel T. Stoessel, M.D., P.A. sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
23-11671) on March 1, 2023, with $100,001 to $500,000 in assets and
$500,001 to $1 million in liabilities. Judge Erik P. Kimball
oversees the case.
Alan R. Crane, Esq., at Furr & Cohen represents the Debtor as
counsel.
SALE LLC: Unsecured Creditors Will Get 10% Dividend over 5 Years
----------------------------------------------------------------
Sale, LLC filed with the U.S. Bankruptcy Court for the District of
Massachusetts a Plan of Reorganization dated July 10, 2023.
As of the Petition Date, the Debtor operated three full-service
restaurants doing business as "As Good as it Gets Cafe" in Action,
Norwood and Wilmington, Massachusetts. The Debtor has been owned
and operated by Abdurrahim Hmina and Nabila Mbabet Hmina, each of
Burlington, Massachusetts since they purchase the Wilmington
restaurant 2017.
The Debtor's Wilmington location was highly profitable after Mr.
and Mrs. Hmina purchased it in 2017. It was so successful in fact
that the Hmina's began planning to open a second location in 2019.
To fund this expansion, the Debtor obtained loans from various
individual acquaintances bearing high interest rates.
Unfortunately, after making a substantial investment in its Norwood
location, the scheduled March 2020 opening was significantly
delayed by the onset of the COVID-19 Pandemic. By February 2023,
the Debtor had seven different merchant cash loans outstanding with
a total balance of more than $500,000.
By March 2023, the Debtor could no longer keep up with its debt
service costs and it defaulted on payments to the merchant cash
lenders. The Debtor was forced to seek relief under Chapter 11 due
to one of the merchant lenders attaching its bank account and
subsequently its credit card processing receipts, leaving the
Debtor unable to meet its payroll and other obligations.
The Debtor's Wilmington location has consistently been profitable,
and the Debtor expects it will continue to be. While the Debtor's
Norwood and Action locations lost more than $90,000 and $73,000
respectively in 2022, the Wilmington location earned over $250,000
in 2022. Similarly, through the first half of 2023, the Norwood
location lost over $14,000 while the Wilmington location earned
more than $48,000 through July 7, 2023. There have been no changes
to the Wilmington business that would suggest it will not continue
to be profitable in the future.
The Plan will be funded from the Debtor's cash on hand as of the
Effective Date of the Plan and its future operating income. The
Plan provides for payment in full of all secured and priority
claims, avoidance of liens held by creditors whose claims are
wholly unsecured by any assets of the bankruptcy estate and a total
dividend of 10% to general unsecured creditors to be paid quarterly
beginning on the Effective Date of the Plan. The Debtor's
principals Abdurrahim Hmina and Nabila hmina will each retain their
respective equity interests in the Debtor following confirmation of
this Plan.
Class 5 consists of the claims of the Debtor's General Unsecured
Creditors, including creditors in Classes 1 and 2 whose liens have
been avoided. As of the date of this Plan, the Debtor has
identified General Unsecured Claims which are undisputed,
liquidated and non-contingent totaling $1,609,720.
Class 5 Claim Holders shall be paid a total dividend 10% in equal
quarterly installments over a period of five years commencing on
the Effective Date of the Plan. The payments to be made to General
Unsecured Creditors constitute substantially all of the Debtor's
projected net disposable income for the five-year period commencing
after the effective Date of the Plan. This Class is impaired.
Class 6 consists of the Debtor's equity holder Abderrahim Hmina and
Nabila Hmina shall retain their respective 50% ownership interests
in the Debtor following confirmation of the Plan and will continue
in their role as the Debtor's managers. This Class is unimpaired.
The Plan will be funded by the Debtor's cash on hand, its
anticipated future revenue as reflected in the Statement of
Financial Projections attached to this Plan and any funds recovered
by the Debtor through the contemplated Avoidance Actions.
A full-text copy of the Plan of Reorganization dated July 10, 2023
is available at https://urlcurt.com/u?l=vw1922 from
PacerMonitor.com at no charge.
Counsel for the Debtor:
Marques C. Lipton, Esq.
Lipton Law Group, LLC
945 Concord Street
Framingham, MA 01701
Phone: (508) 202-0681
Email: marques@liptonlg.com
About Sale LLC
Sale, LLC, is a family-owned cafe with homestyle breakfasts and
classic lunch eats such as sandwiches, hamburgers, muffins and
pancakes. The company is based in Burlington, Mass.
Sale, LLC filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Mass. Case No. 23-10545) on April 10,
2023, with $7,500 in assets and $3.2 million in liabilities. David
B. Madoff, Esq., a partner at Madoff & Khoury, LLP, has been
appointed as Subchapter V trustee.
Judge Christopher J. Panos oversees the case.
Marques C. Lipton, Esq., at Lipton Law Group, LLC, represents the
Debtor as legal counsel.
SAM'S PLACE: Unsecureds Will Get 5% of Claims over 3 Years
----------------------------------------------------------
Sam's Place Lottery & Tobacco, Inc., filed with the U.S. Bankruptcy
Court for the Middle District of Pennsylvania a Plan of
Reorganization under Subchapter V dated July 10, 2023.
The Debtor was incorporated in 2016. Originally, the business only
constituted tobacco stores and lottery sales. Skill games were then
added as such became prevalent throughout the Commonwealth of
Pennsylvania.
A sole proprietorship business of Michael A. Somers, the 100%
shareholder of the Debtor, began to be transferred over to the
Debtor, with operations not fully transferred until 2020. Three
convenience stores were added in the last two to three years. The
convenience stores sell food items and earn commissions for selling
gasoline and other fuels. All licenses and registrations which are
required for the sale of fuel are owned by the landlords in such
stores.
During the Covid Pandemic, certain of the stores did not operate.
Those that operated suffered a loss of business. As a result, the
Debtor took on a great deal of new debt, including the Debtor's SBA
Loans. Also, Merchant Advances were taken out by the Debtor.
Interest rates have began to increase over the last year. Also,
payroll costs have increased greatly. A combination of the
increased interest rates, the amount of debt, and the increased
payroll caused the Debtor to suffer cash flow difficulties.
In order to reduce its debt, the Debtor determined to file Chapter
11. The Debtor believes it will be able to reorganize as set forth
in this Plan. In addition, overhead has declined and revenue has
increased.
Class 7 includes all other Claim holders of the Debtor who are not
otherwise classified under the Plan, including all general
unsecured creditors, as well as including any Claim of LG Funding,
LLC and any other Merchant Capital Companies. Beginning 6 months
after the Effective Date, the general unsecured creditors in Class
7 shall be paid 5% of each allowed Class 7 Claim, payable in 3
equal annual installments of 1.67% each.
The equity of the Debtor is held by Michael A. Somers, holder of
100% of stock of the Debtor. The Equity Holder will continue to
hold the equity subsequent to the Effective Date of the Plan. As of
the Effective Date the Debtor retains the right to cancel the
equity and issue new equity in the same percentage as exists
pre-Petition.
The Debtor intends to continue to operate its tobacco store,
lottery sales and convenience store business throughout Central
Pennsylvania. The Debtor believes that the operations of the Debtor
will be sufficient to fund payments under the Plan.
A full-text copy of the Plan of Reorganization dated July 10, 2023
is available at https://urlcurt.com/u?l=2hWLG2 from
PacerMonitor.com at no charge.
Debtor's Counsel:
Robert E. Chernicoff, Esq.
Cunningham, Chernicoff & Warshawsky , P.C.
320 N 2nd St
Harrisburg, PA 17110
Phone: +1 717-260-3527
Fax: 717-238-4809
About Sam's Place Lottery & Tobacco
Sam's Place Lottery & Tobacco, Inc., is engaged in the operation of
retail tobacco, lottery and convenience stores. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
M.D. Pa. Case No. 23-00874) on April 20, 2023. In the petition
signed by Michael A. Somers, its president, the Debtor disclosed up
to $10 million in both assets and liabilities.
Judge Henry W. Van Eck oversees the case.
Robert E. Chernicoff, Esq., at Cunningham, Chernicoff and
Warshawsky PC, represents the Debtor as legal counsel.
SIGYN THERAPEUTICS: Signs Warrant Exchange Agreements
-----------------------------------------------------
Sigyn Therapeutics, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that it entered into Warrant
Exchange Agreements with certain holders of warrants issued between
Oct. 20, 2020 and Feb. 9, 2023 to exchange the Warrants for newly
issued shares of Common Stock and Series A Preferred Stock, which
upon their conversion, the holder shall receive $1,000 of the
Company's Common Stock at $.199 per share.
The purpose of the Preferred Stock is to allow certain
institutional investors which desire to limit their beneficial
ownership of Company Common Stock below the threshold requiring
reports under the Securities Exchange Act of 1934 the right to
receive a substantially equivalent value to a previous warrant
exchange agreement with other stockholders which did not require
the Blocker Provision. The Conversion Ratio is equal to the price
of the Common Stock on the date of the prior warrant exchange
agreements.
On June 30, 2023, the Company filed a certificate of designation
with the Secretary of State of Delaware, effective as of the time
of filing, designating the rights, preferences, privileges and
restrictions of the shares of Preferred Stock. The Certificate of
Designation provides that the shares of Preferred Stock have no
voting rights except on matters adversely affecting the rights of
the holders of the Preferred Stock.
The Conversion Ratio is subject to antidilution adjustments for any
stock splits and recapitalizations, and for issuances of additional
shares at an issue price of less than the Conversion Ratio in the
Warrant Exchange Agreement. The Preferred Stock has the same
rights as the Common Stock, on an "as-if" converted basis, with
respect to any dividends, distribution of assets of the Company,
including upon a liquidation, bankruptcy, reorganization, merger,
acquisition, sale, dissolution or winding up of the Company,
whether voluntarily or involuntarily.
The Preferred Stock is not subject to any redemption rights.
About Sigyn
Sigyn Therapeutics, Inc. is a development-stage company focused on
the creation of therapeutic solutions that address unmet needs in
global health. Sigyn Therapy, the Company's lead product
candidate, is a broad-spectrum blood purification technology
designed to treat pathogen-associated inflammatory disorders that
are not addressed with approved drug therapies.
Sigyn Therapeutics reported a net loss of $2.93 million for the
year ended Dec. 31, 2022, compared to a net loss of $3 million for
the year ended Dec. 31, 2021. As of March 31, 2023, the Company
had $660,447 in total assets, $3.01 million in total liabilities,
and a total stockholders' deficit of $2.35 million.
New York, NY-based Kreit & Chiu CPA LLP, the Company's auditor
since 2021, issued a "going concern" qualification in its report
dated March 31, 2023, citing that the Company has suffered
recurring losses from operations, has a net capital deficiency, and
negative cash flows from operating activities, therefore, the
Company has stated that substantial doubt exists about its ability
to continue as a going concern.
SOUTHERN DRILL: Jodi Daniel Dubose Named Subchapter V Trustee
-------------------------------------------------------------
The U.S. Trustee for Region 21 appointed Jodi Daniel Dubose, Esq.,
at Stichter, Riedel, Blain & Postler P.A. as Subchapter V trustee
for Southern Drill Supply-Acquisition, LLC.
Ms. Dubose will be paid an hourly fee of $350 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Dubose declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Jodi Daniel Dubose, Esq.
Stichter, Riedel, Blain & Postler P.A.
41 N. Jefferson Street, Suite 111
Pensacola, FL 32502
Phone: (850) 637-1836
Email: jdubose@srbp.com
About Southern Drill
Southern Drill Supply-Acquisition, LLC is a professional and
commercial equipment and supplies merchant wholesaler in Pensacola
Beach, Fla.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Fla. Case No. 23-30452) on July 3,
2023, with $100,000 to $500,000 in assets and $1 million to $10
million in liabilities. William Shearer, managing member, signed
the petition.
Todd M. LaDoucer, Esq., of Galloway Johnson Tompkins Burr & Smith
represents the Debtor as counsel.
SOUTHERN DRILL: Starts Subchapter V Bankruptcy Case
---------------------------------------------------
Southern Drill Supply-Acquisition LLC filed for chapter 11
protection in the Northern District of Florida. The Debtor elected
on its voluntary petition to proceed under Subchapter V of chapter
11 of the Bankruptcy Code.
The Debtor is an underground drill supply and outdoor power
equipment dealer. The Debtor leases the premises at 15474
Duckworth Road, Gulfport, MS 39503, for its operations.
For its bankruptcy filing, the Debtor says that due to wrongdoing
by sellers, the purchased assets for this business were grossly
overvalued and the resulting debt servicing very difficult. Despite
best efforts to ensure success and downsize the operations over the
past years, the business needs time to address the debt without
liquidation by the bank and pursue the sellers in the now stayed
fraud litigation.
According to court filings, the Debtor estimates between $1 million
and $10 million in debt owed to 1 to 49 creditors. The petition
states that funds will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Aug. 9, 2023 at 3:00 p.m. in Room Telephonically on telephone
conference line: (877) 835-0364. participant access code: 4662459).
About Southern Drill Supply-Acquisition
Southern Drill Supply-Acquisition LLC is a professional and
commercial equipment and supplies merchant wholesaler.
Southern Drill Supply-Acquisition sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Fla.Case No. 23-30452) on
July 3, 2023. In the petition filed by William Shearer, as
managing member, the Debtor reported assets between $100,000 and
$500,000 and liabilities between $1 million and $10 million.
The Debtor is represented by:
Todd M. LaDouceur, Esq.
Todd M. LaDouceur, P.A.
1623 Bulevar Menor
Pensacola, FL 32561
Tel: 850-436-7000
Email: tmlservice@gallowaylawfirm.com
SPIRIT AEROSYSTEMS: S&P Affirms 'B' ICR, Alters Outlook to Neg.
---------------------------------------------------------------
S&P Global Ratings revised its outlook to negative from stable and
affirmed the 'B' issuer credit rating on Spirit AeroSystems Inc.
S&P also affirmed the 'BB-' issue-level rating for the company's
senior secured first-lien debt, 'B-' rating for its senior secured
second-lien debt, and 'CCC+' rating for its unsecured debt.
S&P said, "The negative outlook reflects our expectation that
credit metrics, though improving, will remain weak in the near
term. Though we expect continued top-line growth, elevated
operating costs will hurt cash flows and as a result, FOCF will be
negative and pressure Spirit's liquidity profile.
"We expect negative cash flows from operations over the next 12-18
months, which will pressure liquidity. Though top-line growth has
been largely in line with our forecast, supply chain pressures, an
upsized workforce, and an increase in costs related to training
have eroded Spirit's margins more than we expected. Events related
to labor inefficiencies have also contributed to a
larger-than-forecasted use of cash, while out-of-compliance
procedures have led to similar events, such as the vertical fin
bracket on the MAX production line that contributed to unexpected
cash utilization. We expect margins to recover modestly over the
next 12 to 18 months, in line with increases in build rates among
key platforms. Cash from operations will remain negative until
supply chain pressures ease and labor efficiencies are realized. We
expect EBITDA margins to be 2.5%-7.5% for fiscal 2023, improving to
5%-10% in fiscal 2024. We also expect negative cash from operations
to be between negative $350 million and negative $150 million in
2023 and between negative $150 million and break-even in 2024,
pressuring liquidity up until 2025. We note that Spirit has a
sizeable debt maturity in 2025, when its senior secured second-lien
notes totaling about $1.2 billion are due. We see a risk that the
company will be challenged to refinance its debt at favorable terms
if its financial performance does not improve. However, the
company's role as the sole source supplier of aerostructures for
the life of the top narrowbody platforms gives it a strong market
position that supports a return to profitability.
"Increased production rates and robust demand across all sectors
will drive Spirit's top-line growth over the next 12-18 months. We
expect to see material revenue growth as major narrowbody platforms
from original equipment manufacturers (OEMs) continue to experience
increases in production rates. Most notably, we expect production
on Boeing MAX shipsets, the most critical program for Spirit, to
increase from the current rate of 31 shipsets a month to 38 by the
end of fiscal 2023, with additional rate hikes in fiscal 2024. We
also expect material increases in production rates on Airbus' A220
and A320 platforms. Additionally, we expect delivery of business
jets to increase over the next 12 months and the defense segment to
see robust demand from programs such as the Future Long-Range
Assault Aircraft ramp up. The aftermarket segment remains strong
due to robust air traffic, especially domestically. We expect to
see the company's revenue increase 22.5%-27.5% in fiscal 2023 and
maintain momentum into fiscal 2024, with growth of 15%-20%. Revenue
growth will drive EBITDA growth; however, we expect funds from
operations (FFO) to remain below breakeven in 2023, turning
slightly positive in fiscal 2024.
"Labor and supply chain pressures persist, hampering improvement in
cash flow. In fiscal 2022, Spirit's labor shortages and elevated
attrition levels contributed to inefficiencies in production. The
company has been successful in increasing the size of its
workforce; however, a productivity gap will remain as the new hires
receive training and gain experience. Skilled labor has been a
headwind for the entire industry even before the exodus of seasoned
staff during the COVID-19 pandemic. We also expect the supply chain
to remain vulnerable, especially as OEMs look to increase
production rates. Following a brief halt in production related to
labor union negotiations, we expect labor costs to remain high.
Additionally, we believe material cost inflation will likely be
sticky, impairing margins and cash flow.
"The negative outlook on Spirit reflects our expectation that
credit metrics, though improving, will remain weak in the near
term. Though demand remains robust, operating inefficiencies and
higher operating costs will have a lasting negative impact on cash
generation and pressure liquidity. We expect the company's FFO to
debt to be negative in fiscal 2023 and reach 3%-5% in fiscal 2024,
while leverage levels will remain above 10x until 2025.
"We could lower our rating on Spirit if FFO remains below breakeven
over the next 12 months, constraining liquidity. We could also
lower our rating should we expect the company to have difficulty
refinancing upcoming debt maturities, in which case, we may
downgrade the company in excess of one notch." This would likely
occur due to:
-- Operating inefficiencies persisting;
-- Supply chain disruptions upstream and downstream that result in
meaningful pauses in production on major platforms; or
-- Higher-than-anticipated cash utilization.
S&P could raise its outlook on Spirit if FFO improves faster than
our current forecast while the company also addresses its upcoming
maturities. This would likely occur if:
-- Production volumes on key platforms increase faster than we
forecast;
-- EBITDA margins recover faster than we forecast; and
-- The company is able to pass along higher operating costs to
customers through improved pricing.
ESG credit indicators: E-2, S-5, G-2
Social factors are a very negative consideration in S&P's credit
rating analysis of Spirit. Lower aircraft demand from the
significant decline in air travel due to the pandemic and the
temporary production halt of Boeing's 737 MAX (half of sales before
Boeing suspended production) have resulted in substantial declines
in revenues (down more than 50%), losses, and large cash outflows.
Although MAX production has resumed and has seen multiple rate
breaks, it remains at a low rate when compared with 2019 production
rates. Air travel domestically has exceeded prepandemic levels;
however, the international recovery continues. Revenues, earnings,
and cash flows are unlikely to return to pregrounding and
prepandemic levels until after 2024 as sales for widebody aircraft
remain weak for the next few years.
SRAX INC: Chief Financial Officer Resigns
-----------------------------------------
Alan Urban resigned as the chief financial officer of SRAX, Inc.
and has transitioned to a consultant to help the Company complete
its SEC filings.
Mr. Urban is resigning to exclusively focus his efforts on the
Company's filings and there were no disagreements between him and
the Company. His departure is not related to the operations,
policies or practices of the Company, or any issues regarding
accounting policies or practices, the Company stated in its Form
8-K filing with the Securities and Exchange Commission.
About SRAX
SRAX (SRAX) is a financial technology company that provides data
and insights to publicly traded companies through its SaaS platform
Sequire. With Sequire, companies can track their investors'
behaviors and trends and use those insights to engage current and
potential investors across marketing channels. For more
information on SRAX, please visit its websites: srax.com and
mysequire.com.
SRAX reported a net loss of $41.23 million for the year ended Dec.
31, 2022, compared to a net loss of $14.71 million for the year
ended Dec. 31, 2021.
New York, NY-based RBSM LLP, the Company's auditor since 2011,
issued a "going concern" qualification in its report dated Oct. 12,
2022, citing that the Company has recurring losses from operations,
limited cash flow, and an accumulated deficit. These conditions
raise substantial doubt about the Company's ability to continue as
a going concern.
TAPESTRY CHARTER SCHOOL: S&P Affirms 'BB+' Rating on Revenue Bonds
------------------------------------------------------------------
S&P Global Ratings revised the outlook to stable from positive and
affirmed its 'BB+' long-term rating on Buffalo and Erie County
Industrial Land Development Corp., N.Y.'s series 2017A tax-exempt
and series 2017B taxable revenue bonds issued for Tapestry Charter
School (TCS).
"The outlook revision reflects our opinion of TCS' somewhat
weakened balance sheet metrics, including days' cash on hand,
partly as a result of greater-than-expected drawdowns related to
updated and ongoing capital projects, through fiscal 2023," said
S&P Global Ratings credit analyst David Holmes.
TREES CORP: Agrees to Transfer and Assign Cannabis Licenses
-----------------------------------------------------------
Trees Corporation disclosed in a Form 8-K filed with the Securities
and Exchange Commission that the Company and its subsidiaries Green
Tree Colorado, LLC, Green Tree Cultivation LLC, GT Retail LLC, and
Green Tree MIP LLC, each a Colorado limited liability company,
entered into a settlement agreement with Allyson Feiler Downing and
Loree Schwartz (Green Tree Parties), pursuant to which the Company
and the Green Tree Parties agreed to transfer and assign to new
entities controlled by the Green Tree Parties, cannabis licenses
and related assets owned by (i) GT Retail relating to a cultivation
facility and a retail dispensary located in Berthoud, Colorado;
(ii) GT MIP relating to a 'marijuana infused product' dispensary
located in Boulder County, Colorado; and (iii) certain intellectual
property in respect thereof. The Company retained accounts payable
and certain cannabis inventory in respect of the Transferred
Assets. Closing of the transaction is subject to approval of the
license transfers by the Colorado Marijuana Enforcement Division as
well as local regulatory authorities.
In exchange for the transfer to the Green Tree Parties of the
Transferred Assets, the Company and the Green Tree Parties agreed
that upon closing, the Green Tree Parties shall transfer and assign
to the Company, and the Company shall redeem, 9,917,574 shares of
the Company's Common Stock owned by the Green Tree Parties and
originally issued to the Green Tree Parties in the acquisition
consummated in December 2022 pursuant to that certain Asset
Purchase Agreement dated Sept. 13, 2022, as amended, by and among
the Company, Downing, Schwartz and various other parties thereto.
Further, other than payments due Michael Abrams, no further
payments shall be due either of the Green Tree Parties or any
affiliate thereof under the APA or otherwise.
On July 1, 2023, the Company terminated the employment of each of
Downing and Schwartz and each of Downing and Schwartz entered into
a Termination of Employment Agreement and Mutual General Release
with the Company. The Termination Agreements provide for the
termination of employment by the Company of each of Downing and
Schwartz, including a termination of their respective Employment
Agreements with the Company dated Dec. 12, 2022, mutual releases,
and a waiver of the non-compete and non-solicitation agreements
contained in the APA. The parties also executed a separate waiver
in respect thereof.
Furthermore, also on July 1, 2023, the Company and a newly-formed
entity controlled by the Green Tree Parties entered into a
consulting agreement pursuant to which such entity together with
Downing agreed to pay consulting fees to the Company in an
aggregate amount equal to $289,452.39, subject to and conditioned
upon the Company's completion of payments under the APA to Michael
Abrams of $562,380.95.
On July 1, 2023, the parties also entered into a Transition
Services Agreement pursuant to which the Green Tree Parties will
provide certain administrative and management services on a
transition basis to the Company in respect of the Transferred
Assets in exchange for retaining all revenue generated from the
businesses relating to the Transferred Assets; until such time as
the transfer under the Settlement Agreement is consummated.
About Trees Corp
Headquartered in Denver, Colorado, Trees Corporation (formerly
known as General Cannabis Corp) -- is a cannabis retailer and
cultivator in the States of Colorado and Oregon.
Trees Corp reported a net loss of $9.47 million for the year ended
Dec. 31, 2022, compared to a net loss of $8.87 million for the year
ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $31.69
million in total assets, $25.29 million in total liabilities, and a
total stockholders' equity of $6.41 million.
Salt Lake City, Utah-based Haynie & Company, the Company's auditor
since 2021, issued a "going concern" qualification in its report
dated April 17, 2023, citing that the Company has suffered
recurring losses from operations and has a negative working capital
that raise substantial doubt about its ability to continue as a
going concern.
UNIFORM FACTORY: Robert Altman Named Subchapter V Trustee
---------------------------------------------------------
The U.S. Trustee for Region 21 appointed Robert Altman as
Subchapter V trustee for Uniform Factory Outlet of Washington,
LLC.
Mr. Altman will be paid an hourly fee of $275 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Altman declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Robert Altman
P.O. Box 922
Palatka, FL 32178- 0922
Phone: 386-325-4691
Email: robertaltman@bellsouth.net
About Uniform Factory
Uniform Factory Outlet of Washington, LLC filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla.
Case No. 23-01531) on June 30, 2023, with $100,001 to $500,000 in
both assets and liabilities. Judge Jason A. Burgess oversees the
case.
David E. Otero, Esq., at Akerman, LLP represents the Debtor as
counsel.
VISTAGEN THERAPEUTICS: Chief Financial Officer to Retire Next Month
-------------------------------------------------------------------
Vistagen Therapeutics, Inc. announced that Jerrold D. Dotson, CPA,
vice president and chief financial officer (principal financial and
accounting officer), intends to retire from the Company on or about
Aug. 31, 2023.
According to the Company, Mr. Dotson's retirement is not the result
of any disagreement between Mr. Dotson and the Company on any
matter relating to the Company's operations, policies or practices.
He will continue to serve in his current role until the earlier of
his retirement date or the appointment date of his successor.
The Board of Directors of the Company has identified a potential
successor for Mr. Dotson, subject to the completion of certain
customary onboarding activities. The Company will announce Mr.
Dotson's successor upon appointment.
About VistaGen
Headquartered in San Francisco, California, VistaGen Therapeutics,
Inc. -- http://www.vistagen.com-- is a late clinical-stage
biopharmaceutical company aiming to transform the treatment
landscape for individuals living with anxiety, depression and other
CNS disorders. The Company is advancing therapeutics with the
potential to be faster-acting, and with fewer side effects and
safety concerns, than those that are currently available for
treatment of anxiety, depression and multiple CNS disorders.
Vistagen reported a net loss and comprehensive loss of $59.25
million for the fiscal year ended March 31, 2023, compared to a net
loss and comprehensive loss of $47.76 million for the year ended
March 31, 2022. As of March 31, 2023, the Company had $21.09
million in total assets, $9.01 million in total liabilities, and
$12.08 million in total stockholders' equity.
San Francisco, California-based WithumSmith+Brown, PC, the
Company's auditor since 2006, issued a "going concern"
qualification in its report dated June 28, 2023, citing that the
Company has suffered negative cash flows from operations and
recurring losses from operations since inception, resulting in an
accumulated deficit of $326.9 million as of March 31, 2023, that
raise substantial doubt about its ability to continue as a going
concern.
WB MAINTENANCE: Unsecureds Owed $645K Unimpaired
------------------------------------------------
WB Maintenance Inc. d/b/a WB Maintenance & Repair et al., submitted
a Third Amended Joint Plan of Reorganization.
This Plan under Chapter 11 of the Bankruptcy Code proposes to pay
creditors of the Debtors, i.e., WB Maintenance Inc., Go-Pro
Maintenance Inc., W.B. Maintenance & Repair Corp., W.B. & Son
Construction Corp., and W.B. Maintenance & Design Group Inc. from
revenues from past operations of the debtors Go-Pro Maintenance
Inc., W.B. Maintenance & Repair Corp.
Any outstanding priority claims, which include taxes owed to the
NYS Department of Taxation and Finance and the Internal Revenue
Service, will be paid on the Effective Date. The Debtor W.B.
Maintenance & Repair Corp. is current on its monthly lease payments
to its landlord Core Empire Corp. Non-priority unsecured creditors
which are trade creditors or suppliers holding allowed claims will
also be paid in full on the Effective Date.
Non-priority unsecured creditors holding Wage and Hour Claims will
be paid in full on the Effective Date of the Plan, and the
defendants in the FLSA Suit will be discharged and released per
agreement, all as provided pursuant to the parties' settlement
agreement (the "Settlement Agreement"), approved by Order of the
U.S. Bankruptcy Court on February 16, 2023.
This Plan also provides for the payment of administrative and
priority claims in full, and as agreed. The NYS Department of
Taxation & Finance claims and the Internal Revenue Service claim(s)
will be paid in full on the Effective Date.
Under the Plan, Class 1 Non-Priority Unsecured Creditors (Wage and
Hour Claims) total $530,000 or as may otherwise be allowed and
unimpaired. Class 1 was previously deemed impaired by the Plan
because this class was paid in installments under the Plan, but is
now un-impaired. In full satisfaction of the claims in this Class
1, this Class will be paid $530,000.00 (the "Settlement Amount") in
one payment on the Effective Date. Note that the Effective Date
occurs after U.S. District Court dismissal of the FLSA Suit, among
other things. Payments to Class 1 creditors shall be made to the
IOLTA account of Levin-Epstein & Associates, P.C. The claims will
be paid as follows:
(a) Settlement Agreement. The Plaintiffs' claims, as such claims
have been allowed and approved by order of the Court dated February
16, 2023 in these Bankruptcy Cases, are the sole claims filed in
this class prior to the Bar Date issued by the Bankruptcy Court.
The Plaintiffs' claims are scheduled as disputed by the Debtors.
The Plaintiffs' claims were originally asserted without a sum
certain in the FLSA Suit. Plaintiffs then filed unsupported proofs
of claim in these cases totaling $2.7 million. No other employees
(former or current) filed claims in these Cases. The total of the
obligation to be paid by the Debtors to Class 1 creditors as of the
Effective Date is the Settlement Amount. Prior to the Effective
Date, the FLSA Suit will be dismissed with prejudice, except for
the assault claims asserted therein, against Defendant Alexander
Briceno, which will be dismissed without prejudice.
(b) Full Settlement and Discharge. The treatment and
consideration to be received by holders of allowed Class 1 Claims
shall, upon due payment under the Plan, be in full settlement and
final satisfaction and full discharge and release of each holder's
respective claims against the Debtors, the Debtors' estates and
(per the Settlement Agreement) against the Debtors' shareholders
and officers, including those who are also named as Defendants in
the FLSA Suit.
(c) This Class was deemed impaired because it was paid in
installments, but now, since it is paid on the Effective Date, it
is no longer impaired. Per Order of the Court dated February 16,
2023 approving the Settlement Agreement, this Class votes in favor
of the Plan.
Class 2 Non-priority unsecured creditors (except those creditors
included in Class 1 above) total 115,188.69. Non-priority unsecured
creditors holding allowed claims shall receive the following
distribution:
(a) Treatment: Allowed claims of all Pre-Petition unsecured
creditors of the Debtors, subject to an allowance of their claims
by the Court, will be paid in cash, an amount equal to 100% of the
allowed amount of such creditors' claims payable in full on the
Effective Date of the Plan.
(b) The claims in this class total approximately 115,188.69. The
treatment and consideration to be received by holders of allowed
Class 2 Claims shall, upon due payment under the Plan, be in full
settlement and final satisfaction and full discharge of each
holder's respective claims against the Debtors and the Debtors'
estates. The claims in this class are held by the following, which
all timely filed proofs of claim in these cases:
* Dave's Kitchen & Bath Cabinets for $11,439.19
* Da Corta Brothers for $9,419.52
* JP Morgan Chase for $4,862.73
* American Express National Bank $67,014.17
* American Express National Bank $16,178.00
* TMobile $561.99
* NYSDT&F against WBMDGI $3,339.62
* NYSDT&F against WBMRC: $1,019.63
* NYSDT&F against WBMI: $1,353.84
(c) This class is unimpaired because 100% of claims will be paid
in full on the Effective Date, therefore, its vote will not be
solicited.
The Plan shall be funded on the Effective Date by approximately
$670,000 which two of the Debtors have on deposit and set aside for
Plan Confirmation.
Counsel for WB Maintenance Inc., et. al:
Ralph E. Preite, Esq.
KOUTSOUDAKIS & IAKOVOU LAW GROUP PLLC
40 Wall Street, 49th floor
New York, NY 10005
Main: (212) 404-8644
Direct: (212) 404-8608
E-mail: ralph@kilegal.com
A copy of the Disclosure Statement dated July 7, 2023, is available
at https://tinyurl.ph/gKXuj from PacerMonitor.com.
About WB Maintenance
WB Maintenance Inc. sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-41755) on July
22, 2022, listing under $1 million in both assets and liabilities.
Ralph E Preite, Esq. at Koutsoudakis & Iakovou Law Group PLLC, is
the Debtor's counsel.
WESCO AIRCRAFT: Moody's Cuts CFR to Ca Following Bankruptcy Filing
------------------------------------------------------------------
Moody's Investors Service downgraded Wesco Aircraft Holdings,
Inc.'s (doing business as "Incora") Probability of Default Rating
to D-PD from Caa3-PD following the company's announcement[1] that
it has filed for protection under Chapter 11 of the US Bankruptcy
Code. At the same time, Moody's downgraded Incora's Corporate
Family Rating to Ca from Caa3. Moody's also downgraded the rating
on Incora's senior secured first lien notes due 2026 to C from Caa2
and also downgraded the rating on the company's senior secured
second lien notes due 2027 to C from Ca. Concurrently, Moody's
downgraded the ratings on Wesco's senior unsecured notes to C from
Ca. The outlook remains stable. Subsequent to the aforementioned
rating actions, Moody's will withdraw all of the ratings of
Incora.
ESG factors are a key driver for the action. In particular, the
bankruptcy filing reflected very high governance risks associated
with the company's large amount of debt and earnings
underperformance against expectations.
The following is a summary of the rating actions:
Downgrades:
Issuer: Wesco Aircraft Holdings, Inc.
Corporate Family Rating, Downgraded to Ca from Caa3
Probability of Default Rating, Downgraded to D-PD from Caa3-PD
Senior Secured First Lien Regular Bond/Debenture, Downgraded to C
from Caa2
Senior Secured Second Lien Regular Bond/Debenture, Downgraded to C
from Ca
Senior Unsecured Regular Bond/Debenture, Downgraded to C from Ca
Outlook Actions:
Issuer: Wesco Aircraft Holdings, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
The Ca Corporate Family Rating reflects Incora's unsustainable
capital structure that left the company with limited financial
flexibility and very weak liquidity. As of September 2022,
debt-to-EBITDA was well in excess of 20x and interest expense
significantly exceeded EBITDA for the year. The Probability of
Default Rating of D-PD reflects the company's recent Chapter 11
filing.
Wesco Aircraft Holdings, Inc. (dba Incora), headquartered in Fort
Worth, TX, is a leading distributor and provider of supply chain
management services to the global aerospace industry. Services
include the distribution of C-class hardware, chemical and
electrical products and supply chain management services. Incora
reported revenue of $1.9 billion for the twelve months ended
September 2022.
The principal methodology used in these ratings was Aerospace and
Defense published in October 2021.
WEST NOTTINGHAM: Seeks Approval to Hire RDC Appraisals
------------------------------------------------------
The West Nottingham Academy In Cecil County seeks approval from the
U.S. Bankruptcy Court for the District of Maryland to employ RDC
Appraisals, LLC.
The Debtor requires an appraisal of its property located at 1079
Firetower Road, Colora, Md.
The appraiser will receive a flat fee of $8,000 for the appraisal
and will charge an hourly fee of $275 for time spent testifying
before the court in connection with the appraisal.
As disclosed in court filings, RDC Appraisals is a "disinterested
person" pursuant to Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Robert D. Clifford, MAI
RDC Appraisals, LLC
210 Summit Avenue, Suite A-16
Montvale, NJ 07645
Phone: (201) 802-0010
About The West Nottingham Academy
In Cecil County
The West Nottingham Academy in Cecil County is a college
preparatory boarding and day school for grades 9-12 and
postgraduates. The Colora, Md.-based school offers a wide variety
of athletic programs, competitive and non-competitive clubs,
visual, and performing arts.
West Nottingham filed its voluntary petition for Chapter 11
protection (Bankr. D. Md. Case No. 23-13830) on May 31, 2023, with
$2,212,793 in assets and $7,238,821 in liabilities. Judge Michelle
M. Harner oversees the case.
Wolff & Orenstein, LLC serves as the Debtor's legal counsel.
WESTERN DIGITAL: S&P Lowers Unsecured Notes Rating to 'BB-'
-----------------------------------------------------------
S&P Global Ratings lowered its issue-level rating on San Jose,
Calif.-based hard disk drive (HDD) and flash memory provider
Western Digital Corp.'s (WDC) $2.3 billion unsecured notes due 2026
to 'BB-' from 'BB' and revised the recovery rating to '5' from
'3'.
At the same time, S&P raised its issue-level rating on the
company's $500 million secured notes due 2029 and $500 million
secured notes due 2032 to 'BBB-' from 'BB' and revised the recovery
rating to '1' from '3'.
These rating actions follow WDC's recent amendments to its credit
agreement, which loosened the financial covenants, amid the supply
and demand imbalance in the memory market. In connection with the
amendments, Western Digital Technologies Inc. (WDT) and the
company's wholly owned, material domestic subsidiaries now
guarantee its term loan due 2027 (not rated), revolving credit
facility expiring in 2027 (not rated), delayed draw term loan due
June 2024 (not rated) and its unsecured notes due 2026. WDC's
secured notes due 2029 and 2032 and its convertible notes due 2024
(not rated) do not benefit from guarantees. In addition, the credit
facilities and the notes due 2029 and 2032 are now secured by
substantially all the assets of WDC and WDT. The notes due 2026 and
convertible notes due 2024 remain unsecured. The new subsidiary
guarantees and collateral will fall away from all of the
instruments if WDC maintains an investment-grade rating at 2 of the
3 rating agencies that currently rate it as of July 1, 2025, or
sooner if it maintains an investment-grade rating at two of the
agencies and sustains leverage of 3.25x or below for two
consecutive quarters.
S&P views the amended financial covenants as a positive
development, though they do not affect its 'BB' issuer credit
rating or negative outlook on WDC because S&P had previously
expected it would receive covenant relief.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P values WDC on a going-concern basis using a 6x multiple of
its projected emergence EBITDA, which reflects its scale and
proprietary HDD and memory technologies.
-- A default could occur due to a material drop in EBITDA stemming
from a sharp and sustained erosion in flash memory pricing amid
industry oversupply.
-- The credit facilities and the 2029 and 2032 notes are a single
class because they are secured by the same collateral. S&P notes
that the notes do not benefit from the subsidiary guarantees that
benefit the credit facilities.
-- The 2026 notes remain unsecured but benefit from the subsidiary
guarantees that benefit the credit facilities. S&P treats these
notes as having a superior claim relative to the convertible notes
due February 2024 because the convertible notes do not benefit from
subsidiary guarantees.
-- S&P believes the scope of the guarantors and collateral are the
same and represent effectively all of the value of the company in
our default scenario.
-- S&P assumes the company draws on its $600 million delayed draw
term loan and refinances it as of the June 2024 maturity on similar
terms as its term loan A. If the company repays the loan at
maturity, it would not affect our recovery outcome.
-- The new subsidiary guarantees and collateral will fall away
from all of the instruments if WDC maintains an investment-grade
rating at 2 of the 3 companies that currently rate it as of July 1,
2025, or sooner if it maintains an investment-grade rating at two
of the companies and sustains leverage of 3.25x or below for two
consecutive quarters. S&P said, "If this occurs as planned and its
structure remains the same, we would likely revise our recovery
ratings on all of the instruments to '3' given our cap of '3' for
unsecured debt and equalize the issue-level ratings with our issuer
credit rating on WDC."
Simulated default assumptions
-- Year of default: 2026
-- EBITDA at emergence: $1.2 billion
-- EBITDA multiple: 6x
-- Revolver: 85% drawn at default
-- Claims include 6 months of pre-petition interest
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $6.6
billion
-- Senior secured debt claims: $6.1 billion
--Recovery expectations: 90%-100% (rounded estimate: 95%)
-- Value available for unsecured claims: $500 million
-- Unsecured debt claims: $2.4 billion
--Recovery expectations: 10%-30% (rounded estimate: 20%)
-- Value available for structurally subordinated claims: $0
-- Structurally subordinated debt claims: $1.1 billion
[^] BOOK REVIEW: The Heroic Enterprise
--------------------------------------
The Heroic Enterprise: Business and the Common Good
Author: John Hood
Publisher: Beard Books (reprint of book published by The Free
Press/Division of Simon and Schuster in 1996).
Paperback: 266 pages
List Price: $34.95
Order your copy at https://bit.ly/3awLUV3
Hood writes as a counterbalance to ideas that business should be
expected to contribute to the common good along the lines of
charities, say, or public health. He writes too against the highly
partisan, pernicious perspective that business activity is
antisocial and disruptive which at times gains some degree of
credibility.
Critiques of business have been around as long as commerce and
business have been around. These come usually from religious or
political zealots seeking dictatorial hold over all significant
kinds of human activity and enterprise. In this work, Hood aims to
counterbalance latter-day versions of such critiques arising in
American society. The counterculture, antiestablishment 1960s was
a time when such critiques were particularly strong. They have
moderated since, yet remain a persistent chorus which influences
politics and imagery and public affairs of business.
Hood does not aim to stifle or eliminate debate about the effects
of business on society or how business should engage in business.
What he aims for is dismissing once and for all myopic and almost
utopian conceptions about business and related erroneous purposes
and values of it. Such conceptions are worrisome to
businesspersons not because they believe they have any foundation,
but because they waste resources and energy in having to
continually correct them so business can function properly. And to
the extent such myopic conceptions are believed or entertained by
the public, they hamper the public and politicians in working out
policies by which the greatest benefits of business can be reaped
by society.
The author clarifies the place and role of business by contrasting
business with other parts of society. A standard, self-evident
tenet of sociologists going back to the time of Plato is that
society is made up of different parts fulfilling different roles
for the varied needs of society and so that a society will function
smoothly and survive. Business is distinguished from government
and philanthropy. "Businesses exist to make and sell things,
whereas by contrast "governments exist to take and protect things
[and] charities exist to give things away." The social
responsibility for each category of institution is inherent in its
purposes and activities. For example, businesses alone cannot
solve environmental problems. Whatever problems which can be
attached to business are related to government policies and
business's operations to satisfy consumer interests. Hence,
business alone cannot solve environmental problems, and should not
be expected to. Critics requiring that business solve
environmental problems without similarly requiring changes in
government policies and consumer interests are shortsightedly and
unreasonably tarnishing business while not making any relevant or
productive arguments for dealing with environmental problems.
In elucidating business's proper place in and contributions to
society, Hood is not unmindful that some businesses fail to fulfill
their role in good faith and beneficially. But instead of
criticizing business fundamentally, he proffers questions critics
can ask before targeting particular businesses. Two of these are
"Are corporations obtaining their profits through force or fraud?"
and "Are corporations putting investments at their disposal to the
most economically productive use?" Hood's perspective in support
of business against unfair and irrelevant criticisms is based on
the acknowledgment that business is operating productively, for the
common good, and is open to cooperative activities with other parts
of society in trying to resolve common problems.
"The Heroic Enterprise" is not an argument for business -- for as a
fundamental aspect of any society, business does not need an
argument to justify it. The book mostly takes the approach of
reviewing why business is necessary and therefore must be
naturally, easily accepted -- namely, because of the manifold
benefits business provides for society and because it along with
good government and respectable morals has been a primary engine
for the betterment of human life.
John Hood has much experience in the media and communication as a
syndicated columnist, TV commentator, and radio host. Author of
seven nonfiction books on subjects as business, advertising, public
policy, and political history, and many articles for national
publications such as the Wall Street Journal, Hood is President of
the John William Pope Foundation, a Raleigh, N.C.-based grantmaker
that supports public policy organizations, educational
institutions, arts and cultural programs, and humanitarian relief
in North Carolina and beyond. Hood also serves on the board of the
John Locke Foundation, the state policy think tank he helped found
in 1989 and led as its president for more than two decades. He
teaches at Duke University's Sanford School of Public Policy.
*********
Monday's edition of the TCR delivers a list of indicative prices
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then-ending.
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Point your Web browser to http://TCRresources.bankrupt.com/and use
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*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
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Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2023. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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